SEA Q1 Earnings Call Highlights
SEA (NYSE:SE) reported a sharp increase in first-quarter 2026 revenue and crossed $1 billion in adjusted EBITDA for the first time, as growth in its e-commerce and financial services businesses offset continued investment across key initiatives.
Chairman and Chief Executive Officer Forrest Li said Sea generated more than $7 billion in revenue during the quarter, up 47% year over year, while adjusted EBITDA exceeded $1 billion. Li said 2026 is a year in which the company is “leaning into growth investments to deepen our competitive moats while maintaining financial discipline.”
Chief Financial Officer Tony Hou said total GAAP revenue rose 47% year over year to $7.1 billion, driven primarily by Shopee and Monee. total adjusted EBITDA increased 9% to $1 billion, and net income rose 7% year over year to $438 million.
Shopee posts record GMV and revenue
Sea’s e-commerce unit Shopee delivered what Li described as a record-setting quarter, reaching new highs in GMV, gross order value and revenue. Shopee GMV rose 30% year over year to $37.3 billion, while gross orders increased 29% to 4 billion. Shopee generated $5.1 billion in GAAP revenue, including $4.5 billion in marketplace revenue, up 44% year over year.
Hou said Shopee adjusted EBITDA was $223 million, down from $264 million in the prior-year quarter. He attributed the decline to increased investments in delivery, fulfillment, the Shopee VIP membership program and user acquisition, partially offset by higher monetization.
Li said Shopee’s ad revenue grew 80% year over year, while its ad take rate increased by more than 90 basis points. Ad-paying sellers and average ad spend both rose around 35% year over year. Average monthly active buyers increased 16%, and buyer purchase frequency grew around 12%.
Management said Shopee remains on track to grow full-year 2026 GMV by around 25% year over year, with full-year adjusted EBITDA no lower than 2025 in absolute dollar terms. In response to an analyst question, Hou said first-quarter growth benefited from Ramadan and Chinese New Year falling in the quarter, as well as initiatives including VIP, instant delivery and AI-enabled discovery.
Logistics, VIP and content remain priorities
Li highlighted logistics as one of Shopee’s most important differentiators. In Indonesia, he said instant delivery can deliver orders in as little as two hours in urban areas. Order volumes for the service grew more than 35% in the first quarter, while cost per order fell around 20% year over year. By the end of March, Shopee had around 7,000 offline stores available through instant services, including partnerships with convenience stores and pharmacy chains such as Indomaret.
The company is also expanding fulfillment. Li said fulfillment order volumes grew around 25% sequentially in the quarter. In Asia, more than one-third of parcels fulfilled by Shopee were delivered within the next day in March, which Li said was much higher than the platform average.
Shopee VIP subscribers across Asian markets surpassed 10 million by the end of March, up more than 40% from the previous quarter, with program retention averaging above 80%. Li said VIP members contribute around 20% of GMV across Asia and show double-digit spending uplift after subscribing, reaching 30% to 40% in some markets. Shopee launched the program in Brazil in April.
Orders from live streaming and short-form video grew more than 50% year over year and accounted for more than 25% of total physical goods orders in Southeast Asia. Li said orders driven by YouTube more than doubled, while Sea’s collaboration with Meta expanded to more than 4.5 million affiliates across its markets.
Brazil remains a key growth market
Li said Brazil was Shopee’s fastest-growing market in the first quarter while remaining profitable. Growth was supported by increases in active buyers, purchase frequency and average basket size, along with broader assortment, competitive prices and logistics cost advantages.
Shopee opened three new fulfillment centers in Brazil, bringing its total to five. GMV from Shopee Mall sellers more than doubled year over year and represented around 15% of GMV in the country.
Asked about profitability in Brazil, Li said Shopee has been profitable there for several consecutive quarters and that he does not foresee a change “at this point in time.” He said Sea will continue investing in fulfillment, same-day delivery and VIP in the market.
Monee loan book grows 71%
Monee, Sea’s financial services business, reported GAAP revenue growth of 58% year over year to $1.2 billion. Adjusted EBITDA increased 14% to $275 million. Consumer and SME loans principal outstanding reached $9.9 billion at the end of March, up 71% year over year, including $8.8 billion on-book and $1.1 billion off-book.
Li said credit remains the main growth driver for Monee. Active credit users surpassed 38 million, up more than 35% year over year, and the company added 4.9 million first-time borrowers during the quarter. Average loan outstanding per user rose to around $250, up 25% year over year.
Brazil became Monee’s fourth market to exceed $1 billion in loan book size, growing more than 250% year over year. Li said a localized product combining SPayLater and cash loan limits aligned well with how Brazilian consumers use credit. He also said SPayLater penetration on Shopee is around 10% of GMV in Brazil, leaving “substantial headroom for growth.”
Asset quality remained stable. Hou said non-performing loans past due by more than 90 days were 1.1% of total consumer and SME loans at quarter-end.
Garena delivers strongest quarter since 2021
Garena bookings rose 20% year over year to $931 million, while GAAP revenue increased 41% to $697 million. Adjusted EBITDA grew 25% to $574 million. Li said Garena delivered its best quarter since 2021, driven by Free Fire and record quarterly bookings from Arena of Valor.
Free Fire’s collaboration with the anime Jujutsu Kaisen generated more than 700 million official content views, according to Li. He also pointed to a global Ramadan campaign that generated more than 120 billion social media platform impressions, up around 70% from the prior year’s Ramadan campaign.
President Chris Feng said Arena of Valor’s first-quarter performance was not a one-off, citing deliberate investments in content updates and community engagement. He said Sea expects 2026 to be a record year for Arena of Valor, while noting that the first quarter is seasonally stronger for gaming due to Lunar New Year.
Management also emphasized Sea’s use of artificial intelligence across its businesses. Li said AI enhancements to search and recommendations supported a 14% year-over-year improvement in Shopee’s purchase conversion rate, while around 80% of customer queries are now handled by an AI chatbot, reducing customer service cost per contact by around 30% year over year.
About SEA (NYSE:SE)
Sea Limited (NYSE: SE) is a Singapore-based consumer internet company that operates a trio of interconnected businesses across digital entertainment, e-commerce and digital financial services. Founded in 2009 as Garena and later rebranded as Sea, the company is headquartered in Singapore and listed on the New York Stock Exchange. Sea positions itself as a technology platform focused on enabling online consumers, merchants and developers primarily across Southeast Asia and adjacent markets.
Sea's digital entertainment arm, Garena, is a game developer and publisher that also organizes esports initiatives and operates online gaming platforms.
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