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Sea Limited: Initiation of Coverage: Can Shopee, Money And Garena Keep Scaling?

Sea Limited reported a solid financial performance in the first quarter of 2026, demonstrating considerable revenue growth across its major business segments—e-commerce (Shopee), digital financial services (Money), and online gaming (Garena). Total GAAP revenue increased 47% year-over-year to $7.1 billion, driven primarily by Shopee and Money. The company also achieved an adjusted EBITDA of $1 billion, a 9% increase year-over-year, marking a milestone for its overall profitability. Shopee continued to be a key growth engine, with gross merchandise volume (GMV) rising 30% year-over-year to $37.3 billion, supported by 29% growth in gross orders. The e-commerce platform reported an adjusted EBITDA of $223 million, slightly below the previous year’s figure due to increased investments in delivery fulfillment, Shopee VIP membership expansion, and user acquisition. Strengthened monetization was evidenced by an 80% growth in advertising revenue and an increase in the ad take rate. The logistics network, including instant delivery services and fulfillment centers, expanded further, enhancing service quality and lowering delivery costs per order in key markets such as Indonesia and Taiwan. Shopee VIP subscriptions crossed 10 million users, contributing roughly 20% of GMV in Asia, indicating improved user engagement and retention. Brazil emerged as the fastest growing market, showing profitability with expanding fulfillment infrastructure and a growing Shopee Mall presence, though management remains cautious on full-year GMV growth guidance due to macroeconomic uncertainties.