Sea Limited Turns Profitable as Shopee and Garena Margins Improve

Sea Limited Finally in the Black

Sea Limited has reported its first full-year net profit since going public, earning $342 million on revenue of $15.8 billion for fiscal year 2025. The Singapore-headquartered company, which operates e-commerce platform Shopee, gaming arm Garena, and fintech unit SeaMoney, had been loss-making since its 2017 IPO.

CEO Forrest Li told investors on the earnings call that the result "validates the strategic decisions we made over the past two years to prioritize profitability over growth at all costs." Sea's share price rose 14% in after-hours trading on the New York Stock Exchange.

Shopee's Path to Profitability

Shopee, Sea's largest revenue contributor, turned profitable on an adjusted EBITDA basis for the first time. Gross merchandise value grew 18% to $62 billion, while the take rate — the percentage of GMV that Shopee captures as revenue — improved from 9.2% to 10.8%.

The take rate improvement came from higher advertising revenue, commission rate increases in mature markets like Singapore and Malaysia, and a growing logistics service that Shopee now offers sellers. Shopee Express, the company's in-house logistics arm, handled 62% of Shopee orders in Southeast Asia, up from 48% the prior year.

Garena Stabilizes

Garena's quarterly active users stabilized at 498 million after a two-year decline from the peak of 729 million in 2021. Free Fire, the battle royale mobile game that drives most of Garena's revenue, saw bookings increase 3% year-over-year — the first positive quarter since 2022.

The stabilization was attributed to successful content updates and the game's return to the Indian market after a two-year ban. India's Free Fire user base has already reached 60 million monthly active players, making it the game's second-largest market after Brazil.

SeaMoney Growth

SeaMoney, the fintech division, posted revenue of $2.1 billion, up 38%. The unit offers digital payments, lending, and insurance across six Southeast Asian markets. Total loan portfolio reached $3.4 billion with a non-performing loan ratio of 1.8%, which management described as within target.

Analysts at Goldman Sachs raised their price target on Sea's stock, citing the company's "increasingly defensible ecosystem in Southeast Asia's digital economy." The firm noted that Sea's three business lines create cross-selling opportunities that pure-play competitors cannot match.