Sea Limited Soars on Revenue Beat, Bets Big on AI and Growth

By Tyler Flores

SINGAPORE – May 12, 2026 – Sea Limited (NYSE: SE) delivered a powerful message to investors with its first-quarter earnings, showcasing a formidable 46.6% year-on-year revenue surge to US$7.1 billion. The strong top-line performance, which significantly outpaced analyst expectations, overshadowed a narrow miss on earnings per share and sent the company's stock soaring over 10% in premarket trading.

The results paint a picture of a company firing on all cylinders, executing a deliberate strategy of investing heavily in growth and technology to fortify its market leadership. “2026 is a year where we are leaning in to deepen our competitive moats, while maintaining financial discipline,” said Forrest Li, Sea’s Chairman and Chief Executive Officer, in the earnings announcement. The market's enthusiastic response suggests investors are firmly behind this vision, prioritizing market share expansion and long-term potential over immediate profit optimization.

A Diversified Digital Engine

Sea's strength lies in its tripartite business model, with each of its core segments—e-commerce, digital finance, and gaming—delivering impressive results. The synergistic ecosystem continues to prove its resilience and growth capacity.

Its e-commerce arm, Shopee, remains the primary revenue driver, contributing US$5.1 billion in GAAP revenue, a 45.1% increase from the previous year. The platform's dominance is underscored by record-breaking gross merchandise value (GMV) and order volumes.

Monee, the digital financial services segment, reported a blistering 57.8% revenue increase to US$1.2 billion. This growth was fueled by the aggressive expansion of its credit business, which saw its loan portfolio swell to nearly US$10 billion.

Meanwhile, the digital entertainment division, Garena, marked a significant turnaround, delivering its best quarter since 2021. Bookings jumped 20.1% year-on-year to US$931.4 million, signaling a potent resurgence for the gaming giant behind hits like Free Fire.

Shopee's Reign in a Competitive Arena

Shopee’s performance in the first quarter solidifies its position as the undisputed leader in Southeast Asia's booming e-commerce market, which is projected to hit US$234 billion in GMV this year. The platform processed an astounding 4.0 billion orders, up 29.3% year-on-year, with GMV climbing 30.2% to US$37.3 billion.

These figures demonstrate Shopee's ability to not only grow but also to monetize its massive user base effectively, even amidst intense competition from rivals like Alibaba’s Lazada and the rapidly expanding TikTok Shop. A key indicator of this is the 61% year-on-year growth in core marketplace revenue, which is primarily composed of transaction fees and advertising. This surge in high-margin advertising revenue suggests that merchants are increasingly willing to pay for visibility on the platform, reinforcing Shopee's value proposition and its powerful network effect.

While the company increased spending on sales and marketing for Shopee by 40.4% to US$1.1 billion, the resulting revenue growth indicates a positive return on these investments as it continues to capture share in key markets like Indonesia and Brazil.

Monee's Explosive Growth and a Stable Foundation

The most dramatic growth story within Sea's portfolio is Monee. The digital finance arm saw its outstanding consumer and SME loan principal balloon by 71.3% year-on-year to US$9.9 billion. This rapid expansion is a testament to the massive, underserved demand for digital credit in Southeast Asia and Latin America.

Such aggressive growth in lending often raises red flags about potential defaults and asset quality. However, Sea appears to be managing this risk adeptly. The company reported that its non-performing loans (past due by more than 90 days) held steady at a remarkably low 1.1% of its total loan portfolio, a figure that has remained stable quarter-on-quarter. This suggests that Monee's underwriting and risk management systems are scaling effectively alongside its loan book.

The expansion into Brazil has been particularly successful, with Monee's local loan book there surpassing US$1 billion. The company's strategy of leveraging the Shopee ecosystem to cross-sell financial products continues to pay dividends, creating a sticky user base and a larger addressable market.

Garena's Revival and Sea's AI-Powered Future

After a few challenging years, Garena has returned to form with a stellar quarter. The 25.2% year-on-year increase in adjusted EBITDA to US$573.6 million was driven by the enduring popularity of its flagship title, Free Fire, and a record contribution from Arena of Valor. The number of paying users also grew by 12.4% to 72.6 million, demonstrating renewed engagement.

Beyond the gaming revival, Sea is charting its future course with a heavy investment in artificial intelligence. CEO Forrest Li highlighted a “practical, results-oriented approach” to embedding AI across the company’s operations. This is not just corporate jargon; the company is making tangible progress through its dedicated AI Centre of Excellence.

In Shopee, AI-driven enhancements to search and recommendation algorithms have already contributed to a 14% improvement in purchase conversion rates. Furthermore, the deployment of sophisticated AI chatbots is now handling approximately 80% of customer service queries, leading to a 30% year-on-year reduction in cost per contact. The company is also developing its own 245-billion parameter Large Language Model, tailored for Southeast Asian languages and e-commerce, to further deepen its competitive moat. These AI initiatives are not just improving efficiency; they are creating a more intelligent and personalized experience for users, which is crucial for long-term retention and growth. This strategic push into AI demonstrates Sea's commitment to leveraging cutting-edge technology to maintain its leadership and unlock new avenues for value creation across its vast digital landscape.