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EsportsSea Limited Reports First Quarter 2020 Results
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Sea Limited Reports First Quarter 2020 Results

Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results for the first quarter ended March 31, 2020.
“Our company’s mission is to better the lives of consumers and small businesses through technology – and I believe that this mission is more important now than ever given the disruptions we are all facing as a result of the coronavirus crisis,” said Forrest Li, Sea’s Chairman and Group Chief Executive Officer.
“We are fortunate to be in a strong position to play a part in helping our communities navigate these challenging times and get back on the road to recovery.In addition to contributing funds and essential medical equipment to the frontline fight against the virus, we are doing everything we can to support economic recovery across our markets, leveraging the strengths of our platforms as market leaders in the digital economy.Among many other efforts we made to empower our communities, we launched SME recovery programs, including providing special assistance to small businesses to onboard our platforms, accelerated the growth of the staple and essential goods segment of our e-commerce platform to meet increased consumer demand, and quickened the pace of the rollout of our mobile wallet services to facilitate our users’ growing need for online transactions.Through these efforts to harness the benefits of the digital economy, we are helping our communities better navigate near-term turbulence and, at the same time, building even stronger bonds with consumers and merchants across our platforms and the broader communities in our ecosystem.
“The coronavirus crisis is driving a step change in the growth of the digital economy globally, materially accelerating a shift to online lifestyles that is broad, deep, and, in our view, irreversible.We believe that Sea, as a market leader in some of the key sectors of the digital economy, is gaining and will continue to gain a disproportionate share of the resulting growth in our markets.Like all businesses, Sea has been stress-tested by the crisis.

Our robust performance through the first quarter and beyond, as we responded to surges in user demands and navigated significant disruption, underlines the fundamental strength, resilience, and adaptability of our business.

We believe this will, in the long run, enable us to capture the further accelerated and expanded growth opportunities presented to all of our core businesses across our markets.”
First Quarter 2020 Highlights
Group Total adjusted revenue was US$913.9 million, up 57.9% year-on-year from US$578.8 million for the first quarter of 2019.

Total gross profit was US$206.8 million, up 424.1% year-on-year from US$39.5 million for the first quarter of 2019.Total adjusted EBITDA was US$(69.9) million compared to US$(32.0) million for the first quarter of 2019.Digital Entertainment Adjusted revenue was US$512.4 million, up 30.3% year-on-year from US$393.3 million for the first quarter of 2019.Adjusted EBITDA was US$298.4 million, up 32.2% year-on-year from US$225.8 million for the first quarter of 2019.Adjusted EBITDA margin increased to 58.2% for the first quarter of 2020 from 57.4% for the first quarter of 2019.Quarterly active users (“QAUs”) reached 402.1 million, an increase of 48.0% year-on-year from 271.6 million for the first quarter of 2019.

Quarterly paying users grew by 72.5% year-on-year to 35.7 million, accounting for 8.9% of QAUs for the first quarter of 2020, increasing from 7.6% for the same period in 2019.Average revenue per user was US$1.3 compared to US$1.4 for the first quarter of 2019.

Our self-developed global hit game, Free Fire , recently hit a new record high of over 80 million peak daily active users and, according to App Annie 1 , was the highest grossing mobile game in Latin America and in Southeast Asia in the first quarter of 2020.Free Fire was also ranked third globally by downloads for Google Play in the mobile games category in the first quarter of 2020, according to App Annie 1 .In April 2020, Free Fire hit another record high in monthly paying users, which more than doubled year-on-year, and in India, monthly paying users already accounted for over 10% of monthly active users.We continue to focus on esports and community building activities to engage with our rapidly expanding user base.In the first quarter of 2020, we organized more than double the number of esports tournaments online for Free Fire compared to the first quarter of 2019, with these tournaments accumulating over 90 million views.E-commerce Gross merchandise value (“GMV”) growth accelerated to 74.3% year-on-year to reach US$6.2 billion for the first quarter, compared to 64.8% year-on-year in the fourth quarter of 2019.Gross orders totaled 429.8 million, an increase of 111.2% year-on-year from 203.5 million for the first quarter of 2019.Gross orders growth further accelerated to more than 140% year-on-year in April 2020.

Adjusted revenue was US$314.0 million, up 110.5% year-on-year from US$149.2 million for the first quarter of 2019.Adjusted revenue included US$236.7 million of marketplace revenue 2 , up 132.1% year-on-year from US$102.0 million for the first quarter of 2019, and US$77.3 million of product revenue 3 , up 63.6% year-on-year from US$47.2 million for the first quarter of 2019.Adjusted revenue as a percentage of total GMV increased to 5.1% in the first quarter of 2020, up from 4.2% for the same period a year ago.Adjusted marketplace revenue as a percentage of total GMV was 3.8 % in the first quarter of 2020.Sales and marketing expenses were US$206.0 million, compared to US$147.9 million for the first quarter of 2019.Adjusted EBITDA was US$(260.0) million compared to US$(235.3) million for the first quarter of 2019.Adjusted EBITDA loss per order decreased by 48.3% to US$0.60, compared to US$1.16 for the first quarter of 2019.In Indonesia, where Shopee is the largest e-commerce platform by orders, it registered over 185 million orders for the market in the first quarter, or a daily average of over 2 million orders, an increase of 122.6% year-on-year.

Shopee also ranked first in Indonesia by average monthly active users, downloads, and total time spent in app on Android, in the Shopping category in the first quarter of 2020, according to App Annie 1 .Both in Southeast Asia and in Taiwan, Shopee ranked number one in the Shopping category by average monthly active users, and total time spent in app on Android, for first quarter of 2020, according to App Annie 1 .Shopee also ranked number one in the Shopping category by downloads in Southeast Asia, and was among the top three worldwide by downloads in the same category for first quarter of 2020, according to App Annie 1 .Digital Financial Services Update
Our digital financial services offerings experienced accelerated growth in the first quarter, spurred by the rapid and accelerating adoption of digital options by consumers and businesses in our region, as well as Shopee’s sustained, fast growth and deepening integration with SeaMoney.
Our mobile wallet total payment volume (“TPV”) for the first quarter exceeded US$1 billion, a milestone we achieved about a year after we started to integrate the mobile wallet service with our Shopee platform.

Moreover, quarterly paying users for our mobile wallet services surpassed 10 million for the first quarter of 2020.In the month of April 2020, more than 40% of Shopee’s gross orders in Indonesia, our largest market for SeaMoney, were paid using our mobile wallet service.We continued to rapidly expand our suite of online and offline third-party use cases and partnerships.For instance, in March 2020, we joined forces with Google to offer our mobile wallet as a payment option for the Google Play Store in Thailand.
As a result of the accelerating expansion of the digital economy, and rising demand for online and contactless payments, we believe SeaMoney’s long-term market opportunities are rapidly expanding.We are therefore highly confident in SeaMoney’s growth prospects, and fully focused on maximizing the significant long-term growth potential of SeaMoney.
1 Rankings data for App Annie is based on combined data from the Google Play and iOS App Stores, unless otherwise stated.Southeast Asia rankings are based on Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.

Latin America rankings are based on Argentina, Brazil, Chile, Colombia, Mexico and Uruguay.
2 Marketplace revenue mainly consists of transaction-based fees and advertising income and revenue generated from other value-added services.
3 Product revenue mainly consists of revenue generated from direct sales..