US-listed shares of Sea Limited (SE1.US), Singaporean tech conglomerate, are sinking 20% today. Share price plunge was triggered by disappointing Q3 2023 earnings report, that showed company missing profit expectations significantly. Let's take a quick look at the release.
Sales beat but profits miss expectations
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Create account Try a demo Download mobile app Download mobile appEarnings release for third quarter of 2023 from Sea Limited was mixed, at least when it comes to headline results.
Company reported an almost-5% jump in Q3 revenue to $3.31 billion, driven by solid jump in E-commerce revenue. Company managed to beat sales expectations in E-commerce and Digital Entertainment segments while revenue from Digital Financial Services came in-line with expectations. However, earnings disappointed with adjusted EBITDA missing expectations in E-commerce and Digital Entertainment segments and beating in Digital Financial Services segment. However, it should be noted that company's earnings improved significantly compared to a year-ago quarter.
Looking past headline results, user figures also deserve a note. While number of active users turned out to be 4 million higher than expected, company reported number of paying users fell short of estimates by 6 million! Number of active and paying users turned out to be 4.2% YoY and 21.4% YoY lower, respectively.
Q3 2023 earnings
- Revenue: $3.31 billion vs $3.19 billion expected (+4.9% YoY)
- E-commerce: $2.42 billion vs $2.18 billion expected (+16.24% YoY)
- Digital Entertainment: $592.2 million vs $556.5 million expected (-33.7% YoY)
- Digital Financial Services: $446.2 million vs $448.9 million expected (+36.5% YoY)
- Adjusted EBITDA: $35.3 million vs $248.3 million expected (-$357.7 million a year ago)
- E-commerce: -$346.5 million vs -$49.4 million expected (+30.1% YoY)
- Digital Entertainment: $234.0 million vs $237.2 million expected (-19.3% YoY)
- Digital Financial Services: $165.7 million vs $148.3 million expected (+344.6% YoY)
- Adjusted EBITDA margin: 1.06% vs 7.78% expected
- E-commerce: -14.3% vs -2.2% expected
- Digital Entertainment: 39.5% vs 42.6% expected
- Digital Financial Services: 37.1% vs 33.0%
- Adjusted net income: $30.9 million vs $196.4 million expected (-$373.5 million a year ago)
- Adjusted EPS: $0.06 vs $0.29 expected (-$0.66 a year ago)
- Digital Entertainment active users: 544.1 million vs 540.4 million expected (-4.2% YoY)
- Digital Entertainment paying users: 40.5 million vs 46.5 million (-21.4% YoY)
- E-commerce gross merchandise value: $20.1 billion vs $19.7 billion expected (+5.2% YoY)
A look at the chart
Sea Limited (SE1.US) is slumping 20% today. Taking a look at the chart at D1 interval, we can see that the stock has recently attempted to break above the $47.00 resistance zone but failed to do so. Today's post earnings slump erased almost all the gains stock made over the past month and a half. Share price is closing in on the $35.50 support zone, marked with local lows from August and September 2023. A break below this area would push the stock to the levels not seen since late-2019.
Source: xStation5
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