SE — Sea Limited

Sea Limited Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: $7.1 billion, up 47% year-on-year.
• Adjusted EBITDA: Exceeded $1 billion for the first time, up 9% year-on-year.
• Shopee:
  • GMV: $37.3 billion, a 30% increase year-on-year.
  • Gross orders: $4 billion, up 29% year-on-year.
  • Adjusted EBITDA: $223 million, down from $464 million year-on-year.
• Money Segment:
  • Revenue: $1.2 billion, up 58% year-on-year.
  • Adjusted EBITDA: $275 million, up 14% year-on-year.
  • Loan book: $9.9 billion, a 71% increase year-on-year.
• Garena:
  • Bookings: $931 million, up 20% year-on-year.
  • Adjusted EBITDA: $574 million, up 25% year-on-year.

2. Strategic Updates and Business Highlights

• Shopee:
  • Continued investment in logistics and fulfillment, with a focus on instant delivery services.
  • Shopee VIP program saw strong growth, with over 10 million subscribers, contributing 20% of GMV.
  • Enhanced content ecosystem with significant growth in orders from live streaming and short-form video.
• Money Segment:
  • Focus on expanding credit offerings, with successful penetration in Brazil and off-Shopee lending.
  • Stable asset quality with a 90-day NPL ratio of 1.1%.
• Garena:
  • Successful collaborations with popular IPs, including "Jujutsu Kaisen," leading to record engagement and bookings.
  • Emphasis on localized content and global campaigns to enhance player engagement.

3. Forward Guidance and Outlook

• Shopee:
  • Targeting a full-year GMV growth of around 25% year-on-year, with adjusted EBITDA expected to be no lower than 2025 in absolute terms.
• Money:
  • Continued expansion into new user segments and off-Shopee use cases, particularly in Brazil.
• Garena:
  • Confidence in maintaining strong year-on-year bookings growth, especially for Arena of Valor.

4. Bad News, Challenges, or Points of Concern

• Shopee's Adjusted EBITDA Decline: The decrease from $464 million to $223 million year-on-year due to increased investments in growth initiatives.
• Competitive Pressures: Increased investments from competitors in Brazil may impact market share and margins.
• Cost Inflation: Rising fuel prices could affect operational costs, although management believes they can absorb these increases.
• Market Uncertainty: Management expressed caution regarding future guidance due to macroeconomic uncertainties.

5. Notable Q&A Insights

• VIP Program Economics: Management is focused on optimizing the value offered to consumers and potentially adjusting subscription pricing based on market response.
• Brazil's Growth and Profitability: Brazil has been profitable, with expectations of maintaining healthy margins despite increased investments in fulfillment and logistics.
• Gaming Performance: Arena of Valor's strong performance is expected to continue, bolstered by upcoming content and seasonal events, though seasonality may affect quarterly performance.
• Buyback Strategy: Management remains committed to share buybacks, citing confidence in the long-term growth potential of their three verticals.

Overall, Sea Limited reported strong growth across its segments in Q1 2026, with strategic investments aimed at enhancing its competitive position. However, challenges such as rising costs and competitive pressures in key markets were acknowledged.