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    Earnings call· Mar 2026(Q1 FY26)

    Sea Q1 FY26 earnings call SE

    May 12, 2026 Source

    Executive summary

    Sea Limited Q1 FY26 — Strong Growth Across Verticals Driven by Strategic Investments and AI

    Sea Limited delivered a strong Q1 FY26, with robust revenue and adjusted EBITDA growth across its Shopee, Money, and Garena segments. The company is strategically investing in key areas like logistics, membership programs, and AI to deepen its competitive moat and drive long-term value, while maintaining financial discipline. Brazil emerged as a key growth driver, and AI integration is significantly enhancing operational efficiency and user experience.

    Highlights

    5

    • Total revenue grew 47% year-on-year to over $7 billion.

    • Adjusted EBITDA exceeded $1 billion for the first time, up 9% year-on-year.

    • Shopee GMV grew 30% year-on-year to $37.3 billion, with adjusted EBITDA over $220 million.

    • Money's loan book reached $9.9 billion, increasing over 70% year-on-year, while maintaining a stable 90-day NPL ratio of 1.1%.

    • Garena bookings were up 20% year-on-year to $931 million, with adjusted EBITDA growing 25% year-on-year.

    Concerns

    2

    • Shopee's adjusted EBITDA decreased to $223 million in Q1 2026 from $464 million in Q1 2025, reflecting increased investments in growth initiatives.

    • Potential impact of higher fuel prices on operational costs and consumer spending, though management believes it is manageable within guidance.

    Guidance & targets

    5
    CategoryTargetConfidence
    Shopee annual GMV growth
    around 25% year-on-year
    high materiality
    High
    Full year adjusted EBITDA
    no lower than 2025 in absolute dollar terms
    high materiality
    High
    Garena full-year bookings growth
    strong year-on-year bookings growth
    medium materiality
    High
    Arena of Valor annual performance
    record year
    medium materiality
    High
    E-commerce EBITDA margin
    2% to 3%
    high materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Shopee
    Shopee delivered record highs in GMV, gross order volumes, and revenue, driven by strategic investments in logistics, the VIP program, and content. Brazil was the fastest-growing market, maintaining profitability. AI integration significantly improved efficiency and user experience.
    GMV: $37.3 billion (30% YoY growth)Gross orders: 4 billion (29% YoY growth)GAAP marketplace revenue: $4.5 billion (44% YoY growth)Core marketplace revenue (transaction-based fees and advertising): $3.8 billion (61% YoY growth)Value-added services revenue (logistics): $0.7 billionGAAP product revenue: $0.6 billionAd revenue: 80% YoY growthAd take rate: increased >90 bps YoYPaying sellers and average ad spend: increased ~35% YoYAverage monthly active buyers: 16% YoY increaseBuyer purchase frequency: ~12% YoY growthOrders from live streaming and short-form video: >50% YoY growth (25% of total physical goods orders in Southeast Asia)Orders driven by YouTube: more than doubled YoYMeta affiliates: 4.5 million (up ~30% QoQ)Instant delivery service cost per order in media: ~20% YoY reductionInstant delivery order volumes: >35% growth in Q1Offline stores available on instant services: ~7,000 at end of MarchFulfillment orders: ~25% sequential growthTaiwan collection point network: >3,100 locations (nearly 50% more YoY)Average buyer rating time: 12% YoY improvementShopee VIP subscribers (Asia): >10 million (up >40% QoQ)Shopee VIP program retention: averaging >80%Shopee VIP members contribution to GMV (Asia): ~20%Shopee VIP member spending uplift: double-digit (up to 30-40% in some markets)Brazil GMV from Shopee Mall sellers: more than doubled YoY (now ~15% of GMV)AI purchase conversion rate improvement: 14% YoYAI customer queries handled: ~80%AI customer service cost per contact reduction: ~30% YoY
    		$5.1 billion——$223 million adjusted EBITDA
    Money
    Money achieved robust growth in revenue and adjusted EBITDA, primarily driven by its credit business. The loan book expanded significantly while maintaining stable asset quality, supported by localized products and expansion into new user segments and off-Shopee use cases.
    Consumer and SME loans principal outstanding: $9.9 billion (71% YoY increase)On-book loans: $8.8 billionOff-book loans: $1.1 billionNonperforming loans past due by more than 90 days: 1.1%First-time borrowers: 4.9 million addedActive credit users: 38 million (up >35% YoY)Average loan outstanding per user: ~$250 (25% YoY higher)Brazil loan book: >$1 billion (growing >250% YoY)SPay Later penetration on Shopee Brazil: ~10% of GMVOff-Shopee SPayLater loans in Thailand and Indonesia: exceeded 20% of SPay Later portfolio
    		$1.2 billion58%—$275 million adjusted EBITDA
    Garena
    Garena had a stellar start to the year, delivering its best quarter since 2021, driven by the strength of Free Fire and record contribution from Arena of Valor. Successful IP collaborations and a globalized content strategy contributed to strong engagement.
    Bookings: $931 million (20% YoY growth)Free Fire Jujutsu Kaisen collaboration official content views: >$700 millionRamadan campaign global social media platform impressions: exceeded 120 billion (up ~70% YoY)
    		$697 million41%—$574 million adjusted EBITDA

    Operational metrics

    6
    Total GAAP revenue
    $7.1 billion47% year-on-year growth
    Q1 2026

    Overall company revenue.

    Total adjusted EBITDA
    $1 billion9% year-on-year growth
    Q1 2026

    Overall company profitability, exceeded $1 billion for the first time.

    Net nonoperating income
    $62 millioncompared to $89 million in Q1 2025
    Q1 2026

    Non-operating income for the quarter.

    Net income tax expense
    $214 millioncompared to $136 million in Q1 2025
    Q1 2026

    Income tax expense for the quarter.

    Net income
    $438 million7% year-on-year growth
    Q1 2026

    Overall company net income.

    Share buyback executed
    $170 millionout of $1 billion authorization
    since last November

    Amount of shares bought back under the existing authorization.

    Industry KPIs

    9
    MetricValueDetails
    GMV$37.3 billionUSD
    Gross order volume4 billionorders
    Segment revenue mix$5.1 billionUSD
    Regional market performancefastest growing market
    Fintech consumer credit book$9.9 billionUSD
    Advertising revenue take rate80%%
    Subscription membership program>10 millionsubscribers
    Fulfillment shipping cost economics20%%
    Operating income EBIT and adjusted EBITDA$1 billionUSD

    Product announcements

    4
    ProductTypeDetails
    Shopee VIP programexpansion
    SPay Later licensemilestone
    AI shopping assistantroadmap
    AI seller agentroadmap

    Deals & partnerships

    3
    Indomaret and other major convenience stores and pharmacy chainsPartnership

    Shopee expanded partnerships to include around 7,000 offline stores for instant delivery services, enabling expansion into higher frequency categories.

    MetaPartnership

    Collaboration with Meta extended in Indonesia to enable seamless product promotion and checkout on Facebook and Instagram, building on over 4.5 million affiliates.

    Jujutsu KaisenCollaboration

    Free Fire launched a major collaboration with the popular anime Jujutsu Kaisen, integrating core elements into gameplay and generating significant content views.

    Risks & headwinds

    2
    Increased investments impacting profitabilityQ1 2026

    Shopee adjusted EBITDA decreased to $223 million in Q1 2026 from $464 million in Q1 2025

    Mitigation: Strategic investments in delivery fulfillment, Shopee VIP membership program, and user acquisition are expected to improve unit economics over time and maximize long-term value.

    Higher fuel pricesOngoing, more impact expected in Q2

    Impacts operational costs, especially last-mile delivery

    Mitigation: Leveraging government subsidies, working closely with line haul and airline partners to manage costs. Platform's competitive pricing and essential product offerings help mitigate impact on consumer spending.

    Q&A highlights

    8

    What are the key drivers for Shopee's 30% GMV growth, particularly the contribution from higher ASP products in Brazil and VIP members in Southeast Asia? Why is the full-year GMV guidance maintained at 25% despite strong Q1 performance?

    Shopee's GMV growth is a combination of Brazil's faster growth driven by fulfillment and Shopee Mall, and VIP program traction in Asia. Q1 benefited from seasonality (Ramadan, Lunar New Year) and successful initiatives. The full-year guidance remains conservative due to early stage of the year and market evolution, with potential for updates later.

    “For the GMV guidance, Q1 has Ramadan and also both -- and also 10 New Year fall into the quarter. We see very good seasonality attribute positive growth. We also see that the -- many of the initiatives we implemented from last year, including the VIPs, including the instant delivery, including the AI-enabled better discovery that we roll out to our platform. All this contribute to kind of a better growth than we expected in Q1.”

    asked by Alicia Yap · answered by Hou Tianyu

    3 min read7 chapters

    Detailed Narrative

    01

    Shopee's Strategic Growth Investments

    Shopee's strong Q1 performance was driven by strategic investments in logistics, its VIP membership program, and content ecosystem. Logistics capabilities, including SPX Express and instant/same-day delivery, are being scaled, with instant delivery order volumes growing over 35% and cost per order reducing by 20% year-on-year in media. The Shopee VIP program has gained significant traction, with over 10 million subscribers in Asia, demonstrating strong retention and double-digit spending uplift. The content ecosystem, including live streaming, short-form video, and partnerships with YouTube and Meta, continues to drive engagement and orders.

    02

    AI Integration and Efficiency Gains

    Sea Limited is embedding AI across its operations to enhance user experience and drive efficiency. AI-powered search and recommendation algorithms led to a 14% improvement in purchase conversion rates year-on-year. AI-generated content tools assist sellers, and AI-driven personalization contributed to 80% ad revenue growth. On the cost side, AI chatbots now handle approximately 80% of customer queries, reducing customer service cost per contact by about 30% year-on-year while maintaining high satisfaction. The company is also testing AI shopping assistants and virtual business advisors for future rollout.

    03

    Brazil Market Expansion and Profitability

    Brazil was Shopee's fastest-growing market in Q1, maintaining profitability while outpacing market GMV growth. This performance is supported by strong fundamentals, including competitive pricing and logistics advantages. The company opened three new fulfillment centers, bringing the total to five, and improved delivery times by over one day compared to last year. These efforts enabled onboarding more merchants, particularly in Shopee Mall, which saw GMV more than double year-on-year and now contributes around 15% of total GMV in Brazil.

    04

    Money's Expanding Credit Business

    Money's credit business continues its robust growth, with the loan book reaching $9.9 billion, up 70% year-on-year, while maintaining a stable 90-day NPL ratio of 1.1%. The expansion is driven by deepening existing user relationships, acquiring new users in segments with better risk profiles, and expanding credit use cases beyond Shopee. Off-Shopee SPayLater loans in Thailand and Indonesia now exceed 20% of the SPay Later portfolio, demonstrating successful diversification. Brazil's loan book grew over 250% year-on-year to exceed $1 billion, supported by localized product offerings and data from open banking networks.

    05

    Garena's Strong Gaming Performance

    Garena delivered its best quarter since 2021, with bookings up 20% and adjusted EBITDA up 25% year-on-year. This was fueled by the continued strength of Free Fire and a record contribution from Arena of Valor. Free Fire's collaboration with Jujutsu Kaisen generated over $700 million in official content views, showcasing successful IP partnerships. Garena is also evolving its content strategy to both localize and globalize, as exemplified by the Ramadan campaign which achieved over 120 billion global social media impressions, up 70% year-on-year.

    06

    Fuel Price Impact and Mitigation

    The company is closely monitoring the impact of higher fuel prices on its operations. While it affects operational costs, particularly last-mile delivery, Sea leverages government subsidies in various countries and works with partners to manage costs. Management believes the impact can be managed within current guidance. Furthermore, the platform's competitive pricing and focus on essential products help mitigate potential impacts on consumer spending power, as users tend to seek savings during economic pressures.

    07

    Fulfillment Infrastructure Development

    Sea is strategically building out its fulfillment infrastructure, particularly in Brazil, with a focus on high capacity utilization rather than overbuilding. The company aims for a continuous process of expansion, predicting volume needs to align fulfillment center construction. While the goal is to eventually surpass competitors in absolute fulfillment volumes, this will take several years. The CapEx for individual fulfillment centers is primarily for equipping rented facilities, leading to a relatively fast return on investment for these specific product investments.

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