Southeast Asia’s digital powerhouse Sea Group continues to steam ahead, posting revenue growth in the triple digits for the first quarter of the year. The Singapore-based firm recorded total GAAP revenues of USD 1.8 billion, an increase of 146% compared to the same quarter a year ago, according to the earnings release on Tuesday. Although its EBITDA was a positive USD 88 million, Sea Group still generated a net loss of USD 422 million, which was lower than in Q4.
Revenue from its gaming division, Garena, more than doubled year-on-year to USD 781 million. Bookings were USD 1.1 billion, while quarterly active users reached nearly 650 million, 80 million of them paying, according to the company. Last month, its blockbuster title Free Fire, already the most popular mobile game in Latin America, Southeast Asia, and India, became the top-grossing battle royale game in the US.
On the earnings call, chief corporate officer Yanjun Wang said that Free Fire is still growing at a very healthy rate and remains in an early stage of its lifecycle. Active users are spending more time on the game, between 2 and 3 hours per day, and the firm has noted an influx of younger players. CEO Forrest Li pointed out how Garena has been adding in-game characters based on popular local celebrities in order to connect with their communities.
Sea Group’s e-commerce unit Shopee took in USD 772 million in the quarter, almost tripling last year’s result. In Southeast Asia and Taiwan, it ranked first in the shopping category by average monthly active users and total time spent in the app on Android, the company said, citing App Annie data. The gross merchandise value was USD 12.6 billion, double last year’s number.
Analysts on the call asked about a potential further expansion of Shopee Food, which the firm just rolled out in Jakarta. “We haven’t announced any other plans, we’ll let the market know,” responded Wang. There have been updates, however, on the company’s financial business. “ShopeePay is gaining traction and continuing to expand use cases,” said Li. Total payment volume in the first quarter exceeded USD 3.4 billion, and the number of paying users for the mobile wallet services surpassed 26.1 million.
Li was overall pleased about a strong start of the year and the ability of his firm to capture the high growth potential of the industry and region they are operating in. It was the 11th quarter with triple-digit growth on the top line, Wang remarked. On the question if Sea is concerned about the GoTo merger, announced on Monday, Wang said that it shows the huge opportunity for everyone. “The penetration in the region is still low and the runway very long,” she said.