Sea Reports Q2 2025 Earnings: Revenue Surges 38%, EPS Increases 394% Despite Missing Estimates

Sea's Q2 2025 earnings beat expectations, with revenue up 38% to $5.26b and net income up 408% to $406m. Profit margin increased to 7.7%, driven by higher revenue. However, EPS missed analyst estimates by 6.4%, coming in at $0.69. The company's shares are up 18% from a week ago, with revenue forecast to grow 16% p.a. over the next 3 years.

Sea Limited (NYSE: SE) reported its Q2 2025 financial results on August 12, 2025, delivering a strong performance that exceeded analysts' expectations. The company's revenue for the quarter came in at $5.26 billion, up from the anticipated $4.96 billion, representing a 38% year-over-year (YoY) increase. Net income rose significantly to $406 million, up 408% YoY, while the profit margin increased to 7.7%, driven by higher revenue [1].

Despite the impressive top-line growth, Sea Limited's earnings per share (EPS) came in at $0.65 on a basic basis and $0.65 on a diluted basis, both below the expected $0.99. This EPS miss was attributed to margin pressures from rising competition and increased shipping costs [1].

The strong results were driven primarily by the company's e-commerce platform, Shopee, and its gaming division, which includes the popular game "Free Fire". Shopee's revenue grew by 33.7% YoY to $3.8 billion, while the gross merchandise value (GMV) increased by 28% to $29.8 billion. The digital entertainment segment, led by Garena, saw a 28.4% YoY increase in revenue to $559.1 million, supported by a 23.2% rise in bookings to $661.3 million [1].

Sea's digital financial services segment also contributed significantly to the quarter's growth. Revenue from this segment rose by 70% YoY to $882.8 million, driven by a 94% increase in consumer and SME loans outstanding to $6.9 billion. The non-performing loan ratio remained at 1.0%, indicating strong loan quality [2].

Looking ahead, Sea Limited raised its full-year guidance for Garena, expecting bookings to grow by more than 30% YoY. 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 shares surged 18% intra-day following the announcement, reflecting investor confidence in the company's long-term growth trajectory. The market's reaction was mixed, with some analysts noting that while Sea is expanding, it still faces challenges in maintaining consistent profitability [3].

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 [1].

References:
[1] https://finance.yahoo.com/news/sea-limited-q2-2025-preview-183838136.html
[2] https://www.ainvest.com/news/sea-limited-beats-revenue-forecast-shopee-growth-misses-eps-estimates-2508/
[3] https://site.financialmodelingprep.com/market-news/fmp-sea-limited-shares-jump-18-after-revenue-beat-despite-eps-miss