Sea Limited Beats Revenue Forecast on Shopee Growth, Misses EPS Estimates

Sea Limited (NYSE: SE) delivered a mixed but largely positive Q2 2025 financial report, with robust revenue growth overshadowing a shortcoming in earnings per share (EPS) expectations. The company reported total GAAP revenue of $5.3 billion, a 38.2% increase year-over-year, exceeding the anticipated $5.12 billion [1]. This strong performance was driven by its e-commerce division, particularly through Shopee, which generated $3.8 billion in revenue—a 33.7% year-on-year increase. This growth was supported by a 28.2% rise in Gross Merchandise Volume (GMV) to $29.8 billion. Shopee’s success in Brazil, where it became the market leader by order volume, was a notable highlight [1].

The digital financial services segment also contributed significantly, with GAAP revenue rising 70% year-on-year to $882.8 million. This was primarily due to the expansion of its credit business, which saw consumer and SME loans outstanding increase by 94% to $6.9 billion. The digital entertainment segment, led by Garena, posted a 28.4% year-on-year revenue increase to $559.1 million, supported by a 23.2% rise in bookings to $661.3 million [1].

Despite the impressive top-line growth, Sea Limited reported an EPS of $0.68 on a basic basis and $0.65 on a diluted basis, both below the expected $0.99 [1]. The company ended the quarter with a net loss of $0.65 per share, falling short of the consensus estimate [2]. This EPS miss was attributed to margin pressures from rising competition and increased shipping costs, factors analysts had previously highlighted as potential headwinds [2].

Sea’s profitability metrics showed mixed results. The company achieved a gross profit of $2.4 billion, up 52.1% from the previous year, and net income of $414.2 million, compared to $79.9 million in the same period last year [1]. The net margin for the quarter stood at 4.87%, reflecting the challenges in converting strong revenue growth into equivalent profit gains [4].

Looking ahead, Sea Limited raised its full-year guidance for Garena, expecting bookings to grow by more than 30% year-over-year. The company attributed this optimism to the continued success of Free Fire and plans to explore new genres and markets, including the use of AI to enhance future gaming experiences. Shopee is expected to maintain its growth momentum in both Asia and Brazil, while the digital financial services segment anticipates continued expansion driven by Monee’s credit business [1].

Sea Limited’s management remains confident in its long-term growth strategy, with the CEO expressing optimism about delivering “another great year” in 2025 [7]. The company is committed to balancing growth with profitability, leveraging its strong performance across digital services and e-commerce to sustain its market position.

The market’s reaction to the earnings report was mixed. While the strong revenue beat reinforced confidence in Sea’s long-term growth trajectory, the EPS miss led to a more cautious investor response. Analysts noted that the company had missed revenue expectations by 1.2% in the previous quarter, indicating that while Sea is expanding, it still faces challenges in maintaining consistent profitability [6].

Sea Limited remains a key player in the digital services and e-commerce sectors. As the broader market continues to evaluate high-growth tech stocks, investors will be closely monitoring the company’s ability to convert revenue growth into sustainable earnings. With digital financial services and gaming expected to remain strong contributors, Sea’s strategic focus on innovation and operational efficiency will be critical for long-term success [7].

Source: [1] Sea Limited (SE) Reports Strong Revenue Growth with Q2 Results Despite EPS Miss (https://coinmarketcap.com/community/articles/689b1d7f65b2ba30b64e24e6/)

[2] Sea Limited Sponsored ADR (NYSE:SE) Holdings Boosted ... (https://www.marketbeat.com/instant-alerts/filing-sea-limited-sponsored-adr-nysese-holdings-boosted-by-connor-clark-lunn-investment-management-ltd-2025-08-09/)

[4] Sea Limited Sponsored ADR (NYSE:SE) Shares ... (https://www.marketbeat.com/instant-alerts/filing-sea-limited-sponsored-adr-nysese-shares-purchased-by-mitsubishi-ufj-asset-management-co-ltd-2025-08-10/)

[6] Sea (SE) To Report Earnings Tomorrow: Here Is What To Expect (https://markets.financialcontent.com/stocks/article/stockstory-2025-8-11-sea-se-to-report-earnings-tomorrow-here-is-what-to-expect)

[7] Sea Ltd Stock Price Today | NYSE SE (https://ca.investing.com/equities/sea-limited)