Sea Ltd.’s adjusted losses swelled in the third quarter as revenue growth at its e-commerce arm was offset by the biggest-ever sales drop at digital entertainment platform Garena.
(Bloomberg) — Sea Ltd.’s adjusted losses swelled in the third quarter as revenue growth at its e-commerce arm was offset by the biggest-ever sales drop at digital entertainment platform Garena.
The adjusted loss before interest, taxes, depreciation and amortization widened to $357.7 million from $165.5 million a year ago, the Singapore-based company said in a statement on Tuesday. That compares with the $457.4 million average of analysts’ estimates. Net loss amounted to about $565 million.
The gaming and e-commerce company and regional tech peers Grab Holdings Ltd. and GoTo Group — all of which are loss-making — have seen their stock prices plummet this year as they navigate an economic slowdown, rising interest rates and accelerating inflation. The slowing growth in Southeast Asia’s internet economy shows that even emerging digital markets aren’t immune to economic headwinds.
Fall of the World’s Hottest Stock Cost Sea Founders $32 Billion
Sea, Southeast Asia’s largest tech company, cut its full-year forecast for Garena’s bookings to between $2.6 billion and $2.8 billion from its previous guidance of $2.9 billion to $3.1 billion, set to be its first annual decline ever.
Total revenue rose 17% to $3.2 billion in the September quarter. Revenue from Garena tumbled 19% to $893 million, the biggest year-on-year drop ever, reflecting waning popularity of hit mobile game Free Fire. Sales at the online shopping arm Shopee climbed 32% to $1.9 billion.
Shares of the company have plunged 80% this year and declined 7.3% to $45.80 in New York on Monday.
To navigate a more challenging market, Sea has cut about 7,000 jobs, or roughly 10% of its workforce, in the past six months, according to a person familiar with the matter. It has also shuttered operations in India and some European and Latin American markets in a bid to trim costs and reach positive cash flows.
–With assistance from Abhishek Vishnoi.
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