Sea Ltd - Profitable, at what cost?

No doubt the general picture is that there is growth and the company has turned EBITDA positive.

But going deeper into the finer details is where you ask more questions.

Growth has decelerated to just 5% for this once high and mighty growth stock.

Even though the E-Commerce (EC), Digital Financial Services (DFS), and Digital Entertainment (DE) segments posted positive EBITDA, do note that DE's EBITDA has continued to shrink.

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It seems like not many people are concerned about Digital Entertainment as I am. This segment used to be the cash generator and profit pillar.

But yet in just a few quarters, bookings fell, QAU started a downtrend. Paying user ratio is also going down.

This continuous drop could pull down the upcoming quarter's performances.

The only way to churn out a profit is by diligence in cost management. And that was how Sea achieved positive EBITDA.

Most of its cost was reduced, with S&M expenses reduced by -60% YoY.

However, the digital finance initiatives has seen provision for credit losses ballooned. up by +121% YoY.

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