Southeast Asia’s technology giant Sea Limited reported its earnings for the first quarter of 2021. Revenue increased 147% compared to a year ago, while Sea Ltd’s gross profit increased 212% with growth in gaming, e-commerce, and fintech businesses.
Another successful quarter for Sea in the gaming industry
Garena has always been the company’s highlight for Sea. In the first quarter of 2020, it exceeded expectations and achieved mind-boggling growth. With the effect of a 117% increase, revenue doubled to $781 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) got stronger and increased by 140% year-over-year to $717 million.
This success was due to the increase in Garena’s active users and paying users. Thanks to the popular Free Fire game developed by Sea itself, active quarterly users increased by 62% to 649 million, while quarterly paying users increased by 124% to 80 million in the first quarter of 2021.
In the first quarter of 2021, Free Fire became the highest-grossing mobile game in Latin America, Southeast Asia, and India. It held this leading position in Latin America and Southeast Asia for seven consecutive quarters and in India for two consecutive quarters. This underlines Free Fire’s strength in the industry, even nearly four years after its launch. In other words, Free Fire will continue to print money for Garena for at least the next few quarters.
Thanks to Garena, Sea generated positive cash flows of $318 million in the first quarter of 2021, despite spending heavily on growth.
Shopee and Sea Money continued to grow rapidly
Shopee, Sea’s e-commerce arm, has grown even faster than Garena in the past quarter. Revenue increased 250% to $922 million, thanks to a 153% increase in orders and a 103% increase in gross goods volume. As the # 1 shopping app in Southeast Asia and Taiwan, Shopee is well-positioned to sustain its high growth rate for years to come, according to data cited by App Annie.
Unlike Garena, Shopee remains unprofitable as it invests heavily to grow its market. On the good side, Shopee posted its gross profit return from the same period last year. In the long run, Shopee’s financial performance will continue to improve as the market expands and the company gets more money from the e-commerce platform.