Over the next several weeks, subscribers will get 40+ earnings reviews, ongoing fundamental news coverage and real-time updates of my own portfolio/performance.
Other reviews sent so far include AppLovin, Hims, Datadog, Mercado Libre, Axon, Uber, SoFi, Reddit, Amazon, Lemonade, Meta, Alphabet, ServiceNow, Taiwan Semi, Netflix and more!
Links to 20 other earnings reviews from this season can be found here.
My current portfolio/performance vs. the S&P 500 can be found here.
a. Demand
Sea Limited beat revenue estimate by 9.8%. Shopee beat e-commerce gross merchandise value (GMV) estimate by 4.9%.
b. Profits
- Beat 45.4% GPM estimate by 20 basis points (bps; 1 basis point = 0.01%).
- Beat EBITDA estimate by 5%.
- EBITDA rose by 11% Y/Y compared to 48% revenue growth.
- Shopee EBITDA margin was 4.6% vs. 6.9% Y/Y as it focuses on scaling in Brazil and its Asian markets. Monee EBITDA margin was 20.5% vs. 28.9% Y/Y for similar reasons.
- Garena EBITDA margin was 57.5% vs. 65.8% Y/Y.
- Missed $0.76 EPS estimate by $0.06.
- Net income rose by 11% Y/Y. This metric was pressured by its tax bill more than tripling from $144M to $451M Y/Y. If its tax bill rose in line with operating income growth, net income would have grown by 25% Y/Y. Still, EBITDA again only rose by 11% Y/Y, so there are current margin pressures that are stemming from the fulfillment and financial services investment cycle this company is in.
c. Balance Sheet
- $3.5B cash & equivalents.
- $2.4B restricted cash.
- $2.7B long-term investments.