What happened
Shares of Sea Limited (SE -2.20%) charged sharply higher Tuesday, gaining as much as 17.2%. As of 10:52 a.m. ET, the stock was still up 10.6%.
The catalyst that sent the e-commerce and digital entertainment specialist higher was its quarterly financial report, which illustrated robust growth that was much better than expected.
So what
For the first quarter, Sea Limited generated revenue of $92 billion, up an impressive 64% year over year. The company's bottom line deteriorated, however, with a net loss of $580 million, worsening from a loss of $422 million. This resulted in a loss per share of $0.80.
Image source: Getty Images.
To put those numbers in context, analysts' consensus estimates were calling for revenue of $2.8 billion and a loss per share of $1.30, so the company cleared both bars with ease.
Sea Limited continued to produce strong growth across its trifecta of digital segments. E-commerce revenue of $1.5 billion was up 64% year over year, while its digital entertainment revenue of $1.1 billion climbed 45%. Perhaps more impressive was the performance of its fintech segment, as its digital financial services revenue of $236 million surged 360%.
The company's flagship game, Free Fire, continued to take the world by storm. It was the most downloaded mobile game globally during the first quarter, helping to entice users into its growing ecosystem of digital services.
Now what
Sea Limited doesn't provide quarterly guidance, preferring to focus on the long term. The company did, however, widen the range of its full-year outlook. Management is now expecting revenue from its e-commerce business in a range of $8.5 billion to $9.1 billion, which would represent growth of roughly 72% compared to 2021.
Since the onset of the downturn, investors have been inundated with a barrage of headlines that suggest the growth of e-commerce, gaming, and digital payments companies will suffer -- yet not all businesses are created equal. As a result of those widespread fears, Sea Limited stock has taken a nosedive, falling 80% from its high late last year.
Given the robust growth in each of its segments, Sea Limited has shown once again why its stock is a buy.
