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    Earnings call· Mar 2025(Q1 FY25)

    Sea Q1 FY25 earnings call SE

    May 13, 2025 Source

    Executive summary

    Sea Limited Q1 FY25 — Strong Growth and Profitability Across All Businesses

    Sea Limited delivered a strong Q1 FY25, with all three core businesses — Shopee, Monee, and Garena — achieving significant growth and improved profitability, positioning the company for continued success. The company remains confident in its full-year guidance, driven by enhanced monetization, cost optimization, and strategic market penetration, while actively managing capital allocation and risk.

    Highlights

    5

    • Shopee achieved record-high GMV of $28.6 billion and gross order volume of 3.1 billion, with adjusted EBITDA of $264 million in Q1 FY25, up from a loss of $22 million in Q1 FY24.

    • Monee (Digital Financial Services) revenue grew 58% YoY to $787 million and adjusted EBITDA grew 62% YoY to $241 million in Q1 FY25.

    • Garena (Digital Entertainment) bookings grew 51% YoY to $775 million and adjusted EBITDA grew 57% YoY to $458 million in Q1 FY25, marking its best quarter since 2021.

    • Shopee's average monthly active buyers grew over 15% YoY, and ad revenue grew over 50% YoY in Q1 FY25.

    • Monee's loan book grew over 75% YoY to $5.8 billion, with 90-day NPL ratio stable at 1.1%.

    Concerns

    2

    • Potential impact of ForEx rate fluctuations on Shopee's reported numbers, though operations are less affected due to local marketplace focus.

    • Expected quarterly volatility in Garena's bookings due to seasonality and one-off successful collaborations like NARUTO, despite strong Q1 performance.

    Guidance & targets

    3
    CategoryTargetConfidence
    Shopee GMV growth
    20%
    high materiality
    High
    Garena user base and bookings growth
    double-digit growth
    medium materiality
    High
    Monee loan book growth and credit quality
    strong loan book growth while maintaining sound credit quality
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    E-commerce (Shopee)
    Sustained market leadership with improved profitability across both Asia and Brazil. Unit economics improved, largely driven by continued scale expansion, cost optimization, and enhanced monetization, especially from advertising.
    Gross orders: 3.1 billionGross orders growth: 20% year-on-yearGMV: $28.6 billionGMV growth: 22% year-on-yearGAAP marketplace revenue: $3.1 billionGAAP marketplace revenue growth: 29% year-on-yearGAAP product revenue: $0.4 billionCore marketplace revenue: $2.4 billionCore marketplace revenue growth: 39% year-on-yearValue-added services revenue: $0.8 billionValue-added services revenue growth: 4% year-on-year
    		$3.5 billion——$264 million
    Digital Financial Services (Monee)
    Delivered another strong set of results, with both revenue and adjusted EBITDA growing more than 50% year-on-year. This growth was delivered while maintaining stable asset quality, reflecting continued commitment to prudent risk management.
    Consumer and SME loans principal outstanding: $5.8 billionConsumer and SME loans principal outstanding growth: 75% year-on-yearOn-book loans principal outstanding: $4.9 billionOff-book loans principal outstanding: $0.9 billionNon-performing loans past due by more than 90 days: 1.1%Active users for consumer and SME loan products: 28 millionActive users for consumer and SME loan products growth: 50% year-on-yearThailand loan book: >$1 billion
    		$787 million58%—$241 million
    Digital Entertainment (Garena)
    Had a stellar start to 2025, with its best quarter since 2021. In the first quarter, Garena's total bookings grew 51% and adjusted EBITDA grew 57% year-on-year.
    Bookings: $775 millionBookings growth: 51% year-on-yearFree Fire average DAU: close to peak quarterly average DAU during the pandemic
    		$496 million——$458 million

    Operational metrics

    20
    Total GAAP revenue
    $4.8 billion30% year-on-year
    Q1 FY25

    Total GAAP revenue for Sea overall. This is a GAAP statement line, captured due to explicit user request.

    Net non-operating income
    $89 millioncompared to a net non-operating loss of $18 million in Q1 FY24
    Q1 FY25

    Net non-operating income for Sea overall. This is a GAAP statement line, captured due to explicit user request.

    Net income tax expense
    $136 millioncompared to $79 million in Q1 FY24
    Q1 FY25

    Net income tax expense for Sea overall. This is a GAAP statement line, captured due to explicit user request.

    Net income
    $411 millioncompared to a net loss of $23 million in Q1 FY24
    Q1 FY25

    Net income for Sea overall. This is a GAAP statement line, captured due to explicit user request.

    Shopee VIP membership subscribers
    1 million
    as of end of March

    Number of users subscribed to the Shopee VIP membership program in Indonesia.

    Shopee Ad revenue growth
    more than 50%year-on-year
    Q1 FY25

    Growth in advertising revenue for Shopee.

    Shopee Average monthly active buyers growth
    over 15%year-on-year
    Q1 FY25

    Growth in average monthly active buyers on Shopee.

    Shopee Logistics cost-per-order reduction
    6%year-on-year
    Q1 FY25

    Reduction in Shopee's overall logistics cost-per-order in Asia.

    Shopee Logistics cost-per-order reduction
    21%year-on-year
    Q1 FY25

    Reduction in Shopee's overall logistics cost-per-order in Brazil.

    Shopee Sellers using ad products growth
    22%year-on-year
    Q1 FY25

    Increase in the number of sellers who spent on Shopee's ad products.

    Shopee Average ad spend growth
    28%year-on-year
    Q1 FY25

    Increase in average ad spend by sellers on Shopee.

    Shopee Content-driven orders % of physical goods order volume
    about 1/5
    Q1 FY25

    Proportion of total physical goods order volume driven by content (live streaming and short videos).

    YouTube videos with Shopee product links
    over 4 million
    as of March

    Number of YouTube videos with embedded Shopee product links, following partnership expansion.

    Monee First-time borrowers added
    over 4 million
    Q1 FY25

    Number of new users who took out a loan product from Monee.

    Monee Off-Shopee SPayLater loans % of total loan book
    over 10%
    Q1 FY25

    Proportion of Monee's total loan book in Malaysia attributed to off-Shopee SPayLater loans.

    ShopeePay financial services app downloads
    30 million
    as of March

    Total downloads for the standalone ShopeePay financial services app in Indonesia.

    Delta Force Mobile downloads
    over 10 million
    since launch

    Total downloads for the newly published game Delta Force Mobile.

    Shopee EBITDA over GMV long-term target
    2% to 3%
    long-term

    Management's long-term target for Shopee's EBITDA margin as a percentage of GMV.

    Shopee Ad take rate increase
    50 basis points
    from last year

    Improvement in Shopee's ad take rate.

    Shopee Brazil delivery time shortened
    2 to 3 daysversus last year
    Q1 FY25

    Improvement in delivery time for Shopee in Brazil.

    Industry KPIs

    5
    MetricValueDetails
    Segment revenue mix$3.5 billionUSD
    Regional market performance—
    Advertising revenue take ratemore than 50%%
    Subscription membership programmore than 1 millionusers
    Operating income EBIT and adjusted EBITDA$947 millionUSD

    Product announcements

    3
    ProductTypeDetails
    Monee (rebranding from SeaMoney)update
    Delta Force Mobilelaunch
    Free Citylaunch

    Deals & partnerships

    1
    YouTubeExpanded collaboration for content monetization and sales

    Partnership expanded to all six Southeast Asian markets, allowing creators to monetize engagement and sellers to tap YouTube traffic. Over 4 million YouTube videos had Shopee product links embedded as of March.

    Risks & headwinds

    3
    ForEx rate fluctuations

    Can fluctuate quite a lot from time to time

    Mitigation: Monitor closely; operations less impacted due to local marketplace focus.

    Quarterly volatility in Garena bookingsQuarter-over-quarter

    Some volatility expected

    Mitigation: Focus on product and long-term growth; strong Q1 was partly due to seasonality and one-off successful IP collaboration (NARUTO).

    Macro uncertainties

    Not seen a material impact to Shopee growth

    Mitigation: Shopee's local, price-driven marketplace model provides resilience; focus on price advantage, service, and cost optimization.

    What to watch in Q2 FY25

    5

    Shopee GMV Growth

    Next quarter
    Current22% YoY (Q1 FY25)
    TargetMaintain 20% full-year guidance

    Why it matters

    Key indicator of e-commerce market share and overall company growth, reflecting market penetration and competitive positioning.

    With solid first quarter results, we remain confident of achieving our full-year GMV growth guidance of 20% with improving profitability.

    Q&A highlights

    6

    What drove Shopee's Q1 profitability improvement and what's the outlook? How does macro uncertainty affect GMV guidance? What's driving Monee's loan book growth and what are the return/margin profiles?

    Shopee's profitability was driven by Q1 seasonality (Ramadan), improved ad take rates (up 50bps YoY), cost optimization (logistics cost-per-order down 6% in Asia, 21% in Brazil), and AI for operations. The long-term EBITDA over GMV target is 2% to 3%, but growth is prioritized. Macro impact on Shopee is limited due to its local, price-driven marketplace model. Monee's growth stems from higher SPayLater penetration on Shopee and off-Shopee products like cash loans and offline SPayLater. Margins are good, with some fluctuation expected due to country/product mix.

    “if you look at the rest of the year, we believe the top line guidance of 20% growth still stays. If you look at the profit side, as a long-term trend, we're still targeting around 2% to 3% of the EBITDA over GMV.”

    asked by Pang Vittayaamnuaykoon · answered by Feng Zhimin

    2 min read5 chapters

    Detailed Narrative

    01

    Monee Rebranding and Strategic Vision

    SeaMoney rebranded to Monee (M-O-N-E-E) on May 8th, reflecting its seamless connection with Shopee. The digital financial services business, with a decade-long history, aims to provide simple, accessible, and inclusive solutions. Monee is expanding beyond payments and credit to banking, investment, and insurance, with a commitment to creating financial freedom and empowerment for consumers and small businesses, leveraging technology for both current and future generations.

    02

    Shopee Operational Efficiencies and Customer Engagement

    Shopee's strong Q1 FY25 performance was driven by enhanced price competitiveness, improved service quality, and a strengthened content ecosystem. Logistics cost-per-order decreased by 6% in Asia and 21% in Brazil year-on-year, alongside improved delivery times. New initiatives include an instant delivery option in Indonesia and a Shopee VIP membership program, which attracted over 1 million subscribers by March, demonstrating significantly higher purchase frequency and spend.

    03

    Shopee Seller Empowerment and Content Ecosystem Growth

    Shopee is empowering sellers with intelligent tools like the Shopee AI Assistant for customer queries and GMV Max for ad campaigns, leading to a 22% increase in sellers using ad products and a 28% increase in average ad spend year-on-year. Content-driven orders, including live streaming and short videos, now account for approximately one-fifth of total physical goods order volume in Southeast Asia. The partnership with YouTube has expanded to all six Southeast Asian markets, with over 4 million embedded product links.

    04

    Monee Loan Book Diversification and Prudent Risk Management

    Monee's loan book growth is fueled by increased SPayLater penetration within Shopee and the expansion of off-Shopee products, such as cash loans and offline SPayLater. The loan portfolio is diversifying across markets, with Thailand's loan book surpassing $1 billion and robust growth in Brazil. The company maintains a proactive and dynamic approach to credit risk management, leveraging ecosystem insights and short loan tenures (typically three to six months) to adjust underwriting thresholds and pricing quickly in response to macroeconomic changes.

    05

    Garena's Stellar Performance and Portfolio Expansion

    Garena achieved its best quarter since 2021 in Q1 FY25, driven by Free Fire and other titles. The NARUTO SHIPPUDEN collaboration was a resounding success, boosting Free Fire's average DAU to near pandemic peaks and reactivating churned players. Garena is expanding its game portfolio with new launches like Delta Force Mobile, which garnered over 10 million downloads since its April launch, and the upcoming open-world adventure game Free City, set for a phased launch in May.

    AI-generated summary of the company’s earnings call. Not investment advice.