Sea Ltd, the parent company of e-commerce platform Shopee, has reported impressive financial results for the recent quarter. The company’s revenue surpassed estimates, and Shopee turned profitable for the first time since its inception. Sea’s overall net income reached $153.3 million, exceeding expectations, while revenue grew by 31% to $4.3 billion.
The strong performance has led to a significant increase in the company’s share price, with its US shares climbing 10.5%, the biggest gain since August. Shopee’s profitability is a major milestone for the company, which has been competing against larger Chinese rivals like Alibaba’s Lazada and ByteDance’s TikTok in the Southeast Asian market. The e-commerce platform’s adjusted operating profit reached $34.4 million, following years of losses.
Shopee reaches profitability milestone
Sea’s chief executive, Forrest Li, expressed confidence in Shopee’s future, stating, “As we continue to focus on delivering growth, we expect Shopee to remain profitable going forward.
The company’s success can be attributed to its cost-cutting measures, efficiency improvements, and expanding market share in its core regions. Shopee has also raised the commissions it charges merchants by about a third since the start of the year, demonstrating its confidence in attracting and retaining sellers.
In addition to its e-commerce business, Sea’s gaming unit, Garena, has supported the company’s finances. The more-profitable gaming division has helped Sea build out its e-commerce operations. Shopee’s gross merchandise volume (GMV) grew by 25% to $25.1 billion in the third quarter, surpassing estimates.
The company has also made strides in newer markets, such as Brazil, where the number of average monthly active buyers grew by nearly 40% year-on-year. Analysts have praised Sea’s performance, with Citigroup analyst Alicia Yap noting that the earnings report “demonstrates operating efficiency and management execution towards balancing between growth and profitability.”
As Sea continues to focus on growth and profitability, investors and industry experts will be closely watching the company’s progress in the highly competitive e-commerce market.
