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.
Sea Limited Sponsored ADR Price, Consensus and EPS Surprise
Sea Limited Sponsored ADR price-consensus-eps-surprise-chart | Sea Limited Sponsored ADR Quote
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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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
