Southeast Asian technology giant Sea Limited reported its fourth-quarter financial results on Tuesday, with net income turning positive.
Total revenue was $3.5 billion, up 7.1% year-over-year.
E-commerce unit Shopee reported revenues of $2.1 billion, up 31.8% year-over-year. The Asian market recorded an adjusted EBITDA of $320 million, compared to a negative $525.8 million in the fourth quarter of 2021. In Brazil, unit economics continued to improve significantly, with contribution margin loss per order improving 53.9% quarter-on-quarter to reach $0.47.
Revenues from digital entertainment arm Garena were $948.9 million compared to $892.9 million in the prior-year quarter.
SeaMoney, the digital finance business, reported revenue of $380.2 million, up 92.5% year-over-year.
Total net income turned positive at $422.8 million, compared to a negative $616.3 million in the fourth quarter of 2021.
The improvement in net income should be attributed to a series of cost control efforts by the company starting in early 2022, including exiting non-core markets, laying off employees, etc.
The company also reduced its sales and marketing expenses. In the fourth quarter, sales and marketing for Shopee, its largest source of revenue, fell more than 50% year-over-year.
"We are starting 2023 on a much stronger footing," Chief Executive Forrest Li said in a news release. "Our decisive pivot to focus on efficiency and profitability since late last year is already driving meaningful bottom line improvements."
He added, "As we continue this transition and maintain our focus on sustainable growth, our approach is to do less but do it better as we serve our users across our digital ecosystem."
Founded in 2009 in Singapore, Sea counts Tencent as one of its biggest investors. The Chinese social media and gaming behemoth has also collaborated with Sea in various ways, including licensing some of its games for distribution in Southeast Asia.
Last January, Tencent sold 14.5 million shares of Sea, reducing its stake in the company from 21.3% to 18.7%, and said it intends to retain the vast majority of its stake in Sea for the long term.