Sea beats revenue estimates as Shopee and fintech drive Q2 growth

Sea Ltd shares were up 13.81% by midday Tuesday at about $130.65 after quarterly results renewed investor optimism around the Southeast Asian group's e-commerce, fintech and gaming businesses. The company reported revenue of $7.10 billion, up 46.61% year over year and 10.86% above consensus, while earnings per share of $0.67 missed the $0.7742 consensus. Investors appeared to focus on growth and reinvestment instead of the profit shortfall, with CEO Forrest Li saying adjusted EBITDA exceeded $1 billion for the first time. Shopee remained the main growth engine, with revenue rising 45.1% to $5.11 billion, gross merchandise value reaching $37.30 billion and gross orders totaling 4.0 billion. Sea said Shopee advertising revenue grew 80%, purchase conversion improved 14% from a year earlier, and AI-driven automation now handles about 80% of customer queries, cutting service cost per contact by about 30%. Management reiterated guidance for roughly 25% Shopee GMV growth for the full year, with adjusted EBITDA no lower than 2025 in absolute dollar terms. Monee, Sea's digital financial services arm, posted 57.8% growth and expanded its loan book to $9.90 billion, up 71.3%. Garena revenue reached $696.6 million in what Sea described as its best quarter since 2021, helped by a Free Fire collaboration with Jujutsu Kaisen that generated more than 700 million official content views. The move also put Sea back alongside Shopify and MercadoLibre in investor discussions about high-growth e-commerce platforms. Sea's accelerating top-line growth and narrowing earnings miss suggest the market is rewarding companies that keep investing while growth reaccelerates.

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