Sea Limited (SE) stock fell Tuesday after the Singapore-based company reported mixed third-quarter 2026 results.

Revenue jumped 43.4% year over year to $8.58 billion, beating the analyst estimate of $8.05 billion. However, earnings of 78 cents per share missed expectations of 81 cents.

Shopee Fuels Growth As Competition Intensifies

Sea operates three main businesses: e-commerce platform Shopee, gaming unit Garena and financial-services arm Monee.

Shopee remained the company's main growth driver. However, competition from TikTok Shop, Lazada and Shein pressured pricing, Bloomberg reported Tuesday.

Shopee revenue surged 41.3% to $6.1 billion. Gross orders rose 25.5% to 4.5 billion, while gross merchandise volume climbed 23.3% to $39.7 billion.

The segment's adjusted EBITDA increased 44.7% to $269.2 million.

Garena revenue climbed 28.6% to $840.1 million. Bookings rose 5.9% to $890 million, while adjusted EBITDA jumped 45.9% to $458.2 million.

Quarterly active users edged up 0.1% to 671.7 million. Paying users increased 4.1% to 68.6 million, while average bookings per user rose to $1.33 from $1.25.

AI Spending Weighs on Profitability

Sea's consolidated adjusted EBITDA rose 28.9% to $931.3 million but missed the $990 million estimate.

Higher AI spending and intense e-commerce competition weighed on profitability, according to Bloomberg.

Meanwhile, Sea continues investing in AI, cloud computing and food delivery. The company is also expanding Shopee in Brazil and considering a potential Monee listing.

Bloomberg Intelligence warned that cloud expansion could require substantial spending on chips and storage before turning profitable.

Sea Expands Share Buyback Program

Sea generated $1.5 billion in operating cash flow during the quarter.

As of Sept. 30, cash, cash equivalents and restricted cash totaled $5.23 billion.

The company repurchased 11.1 million shares for $997.2 million under its existing $1 billion buyback program.

On Nov. 9, Sea's board authorized another $1 billion in share repurchases without an expiration date.

SE Price Action

SE Price Action: Sea shares were down 3.03% at $75.60 during premarket trading on Tuesday, according to market data.