BENGALURU, March 8 (Reuters Breakingviews) – Singapore technology giant Sea (SE.N) on Tuesday reported its first ever quarterly profit, beating regional tech firms like GoTo (GOTO.JK) and Grab (GRAB.O) to the punch. The almost $1 billion swing from a fourth-quarter loss in 2021 to a $423 million profit in the final three months of last year is largely down to cost cuts.

The company run by Forrest Li slashed sales and marketing expenses alone by $745 million, a whopping 62% drop. Whether that’s sustainable is unclear, though Li pointed out that the company had sold, closed or downsized a number of non-core operations and investments. It has also lowered discounts.

Reducing outlays allowed Shopee, Sea’s e-commerce unit which accounts for about 60% of the top line, to join the financial technology and gaming units in turning a profit on an adjusted EBITDA basis. Net cash from operating activities also turned positive. That’s well ahead of the 12-to-18-month timeframe Li set out in a September memo. Overall cash and liquidity fell, but only because the company bought back some convertible debt.

Revenue improved, too, though, rising 7% in the quarter to $3.5 billion. It’s a welcome sign that upstart tech companies don’t always have to sacrifice profitability for growth. Little wonder shareholders bid the stock up 22%. (By Pranav Kiran)

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