SEA LIMITED Third Quarter 2020 Results
November 2020
Disclaimer
This presentation by Sea Limited ("Sea") contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident," "guidance," and similar statements. Among other things, statements that are not historical facts, including statements about Sea's beliefs and expectations, the business, financial and market outlook, projections, and Sea's strategic and operational plans, contain forward- looking statements. Sea may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Sea's goals and strategies; its future business development, financial condition, financial results, and results of operations; the growth in, and market size of, the digital entertainment, e-commerce and digital financial services industries in the markets where it operates, including segments within those industries; changes in its revenue, costs or expenditures; its ability to continue to source, develop and offer new and attractive online games and to offer other engaging digital entertainment content; the growth of its digital entertainment, e-commerce and digital financial services businesses and platforms; the growth in its user base, level of user engagement, and monetization; its ability to continue to develop new technologies and/or upgrade its existing technologies; growth and trends of its markets and competition in its industries; government policies and regulations relating to its industries; general economic and business conditions in its markets; and the impact of widespread health developments, including the recent global coronavirus pandemic, and the responses thereto (such as voluntary and in some cases, mandatory quarantines as well as shut downs and other restrictions on travel and commercial, social and other activities) which could materially and adversely affect, among other things, the business and manufacturing activities of its sellers, merchants and logistics providers, the global supply chain including those of its sellers' and merchants', and consumer discretionary spending. Further information regarding these and other risks is included in Sea's filings with the SEC. All information provided in this presentation is as of the date hereof, and Sea undertakes no obligation to update any forward-looking statement, except as required under applicable law.
This presentation contains certain financial measures that are not recognized under generally accepted accounting principles in the U.S. ("GAAP"), including "adjusted EBITDA," "total adjusted EBITDA," and "net loss excluding share-based compensation and changes in fair value of the 2017 convertible notes." The reconciliation of those measures to the most comparable GAAP measures is contained within this presentation. The non-GAAP measures have limitations as an analytical tool and you should not consider them in isolation or as a substitute for an analysis of the Company's results under GAAP.
This presentation does not contain all relevant information relating to Sea or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of Sea. Nothing contained in this presentation shall be relied upon as a promise or representation as to the past or future performance of Sea.
Sea 3Q2020 Results | | 1 |
Group: Robust Revenue Growth
99% YoY Growth in Total GAAP Revenue1 | 110% YoY Growth in DE Bookings3 |
US$ Millions
DE GAAP Revenue
DFS GAAP Revenue
EC GAAP Revenue
Other Services GAAP
Revenue2
US$ Millions | 944.7 |
1,212.2
10.1 14.4
3Q 2019 | 4Q 2019 | 1Q 2020 | 2Q 2020 | 3Q 2020 |
610.1 53.0
1.7 226.4
329.1
618.7
569.0
173% YoY Growth in EC GAAP Revenue
US$ Millions
618.7 | ||||
3Q 2019 | 4Q 2019 | 1Q 2020 | 2Q 2020 | 3Q 2020 |
3Q 2019 | 3Q 2020 |
Note: Financial figures are unaudited.
- Sum of digital entertainment ("DE") GAAP revenue, e-commerce ("EC") GAAP revenue, digital financial services ("DFS") GAAP revenue, and other services GAAP revenue.
- A combination of multiple business activities that does not meet the quantitative thresholds to qualify as reportable segments are grouped together as
"Other Services." - GAAP revenue for the digital entertainment segment plus change in digital entertainment deferred revenue. This operating metric is used as an
approximation of cash spent by our users in the applicable period that is attributable to our digital entertainment segment. | Sea 3Q2020 Results | | 2 |
Digital Entertainment: Continued Growth of User Base
Quarterly Active Users | Quarterly Paying Users |
Millions | Millions |
65.3
572.4
3Q 2019 | 4Q 2019 | 1Q 2020 | 2Q 2020 | 3Q 2020 | 3Q 2019 | 4Q 2019 | 1Q 2020 | 2Q 2020 | 3Q 2020 |
Sea 3Q2020 Results | | 3 |
E-commerce: Extending Our Leading Position Across the Region
Gross Orders | GMV |
Millions | US$ Billions |
741.6 | 9.3 |
3Q 2019 | 4Q 2019 | 1Q 2020 | 2Q 2020 | 3Q 2020 | 3Q 2019 | 4Q 2019 | 1Q 2020 | 2Q 2020 | 3Q 2020 |
Sea 3Q2020 Results | | 4 |
Digital Financial Services: Accelerating Adoption In Our Region
> US$2.1 Billion | > 17.8 Million | > 30% |
in mobile wallet | Quarterly Paying Users for | of Shopee's Gross Orders were |
Total Payment Volume in 3Q 2020 | mobile wallet services in 3Q 2020 | paid using our mobile wallet in Oct1 |
Note:
1. In October 2020, more than 30% of Shopee's total gross orders across our markets combined were paid using our mobile wallet.
Sea 3Q2020 Results | | 5 |
Gross Profit
Total Gross Profit
US$ Millions
407.6
203.2
3Q 2019 | 3Q 2020 |
Note: Financial figures are unaudited.
Sea 3Q2020 Results | | 6 |
Non-GAAP EBITDA
Total Adjusted EBITDA | ||||||||||||||
US$ Millions | US$ Millions | |||||||||||||
DE Adjusted EBITDA | ||||||||||||||
EC Adjusted EBITDA | ||||||||||||||
DFS Adjusted EBITDA | ||||||||||||||
Unallocated Expenses | ||||||||||||||
120.4 | Other Services Adjusted EBITDA | |||||||||||||
120.4 | ||||||||||||||
584.5 | ||||||||||||||
266.0 | ||||||||||||||
(253.7) | (301.6) | |||||||||||||
(33.6) | ||||||||||||||
(6.5) | (149.3) | |||||||||||||
(30.8) | ||||||||||||||
(2.9) | (9.1) | |||||||||||||
(4.2) | ||||||||||||||
(30… | ||||||||||||||
3Q 2019 | 3Q 2020 | 3Q 2019 | 3Q 2020 |
Note: Financial figures are unaudited. Please refer to the appendix for details on reconciliation between GAAP and non-GAAP figures.
Sea 3Q2020 Results | | 7 |
Cost and Expense Trends
Cost of Revenue | Sales & Marketing Expenses |
US$ Millions
804.6 | |
407.0 | |
3Q 2019 | 3Q 2020 |
General & Administrative Expenses
US$ Millions
196.7 | |
99.3 | |
3Q 2019 | 3Q 2020 |
Note: Financial figures are unaudited.
US$ Millions
471.0
251.8 | |
3Q 2019 | 3Q 2020 |
R&D Expenses
US$ Millions
104.3 | |
43.6 | |
3Q 2019 | 3Q 2020 |
Sea 3Q2020 Results | | 8 |
Net Loss
Net Loss
US$ Millions
3Q 2019 | 3Q 2020 | |
(206.1)
(425.3)
Net Loss Excluding Share-based Compensation and Changes in Fair Value of the 2017 Convertible Notes
US$ Millions
3Q 2019 | 3Q 2020 | |
(175.2)
(346.0)
Note: Financial figures are unaudited. Please refer to the appendix for details on reconciliation between Net Loss and Net loss excluding share-based compensation and changes in fair value of the 2017 convertible notes.
Sea 3Q2020 Results | | 9 |
Cash and Cash Equivalents
US$ Millions
3,432.83,509.0
3,119.0
2,599.7
2,297.2
3Q 2019 | 4Q 2019 | 1Q 2020 | 2Q 2020 | 3Q 2020 |
Note: Financial figures are unaudited.
Sea 3Q2020 Results | | 10 |
Raised Full Year 2020 Guidance
Guidance | |
> US$3.1 Billion | |
Digital Entertainment Bookings1 | > 75.4% YoY Growth |
(Previous: US$1.9 Billion to US$2.0 Billion) | |
E-commerce GAAP revenue plus sales | > US$2.3 Billion |
> 144.1% YoY Growth |
incentives net-off2
(Previous: US$1.7 Billion to US$1.8 Billion)
Note:
1. Adjusted revenue for digital entertainment in the previously disclosed guidance.
2. Adjusted revenue for e-commerce in the previously disclosed guidance. | Sea 3Q2020 Results | | 11 |
Appendix
Sea 3Q2020 Results | | 12 |
Reconciliation Between GAAP and Non-GAAP EBITDA
US$ Thousands | 3Q 2019 | 3Q 2020 |
Digital Entertainment | ||
Operating income / (loss) | 278,614 | |
Net effect of changes in deferred revenue & related cost | 299,200 | |
Depreciation and amortization | 6,711 | |
Digital Entertainment Adjusted EBITDA | 584,525 | |
E-commerce | ||
Operating income / (loss) | (338,097) | |
Depreciation and amortization | 36,507 | |
E-commerce Adjusted EBITDA | (301,590) | |
Group | ||
Operating income / (loss) | (305,473) | |
Net effect of changes in deferred revenue & related cost | 299,200 | |
Depreciation and amortization | 47,446 | |
Share-based compensation | 79,213 | |
Total Adjusted EBITDA | 120,386 |
Note: Financial figures are unaudited.
Sea 3Q2020 Results | | 13 |
Reconciliation Between Net Loss and Net Loss Excluding Share-based Compensation and Changes in Fair Value of the 2017 Convertible Notes
US$ Thousands | 3Q 2019 | 3Q 2020 |
Group
Net loss
Share-based compensation
Changes in fair value of the 2017 convertible notes
Net loss excluding share-based compensation and changes in fair value of the 2017 convertible notes
(425,262)
79,213
-
(346,049)
Note: Financial figures are unaudited.
Sea 3Q2020 Results | | 14 |
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Disclaimer
Sea Ltd. published this content on 17 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2020 09:24:03 UTC
