Sea Limited Q3 Earnings Miss Estimates, Revenues Increase Y/Y

Sea Limited SE reported adjusted earnings of 78 cents per share in the third quarter of 2025, which increased 44.4% from the year-ago quarter but missed the Zacks Consensus Estimate by 24.27%.

Revenues of $6 billion increased 38.3% on a year-over-year basis, primarily driven by growth in Gross Merchandise Value (GMV) for the e-commerce and digital financial services segments. The top line beat the Zacks Consensus Estimate by 3.35%.

SE’s Q3 Top-Line Details

Digital Entertainment (Garena): Digital Entertainment revenues were $653 million, marking year-over-year growth of 31.2%. The growth was primarily driven by an increase in the active user base and a deepening of paying user penetration.

Quarterly active users were 670.8 million, up 6.7% year over year.

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Quarterly paying users of 65.9 million increased 31.2% year over year. The paying user ratio was 9.8% in the third quarter compared with 8% in the year-ago quarter.

Average bookings per user in the reported quarter were $1.25 compared with $0.89 in the year-ago quarter.

The Garena segment reported strong growth in the third quarter, with total bookings reaching $840.7 million, marking a 51.1% year-over-year increase.

E-commerce (Shopee): E-commerce service revenues totaled $4.3 billion, up 34.9% year over year, which includes GAAP marketplace revenues of $3.8 billion and GAAP product revenues of $0.5 billion.

GMV increased by 28.4% year on year to $32.2 billion in the second quarter.

Gross orders for the quarter reached 3.6 billion, representing a 28.4% year-over-year increase.

Shopee strengthened its market leadership in Asia and Brazil, driven by its highly price-competitive product offerings. The platform’s average monthly active buyers grew 15% year over year in the third quarter.

Digital Financial Services (Rebranded to Monee): Digital Financial Services’ revenues surged 60.8% year over year to $989.9 million. The uptick was driven by strong growth in its loan book, which reached $7.9 billion, up 69.8%.

Non-performing loans over 90 days were stable at 1.1% of total consumer and SME loans in the reported quarter, indicating strong credit quality.

Sales of goods increased 23.8% year over year to $517.7 million in the third quarter.

Other Services, which encompass a mix of various business activities, increased 58.7% year over year to $46.8 million in the third quarter.

Sea Limited’s Operating Details

Gross profit increased 39.7% year over year to $2.6 billion in the third quarter. The company’s gross margin expanded 40 basis points (bps) year over year to 43.4%.

Sea Limited reported an adjusted EBITDA of $874.3 million in the quarter under review, up 67.7% year over year, representing an adjusted EBITDA margin of 14.6%, which expanded 260 bps.

Digital Entertainment's adjusted EBITDA rose 48.2% year over year to $465.9 million in the third quarter, from $314.4 million in the prior-year period.

E-commerce adjusted EBITDA reached $186.1 million in the third quarter, up sharply from $34.4 million in the same period last year.

Digital Financial Services adjusted EBITDA increased 37.5% year over year to $258.3 million, up from $187.9 million in the prior-year period.

SE’s Balance Sheet & Cash Flow

As of Sept. 30, 2025, SE had cash and cash equivalents of $3.07 billion compared with $2.17 billion as of June 30, 2025.

The company generated $1.18 billion in cash from operating activities in the reported quarter compared with $1.62 billion in the previous quarter.

SE’s Zacks Rank & Stocks to Consider

Currently, Sea Limited carries a Zacks Rank #3 (Hold).

NVIDIA NVDA, Dell Technologies DELL and Nutanix NTNX are some top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Each stock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NVIDIA shares have gained 43.9% in the year-to-date period. NVDA is set to report its third-quarter fiscal 2026 results on Nov. 19.

Dell Technologies' shares have appreciated 21% year to date. DELL is set to report its third quarter of fiscal 2026 results on Nov. 25.

Nutanix shares have returned 12.3% year to date. NTNX is set to report its first quarter of fiscal 2026 results on Nov. 25.

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