Sea Group's Q3 2025 Earnings: A Tale of Two Metrics – Revenue Growth vs. EPS Underperformance

Sea Limited (NYSE: SE) has long been a poster child for Southeast Asia's digital transformation. Its third-quarter 2025 earnings report, released November 11, 2025, underscored this narrative with a 38.3% year-on-year revenue surge to $6.0 billion, driven by robust performance across all three core segments: e-commerce, digital financial services, and digital entertainment, according to a stocktitan.net report. Yet, beneath this impressive top-line growth lies a troubling divergence: the company's earnings per share (EPS) are expected to decline by 7.2% from the previous 30-day Zacks Consensus Estimate, with a projected $1.03 per share for Q3 2025, down from 54 cents in the same period in 2024, as reported in a Yahoo Finance article. This disconnect between revenue strength and EPS underperformance demands closer scrutiny.

Revenue Drivers: A Tripartite Engine of Growth

Sea's revenue expansion is fueled by its three business pillars. Shopee, the e-commerce arm, set new records in Gross Merchandise Value (GMV) and gross order volume, reflecting its dominance in a region where e-commerce adoption is accelerating, according to a stocktitan.net report. Meanwhile, Monee, the digital financial services segment, saw GAAP revenue jump 60.8% year-on-year to $989.9 million, a testament to the growing demand for mobile payments and lending in underbanked markets, according to a stocktitan.net report. Garena, the gaming division, also shone, with bookings rising 51% to $840.7 million, propelled by hits like Free Fire and cross-promotional campaigns such as Squid Game and NARUTO SHIPPUDEN Chapter 2, according to a stocktitan.net report.

EPS Divergence: The Cost of Scaling

Despite these gains, Sea's EPS trajectory tells a different story. The Zacks Consensus Estimate highlights a 7.2% decline in EPS expectations over the past month, contrasting with the 39.9% year-over-year revenue growth, as reported in a Yahoo Finance article. Several factors explain this divergence. First, operating expenditures-particularly sales and marketing expenses-have risen sharply. Shopee's aggressive expansion into new markets and its battle for user acquisition in a competitive e-commerce landscape have inflated costs, as reported in a Yahoo Finance article. Similarly, Garena's success with Free Fire (which retains over 100 million daily active users), as reported in a Yahoo Finance article, requires sustained investment in game development and marketing campaigns.

Second, SeaMoney's rapid loan portfolio growth-up 90% year-on-year to $6.9 billion-likely involves higher operational and risk management costs, as reported in a Yahoo Finance article. While this expansion is critical for long-term market penetration, it may temporarily compress margins. Third, the company's adjusted EBITDA of $874.3 million, while up from $521.3 million in Q3 2024, still reflects a net income of just $375 million for the quarter, as reported in a TradingView brief. This suggests that non-operating expenses, taxes, or share-based compensation may be eroding profitability.

Future Outlook: Balancing Growth and Profitability

The challenge for Sea lies in balancing its growth-at-all-costs strategy with shareholder returns. While its revenue growth validates its long-term vision, the EPS underperformance raises questions about short-term profitability. Analysts will be watching whether Sea can optimize its cost structure-particularly in marketing and user acquisition-without stifling growth. The absence of a Q3 2025 10-Q filing complicates deeper analysis, but the press release and consensus estimates provide enough insight to infer that reinvestment in core businesses is a key factor, according to a stocktitan.net report.

For investors, the key takeaway is that Sea's story is still one of scale and market capture. However, the EPS drag highlights the risks of investing in high-growth companies operating in capital-intensive, competitive environments. Those with a long-term horizon may tolerate the near-term EPS pressure, but those prioritizing near-term returns should weigh the trade-offs carefully.

Conclusion

Sea Limited's Q3 2025 results exemplify the classic tension between growth and profitability. While its revenue growth is a testament to its strategic acumen and regional dominance, the EPS underperformance underscores the costs of scaling in a hyper-competitive market. For now, the company appears willing to sacrifice short-term earnings to secure long-term market leadership-a calculus that may resonate with patient capital but test the patience of value-oriented investors.