What happened

Shares of Sea Ltd (NYSE:SE) jumped on Wednesday after the internet company reported its first-quarter results. Sea reported strong revenue growth across all of its segments, which led investors to push the stock up about 12.6% by market close.

So what

Sea reported first-quarter adjusted revenue of $197 million, up 81.2% year over year. Digital entertainment accounted for $146 million of revenue, up 42.6% year over year. The e-commerce segment recorded a gross merchandise value of $1.9 billion during the quarter, nearly tripling from the prior-year period, while the digital financial services segment increased gross transaction value by more than 400% to $1.7 billion.

The lobby of a Sea Ltd office.

Image source: Sea Ltd.

This massive growth came with equally massive losses. Sea lost $205.5 million on an adjusted basis, more than three times more than the first quarter of 2017. The non-digital entertainment businesses are currently operating at a severely negative gross margin, and total operating expenses more than doubled year over year.

The company is focused squarely on growth: "We will continue to invest in growth, and to focus on improving our services to our platform users, as well as the infrastructure supporting our core businesses," said Sea CEO Forrest Li.

Now what

Sea is losing an incredible amount of money as it tries to grow revenue as fast as possible. Investors seem to be on board with that approach for now, but Sea's heavy spending is clearly not sustainable. The company spent $127.2 million on sales and marketing for the e-commerce business during the quarter, while bringing in just $33.7 million of adjusted revenue.

The market overlooked those losses on Wednesday, instead focusing on the rapidly growing revenue. The stock dropped in February when the company reported the same combination of fast growth and big losses in the fourth quarter of 2017, so it seems that investors have warmed a bit to the stock.

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