What happened

Shares of Southeast Asian e-commerce and gaming star Sea Limited (SE 0.19%) exploded 7% higher through 3:20 p.m. EDT on Tuesday, a bright green island in a sea of red on the stock market today.

Although Sea fell short of analyst projections for second-quarter profit, reporting a loss of $0.61 per share instead of the smaller $0.52 loss that was expected, the company beat sales expectations handily with revenue of $2.3 billion versus the $1.9 billion that Wall Street had forecast.  

Arrow angles up on a green stock chart

Image source: Getty Images.

So what

Those sales were up 159% year over year, with digital entertainment revenue rising 167% and e-commerce revenue up 161%. The company's smaller digital financial services division slowed the overall growth rate only a bit, rising close to 150% year over year, management said.  

Now what

And Sea says it won't be slowing down much over the rest of 2021, either. Updating guidance today, Sea projected 122% sales growth in e-commerce for all of 2021. Bookings growth in digital entertainment should be 44%, versus 65% bookings growth in the second quarter alone.

In terms of profit, Sea achieved 40.8% gross margins in the second quarter, up an amazing 1,800 basis points from 22.8% a year ago. Accordingly, while it's true that earnings on the bottom line missed estimates, Sea Limited booked smaller operating and net losses in the second quarter this year than last year.

That seems good enough for investors today.