Fourth Quarter 2023 Financial Highlights: A Comprehensive Overview

The final quarter of 2023 saw a moderate increase in total GAAP revenue for the group, reaching US$3.6 billion, which represents a 4.8% growth year-on-year. Despite this revenue growth, the group experienced a significant shift in profitability, with a total gross profit of US$1.5 billion, down from US$1.7 billion in the same quarter of the previous year. This decline in gross profit accompanies a notable swing from a net income of US$422.8 million in Q4 2022 to a net loss of US$111.6 million in Q4 2023. Additionally, the adjusted EBITDA decreased significantly to US$126.7 million from US$495.7 million year-on-year. However, the group's liquidity position improved, with cash, cash equivalents, and other treasury investments reaching US$8.5 billion by the end of December 2023, marking a net increase of US$565.7 million from the end of the previous quarter.

E-commerce Segment

The e-commerce sector of the group showed robust growth, with GAAP revenue surging by 23.2% year-on-year to US$2.6 billion. This includes US$2.3 billion from marketplace revenue, which itself rose by 23.2% due to platform expansion and enhanced monetization strategies. Core marketplace revenue, primarily from transaction-based fees and advertising, jumped by 40.6% year-on-year to US$1.6 billion. Conversely, value-added services revenue dipped by 5.3% to US$657.9 million, affected by increased shipping subsidies. Despite these revenues, the e-commerce segment's adjusted EBITDA was negative, recorded at US$(225.3) million, though it showed an improvement from the previous quarters. The segment witnessed significant growth in gross orders and GMV, increasing by 46.0% and 28.6% year-on-year, respectively.

Digital Financial Services

The digital financial services sector reported a 24.3% increase in GAAP revenue year-on-year, totaling US$472.4 million. The adjusted EBITDA for this segment was notably higher at US$148.5 million, up 96.4% from the previous year, mainly driven by the consumer and SME credit business. The loans principal outstanding for these services was US$3.1 billion, showing a healthy growth of 27.0% year-on-year. The non-performing loans ratio remained stable quarter-on-quarter at 1.6%.

Digital Entertainment

In the digital entertainment sector, GAAP revenue decreased to US$510.8 million from US$592.2 million in the previous quarter. However, bookings saw a slight quarter-on-quarter increase of 1.9%, totaling US$456.3 million. The adjusted EBITDA for this segment was US$217.4 million, down from the previous quarter, with the adjusted EBITDA margin slightly decreasing. The sector also experienced a slight decrease in quarterly active and paying users.

Full Year 2023 Overview

For the entire year of 2023, the group reported a total GAAP revenue of US$13.1 billion, marking a 4.9% increase year-on-year. The total gross profit for the year was notably higher at US$5.8 billion, indicating a 12.5% year-on-year growth. The total net income showed a remarkable recovery from a net loss of US$(1.7) billion in 2022 to a net income of US$162.7 million in 2023. The total adjusted EBITDA also improved significantly to US$1.2 billion, reversing the negative trend from the previous year.

E-commerce Yearly Performance

The e-commerce segment continued its upward trajectory with a 23.5% increase in GAAP revenue to US$9.0 billion for the year. Adjusted EBITDA losses narrowed to US$(213.8) million from US$(1.7) billion in 2022, reflecting improved operational efficiency. The segment also reported an 8.8% increase in gross orders and a 6.8% rise in GMV year-on-year.

Digital Financial Services Annual Results

The annual performance of the digital financial services showed significant improvement, with GAAP revenue up by 44.0% to US$1.8 billion. The adjusted EBITDA turned positive, reaching US$550.1 million, a substantial recovery from a loss in the previous year.

Digital Entertainment Yearly Insights

The digital entertainment sector faced challenges, with a decrease in GAAP revenue to US$2.2 billion from US$3.9 billion in 2022. Bookings and adjusted EBITDA also saw declines, although the adjusted EBITDA margin slightly improved year-on-year.

The financial results for the fourth quarter and the full year of 2023 reveal a mixed performance across the group's diverse segments, with significant growth in certain areas tempered by challenges in others. The recovery in net income and significant improvement in adjusted EBITDA for the full year highlight the group's resilience and adaptability in a dynamic market environment.

Shares of Sea climbed more than 15% in pre-market trading in New York.

(Source: SEA)