SG’s Gaming And E-Commerce Titan Sea’s Revenue Nearly Doubles in Q3 2020

SG’s Gaming And E-Commerce Titan Sea’s Revenue Nearly Doubles in Q3 2020

Southeast Asian gaming and e-commerce unicorn Sea Ltd reported total revenue of $1.2 billion for the third quarter of 2020, up 98.7 per cent year-on-year, boosted by growth in the digital entertainment and e-commerce sectors, and sales of goods.

Total adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) came in at $120.4 million in the July-September period, swinging from a $30.8 million loss in the year-ago quarter, Sea said. That beat Morgan Stanley’s forecast of $22 million.

For the first nine months of the year, Sea posted total revenue of $2.81 billion. That compares with full-year total revenue forecasts from Morgan Stanley, CGS-CIMB, and Daiwa of $5.38 billion, $3.96 billion, and $4.04 billion, respectively.

Sea is a beneficiary of the lifestyle and work changes caused by the global COVID-19 pandemic. Pandemic-induced lockdowns have created an increased demand for e-commerce, digital payments, and home entertainment, including gaming. Unlike many industries, gaming can be considered counter-cyclical, as unemployment may boost the time spent playing online games.

For the digital entertainment segment, which includes Sea’s games offerings, bookings climbed to $944.7 million, up 109.5 per cent year-on-year, while its revenue under generally accepted accounting principles (GAAP), came in at $569 million, up 72.9 per cent year-on-year.

The digital entertainment division reported revenue of $1.32 billion for the nine-month period.  Quarterly paying users more than doubled to 65.3 million, with average bookings per user coming at $1.7, compared with $1.40 a year earlier, Sea said, pointing to data from App Annie showing its self-developed game Free Fire was the highest-grossing mobile game in Latin America and Southeast Asia in the quarter.

Sea’s e-commerce division, Shopee, reported GAAP revenue of $618.7 million, up 173.3 per cent on-year. Morgan Stanley had projected revenue for the segment at $617 million and Daiwa had estimated $585 million.

The e-commerce segment posted nine-month revenue of $1.12 billion.

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