Sea Ltd ((SE)) has held its Q4 earnings call. Read on for the main highlights of the call.
Sea Limited’s latest earnings call reflected a robust performance across all business segments, with record-breaking achievements in e-commerce, digital financial services, and digital entertainment. Despite some concerns about potential profitability fluctuations in Brazil and managing loan book growth risks, the overall sentiment was positive, driven by significant growth and strategic accomplishments.
Record-Breaking E-commerce Performance
Shopee, Sea’s e-commerce platform, achieved a milestone by surpassing $100 billion in GMV for the first time in 2024. This was accompanied by over 10 billion orders and a 28% year-on-year growth. Notably, it marked the first full year of being adjusted EBITDA positive, highlighting the platform’s strong financial health and operational efficiency.
Digital Financial Services Growth
Sea’s digital financial services segment reported impressive annual revenue of $2.4 billion and an adjusted EBITDA of over $700 million, with a 30% year-on-year growth in both top and bottom lines. This growth underscores the segment’s increasing contribution to the company’s overall financial performance.
Free Fire’s Comeback
Garena’s Free Fire experienced a remarkable resurgence, with bookings growing 34% year-on-year. It became the world’s largest mobile game by average daily active users (DAU) in 2024, with DAU growth of 28% year-on-year, reflecting the game’s enduring popularity and market dominance.
Strong Financial Performance
Sea Limited reported a total GAAP revenue increase of 37% year-on-year to $5 billion in Q4 2024, with a total adjusted EBITDA of $591 million compared to $127 million in Q4 2023. This robust financial performance highlights the company’s successful execution of its strategic initiatives.
Potential Profitability Fluctuations in Brazil
While Brazil demonstrated strong growth and market share gains, the company noted that profitability could be choppy quarter-to-quarter due to new market dynamics. This indicates a need for cautious optimism as the company navigates these challenges.
High Loan Book Growth Risks
Despite exceptional loan book growth of more than 60% year-on-year, Sea Limited is focused on maintaining stable risk exposure, with the 90-day non-performing loan (NPL) ratio at 1.2%. This cautious approach aims to balance growth with risk management.
Forward-Looking Guidance
Sea Limited anticipates continued growth and profitability in 2025, with Shopee’s GMV expected to grow by 20% and Garena projected to maintain double-digit growth in both user base and bookings. The company also plans to enhance service quality and operational efficiencies through AI integration, which is expected to increase customer satisfaction and reduce costs.
In summary, Sea Limited’s earnings call showcased a strong performance across its business segments, with significant achievements in e-commerce, digital financial services, and digital entertainment. Despite some challenges in Brazil and loan book growth risks, the overall sentiment remains positive, with promising forward-looking guidance for 2025.