Sea Limited SE reported adjusted earnings of 54 cents per share in the third quarter of 2024, missing the Zacks Consensus Estimate by 8.47%. It had posted earnings of 6 cents in the year-ago quarter.

SE’s earnings lagged the Zacks Consensus Estimate in the trailing four quarters, the average negative earnings surprise being 55.54%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Revenues of $4.3 billion increased 30.8% on a year-over-year basis, beating the Zacks Consensus Estimate by 3.59%. The uptick was primarily driven by growth in Gross Merchandise Value (GMV) for e-commerce and the credit business.

Shares jumped 10.46% to close at $107.65 on Nov. 12 following the third-quarter 2024 results. Sea Limited’s shares have surged 164.7% year to date compared with the Zack Computer and Technology sector’s rise of 29.5%.

SE’s Top-Line Details

Digital Entertainment revenues were $497.8 million, marking a year-over-year decline of 15.9%.

Quarterly active users were 628.5 million, up 15.5% year over year.

Quarterly paying users of 50.2 million increased 23.9% year over year. The paying user ratio was 8% in the second quarter compared with 7.5% in the year-ago quarter.

Average bookings per user in the reported quarter were 89 cents compared with 82 cents in the year-ago quarter.

Garena segment reported strong growth in the third quarter, with total bookings reaching $556.5 million, marking a 24.3% year-over-year increase, driven by Free Fire and above 100 million daily active users.

E-commerce and other services’ revenues totaled $3.4 billion, up 41.2% year over year.

The uptick was driven by the robust performance in Shopee, with gross orders rising 24.2% and GMV growing 25.2% year over year.

Shopee segment maintained its market leadership in Asia, with average monthly active buyers increasing more than 20% year over year in the third quarter.

Sales of goods increased 38.9% year over year to $418 million in the third quarter of 2024.

Digital Financial Services’ revenues increased 38% year over year to $615.7 million. The uptick was driven by strong growth in its loan book, which reached $4.6 billion, up 73.2%.

Non-performing loans over 90 days were stable at 1.2% of total consumer and SME loans in the reported quarter.

Sea Limited’s Operating Details

Gross profit increased 29.1% year over year to $1.86 billion in the third quarter of 2024.

Adjusted EBITDA was $521.3 million compared with an EBITDA of $35.3 million in the year-ago quarter.

Digital Entertainment's adjusted EBITDA was $314.4 million, rising 34.4% from $234 million in the year-ago quarter.

E-commerce adjusted EBITDA was $34.4 million against a loss of $346.5 million incurred in the year-ago quarter.

Digital Financial Services adjusted EBITDA reached $187.9 million, up 13.4% year-over-year from $165.7 million.

SE’s Balance Sheet & Cash Flow

As of Sept. 30, 2024, SE had cash and cash equivalents of $2.54 billion compared with $2.64 billion as of June 30, 2024.

The company generated $1.17 million in cash from operating activities in the reported quarter compared with $0.62 million in the previous quarter.

Sea Limited’s Zacks Rank & Stocks to Consider

Currently, SE has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer & Technology sector are CyberArk Software CYBR, Palo Alto Networks PANW and Bilibili BILI. CyberArk Software sports a Zacks Rank #1 (Strong Buy), and Palo Alto and Bilibili each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CyberArk Software’s shares have lost 39.7% in the year-to-date period. CYBR is set to report third-quarter 2024 results on Nov. 13.

Palo Alto Networks’ shares have jumped 35% year to date. PANW is set to report first-quarter fiscal 2025 results on Nov. 20.

Bilibili’s shares have gained 72.8% year to date. BILI is set to report third-quarter 2024 results on Nov. 14.

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