Sea Limited SE reported adjusted earnings of 86 cents per share in the first quarter of 2025, missing the Zacks Consensus Estimate by 7.53%. The company posted earnings of 21 cents per share in the year-ago quarter.

Revenues of $4.8 billion increased 29.6% on a year-over-year basis, primarily driven by growth in Gross Merchandise Value (GMV) for the e-commerce and digital financial services segments.

Following the release, SE shares rose 1.41% in the pre-market trading. Year to date, SE shares have surged 47.1%, significantly outperforming the Zacks Computer and Technology sector, which has declined 4.4% over the same period.

SE’s Top-Line Details

Digital Entertainment (Garena): Digital Entertainment revenues were $495.6 million, marking year-over-year growth of 8.2%. The growth was primarily driven by a larger active user base and improved paying user penetration.

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Quarterly active users were 661.8 million, up 11.3% year over year.

Quarterly paying users of 64.6 million increased 32.2% year over year. The paying user ratio was 9.8% in the first quarter compared with 8.2% in the year-ago quarter.

Average bookings per user in the reported quarter were $1.17 compared with 86 cents in the year-ago quarter.

The Garena segment reported strong growth in the first quarter, with total bookings reaching $775.4 million, marking a 51.4% year-over-year increase, due to the resurgence of Free Fire during the quarter. This is supported by the partnership with NARUTO, which enhanced user engagement and contributed to the game's best performance since 2021.

E-commerce (Shopee): E-commerce service revenues totaled $3.1 billion, up 28.7% year over year, primarily driven by GMV growth.

Gross orders for the quarter reached 3.1 billion, representing a 20.5% year-over-year increase.

Shopee maintained its market leadership in Asia and Brazil, with average monthly active buyers increasing more than 15% year over year in the first quarter.

Digital Financial Services (Rebranded to Monee): Digital Financial Services’ revenues increased 57.6% year over year to $787.1 million. The uptick was driven by strong growth in its loan book, which reached $5.8 billion, up 76.5%.

Non-performing loans over 90 days were stable at 1.1% of total consumer and SME loans in the reported quarter, indicating strong credit quality.

Sales of goods increased 24.6% year over year to $406.6 million in the first quarter.

Other Services, which encompass a mix of various business activities, increased 17.9% year over year to $32.9 million in the first quarter.

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Sea Limited’s Operating Details

Gross profit increased 43.9% year over year to $2.24 billion in the first quarter.

Adjusted EBITDA was $946.5 million, more than doubling from $401.1 million in the year-ago quarter.

Digital Entertainment's adjusted EBITDA rose 56.8% year over year to $458.2 million in the first quarter from $292.2 million in the prior-year period.

E-commerce adjusted EBITDA reached $264.4 million in the first quarter, a significant turnaround from a loss of $21.7 million in the same period last year.

Digital Financial Services adjusted EBITDA increased 62.4% year over year to $241.4 million, up from $148.7 million in the prior-year period.

SE’s Balance Sheet & Cash Flow

As of March 31, 2025, SE had cash and cash equivalents of $2.18 billion compared with $2.41 billion as of Dec. 31, 2024.

The company generated $756.9 million in cash from operating activities in the reported quarter compared with $1.02 million in the previous quarter.

Sea Limited’s Zacks Rank & Stocks to Consider

Currently, SE has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are WidePoint WYY, Kingsoft Cloud KC and Broadcom AVGO. WidePoint sports a Zacks Rank #1 (Strong Buy), and Kingsoft Cloud and Broadcom each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

WidePoint is scheduled to report its first-quarter 2025 results on May 15. Kingsoft Cloud will release its first-quarter 2025 results on May 28, while Broadcom is set to announce its fiscal second-quarter 2025 earnings on June 5.

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