UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 6-K

 

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2024

 

Commission File Number: 001-38237

 

 

 

Sea Limited

 

 

 

1 Fusionopolis Place, #17-10, Galaxis

Singapore 138522

(Address of principal executive office)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  x                Form 40-F  ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit 99.1 — Press Release

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  SEA LIMITED
   
   
  By: /s/ Forrest Xiaodong Li
  Name: Forrest Xiaodong Li
  Title: Chairman and Chief Executive Officer

 

Date: August 13, 2024

 

 

 

 

Exhibit 99.1

 

 

 

Sea Limited Reports Second Quarter 2024 Results

 

Singapore, August 13, 2024 – Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results for the second quarter ended June 30, 2024.

 

“I’m happy to report that it has been a solid quarter for us, with our strong momentum from Q1 continuing into Q2. All three of our businesses have shown both strong growth and higher profitability,” said Forrest Li, Sea’s Chairman and Chief Executive Officer.

 

On Shopee’s 2024 outlook, he said “With the strong results delivered in the first half and our outlook for the rest of the year, we expect that Shopee will become adjusted EBITDA positive from the third quarter. We are also revising up our guidance for Shopee’s 2024 full year GMV growth to mid-20%.”

 

On digital entertainment, Mr. Li said, “Garena delivered a strong quarter, with more than 20% year-on-year growth in bookings, mainly contributed by Free Fire.” On Free Fire, Mr. Li said, “I am very proud to share that, every single day throughout Q2, Free Fire had more than 100 million daily active players. This reinforces our conviction that Free Fire is an evergreen franchise.”

 

Second Quarter 2024 Highlights

 

§Group

oTotal GAAP revenue was US$3.8 billion, up 23.0% year-on-year.

oTotal gross profit was US$1.6 billion, up 9.2% year-on-year.

oTotal net income was US$79.9 million, as compared to total net income of US$331.0 million for the second quarter of 2023.

oTotal adjusted EBITDA1 was US$448.5 million, as compared to US$510.0 million for the second quarter of 2023.

oAs of June 30, 2024, cash, cash equivalents, short-term investments, and other treasury investments2 were US$9.0 billion, representing a net increase of US$364.7 million from March 31, 2024.

 

§E-commerce

oGross orders totaled 2.5 billion for the quarter, increasing by 40.3% year-on-year.

oGMV was US$23.3 billion for the quarter, increasing by 29.1% year-on-year.

oGAAP revenue was US$2.8 billion, up 33.7% year-on-year.

oGAAP revenue included US$2.5 billion of GAAP marketplace revenue, which consists of core marketplace revenue and value-added services revenue and increased by 32.7% year-on-year.

·Core marketplace revenue, mainly consisting of transaction-based fees and advertising revenues, was up 41.4% year-on-year to US$1.8 billion.

·Value-added services revenue, mainly consisting of revenues related to logistics services, was up 15.5% year-on-year to US$722.3 million.

oAdjusted EBITDA1 was US$(9.2) million, as compared to US$150.3 million for the second quarter of 2023.

·Asia markets recorded adjusted EBITDA of US$3.8 million, as compared to US$204.1 million for the second quarter of 2023.

·Other markets recorded adjusted EBITDA of US$(13.0) million, as compared to US$(53.7) million for the second quarter of 2023.

·In Brazil, unit economics continued to improve, as we achieved positive contribution margin3 per order of US$0.09 for the quarter, as compared to a loss of US$(0.24) for the second quarter of 2023.

 

1 

 

 

§Digital Financial Services

oGAAP revenue was US$519.3 million, up 21.4% year-on-year.

oAdjusted EBITDA1 was US$164.7 million, up 20.2% year-on-year.

oDigital financial services revenue and operating income are primarily attributed to the consumer and SME credit business. As of June 30, 2024, consumer and SME loans principal outstanding was US$3.5 billion, up 39.5% year-on-year. This consists of US$2.9 billion on-book and US$0.7 billion off-book loans principal outstanding4.

oNon-performing loans past due by more than 90 days as a percentage of consumer and SME loans principal outstanding, which includes both on-book and off-book loans principal outstanding4, was 1.3%, a slight improvement quarter-on-quarter.

 

§Digital Entertainment

oBookings5 were US$536.8 million, up 21.1% year-on-year.

oGAAP revenue was US$435.6 million, as compared to US$529.4 million for the second quarter of 2023.

oAdjusted EBITDA1 was US$302.8 million, up 26.5% year-on-year.

oAdjusted EBITDA represented 56.4% of bookings for the second quarter of 2024, as compared to 54.0% for the second quarter of 2023.

oQuarterly active users were 648.0 million, up 19.0% year-on-year.

oQuarterly paying users were 52.5 million, up 21.7% year-on-year. Paying user ratio was 8.1%, as compared to 7.9% for the second quarter of 2023.

oAverage bookings per user were US$0.83, as compared to US$0.81 for the second quarter of 2023.

 

Changes in Board of Directors

 

With effect from August 12, 2024, Dr. Silvio Savarese and Ms. Jessica Tan have been elected to Sea’s board of directors as independent directors. Mr. Tony Hou, who is also serving as Sea’s Chief Financial Officer, has stepped down from the board at the same time, such that with effect of these changes, our seven-member board now comprises a majority of independent directors. Tony will continue to serve as Sea’s Chief Financial Officer.

 

Dr. Savarese currently serves as Executive Vice President and Chief Scientist of Salesforce Research where he leads the AI Research organization and shapes Salesforce’s scientific direction and long-term AI strategy. He has been in this position since April 2021. Dr. Savarese is also an adjunct professor of Computer Science at Stanford University.

 

2 

 

 

Ms. Tan previously served as the Group co-CEO and Executive Director of Ping An Group. Ms. Tan is a member of the board of directors of Ping An Bank Co Ltd., listed on the Shenzhen Stock Exchange, and is on the boards of the Central Provident Fund Board, the National Healthcare Group, and the Agency Integrated Care, three non-profit organizations in Singapore. Ms. Tan is also a member of the advisory panel of the Monetary Authority of Singapore and the World Bank Private Sector Investment Lab.

 

 

1 For a discussion of the use of non-GAAP financial measures, see “Non-GAAP Financial Measures”.

2 Other treasury investments currently consist of group treasury related investments, such as available-for-sale sovereign bonds and corporate bonds, classified as part of long-term investments and securities purchased under agreements to resell relating to our banking operations.

3 Contribution margin refers to adjusted EBITDA before allocation of HQ costs.

4 Off-book loans principal outstanding mainly refers to channeling arrangements, which is lending by other financial institutions on our platform.

5 GAAP revenue for the digital entertainment segment plus change in digital entertainment deferred revenue. This operating metric is used as an approximation of cash spent by our users in the applicable period that is attributable to our digital entertainment segment.

 

3 

 

 

Unaudited Summary of Financial Results

 

(Amounts are expressed in thousands of US dollars “$” except for per share data)

 

    For the Three Months
ended June 30,
     
    2023   2024      
    $   $   YOY%  
Revenue              
Service revenue              
Digital Entertainment   529,397   435,559   (17.7 )%
E-commerce and other services   2,322,496   3,028,717   30.4 %
Sales of goods   243,767   342,592   40.5 %
    3,095,660   3,806,868   23.0 %
Cost of revenue              
Cost of service              
Digital Entertainment   (160,669 ) (139,501 ) (13.2 )%
E-commerce and other services   (1,263,522 ) (1,764,815 ) 39.7 %
Cost of goods sold   (220,591 ) (317,735 ) 44.0 %
    (1,644,782 ) (2,222,051 ) 35.1 %
Gross profit   1,450,878   1,584,817   9.2 %
Other operating income   58,003   42,563   (26.6 )%
Sales and marketing expenses   (493,601 ) (774,768 ) 57.0 %
General and administrative expenses   (295,169 ) (303,838 ) 2.9 %
Provision for credit losses   (153,001 ) (167,415 ) 9.4 %
Research and development expenses   (283,297 ) (298,465 ) 5.4 %
Total operating expenses   (1,167,065 ) (1,501,923 ) 28.7 %
Operating income   283,813   82,894   (70.8 )%
Non-operating income, net   107,565   56,414   (47.6 )%
Income tax expense   (62,212 ) (60,612 ) (2.6 )%
Share of results of equity investees   1,817   1,215   (33.1 )%
Net income   330,983   79,911   (75.9 )%
Earnings per share attributable to Sea Limited’s ordinary shareholders:              
Basic   0.57   0.14   (75.4 )%
Diluted   0.54   0.14   (74.1 )%
Change in deferred revenue of Digital Entertainment   (86,254 ) 101,258   (217.4 )%
Adjusted EBITDA for Digital Entertainment (1)   239,459   302,800   26.5 %
Adjusted EBITDA for E-commerce (1)   150,339   (9,180 ) (106.1 )%
Adjusted EBITDA for Digital Financial Services (1)   136,961   164,678   20.2 %
Adjusted EBITDA for Other Services (1)   (7,189 ) (5,958 ) (17.1 )%
Unallocated expenses (2)   (9,549 ) (3,867 ) (59.5 )%
Total adjusted EBITDA (1)   510,021   448,473   (12.1 )%

 

(1) For a discussion of the use of non-GAAP financial measures, see “Non-GAAP Financial Measures”.

(2) Unallocated expenses within total adjusted EBITDA are mainly related to general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the Chief Operating Decision Maker (“CODM”) as part of segment performance.

 

4 

 

 

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

 

Revenue

 

Our total GAAP revenue increased by 23.0% to US$3.8 billion in the second quarter of 2024 from US$3.1 billion in the second quarter of 2023.

 

·Digital Entertainment: GAAP revenue was US$435.6 million in the second quarter of 2024 compared to US$529.4 million in the second quarter of 2023. Despite the increase in bookings during the second quarter of 2024, the decrease in GAAP revenue was primarily due to lower recognition of accumulated deferred revenue due to lower bookings in previous quarters.

 

·E-commerce and other services: GAAP revenue increased by 30.4% to US$3.0 billion in the second quarter of 2024 from US$2.3 billion in the second quarter of 2023, primarily driven by the GMV growth of our e-commerce business and the growth of our credit business.

 

·Sales of goods: GAAP revenue increased by 40.5% to US$342.6 million in the second quarter of 2024 from US$243.8 million in the second quarter of 2023.

 

Cost of Revenue

 

Our total cost of revenue was US$2.2 billion in the second quarter of 2024, as compared to US$1.6 billion in the second quarter of 2023.

 

·Digital Entertainment: Cost of revenue decreased by 13.2% to US$139.5 million in the second quarter of 2024 from US$160.7 million in the second quarter of 2023.

 

·E-commerce and other services: Cost of revenue for our e-commerce and other services segment combined was US$1.8 billion in the second quarter of 2024, as compared to US$1.3 billion in the second quarter of 2023, primarily driven by an increase in logistics costs as orders volume grew.

 

·Cost of goods sold: Cost of goods sold increased by 44.0% to US$317.7 million in the second quarter of 2024 from US$220.6 million in the second quarter of 2023.

 

Other Operating Income

 

Our other operating income was US$42.6 million and US$58.0 million in the second quarter of 2024 and 2023, respectively. Other operating income mainly consists of rebates from e-commerce related logistics services providers.

 

5 

 

 

Sales and Marketing Expenses

 

Our total sales and marketing expenses increased by 57.0% to US$774.8 million in the second quarter of 2024 from US$493.6 million in the second quarter of 2023. The table below sets forth breakdown of the sales and marketing expenses of our major reporting segments. Amounts are expressed in thousands of US dollars (“$”).

 

   For the Three Months
ended June 30,
     
   2023   2024   YOY% 
Sales and Marketing Expenses   $    $      
E-commerce   431,979    672,944    55.8%
Digital Financial Services   19,207    54,950    186.1%
Digital Entertainment   26,636    27,069    1.6%

 

General and Administrative Expenses

 

Our general and administrative expenses were US$303.8 million, as compared to US$295.2 million in the second quarter of 2023, relatively flat year-on-year.

 

Provision for Credit Losses

 

Our provision for credit losses increased by 9.4% to US$167.4 million in the second quarter of 2024 from US$153.0 million in the second quarter of 2023.

 

Research and Development Expenses

 

Our research and development expenses increased by 5.4% to US$298.5 million in the second quarter of 2024 from US$283.3 million in the second quarter of 2023.

 

Non-operating Income or Losses, Net

 

Non-operating income or losses mainly consist of interest income, interest expense, investment gain (loss), foreign exchange gain (loss) and gain (loss) on debt extinguishment. We recorded a net non-operating income of US$56.4 million in the second quarter of 2024, as compared to a net non-operating income of US$107.6 million in the second quarter of 2023. The non-operating income in the second quarter of 2024 was primarily due to interest income of US$91.4 million, partially offset by foreign exchange loss of US$16.1 million and investment losses of US$14.1 million recognized.

 

Income Tax Expense

 

We had a net income tax expense of US$60.6 million and US$62.2 million in the second quarter of 2024 and 2023, respectively.

 

Net Income

 

As a result of the foregoing, we had net income of US$79.9 million in the second quarter of 2024, as compared to net income of US$331.0 million in the second quarter of 2023.

 

6 

 

 

Basic and Diluted Earnings Per Share Attributable to Sea Limited’s Ordinary Shareholders

 

Basic earnings per share attributable to Sea Limited’s ordinary shareholders was US$0.14 and US$0.57 in the second quarter of 2024 and 2023, respectively.

 

Diluted earnings per share attributable to Sea Limited’s ordinary shareholders was US$0.14 and US$0.54 in the second quarter of 2024 and 2023, respectively.

 

7 

 

 

Webcast and Conference Call Information

 

The Company’s management will host a conference call today to review Sea’s business and financial performance.

 

Details of the conference call and webcast are as follows:

 

Date and time: 7:30 AM U.S. Eastern Time on August 13, 2024
7:30 PM Singapore / Hong Kong Time on August 13, 2024  
   
Webcast link: https://events.q4inc.com/attendee/415790387 

 

A replay of the conference call will be available at the Company’s investor relations website (www.sea.com/investor/home). An archived webcast will be available at the same link above.

 

For enquiries, please contact:

 

Investors / analysts: ir@sea.com 

Media: media@sea.com

 

About Sea Limited

 

Sea Limited (NYSE: SE) is a leading global consumer internet company founded in Singapore in 2009. Its mission is to better the lives of consumers and small businesses with technology. Sea operates three core businesses across digital entertainment, e-commerce, as well as digital financial services, known as Garena, Shopee and SeaMoney, respectively. Garena is a leading global online games developer and publisher. Shopee is the largest pan-regional e-commerce platform in Southeast Asia and Taiwan and has a significant presence in Latin America. SeaMoney is a leading digital financial services provider in Southeast Asia and is growing its presence in Brazil.

 

8 

 

 

Forward-Looking Statements

 

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “could,” “will,” “expect,” “anticipate,” “aim,” “future,” “intend,” “plan,” “believe,” “estimate,” “likely to,” “potential,” “confident,” “guidance,” and similar statements. Among other things, statements that are not historical facts, including statements about Sea’s beliefs and expectations, the business, financial and market outlook, and projections from its management in this announcement, as well as Sea’s strategic and operational plans, contain forward-looking statements. Sea may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases, and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Sea’s goals and strategies; its future business development, financial condition, financial results, and results of operations; the expected growth in, and market size of, the digital entertainment, e-commerce and digital financial services industries in the markets where it operates, including segments within those industries; expected changes or guidance in its revenue, costs or expenditures; its ability to continue to source, develop and offer new and attractive online games and to offer other engaging digital entertainment content; the expected growth of its digital entertainment, e-commerce and digital financial services businesses; its expectations regarding growth in its user base, level of engagement, and monetization; its ability to continue to develop new technologies and/or upgrade its existing technologies; growth and trends of its markets and competition in its industries; government policies and regulations relating to its industries, including the effects of any government orders or actions on its businesses; general economic, political, social and business conditions in its markets; and the impact of widespread health developments. Further information regarding these and other risks is included in Sea’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Sea undertakes no obligation to update any forward-looking statement, except as required under applicable law.

 

9 

 

 

Non-GAAP Financial Measures

 

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures to help evaluate our operating performance:

 

·“Adjusted EBITDA” for our digital entertainment segment represents operating income (loss) plus (a) depreciation and amortization expenses, and (b) the net effect of changes in deferred revenue and its related cost for our digital entertainment segment. We believe that the segment adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.

 

·“Adjusted EBITDA” for our e-commerce segment, digital financial services segment and other services segment represents operating income (loss) plus depreciation and amortization expenses. We believe that the segment adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.

 

·“Total adjusted EBITDA” represents the sum of adjusted EBITDA of all our segments combined, plus unallocated expenses. We believe that the total adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.

 

These non-GAAP financial measures have limitations as analytical tools. None of the above financial measures should be considered in isolation or construed as an alternative to revenue, net loss/income, or any other measure of performance or as an indicator of our operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to Sea’s data. We compensate for these limitations by reconciling the non-GAAP financial measures to their nearest U.S. GAAP financial measures, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on any single financial measure.

 

10 

 

 

 

The tables below present selected financial information of our reporting segments, the non-GAAP financial measures that are most directly comparable to GAAP financial measures, and the related reconciliations between the financial measures. Amounts are expressed in thousands of US dollars (“$”) except for number of shares & per share data.

 

   For the Three Months ended June 30, 2024 
   E-
commerce
   Digital
Financial
Services
   Digital
Entertainment
   Other
Services
(1)
   Unallocated
expenses
(2)
   Consolidated 
   $   $   $   $   $   $ 
Operating (loss) income   (84,762)   151,261    210,078    (9,003)   (184,680)   82,894 
Net effect of changes in deferred revenue and its related cost   -    -    86,546    -    -    86,546 
Depreciation and Amortization   75,582    13,417    6,176    3,045    -    98,220 
Share-based compensation   -    -    -    -    180,813    180,813 
Adjusted EBITDA   (9,180)   164,678    302,800    (5,958)   (3,867)   448,473 

 

   For the Three Months ended June 30, 2023 
   E-
commerce
   Digital
Financial
Services
   Digital
Entertainment
   Other
Services
(1)
   Unallocated
expenses
(2)
   Consolidated 
    $    $    $    $    $    $ 
Operating income (loss)   65,550    120,966    296,457    (10,034)   (189,126)   283,813 
Net effect of changes in deferred revenue and its related cost   -    -    (65,360)   -    -    (65,360)
Depreciation and Amortization   84,789    15,995    8,362    2,845    -    111,991 
Share-based compensation   -    -    -    -    179,577    179,577 
Adjusted EBITDA   150,339    136,961    239,459    (7,189)   (9,549)   510,021 

 

(1) A combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.

(2) Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.

 

11

 

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Amounts expressed in thousands of US dollars (“$”) except for number of shares & per share data

 

   For the Six Months ended June 30, 
   2023   2024 
   $   $ 
Revenue          
Service revenue          
Digital Entertainment   1,069,083    893,678 
E-commerce and other services   4,582,073    5,978,737 
Sales of goods   485,608    668,782 
           
Total revenue   6,136,764    7,541,197 
           
Cost of revenue          
Cost of service          
Digital Entertainment   (334,035)   (295,478)
E-commerce and other services   (2,504,850)   (3,479,869)
Cost of goods sold   (430,311)   (627,283)
           
Total cost of revenue   (3,269,196)   (4,402,630)
           
Gross profit   2,867,568    3,138,567 
           
Operating income (expenses)          
Other operating income   115,883    86,540 
Sales and marketing expenses   (893,744)   (1,544,403)
General and administrative expenses   (628,546)   (594,692)
Provision for credit losses   (330,440)   (329,182)
Research and development expenses   (603,809)   (602,844)
Impairment of goodwill   (117,875)    
           
Total operating expenses   (2,458,531)   (2,984,581)
           
Operating income   409,037    153,986 
Interest income   152,326    178,500 
Interest expense   (20,773)   (19,406)
Investment loss, net   (28,815)   (125,352)
Net gain on debt extinguishment       32,009 
Foreign exchange gain (loss)   27,349    (26,878)
           
Income before income tax and share of results of equity investees   539,124    192,859 
Income tax expense   (124,110)   (139,372)
Share of results of equity investees   3,261    3,424 
           
Net income   418,275    56,911 
           
Net (income) loss attributable to non-controlling interests   (8,595)   1,290 
Net income attributable to Sea Limited’s ordinary shareholders   409,680    58,201 
           
Earnings per share:          
Basic   0.73    0.10 
Diluted   0.69    0.10 
           
Weighted average shares used in earnings per share computation:          
Basic   564,261,877    571,968,378 
Diluted   598,716,012    599,898,424 

 

12

 

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts expressed in thousands of US dollars (“$”)

 

   As of
December 31,

2023
   As of
June 30,

2024
 
   $   $ 
ASSETS          
Current assets          
Cash and cash equivalents   2,811,056    2,646,488 
Restricted cash   1,410,365    1,401,038 
Accounts receivable, net of allowance for credit losses of $9,351 and $5,539, as of December 31, 2023 and June 30, 2024 respectively   262,716    249,543 
Prepaid expenses and other assets   1,861,842    1,823,988 
Loans receivable, net of allowance for credit losses of $319,463 and $327,378, as of December 31, 2023 and June 30, 2024 respectively   2,464,662    2,809,987 
Inventories, net   125,395    157,523 
Short-term investments   2,547,644    3,387,461 
Amounts due from related parties   290,254    404,711 
Total current assets   11,773,934    12,880,739 
           
Non-current assets          
Property and equipment, net   1,207,698    1,081,414 
Operating lease right-of-use assets, net   1,015,982    1,107,279 
Intangible assets, net   50,821    35,692 
Long-term investments   4,262,562    3,769,487 
Prepaid expenses and other assets   87,705    108,400 
Loans receivable, net of allowance for credit losses of  $2,105 and $2,953, as of December 31, 2023 and June 30, 2024 respectively   20,551    51,129 
Restricted cash   22,236    27,587 
Deferred tax assets   328,961    401,922 
Goodwill   112,782    106,371 
Total non-current assets   7,109,298    6,689,281 
Total assets   18,883,232    19,570,020 

 

13

 

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts expressed in thousands of US dollars (“$”)

 

   As of
December 31,

2023
   As of
June 30,
2024
 
   $   $ 
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities          
Accounts payable   342,547    293,688 
Accrued expenses and other payables   1,834,807    1,804,152 
Deposits payable   1,706,299    2,144,679 
Escrow payables and advances from customers   2,199,464    2,247,416 
Amounts due to related parties   64,081    227,575 
Borrowings   146,661    69,917 
Operating lease liabilities   290,788    296,572 
Convertible notes   151,764    151,919 
Deferred revenue   1,208,892    1,298,430 
Income tax payable   223,638    82,823 
Total current liabilities   8,168,941    8,617,171 
           
Non-current liabilities          
Accrued expenses and other payables   79,257    74,617 
Borrowings   119,323    117,348 
Operating lease liabilities   789,514    862,877 
Deferred revenue   72,587    118,229 
Convertible notes   2,949,785    2,743,936 
Deferred tax liabilities   133    358 
Unrecognized tax benefits   6,107    69,207 
Total non-current liabilities   4,016,706    3,986,572 
Total liabilities   12,185,647    12,603,743 

 

14

 

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts expressed in thousands of US dollars (“$”)

 

   As of
December 31,

2023
   As of
June 30,

2024
 
   $   $ 
Shareholders’ equity           
Class A Ordinary shares   262    264 
Class B Ordinary shares   23    23 
Additional paid-in capital   15,283,870    15,640,134 
Accumulated other comprehensive loss   (108,000)   (249,019)
Statutory reserves   16,981    17,021 
Accumulated deficit   (8,599,306)   (8,541,145)
Total Sea Limited shareholders’ equity   6,593,830    6,867,278 
Non-controlling interests   103,755    98,999 
Total shareholders’ equity   6,697,585    6,966,277 
Total liabilities and shareholders’ equity   18,883,232    19,570,020 

 

15

 

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts expressed in thousands of US dollars (“$”)

 

   For the Six Months ended June 30, 
   2023   2024 
   $   $ 
Net cash generated from operating activities   1,201,016    1,086,362 
Net cash used in investing activities   (3,867,640)   (1,563,708)
Net cash generated from financing activities   58,143    426,438 
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash   (22,114)   (117,636)
Net decrease in cash, cash equivalents and restricted cash   (2,630,595)   (168,544)
Cash, cash equivalents and restricted cash at beginning of the period   7,610,384    4,243,657 
Cash, cash equivalents and restricted cash at end of the period   4,979,789    4,075,113 

 

Net cash used in investing activities amounted to US$1,564 million for the six months ended June 30, 2024. This was primarily attributable to increase in loans receivable of our credit business of US$873 million, net placement of US$575 million in securities purchased under agreements to resell, time deposits and liquid investment products, for better cash yield management and purchase of property and equipment of US$91 million to support the existing operations. Net cash generated from financing activities amounted to US$426 million for the six months ended June 30, 2024. This was primarily attributable to an increase in bank deposits of US$674 million, offset by the cash used in repurchase of convertible notes of US$176 million as well as net repayment of our other funding sources related to the credit business of US$70 million.

 

16

 

 

UNAUDITED SEGMENT INFORMATION

 

The Company has three reportable segments, namely e-commerce, digital financial services and digital entertainment. The Chief Operating Decision Maker (“CODM”) reviews the performance of each segment based on revenue and certain key operating metrics of the operations and uses these results for the purposes of allocating resources to and evaluating the financial performance of each segment. Amounts are expressed in thousands of US dollars (“$”).

 

   For the Three Months ended June 30, 2024 
   E-
commerce
   Digital
Financial
Services
   Digital
Entertainment
   Other
Services
(1)
   Unallocated
expenses
(2)
   Consolidated 
   $   $   $   $   $   $ 
Revenue   2,821,269    519,338    435,559    30,702    -    3,806,868 
Operating (loss) income   (84,762)   151,261    210,078    (9,003)   (184,680)   82,894 
Non-operating income, net                            56,414 
Income tax expense                            (60,612)
Share of results of equity investees                            1,215 
Net income                            79,911 

 

   For the Three Months ended June 30, 2023 
   E-
commerce
   Digital
Financial
Services
   Digital
Entertainment
   Other
Services
(1)
   Unallocated
expenses
(2)
   Consolidated 
   $   $   $   $   $   $ 
Revenue   2,110,551    427,940    529,397    27,772    -    3,095,660 
Operating income (loss)   65,550    120,966    296,457    (10,034)   (189,126)   283,813 
Non-operating income, net                            107,565 
Income tax expense                            (62,212)
Share of results of equity investees                            1,817 
Net income                            330,983 

 

(1) A combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.

(2) Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.

 

17

 


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