Sea swings into the black in Q1 with US$410 million profit on surge in Shopee, financial services earnings

[SINGAPORE] Sea reported first-quarter 2025 earnings of US$410.8 million, reversing from a loss of US$23 million in Q1 2024 on Tuesday (May 13).

Revenue for the quarter rose 29.6 per cent to US$4.8 billion from US$3.7 billion a year prior. This was a slight miss from US$4.88 billion to US$4.84 billion forecast by a Bloomberg poll of 14 analysts.

“Our strong start to the year gives us more confidence in achieving our full-year guidance,” said Forrest Li, chairman and CEO of Sea.

E-commerce segment Shopee reported a 28.3 per cent increase in Q1 2025 revenue to US$3.1 billion, up from US$2.4 billion in Q1 2024. Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) for the segment stood at US$264.4 million for the quarter, reversing from a loss of US$21.7 million in Q1 2024.

“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,” said Li.

Currently, the e-commerce competitive landscape in South-east Asia is relatively stable with no big movements, although Sea’s management said it will be monitoring TikTok Shop’s recent launch in Brazil.

Shopee’s core focus in Brazil will be good pricing and infrastructure to deliver a low-cost and better experience. The group’s live-streaming service Shopee Live is also available in the country, but the ecosystem development for live streams is still in the early stages, said Chris Feng, president of Sea. 

The live-streaming behaviour as we see right now is probably not as prominent as we are seeing in the Asia market… if we see that there is a good trend of ecosystem development – we have the capability, we have the experience, we have the technology to capture where we need it,” said Feng.

Monee, Sea’s newly rebranded digital financial services arm, reported a 57.6 per cent increase in Q1 2025 revenue to US$787.1 million from US$499.4 million in Q1 2024. Adjusted Ebitda for the quarter was US$241.4 million, a 62.4 per cent year-on-year increase.

The increase in Monee’s Q1 2025 revenue was driven mainly by consumer and small and medium enterprise credit business. As at Mar 31, 2025, Monee’s loan book stood at US$5.8 billion, a 76.5 per cent increase year on year. The non-performing loans ratio for the loan book stood at 1.1 per cent.

“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 in the long term,” said Li.

In the short term, while it may make more economic sense for Sea to fund the loan book, it is also looking to build up a more sustainable source of funding by collaborating with third-party financial institutions and banks. This could be via a channelling arrangement or structured products.

Gaming arm Garena reported a 51.4 per cent year-on-year increase in bookings for Q1 2025 to US$775.4 million. Revenue also grew 8.2 per cent to US$495.6 million for the quarter from US$458.1 million in Q1 2024.

Quarterly active users for Garena’s Free Fire game increased 56.8 per cent in Q1 2025 to 661.8 million, and quarterly paying users were up 32.2 per cent to 64.6 million, compared with a year prior.

This was Garena’s best quarter since 2021, with Li saying: “Thanks to the phenomenal success of the Free Fire and Naruto collaboration in January, Free Fire’s average daily active users (DAU) in the first quarter was close to its peak quarterly average DAU during the pandemic.”