This morning Sea Limited reported its Q3 earnings. I know it has been brought up at least a few times on this board as it certianly checks the box of being a hypergrowth company. It is one of my largest holdings at close to 10% of my portfolio. Here were the highlights, bolding is mine -
Third Quarter 2020 Highlights
o Total GAAP revenue was US$1.2 billion, up 98.7% year-on-year.
o Total gross profit was US$407.6 million, up 100.6% year-on-year.
o Total adjusted EBITDA was US$120.4 million compared to US$(30.8) million for the third quarter of 2019.
? Digital Entertainment
o Bookings were US$944.7 million, up 109.5% year-on-year.
o Adjusted EBITDA was US$584.5 million, up 119.8% year-on-year.
o GAAP Revenue was US$569.0 million, up 72.9% year-on-year from US$329.1 million for the third quarter of 2019.
o Our self-developed global hit game, Free Fire, continued to be the highest grossing mobile game in Latin America and in Southeast Asia in the third quarter, according to App Annie
o GAAP Revenue was US$618.7 million, up 173.3% year-on-year.
o Gross orders totaled 741.6 million, an increase of 130.7% year-on-year.
o Gross merchandise value (“GMV”) was US$9.3 billion, an increase of 102.7% year on-year.
o Adjusted EBITDA was US$(301.6) million compared to US$(253.7) million for the third quarter of 2019. Adjusted EBITDA loss per order decreased by 48.1% year-on-year to US$0.41, compared to US$0.79 for the third quarter of 2019.
o Shopee was also the second most downloaded app globally in the Shopping category in the third quarter, according to App Annie
? Digital Financial Services Update
o Mobile wallet total payment volume for the quarter exceeded US$2.1 billion
o Quarterly paying users for our mobile wallet services surpassed 17.8 million
o In digital entertainment, we expect bookings for digital entertainment to exceed US$3.1 billion, representing over 75.4% growth from 2019. The revised guidance represents an increase of more than 59.0% from the midpoint of the previously disclosed guidance of between US$1.9 billion and US$2.0 billion
o In e-commerce, we expect GAAP revenue plus sales incentives net-off for e-commerce to exceed US$2.3 billion. The revised guidance represents a more than 144.1% increase from 2019, and a more than 31.4% increase from the midpoint of the previously disclosed guidance of between US$1.7 billion and US$1.8 billion
Me here - I thought this was a great quarter as we see revenues are continuing to grow 100% which is pretty impressive at this scale. The most impressive part for me is the continued hyper growth of Shopee. Revenues were less than $9M in 2017 and will likely be over $2B this year. That is absolutely unreal growth. All the while, the loss per order (calculated by dividing adjusted EBITDA by gross orders) has shrunk from $(1.61) to $(0.41). This was also the first quarter Sea has ever posted a significant positive number for adjusted EBITDA (thanks Garena). Overall, it was another strong quarter which I am quite pleased with. This company, along with MELI, I think deserve a spot in most portfolios.