Posted 3/4/2024, 12:18:22 PM
Sea Bets on Growth to Fend Off Rivals Despite Margin Risk After Smaller-Than-Expected Earnings Drop
- Sea Ltd shares advanced after reporting smaller-than-expected drop in quarterly earnings and predicting improving prospects for e-commerce and gaming
- E-commerce division Shopee grew sales 23% and gross merchandise value 29%, beating estimates, showing resilience versus rivals
- Hit game Free Fire achieved over 100 million peak daily active users; gaming revenue still dropped 46% without a new blockbuster
- Company will ramp up investments into Shopee to defend market share against competitors like TikTok and Pinduoduo
- Sea embarked on cost-cutting in 2022 to reach profitability, but is now prioritizing growth again to fend off threats, potentially pressuring margins