Sea’s Third Quarter 2022 Results

2022-11-15

Dear Sailors,

Earlier today we reported our results for the third quarter of 2022. A summary is attached.

As you know, over the last two months, we have shifted our focus from growth to achieving self-sufficiency and profitability as soon as possible. I know this has not been easy on you. I am proud of how our teams have come together to push hard on this, and do what we need to do to make it happen.

This past quarter, we have taken decisive actions to improve margins, and set clear goals and priorities for the quarters to come. We have completely overhauled our budgeting practice, to constantly and comprehensively review our spending. Across all businesses and markets, we decreased existing spending and future commitments, from office space to computer hardware to logistics facilities to travel and entertainment needs. And we have improved procurement policies and procedures across the board.

We have also accelerated cost saving initiatives in our business operations. At Shopee, we have meaningfully scaled back marketing expenses. At Garena, we are focusing on running existing key franchises as efficiently as possible, and prioritizing only the best new games to develop and launch. Finally, at SeaMoney, we have deprioritized offline adoption of ShopeePay, and are further diversifying funding for our credit business.

In the third quarter, our total adjusted EBITDA loss narrowed to US$ 358 million, an improvement by 29% quarter-on-quarter. This is a result that speaks volumes. If we remain disciplined, even more cost savings will show in the coming quarters.

I want to highlight this progress because it shows that, even in a short span of time, consistent and diligent effort can already begin to yield results. The direction we are taking is the right one. I hope you, like me, will feel encouraged by this result, and use that to continue pushing forward with determination.

Importantly, even as we pivot towards profitability, our customer engagement remains robust. This demonstrates our ability to continue to bring greater value to our customers despite operating within narrower constraints – by innovating to improve products and services, bettering operational efficiency and predictability, resolving complaints quickly, and more. It is never easy to find ways to do more with less, but you have risen to the challenge!

As I mentioned in my last email to you, the macro environment continues to be highly uncertain. We are adapting rapidly to the changing climate, which may still get worse before it gets better. We must stay alert, vigilant, and focused on execution. Right now, all our efforts are to ensure that Sea not only survives the macro storms, but emerges more efficient, and more resilient – and as a long-term winner in our markets.

I am confident in our ability to execute against our goal to achieve self-sufficiency. Every day, we draw closer to it. We are not at the finish line yet, but we are making progress. More importantly, with each step we take together, in unity, we become an even stronger team and organisation.

Thank you all for your resilience, commitment, and support during this period. Let us keep going, and accomplish this task together.

Sincerely,

Forrest