Sea Ltd., the Singapore-based owner of e-commerce platform Shopee, said on Tuesday that third-quarter net income rose 34% to $502.5 million as revenue jumped 43.4% to $8.6 billion, and its board approved another $1 billion for share buybacks.

The results give investors a read on online spending across Southeast Asia, where Sea says Shopee is the largest e-commerce platform. They also show the cost of that growth. Sales and marketing expenses rose 64% from a year earlier to $1.9 billion, and provisions for credit losses at the group's lending business rose 82.3% to $681.5 million, according to the company's results release filed with the U.S. Securities and Exchange Commission.

Diluted earnings per share were 78 cents, compared with 59 cents a year earlier. Group adjusted EBITDA increased 28.9% to $931.3 million, a slower pace than revenue. Operating income rose 39.5% to $664.2 million.

Shopee orders up 25.5%

Shopee handled 4.5 billion gross orders in the quarter, up 25.5% from a year earlier. Gross merchandise value, the total value of goods sold on the platform, rose 23.3% to $39.7 billion.

Shopee's revenue grew faster than the goods it sold, which means the platform is taking a larger cut of each transaction. Core marketplace revenue, mostly transaction fees and advertising, rose 50.6% to $4.6 billion. Value-added services revenue, mainly logistics, was flat at $724.4 million.

Adjusted EBITDA at Shopee rose 44.7% to $269.2 million. Chairman and Chief Executive Forrest Li said in the release that Shopee reached "new record highs in both top- and bottom-line metrics." The unit's cost base still grew fast. Shopee's sales and marketing spending rose 60% to $1.43 billion, and its cost of revenue rose 36.8% to $3.5 billion, which the company attributed to higher logistics costs as order volumes grew and to investment in delivery capabilities.

Monee loan book grows 60%, bad loans tick up

Monee, the digital financial services arm that Sea is preparing to list separately, was the fastest-growing segment. Revenue rose 63.9% to $1.6 billion, driven by consumer and small business lending.

Loans outstanding reached $12.6 billion at the end of September, up 60% from a year earlier. Of that, $11.2 billion was held on Sea's balance sheet and $1.3 billion was off-book lending by partner financial institutions on its platform.

Credit quality weakened slightly. Loans more than 90 days past due were 1.3% of the total, up from 1.1% a year earlier. Monee's adjusted EBITDA rose only 15.5% to $298.3 million, far behind its revenue growth, as credit-loss provisions and a 111.8% jump in Monee's marketing spending to $334.6 million ate into margins. Monee's cost of revenue rose 43.9%, which the company linked to higher interest expense on customer deposits, funding costs and collection expenses.

For investors weighing a Monee listing, the gap between loan growth and earnings growth is the figure to watch: the lending arm is expanding its book faster than it is expanding profit.

Garena profit rises 45.9%

Garena, the games unit best known for Free Fire, posted bookings of $890 million, up 5.9%. Revenue rose 28.6% to $840.1 million, and adjusted EBITDA increased 45.9% to $458.2 million, making Garena the largest contributor to segment earnings in the quarter.

Quarterly active users were little changed at 671.7 million, while paying users rose 4.1% to 68.6 million. Average bookings per user rose to $1.33 from $1.25. Li said Arena of Valor had kept up its momentum after its 10th anniversary celebrations.

The group's "other services" segment, which Sea does not break out further, posted an adjusted EBITDA loss of $83.9 million, more than three times the $25.1 million loss a year earlier. The release lists artificial intelligence, cloud and infrastructure initiatives among the risks attached to new business lines.

Buyback extended

Sea said it had repurchased 11.1 million shares for $997.2 million under its existing $1 billion program, close to using it up. On Nov. 9, the board approved a further $1 billion, with no expiration date. The company said the timing and size of purchases would depend on market conditions.

Below the operating line, Sea booked $123.3 million of net non-operating income, double the year-earlier figure, including a $65.2 million investment gain and $62.2 million of interest income. Income tax expense rose 74% to $280.4 million.

Sea was founded in Singapore in 2009 but its shares trade on the New York Stock Exchange. Its next results will be for the fourth quarter and full year; the company filed last year's equivalent report with the SEC on March 3.