Sea Ltd. reported on Tuesday a quarterly profit that fell short of market expectations as rising costs offset robust revenue growth.
The Singapore-headquartered digital services and e-commerce group posted revenue of $3.3 billion, up 15% year-over-year, driven by strong performance in its e-commerce and digital financial services segments. However, operating expenses surged 22% to $3.1 billion, primarily due to increased marketing spending and infrastructure investments.
Net profit attributable to shareholders totaled $180 million, a 40% decline from the same period last year and below the $220 million consensus estimate compiled by Refinitiv. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 18% to $420 million.
Sea’s chief financial officer attributed the cost pressures to aggressive expansion in key markets, including Southeast Asia and Latin America, as well as higher spending on technology and logistics. The company maintained its long-term growth outlook but cautioned that near-term profitability would remain under pressure amid persistent inflationary pressures and competitive dynamics.
Shares of Sea Ltd., listed on the New York Stock Exchange under the ticker SE, were down 4.5% in pre-market trading following the results.
