Sea's Q3 loss widens, but revenue grows 3.9%

This article is more than 12 months old

Gaming and e-commerce firm Sea pretty much hit market expectations when it delivered its first earnings report since its rocky public debut in October.

Although Tencent-backed Sea's net loss doubled to US$132.7 million (S$180 million) in the third quarter from US$64.9 million in the same period a year earlier, revenue grew 3.9 per cent to US$94.1 million.

A US$34.3 million investment gain from the disposal of an investment in Vietnam as well as a net gain on the re-measurement of investments from other holdings also helped improve the net loss figure.


Most analysts who cover Sea had been bullish on the firm, calling it a key beneficiary of the Internet wave in South-east Asia and Taiwan.

Sea has not disappointed, with takings in the three months to Sept 30 broadly matching street estimates on a cash revenue basis.

Cash revenue was US$151.7 million, up 73 per cent from the third quarter last year. This is the sum of GAAP (generally accepted accounting principles) revenue plus the change in digital entertainment deferred revenue and e-commerce commission income.

Unlike GAAP revenue, cash revenue is more aligned with Sea's actual cash flows, it said. For example, the group's revenue recognition policy requires turnover from the recently launched Arena of Valor game to be recognised over a long period of time although cost is expensed immediately.

Sea's gaming platform, Garena, saw digital entertainment gross billings grow to US$134.5 million, up 62 per cent from the third quarter last year.

Shopee, its mobile e-commerce portal, reported a gross merchandise value (GMV) of US$1.06 billion, up 219 per cent from a year earlier and in line with consensus forecasts.