Revenue surged 43% and net profit rose 34%. The stock briefly jumped 9% intraday, only to close down 1.5%—so what exactly is the market picking apart in these results?
Sea reported its Q3 results before the market opened on Tuesday:
① Revenue of $8.58 billion, up 43.4% year over year and above market expectations;
② Net profit of $503 million, up 34% year over year. Shopee had its most profitable quarter ever: GMV of $39.7 billion, revenue of $6.1 billion, and adjusted profit of $269 million;
③ Financial-services business Monee generated $1.6 billion in revenue, up 64% year over year, while its loan book grew 60% to $12.6 billion;
④ Gaming business Garena generated $840 million in revenue, up 29%, with adjusted profit up 46%;
⑤ The board approved a new $1 billion share buyback program with no expiration date. The previous $1 billion program has been almost fully used.
My takeaway: the results weren’t bad, but they weren’t dazzling either. EPS of $0.78 fell short of expectations, and the group’s adjusted profit of $931 million was also below the market’s roughly $990 million estimate. Shopee’s GMV growth slowed to 23% from 28% last quarter; Monee is lending more and more, and its NPL ratio also climbed from 1.1% to 1.3%. The market isn’t just looking for “growth” now—it wants “growth that’s still profitable.”
Three possible paths: a peak holiday quarter and buybacks could help the stock stabilize near its 52-week low; if Monee’s credit costs keep eating into profits, the valuation may need to come down further; and the AI cloud business is only just getting started. Li Xiaodong himself says the company will keep it asset-light and won’t pour money into data centers, so don’t expect a new story from it anytime soon. $SE is already down 40% year to date, and patience during earnings season is more precious than you might think.
Sea reported its Q3 results before the market opened on Tuesday:
① Revenue of $8.58 billion, up 43.4% year over year and above market expectations;
② Net profit of $503 million, up 34% year over year. Shopee had its most profitable quarter ever: GMV of $39.7 billion, revenue of $6.1 billion, and adjusted profit of $269 million;
③ Financial-services business Monee generated $1.6 billion in revenue, up 64% year over year, while its loan book grew 60% to $12.6 billion;
④ Gaming business Garena generated $840 million in revenue, up 29%, with adjusted profit up 46%;
⑤ The board approved a new $1 billion share buyback program with no expiration date. The previous $1 billion program has been almost fully used.
My takeaway: the results weren’t bad, but they weren’t dazzling either. EPS of $0.78 fell short of expectations, and the group’s adjusted profit of $931 million was also below the market’s roughly $990 million estimate. Shopee’s GMV growth slowed to 23% from 28% last quarter; Monee is lending more and more, and its NPL ratio also climbed from 1.1% to 1.3%. The market isn’t just looking for “growth” now—it wants “growth that’s still profitable.”
Three possible paths: a peak holiday quarter and buybacks could help the stock stabilize near its 52-week low; if Monee’s credit costs keep eating into profits, the valuation may need to come down further; and the AI cloud business is only just getting started. Li Xiaodong himself says the company will keep it asset-light and won’t pour money into data centers, so don’t expect a new story from it anytime soon. $SE is already down 40% year to date, and patience during earnings season is more precious than you might think.
