Sea Ltd Q4’FY22 Earnings Summary
$Sea(SE.US$ just reported a surprise Q4 EPS of $0.72 which beats the estimated EPS loss of -$0.64, and that is largely due to significant cost reduction (i.e massive layoffs, slashing marketing expenses, and closing down some of their operations in India, Europe and Latin America)) and greater monetization of its e-commerce business.
Financial summary of the quarter:
- Total GAAP revenue increased to US$ 3.5 bil (+7.1% y-o-y)
- Total gross profit increased to US$ 1.7 bil (+29.5% y-o-y)
- Total net income turned positive to US$ 422.8 mil
- Total adjusted EBITDA turned positive to US$ 495.7 mil
- Cash and cash equivalent stands at US$ 6.9 bil, a decrease of US$401.6 mil from the previous quarter
Sea’s e-commerce arm (Shopee) had a +44% y-o-y increase in their GAAP marketplace revenue, for which they see GMV in the quarter increased +8% y-o-y. While it's encouraging to see Shopee turned positive EBITDA, investors should not forget that Shopee’s long-term revenue growth trajectory is facing significant headwinds from the global economic slowdown.
It is worth noting that Sea did not address some of their fundamental issues, such as the continued user and bookings decline of Garena + lack of visibility into their SeaMoney business (which has now transformed into a service provider).
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