Sea Limited (NYSE:SE) shares climbed 8.91% in pre-market trading on Tuesday after the Singapore-based technology group delivered stronger-than-expected second-quarter revenue and highlighted continued momentum across its Shopee, Monee and Garena businesses.
Adjusted earnings per share came in at $0.70, below the analyst consensus of $0.83. However, revenue surged 48.1% year-on-year to $7.79 billion, comfortably exceeding the $7.09 billion expected by analysts.
The positive share-price reaction suggests investors placed greater emphasis on accelerating top-line growth and the company’s improved outlook than on the quarterly earnings miss.
Shopee revenue climbs 48% as e-commerce activity expands
Sea’s Shopee e-commerce business delivered another quarter of strong growth, with revenue increasing 48.2% from the same period last year.
Gross merchandise volume reached $38.3 billion, representing year-on-year growth of 28.4%, while gross orders increased 27.5% to 4.2 billion.
Shopee generated adjusted EBITDA of $255.4 million, up 12.2% year-on-year.
“Our strong momentum from the first quarter has continued into the second,” said Forrest Li, Sea’s Chairman and Chief Executive Officer. “We are optimistic that Shopee will achieve the milestone of $1 billion in adjusted EBITDA for the full year.”
Reaching that target would mark an important profitability milestone for a platform that remains a major driver of Sea’s overall growth.
Monee loan portfolio expands more than 60%
Monee, Sea’s digital financial services division, recorded the fastest revenue growth of the company’s three major businesses, increasing 58.9% year-on-year.
Its loan portfolio expanded 62.5% to $11.1 billion, while adjusted EBITDA increased 12.8% to $288.0 million.
Despite the rapid expansion in lending, non-performing loans remained stable at 1.0% of total outstanding loans.
The combination of strong credit growth and stable non-performing loans provides an important operating indicator as Monee continues scaling its financial services business.
Garena maintains growth across bookings and EBITDA
Sea’s digital entertainment division Garena also contributed to the quarter’s broad-based growth, with revenue increasing 33.5% year-on-year.
Bookings rose 15.5% to $763.5 million, while adjusted EBITDA advanced 16.7% to $429.8 million.
The performance means all three of Sea’s core businesses delivered double-digit revenue growth during the quarter, reducing reliance on any single division to drive the group’s expansion.
Why Sea Limited shares are rising despite the earnings miss
Sea’s adjusted EPS shortfall provides a counterweight to the headline growth figures, but the quarter delivered several metrics that help explain the strong pre-market reaction.
Revenue exceeded expectations while growing 48.1%, Shopee continued expanding GMV and orders, Monee’s loan portfolio grew more than 60%, and Garena increased both bookings and adjusted EBITDA.
Management’s expectation that Shopee can generate $1 billion in adjusted EBITDA for the full year adds another forward-looking catalyst. Investors will now be watching whether Sea can sustain its rapid revenue expansion while converting that growth into stronger earnings across its three major businesses.
Sea Ltd stock price
