Sea Ltd (NYSE:SE) reported third-quarter results that exceeded analyst estimates, however, shares fell about 8% in pre-market Tuesday.
The company posted total revenue of $3.31 billion, beating the consensus estimate of $3.17 billion. Within its segments, E-commerce revenue reached $2.42 billion, surpassing the estimated $2.18 billion.
Digital entertainment revenue amounted to $592.2 million, exceeding the estimate of $556.5 million, while Digital Financial Services revenue totaled $446.2 million, slightly below the estimated $448.9 million.
Sea reported an adjusted EBITDA of $35.3 million. A loss per share of 26 cents came in much worse than the expected 12 cents.
Earnings were worse than expected and shares also fell on CEO Forrest Li’s comments.
“In this current period, we will prioritize investing in the business to increase our market share and further strengthen our market leadership,” Li said.
“We are committed to maintaining a strong cash position, not relying on external funding, and investing within our means at a time and pace of our choosing. At the same time, given that e-commerce penetration remains low in most of our markets, we as the market leader have a responsibility to help grow the whole e-commerce ecosystem.”
Morgan Stanley (NYSE:MS) analysts said the loss was bigger than expected, which were investor fears heading into the print.
"Stock price reaction likely to be negative as losses were larger than feared and an 11% q/q growth in GMV might not be commensurate for now," the analysts said.