Sea Limited Reports First Quarter 2025 Results

Published: 2025-05-13 06:32:04 ET SE

Published on 05/13/2025 at 06:32

Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results for the first quarter ended March 31, 2025.

“We have delivered another great quarter of strong growth with improving profitability across all three businesses. Our strong start to the year gives us more confidence of achieving our full-year guidance.” said Forrest Li, Sea’s Chairman and Chief Executive Officer.

On e-commerce, he said, “Shopee has delivered a record-high GMV and gross order volume in the first quarter. We sustained market leadership with improved profitability across both Asia and Brazil. Our strong execution of our operational priorities – enhancing price competitiveness, improving service quality, and strengthening our content ecosystem – has continued to make Shopee competitive and differentiated.”

On digital financial services, Mr. Li shared that SeaMoney had been rebranded to Monee. “We chose the name Monee because it is simple, cute, and, just like our company’s name Sea, easy to write and pronounce. Monee also resonates well with the name of its sister brand, Shopee, reflecting the seamless, synergetic connection between the two ecosystems.”

On Monee’s performance for the quarter, Mr. Li said, “Monee delivered another strong set of results, with both revenue and adjusted EBITDA growing more than 50% year-on-year while maintaining stable asset quality. As we scale, we remain focused on risk management as a top priority. We are confident that we can grow Monee in a way that is resilient to credit cycles and profitable into the long term.”

On digital entertainment, Mr. Li said, “Garena had a stellar start to 2025, with its best quarter since 2021. Thanks to the phenomenal success of the Free Fire and NARUTO collaboration in January, Free Fire’s average DAU in the first quarter was close to its peak quarterly average DAU during the pandemic. We will continue to drive Free Fire’s popularity and longevity, improve localized content across our games, and expand our game portfolio for overall sustained growth.”

First Quarter 2025 Highlights

1 For a discussion of the use of non-GAAP financial measures, see “Non-GAAP Financial Measures”.

2 Off-book loans principal outstanding mainly refers to channeling arrangements, which is lending by other financial institutions on our platform.

3 GAAP revenue for the digital entertainment segment plus change in digital entertainment deferred revenue. This operating metric is used as an approximation of cash spent by our users in the applicable period that is attributable to our digital entertainment segment.

Unaudited Summary of Financial Results

(Amounts are expressed in thousands of US dollars “$” except for per share data)

For the Three Months ended March 31,

2024

2025

YOY%

Revenue

Service revenue

3,408,139

4,434,537

30.1

Sales of goods

326,190

406,563

24.6

3,734,329

4,841,100

29.6

Cost of revenue

Cost of service

(1,871,031

)

(2,231,118

)

19.2

Cost of goods sold

(309,548

)

(373,789

)

20.8

(2,180,579

)

(2,604,907

)

19.5

Gross profit

1,553,750

2,236,193

43.9

Other operating income

43,977

34,901

(20.6

Sales and marketing expenses

(769,635

)

(929,699

)

20.8

General and administrative expenses

(290,854

)

(307,189

)

5.6

Provision for credit losses

(161,767

)

(281,944

)

74.3

Research and development expenses

(304,379

)

(295,858

)

(2.8

Total operating expenses

(1,482,658

)

(1,779,789

)

20.0

Operating income

71,092

456,404

542.0

Non-operating (loss) income, net

(17,541

)

89,208

(608.6

Income tax expense

(78,760

)

(136,315

)

73.1

Share of results of equity investees

2,209

1,528

(30.8

Net (loss) income

(23,000

)

410,825

(1,886.2

(Loss) Earnings per share attributable to Sea Limited’s ordinary shareholders:

Basic

(0.04

)

0.68

(1,800.0

Diluted

(0.04

)

0.65

(1,725.0

Change in deferred revenue of Digital Entertainment

54,029

279,820

417.9

Adjusted EBITDA for Digital Entertainment (1)

292,208

458,206

56.8

Adjusted EBITDA for E-commerce (1)

(21,700

)

264,417

(1,318.5

Adjusted EBITDA for Digital Financial Services (1)

148,658

241,439

62.4

Adjusted EBITDA for Other Services (1)

(10,671

)

(9,110

)

(14.6

Unallocated expenses (2)

(7,346

)

(8,443

)

14.9

Total adjusted EBITDA (1)

401,149

946,509

135.9

(1) For a discussion of the use of non-GAAP financial measures, see “Non-GAAP Financial Measures”.

(2) Unallocated expenses within total adjusted EBITDA are mainly related to general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the Chief Operating Decision Maker (“CODM”) as part of segment performance.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Revenue

Our total GAAP revenue increased by 29.6% to US$4.8 billion in the first quarter of 2025 from US$3.7 billion in the first quarter of 2024. The table below sets forth our revenue breakdown. Amounts are expressed in thousands of US dollars (“$”).

For the Three Months ended March 31,

2024

2025

YOY%

Service revenue

E-commerce

2,422,740

3,118,931

28.7

Digital Financial Services

499,364

787,117

57.6

Digital Entertainment

458,119

495,589

8.2

Other Services(1)

27,916

32,900

17.9

Sales of goods

326,190

406,563

24.6

Total revenue

3,734,329

4,841,100

29.6

(1)

Other services are a combination of multiple business activities that do not meet the quantitative threshold to qualify as reportable segments.

Cost of Revenue

Our total cost of revenue was US$2.6 billion in the first quarter of 2025, as compared to US$2.2 billion in the first quarter of 2024. The table below sets forth our cost of revenue breakdown. Amounts are expressed in thousands of US dollars (“$”).

For the Three Months ended March 31,

2024

2025

YOY%

Cost of service

E-commerce

1,627,509

1,934,323

18.9

Digital Financial Services

78,301

106,433

35.9

Digital Entertainment

155,977

181,004

16.0

Other Services(1)

9,244

9,358

1.2

Cost of goods sold

309,548

373,789

20.8

Total cost of revenue

2,180,579

2,604,907

19.5

(1)

Other services are a combination of multiple business activities that do not meet the quantitative threshold to qualify as reportable segments.

Other Operating Income

Our other operating income was US$34.9 million and US$44.0 million in the first quarter of 2025 and 2024, respectively. Other operating income mainly consists of rebates from e-commerce related logistics services providers.

Sales and Marketing Expenses

Our total sales and marketing expenses increased by 20.8% to US$929.7 million in the first quarter of 2025 from US$769.6 million in the first quarter of 2024. The table below sets forth breakdown of the sales and marketing expenses of our major reporting segments. Amounts are expressed in thousands of US dollars (“$”).

For the Three Months ended March 31,

2024

2025

YOY%

Sales and Marketing Expenses

E-commerce

675,881

777,492

15.0

Digital Financial Services

56,768

96,261

69.6

Digital Entertainment

19,376

28,906

49.2

General and Administrative Expenses

Our general and administrative expenses increased by 5.6% to US$307.2 million in the first quarter of 2025 from US$290.9 million in the first quarter of 2024.

Provision for Credit Losses

Our provision for credit losses increased by 74.3% to US$281.9 million in the first quarter of 2025 from US$161.8 million in the first quarter of 2024.

Research and Development Expenses

Our research and development expenses decreased by 2.8% to US$295.9 million in the first quarter of 2025 from US$304.4 million in the first quarter of 2024.

Non-operating Income or Losses, Net

Non-operating income or losses mainly consist of interest income, interest expense, investment gain (loss), foreign exchange gain (loss) and gain (loss) on debt extinguishment. We recorded a net non-operating income of US$89.2 million in the first quarter of 2025, as compared to a net non-operating loss of US$(17.5) million in the first quarter of 2024. The non-operating income in the first quarter of 2025 was primarily due to interest income of US$88.8 million.

Income Tax Expense

We had a net income tax expense of US$136.3 million and US$78.8 million in the first quarter of 2025 and 2024, respectively.

Net Income or Loss

As a result of the foregoing, we had net income of US$410.8 million in the first quarter of 2025, as compared to net loss of US$(23.0) million in the first quarter of 2024.

Basic and Diluted Earnings or Loss Per Share Attributable to Sea Limited’s Ordinary Shareholders

Basic earnings per share attributable to Sea Limited’s ordinary shareholders was US$0.68 in the first quarter of 2025, compared to basic loss per share attributable to Sea Limited’s ordinary shareholders of US$(0.04) in the first quarter of 2024.

Diluted earnings per share attributable to Sea Limited’s ordinary shareholders was US$0.65 in the first quarter of 2025, compared to diluted loss per share attributable to Sea Limited’s ordinary shareholders of US$(0.04) in the first quarter of 2024.

Webcast and Conference Call Information

The Company’s management will host a conference call today to review Sea’s business and financial performance.

Details of the conference call and webcast are as follows:

Date and time:

7:30 AM U.S. Eastern Time on May 13, 2025 7:30 PM Singapore / Hong Kong Time on May 13, 2025

Webcast link:

https://events.q4inc.com/attendee/514818182

A replay of the conference call will be available at the Company’s investor relations website (www.sea.com/investor/home). An archived webcast will be available at the same link above.

About Sea Limited

Sea Limited (NYSE: SE) is a leading global consumer internet company founded in Singapore in 2009. Its mission is to better the lives of consumers and small businesses with technology. Sea operates three core businesses across digital entertainment, e-commerce, as well as digital financial services, known as Garena, Shopee and Monee, respectively. Garena is a leading global online games developer and publisher. Shopee is the largest pan-regional e-commerce platform in Southeast Asia and Taiwan and has a significant presence in Latin America. Monee is a leading digital financial services provider in Southeast Asia and is growing its presence in Brazil.

Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “could,” “will,” “expect,” “anticipate,” “aim,” “future,” “intend,” “plan,” “believe,” “estimate,” “likely to,” “potential,” “confident,” “guidance,” and similar statements. Among other things, statements that are not historical facts, including statements about Sea’s beliefs and expectations, the business, financial and market outlook, and projections from its management in this announcement, as well as Sea’s strategic and operational plans, contain forward-looking statements. Sea may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases, and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Sea’s goals and strategies; its future business development, financial condition, financial results, and results of operations; the expected growth in, and market size of, the digital entertainment, e-commerce and digital financial services industries in the markets where it operates, including segments within those industries; expected changes or guidance in its revenue, costs or expenditures; its ability to continue to source, develop and offer new and attractive online games and to offer other engaging digital entertainment content; the expected growth of its digital entertainment, e-commerce and digital financial services businesses; its expectations regarding growth in its user base, level of engagement, and monetization; its ability to continue to develop new technologies and/or upgrade its existing technologies; growth and trends of its markets and competition in its industries; government policies and regulations relating to its industries, including the effects of any government orders or actions on its businesses; general economic, political, social and business conditions in its markets; and the impact of widespread health developments. Further information regarding these and other risks is included in Sea’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Sea undertakes no obligation to update any forward-looking statement, except as required under applicable law.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures to help evaluate our operating performance:

These non-GAAP financial measures have limitations as analytical tools. None of the above financial measures should be considered in isolation or construed as an alternative to revenue, net loss/income, or any other measure of performance or as an indicator of our operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to Sea’s data. We compensate for these limitations by reconciling the non-GAAP financial measures to their nearest U.S. GAAP financial measures, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on any single financial measure.

The tables below present selected financial information of our reporting segments, the non-GAAP financial measures that are most directly comparable to GAAP financial measures, and the related reconciliations between the financial measures. Amounts are expressed in thousands of US dollars (“$”) except for number of shares & per share data.

For the Three Months ended March 31, 2025

E- commerce

Digital Financial Services

Digital Entertainment

Other Services(1)

Unallocated expenses(2)

Consolidated

Operating income (loss)

195,002

228,612

220,031

(11,006

)

(176,235

)

456,404

Net effect of changes in deferred revenue and its related cost

233,436

Depreciation and Amortization

69,415

12,827

4,739

1,896

88,877

Share-based compensation

167,792

Adjusted EBITDA

264,417

241,439

458,206

(9,110

)

(8,443

)

946,509

For the Three Months ended March 31, 2024

E- commerce

Digital Financial Services

Digital Entertainment

Other Services(1)

Unallocated expenses(2)

Consolidated

Operating (loss) income

(97,335

)

134,443

236,198

(13,787

)

(188,427

)

71,092

Net effect of changes in deferred revenue and its related cost

46,701

Depreciation and Amortization

75,635

14,215

9,309

3,116

102,275

Share-based compensation

181,081

Adjusted EBITDA

(21,700

)

148,658

292,208

(10,671

)

(7,346

)

401,149

(1) A combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.

(2) Unallocated expenses are mainly related to share-based compensation, and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Amounts expressed in thousands of US dollars (“$”) except for number of shares & per share data

For the Three Months ended March 31,

2024

2025

Revenue

Service revenue

3,408,139

4,434,537

Sales of goods

326,190

406,563

Total revenue

3,734,329

4,841,100

Cost of revenue

Cost of service

(1,871,031

)

(2,231,118

)

Cost of goods sold

(309,548

)

(373,789

)

Total cost of revenue

(2,180,579

)

(2,604,907

)

Gross profit

1,553,750

2,236,193

Operating income (expenses):

Other operating income

43,977

34,901

Sales and marketing expenses

(769,635

)

(929,699

)

General and administrative expenses

(290,854

)

(307,189

)

Provision for credit losses

(161,767

)

(281,944

)

Research and development expenses

(304,379

)

(295,858

)

Total operating expenses

(1,482,658

)

(1,779,789

)

Operating income

71,092

456,404

Interest income

87,115

88,823

Interest expense

(9,718

)

(9,081

)

Investment loss, net

(111,244

)

(522

)

Net gain on debt extinguishment

27,112

10,602

Foreign exchange loss

(10,806

)

(614

)

Income before income tax and share of results of equity investees

53,551

545,612

Income tax expense

(78,760

)

(136,315

)

Share of results of equity investees

2,209

1,528

Net (loss) income

(23,000

)

410,825

Net income attributable to non-controlling interests

(663

)

(7,775

)

Net (loss) income attributable to Sea Limited’s ordinary shareholders

(23,663

)

403,050

(Loss) Earnings per share:

Basic

(0.04

)

0.68

Diluted

(0.04

)

0.65

Weighted average shares used in (loss) earnings per share computation:

Basic

570,937,761

590,286,824

Diluted

570,937,761

634,637,711

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts expressed in thousands of US dollars (“$”)

As of December 31,

As of March 31,

2024

2025

ASSETS

Current assets

Cash and cash equivalents

2,405,153

2,183,030

Restricted cash

1,655,171

1,810,071

Accounts receivable, net of allowance for credit losses of $5,089 and $7,043, as of December 31, 2024 and March 31, 2025 respectively

306,657

342,319

Prepaid expenses and other assets

1,661,373

1,863,143

Loans receivable, net of allowance for credit losses of $443,555 and $516,332, as of December 31, 2024 and March 31, 2025 respectively

4,052,215

4,674,606

Inventories, net

143,246

172,696

Short-term investments

6,215,423

6,243,214

Amounts due from related parties

418,430

490,221

Total current assets

16,857,668

17,779,300

Non-current assets

Property and equipment, net

1,097,699

1,081,491

Operating lease right-of-use assets, net

1,054,785

1,166,823

Intangible assets, net

27,310

20,605

Long-term investments

2,694,305

2,828,545

Prepaid expenses and other assets

138,839

171,885

Loans receivable, net of allowance for credit losses of $5,780 and $7,667, as of December 31, 2024 and March 31, 2025 respectively

108,594

152,173

Restricted cash

21,261

22,895

Deferred tax assets

517,383

513,325

Goodwill

107,625

106,031

Total non-current assets

5,767,801

6,063,773

Total assets

22,625,469

23,843,073

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts expressed in thousands of US dollars (“$”)

As of December 31,

As of March 31,

2024

2025

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable

350,021

320,948

Accrued expenses and other payables

2,380,371

2,163,786

Deposits payable

2,711,693

3,154,334

Escrow payables and advances from customers

2,498,094

2,603,794

Amounts due to related parties

255,896

188,973

Borrowings

130,615

120,502

Operating lease liabilities

300,274

311,707

Convertible notes

1,147,984

1,148,395

Deferred revenue

1,405,785

1,630,687

Income tax payable

115,419

158,141

Total current liabilities

11,296,152

11,801,267

Non-current liabilities

Accrued expenses and other payables

71,678

77,506

Borrowings

249,474

329,577

Operating lease liabilities

803,502

907,743

Deferred revenue

109,895

189,150

Convertible notes

1,478,784

1,330,217

Deferred tax liabilities

408

1,172

Unrecognized tax benefits

138,000

132,100

Total non-current liabilities

2,851,741

2,967,465

Total liabilities

14,147,893

14,768,732

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts expressed in thousands of US dollars (“$”)

As of December 31,

As of March 31,

2024

2025

Shareholders’ equity

Class A Ordinary shares

272

273

Class B Ordinary shares

Additional paid-in capital

16,703,192

16,886,015

Accumulated other comprehensive loss

(193,148

)

(187,939

)

Statutory reserves

17,260

Accumulated deficit

(8,155,264

)

(7,752,214

)

Total Sea Limited shareholders’ equity

8,372,335

8,963,418

Non-controlling interests

105,241

110,923

Total shareholders’ equity

8,477,576

9,074,341

Total liabilities and shareholders’ equity

22,625,469

23,843,073

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts expressed in thousands of US dollars (“$”)

For the Three Months ended March 31,

2024

2025

Net cash generated from operating activities

468,494

756,931

Net cash used in investing activities

(853,786

)

(1,114,732

)

Net cash generated from financing activities

183,831

274,387

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

(72,819

)

17,825

Net decrease in cash, cash equivalents and restricted cash

(274,280

)

(65,589

)

Cash, cash equivalents and restricted cash at beginning of the period

4,243,657

4,081,585

Cash, cash equivalents and restricted cash at end of the period

3,969,377

4,015,996

Net cash used in investing activities amounted to US$1,115 million for the three months ended March 31, 2025. This was primarily attributable to increase in loans receivable of our credit business of US$942 million. Net cash generated from financing activities amounted to US$274 million for the three months ended March 31, 2025. This was primarily attributable to an increase in bank deposits of US$328 million, offset by the cash used in repurchase of convertible notes of US$139 million.

UNAUDITED SEGMENT INFORMATION

The Company has three reportable segments, namely e-commerce, digital financial services and digital entertainment. The Chief Operating Decision Maker (“CODM”), comprising our senior management team, reviews the performance of each segment based on revenue and certain key operating metrics of the operations and uses these results for the purposes of allocating resources to and evaluating the financial performance of each segment. Amounts are expressed in thousands of US dollars (“$”).

For the Three Months ended March 31, 2025

E-commerce

Digital Financial Services

Digital Entertainment

Other Services(1)

Total

Revenue

3,524,186

787,117

495,589

34,208

4,841,100

Less(2)

Cost of revenue

(2,307,199

)

(106,433

)

(181,004

)

Sales and marketing expenses

(777,492

)

(96,261

)

(28,906

)

Provision for credit losses

(277,562

)

Other operating expenses(3)

(244,493

)

(78,249

)

(65,648

)

(45,214

)

Operating segment income (loss)

195,002

228,612

220,031

(11,006

)

632,639

Unallocated expenses(4)

(176,235

)

Operating income

456,404

Non-operating income, net

89,208

Income tax expense

(136,315

)

Share of results of equity investees

1,528

Net income

410,825

For the Three Months ended March 31, 2024

E-commerce

Digital Financial Services

Digital Entertainment

Other Services(1)

Total

Revenue

2,747,768

499,364

458,119

29,078

3,734,329

Less(2)

Cost of revenue

(1,936,340

)

(78,301

)

(155,977

)

Sales and marketing expenses

(675,881

)

(56,768

)

(19,376

)

Provision for credit losses

(161,729

)

Other operating expenses(3)

(232,882

)

(68,123

)

(46,568

)

(42,865

)

Operating segment (loss) income

(97,335

)

134,443

236,198

(13,787

)

259,519

Unallocated expenses(4)

(188,427

)

Operating income

71,092

Non-operating loss, net

(17,541

)

Income tax expense

(78,760

)

Share of results of equity investees

2,209

Net loss

(23,000

)

(1) A combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.

(2) The significant expenses categories and other income amounts align with the segmental-level information that is regularly provided to the CODM.

(3) Other operating expenses for E-commerce and Digital Entertainment include general and administrative expenses, research and development expenses and provision for credit losses, net of other operating income. Other operating expenses for Digital Financial Services include general and administrative expenses and research and development expenses, net of other operating income.

(4) Unallocated expenses are mainly related to share-based compensation, and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.

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