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Sea Limited (SE) reported fiscal first-quarter 2026 results on Tuesday, posting strong revenue growth but missing Wall Street earnings expectations.
The company reported quarterly revenue of $7.10 billion, up 46.6% year over year and ahead of the analyst consensus estimate of $6.41 billion. Earnings came in at 67 cents per share, below expectations of 70 cents per share.
Sea generates revenue through three main businesses: Garena, Shopee and Monee. Garena generates revenue from in-game purchases and advertising, Shopee earns from transaction fees, seller services and advertising, while Monee generates income through transaction fees and financial products, including loans and insurance.
Shopee revenue rose 45.1% year over year to $5.1 billion, driven mainly by higher gross merchandise volume (GMV). Gross orders increased 29.3% to 4.0 billion, while GMV climbed 30.2% to $37.3 billion. Adjusted EBITDA declined 15.6% year over year to $223.2 million.
Chief Executive Officer Forrest Li said Shopee delivered record GMV, order volume and revenue growth during the quarter, supported by stronger monetization, advertising revenue and higher buyer and seller engagement.
Li said Shopee expanded instant and same-day delivery services, increased fulfillment operations and strengthened partnerships with convenience stores and pharmacies in Indonesia. He added that Shopee VIP subscriptions surpassed 10 million users across Asia, with retention rates above 80%, while VIP members accounted for about 20% of regional GMV.
President Chris Feng said initiatives such as instant delivery, VIP memberships and AI-powered product discovery contributed to stronger-than-expected growth. He added that Shopee plans to continue investing in fulfillment centers, same-day delivery and memberships, particularly in Brazil.
Li also said Sea embedded AI tools across its platform to improve product discovery, advertising targeting, seller tools and customer service efficiency. AI chatbots now handle about 80% of customer queries while reducing customer service costs per contact by about 30%, he said.
Monee revenue rose 57.8% year over year to $1.2 billion, driven by growth in its lending business. Adjusted EBITDA increased 14.0% to $275.2 million.
Li said SeaMoney's loan book grew more than 70% year over year to $9.9 billion while maintaining a 90-day non-performing loan ratio of 1.1%.
He highlighted Brazil as a key growth market, noting that it became SeaMoney's fourth market to surpass $1 billion in loans outstanding, rising more than 250% year over year.
Feng added that off-Shopee SPayLater loans now account for more than 20% of the SPayLater portfolio in some markets as the company expands partnerships with merchants, retailers and payment networks.
Garena revenue rose 40.6% year over year to $696.6 million. Bookings increased 20.1% to $931.4 million, while adjusted EBITDA rose 25.2% to $573.6 million.
Quarterly active users increased 0.7% year over year to 666.5 million, while paying users rose 12.4% to 72.6 million. Average bookings per user increased to $1.40 from $1.17 a year earlier.
Li said Garena delivered its strongest quarter since 2021, driven by titles including Free Fire and Arena of Valor. He said Free Fire's collaboration with the anime "Jujutsu Kaisen" generated more than 700 million official content views.
Feng said Arena of Valor achieved record bookings in its 10th year, supported by ongoing investments in content updates and player engagement.
Sea generated $1.06 billion in operating cash flow during the quarter. As of March 31, 2026, the company held $6.30 billion in cash, cash equivalents and restricted cash.
Li said Sea continued investing aggressively in logistics, AI, memberships and financial services while maintaining profitability and strengthening its competitive position.
SE Price Action: Sea shares were up 11.01% at $94.21 at the time of publication on Tuesday.
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