Sea Limited Misses EPS by $0.26 but Revenue Climbs 43.7% to $8.58B

Sea Limited (NYSE: SE) reported quarterly EPS of $0.78 on Tuesday, missing the analyst consensus of $1.04 by $0.26. Revenue told the opposite story: $8.58 billion for the quarter, beating the $8.08 billion consensus and up 43.7% year over year, against $0.59 EPS in the same quarter last year. Return on equity came in at 13.54%, with a net margin of 5.98%.

Despite the miss, the market shrugged it off. Shares rose $1.63, or 2.1%, to $79.59 on volume of 10,295,845 — roughly double the average of 5,120,915. Still, the stock sits far below its 52-week high of $159.09, trading closer to the 52-week low of $71.53.

What drove the quarter?

Sea's conference call laid out the segment detail. Net income rose 34% to $502.5 million, gross profit climbed 51.4% to $3.9 billion, and adjusted EBITDA (a profitability measure excluding items like stock compensation) grew 28.9% to $931.3 million. Management also unveiled plans for an additional $1 billion share repurchase after nearly completing its prior program.

• Shopee (e-commerce): GMV (gross merchandise value, the total value of transactions) up 23.3% to $39.7 billion, orders up 26%, and adjusted EBITDA up 45% to $269 million — its highest quarterly result. Sea reaffirmed 2026 targets of roughly 25% GMV growth and $1 billion in adjusted EBITDA, while noting investment continues to absorb some monetization gains.
• Monee (digital finance): the loan book grew 60% to $12.6 billion, serving nearly 44 million active credit users. Sea is weighing a standalone listing within one to three years.
• Garena (gaming): bookings up 6% to $890 million, adjusted EBITDA up 46% to $458 million, supported by Free Fire and Arena of Valor engagement.
• Sea Cloud: an early-stage AI venture selling internal capabilities externally — no enterprise contracts yet, with management calling it a long-term, selectively funded bet tied to customer commitments and attractive returns.

The takeaway: growth is broad-based, and the buyback signals confidence in cash generation.

Where's the risk?

The EPS miss has a name: credit provisions. Monee's credit-loss provisions jumped 82.3%, and the 90-day NPL ratio (non-performing loans — borrowings overdue by 90-plus days) ticked up to 1.3%. Management attributed the rise partly to market and product mix and is tightening underwriting in selected segments. That lending risk, analysts note, helps explain the negative premarket reaction despite strong revenue.

Balance-sheet posture stays conservative: a current ratio of 1.49, a quick ratio of 1.48, and debt-to-equity of just 0.07. Market capitalization stands at $48.63 billion, with a price-to-earnings ratio of 30.81, a PEG ratio of 0.83, and a beta of 1.58.

What are insiders and analysts doing?

Insiders have been selling. In the past ninety days, they offloaded 876,036 shares worth $97,506,130, and insiders own just 0.22% of the company. Specific filings: Jingye Chen sold 30,000 shares on September 9 at an average of $108.87 for $3,266,100, a 10% cut in that position, leaving 270,000 shares. Feng Zhao sold 40,000 shares on October 1 at $95.02 for $3,800,800 — a 29.94% reduction, leaving 93,580 shares.

The analyst picture is mixed but mostly constructive:

• TD Cowen: hold, target raised to $115 from $100 (August 17).
• Barclays: overweight, target up to $156 from $122 (August 12).
• Royal Bank of Canada: upgrade to buy from sector perform (September 8).
• Wall Street Zen: downgrade to hold from buy (November 1).
• Sanford C. Bernstein: outperform reaffirmed (July 20).

One Strong Buy, ten Buys and four Holds produce a consensus "Moderate Buy" with an average price target of $137.73, per MarketBeat — well above where the stock closed Tuesday.

A $0.26 miss, then, hasn't dented the Street's math: growth outran the stumble.