Shopee owner Sea misses earnings estimate as AI costs climb

Detailed summary

Shopee owner Sea misses earnings estimates as AI costs climb and shares fall after revenue rises 43% to US$8.6 billion. Read more at straitstimes.com.

Sea’s adjusted earnings before interest, taxes, depreciation and amortisation for the three months through September climbed 29% to US$931 million (S$1.19 billion).

SINGAPORE – The shares of Sea fell after the South-east Asia e-commerce leader reported earnings that missed estimates, stoking investor concerns about the cost of keeping pace in the AI race.

The Singapore-based business is the parent company of Shopee, Garena and Monee.

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) for the three months through September climbed 29% to US$931 million (S$1.19 billion), the company said on Nov 10.

Analysts estimated US$990 million on average, according to Bloomberg-compiled data. Revenue rose 43% to US$8.6 billion, exceeding predictions.

Investors have been concerned that competition with ByteDance’s TikTok Shop, Alibaba’s Lazada and recently listed Shein is weighing on prices and margins at Shopee, Sea’s biggest unit.

At the same time, Sea’s expenditures are increasing as the company embeds artificial intelligence features into its product offerings and works to expand in areas such as cloud computing and food delivery.

Adjusted Ebitda at Shopee rose 45% to US$269.2 million in the period, while revenue jumped to US$6.1 billion.

Sea said its board authorised an additional US$1 billion in stock buybacks, after the company purchased a similar amount under a previous repurchase programme.

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