Sea Group generated $3 billion in revenue in the first quarter of 2023, representing a 4.9% increase from the same period in 2022.
The company’s latest financial report examines its performance over the previous period, with increases in several key metrics. Gross profit rose 21.1% year-on-year, standing at $1.4 billion compared to $1.2 billion in Q1 2022.
While the company reported a $580.1 million loss in net income in Q1 2022, it reported earnings of $87.3 million. This positive outcome was negatively impacted by $117.9 million impairment in goodwill associated with its prior acquisition.
EBITDA rose by almost a billion dollars, with Sea reporting losses of $509.9 million in Q1 2022 compared to earnings of $507.2 million in Q1 2023.
“The first quarter of 2023 was another strong quarter for us,” said Sea Chairman and Group Chief Executive Officer Forrest Li. “The results for the quarter are a testament to our team’s commitment and creativity. We have innovated to do more with fewer resources, while never losing sight of our commitment to our users, and never letting our service standards fall. Across our business, we have been focused on maximising operational efficiency and improving user experiences. And we continued to make meaningful progress on both fronts.”
“We are also pleased with the progress we have made so far to strengthen the fundamentals of our business. As we continue to fine-tune our operations and navigate near-term macro uncertainties, we remain highly confident in the long-term opportunities in our markets and our ability to capture those profitably.”
Is gaming lagging behind?
Despite these positive results, the company’s digital entertainment branch, which incorporates gaming, was down compared to Q4 2022.
The company generated $539.7 million in revenue from its digital entertainment division in Q1 2023, representing a decrease of 43% from $948.9 million in Q4 2022.
Bookings decreased 15% quarter-on-quarter, standing at $462.3 million compared to $543.6 million. Sea also saw a fall in adjusted EBITDA for digital entertainment over the same period, reporting $230.1 million compared to $258.2 million – a fall of 11%.
Despite these declines, adjusted EBITDA as a percentage of bookings rose 2.3% quarter-on-quarter, standing at 49.8% compared to 47.5%.
The company also saw an increase in quarterly active users, with 491.6 million consumers playing its games compared to 485.5 million in Q4 2022. However, there was a significant fall in quarterly paying users, with the company reporting a total of 37.6 million compared to 43.6 million in Q4 2022.
We listed Sea Group as one of the top 50 mobile game makers of 2022.
