Sea Ltd (NYSE:SE) stock rose 6.02% (As on March 5, 11:32:36 AM UTC-4, Source: Google Finance) after the company topped Wall Street estimates for fourth-quarter revenue, helped by strong growth in its financial services segment and e-commerce platform Shopee. Indonesia’s e-commerce market leader, Shopee, has attracted a large user base and become a significant growth driver for its parent company. Sea’s e-commerce segment, which accounts for more than two-thirds of the company’s total business, reported a 41.3% jump in revenue on higher consumer spending during the holiday quarter. Shopee’s “savings” brand image might be something that emerging competitors find difficult to overcome, according to venture and insights firm Momentum Works. The company expects Garena, its digital entertainment business that offers popular games such as Free Fire, to grow in the double-digit percentage range in terms of user base and bookings this year. Further, Shopee’s e-commerce GMV surpassed $100 billion for the first time in 2024, growing 28% year-on-year, with profitability achieved in Asia and Brazil. Shopee’s ad revenue increased by over 50% year-on-year in Q4, with an ad take rate improvement of more than 50 basis points compared to the prior year.
Moreover, the revenue at its digital financial services business, which is home to digital payments and financial services provider SeaMoney, grew 55.2%, beating analysts’ estimates of a 35.3% increase, according to data compiled by LSEG. Sea in September has announced a partnership with Alphabet’s YouTube, which will allow users in Indonesia to purchase products featured on YouTube via direct links to Shopee. SeaMoney’s digital financial services business saw its loan book grow over 60% year-on-year, reaching $5.1 billion by the end of 2024. The segment achieved annual revenue of $2.4 billion with an adjusted EBITDA of over $700 million. Free Fire, part of the Garena segment, delivered 34% year-on-year growth in annual bookings. It was the world’s largest mobile game by average daily active users in 2024, with DAU exceeding 100 million.
SE in the fourth quarter of FY24 has reported the adjusted earnings per share of 39 cents, missing the analysts’ estimates for the adjusted earnings per share of 41 cents. The company had reported the adjusted revenue growth of 36.9 percent to $4.95 billion in the fourth quarter of FY24, beating the analysts’ estimates for revenue of $4.62 billion. Total adjusted EBITDA for Q4 was $591 million, compared to $127 million in Q4 2023.
Looking ahead, Sea expects Shopee’s full year 2025 GMV growth to be around 20%, with improving profitability.