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Asian Pacific e-commerce, fintech, and video game giant Sea Limited (SE +12%) continues to ride a massive wave of buying today, climbing to its best levels since early 2022 following a long-awaited return to delivering adjusted earnings upside in Q3. SE shifted away from profits over growth last year, much to shareholder dismay, mainly since the shift came shortly after the company announced it would focus on profitability over growth at all costs. The back and forth led to significant selling pressure last year, sinking shares of SE by as much as 90% from all-time highs reached in 2021.

However, SE's move back toward growth while still targeting efficiency gains proved to be the correct course of action. The stock has enjoyed a resurgence in 2024, nearly tripling YTD following today's move. Investors continue giving SE a standing ovation as the company accelerates growth while registering meaningful profitability improvements.

• During Q3, Shopee -- SE's e-commerce arm, its largest business -- stayed on track to reach the company's projected FY24 gross merchandise volume (GMV) growth in the mid-20s percentage, registering a 25.2% increase to $25.1 bln. Orders expanded by a similar margin, propelling revs 42.6% higher yr/yr to $3.2 bln. SeaMoney, housed in SE's Digital Financial Services segment, enjoyed a 38% leap in revenue to $615 mln. Likewise, Garena, SE's Digital Entertainment division, posted bookings growth of 24.3%, fueling the company's raised FY24 forecast of +30%.
  • As a result, SE posted 30.8% consolidated revenue growth in Q3 to $4.33 bln, an uptick from the +23.0% recorded last quarter and +22.8% in Q1.
• Impressively, profitability was not squeezed to attain these growth figures. Shopee achieved a positive adjusted EBITDA of $34.4 mln, a stark reversal from the $(346.5) mln posted in the year-ago period. Similarly, adjusted EBITDA shot higher across SeaMoney and Garena, expanding by 13.4% and 34.4% yr/yr, respectively.
  • These figures supported SE's second consecutive quarter of non-GAAP profitability, ending with EPS of $0.24, slightly ahead of consensus.
• Looking ahead, SE eyes many growth opportunities. Shopee is benefiting significantly from live streaming, with daily live-streaming buyers up 15% sequentially in Q3. This feature has provided considerable fuel for Chinese-based e-commerce giant PDD Holdings (PDD). SE is deploying the tactic across its markets, from Indonesia to Thailand and Vietnam.
  • Meanwhile, Garena's most popular Free Fire game remains one of the largest mobile games globally, boasting over 100 mln daily active users during Q3, 25% higher than last year. There remains ample room for growth as it begins expanding in North Africa, a largely unpenetrated region. Within Digital Financial Services, SE is extracting massive gains from credit lending, which remains underserved in its markets.

SE's exceptional combination of accelerating revenue growth and improving profitability is keeping buyers in control today. While shares are roughly 70% lower than record 2021 highs, SE continues to take the proper steps to cement its position within its several Asian Pacific markets, positioning it for further upside over the long term.