SE

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the online marketplace stocks, including Sea (NYSE:SE) and its peers. Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition. The 12 online marketplace stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 1.8% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.3% since the latest earnings results. Founded in 2009 and a publicly traded company since 2017, Sea (NYSE:SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia. Sea reported revenues of $7.81 billion, up 45.7% year on year. This print exceeded analysts’ expectations by 8.3%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EBITDA estimates and solid growth in its users. Sea scored the biggest analyst estimate beat among its peers. The company reported 68.1 million users, up 10.2% year on year. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 8.7% since reporting and currently trades at $120.05. Read why we think that Sea is one of the best online marketplace stocks, our full report is free. Founded by a struggling amateur furniture maker Robert Kalin and his two friends, Etsy (NYSE:ETSY) is one of the world’s largest online marketplaces, focusing on handmade or vintage items. Etsy reported revenues of $668.3 million, up 6.2% year on year, outperforming analysts’ expectations by 3.4%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 5.5% since reporting. It currently trades at $81.10. Is now the time to buy Etsy? Access our full analysis of the earnings results here, it’s free. Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE:SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content. Shutterstock reported revenues of $221.8 million, down 16.9% year on year, falling short of analysts’ expectations by 12.4%. It was a disappointing quarter, leaving some shareholders looking for more. Shutterstock delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. As expected, the stock is down 7.8% since the results and currently trades at $5.55. Read our full analysis of Shutterstock’s results here. Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America. MercadoLibre reported revenues of $10.17 billion, up 49.8% year on year. This print surpassed analysts’ expectations by 4.5%. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ EBITDA estimates and impressive growth in its users. MercadoLibre pulled off the fastest revenue growth in the group. The company reported 89 million daily active users, up 25.4% year on year. The stock is down 1.2% since reporting and currently trades at $1,899. Read our full, actionable report on MercadoLibre here, it’s free. Originally known as the first online auction site, eBay (NASDAQ:EBAY) is one of the world’s largest online marketplaces. eBay reported revenues of $3.13 billion, up 14.8% year on year. This result topped analysts’ expectations by 3.7%. More broadly, it was a satisfactory quarter as it also logged revenue guidance for next quarter beating analysts’ expectations but EPS guidance for next quarter missing analysts’ expectations. eBay delivered the highest guidance raise among its peers. The company reported 136 million active buyers, up 1.5% year on year. The stock is down 7.2% since reporting and currently trades at $103.12. Read our full, actionable report on eBay here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Sea’s second quarter reflected robust operational momentum, with revenue growth well above market expectations, supported by strength in e-commerce and fintech. Management highlighted Shopee’s accelerated user acquisition and engagement, with market share gains in core regions and operational improvements in logistics and fulfillment. Forrest Li, CEO, credited “improving operational efficiency and growing scale” as key factors, while also noting continued progress in monetizing advertising and content channels across the platform. Is now the time to buy SE? Find out in our full research report (it’s free). Revenue: $7.81 billion vs analyst estimates of $7.21 billion (45.7% year-on-year growth, 8.3% beat) Adjusted EPS: $0.84 vs analyst expectations of $0.86 (2.9% miss) Adjusted EBITDA: $917.2 million vs analyst estimates of $874 million (11.7% margin, 4.9% beat) Operating Margin: 8.3%, in line with the same quarter last year Paying Users: 68.1 million, up 6.3 million year on year Market Capitalization: $73.16 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Piyush Choudhary (HSBC) asked about Shopee’s GMV outlook and AI initiatives; CFO Tony Hou described continued strong growth trends and highlighted improvements in unit economics from AI-driven advertising and buyer conversion, with a focus on maintaining investment discipline. Alicia Yap (Citigroup) inquired about Shopee’s outperformance and profitability trends in Brazil and Asia; CEO Forrest Li noted stable competition and market share gains, while emphasizing ongoing fulfillment investments and the gradual maturation of logistics capabilities. Divya Kothiyal (Morgan Stanley) questioned the sustainability of commission increases and fintech margin stabilization; Hou explained that take rate increases are being reinvested in ecosystem growth, and that Monee’s margin profile reflects intentional expansion into new markets and user segments with stable credit quality. John Choi (Daiwa) sought details on ad take rate upside and Monee’s Brazil strategy; Li described AI-powered ad tools and analytics as key levers for future growth, and outlined plans to localize financial services in Brazil, leveraging Shopee’s user base and data. Navin Killa (UBS) asked about the path to higher e-commerce margins and credit risk from larger loans; Li reiterated their target margin range is within reach as investments mature, and confirmed that average loan size increases do not correlate with higher credit risk, due to enhanced underwriting models. As we look ahead, our analyst team will be monitoring (1) continued adoption and monetization of new AI-powered tools in Shopee, (2) the rollout and performance of Monee’s standalone fintech app in Brazil and other markets, and (3) the impact of logistics and fulfillment investments on both buyer experience and margin trends. Progress in new game launches and further integration of AI across Sea’s platforms will also be critical signposts. Sea currently trades at $118.90, down from $131.51 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Yanjun Wang, CCO and general counsel of Sea Limited (NYSE:SE), sold 3,000 shares of Class A ordinary shares on August 11 and August 12, according to a recent SEC Form 4 filing. Transaction value based on SEC Form 4 weighted average sale price ($129.25); post-transaction value based on the August 12 market close ($128.11). What was the nature of this transaction?The sale was executed by a British Virgin Islands entity controlled by Yanjun Wang under a Rule 10b5-1 trading plan adopted on March 26, which allows insiders to set up a predetermined schedule for selling stock to avoid concerns about trading on non-public information. How does this affect the insider's total equity exposure?The 3,000 shares sold represent a minor reduction in total holdings, as the insider continues to maintain a substantial position consisting of 1,162,442 directly held shares and 7,000 shares held indirectly, as disclosed in the Form 4. What is the financial profile of the company at the time of this filing?Sea Limited reported trailing 12-month revenue of $25.2 billion and net income of $1.6 billion, operating across the digital entertainment, e-commerce, and digital financial services sectors. Sea Limited operates a diversified digital ecosystem spanning digital entertainment via its Garena platform, e-commerce, and digital financial services across Southeast Asia, Latin America, and other international markets. The company generates revenue through multiple business segments, including online gaming and eSports, marketplace and logistics services, and fintech solutions, creating a vertically integrated platform business model. Sea Limited serves millions of consumers and merchants across emerging markets, targeting digitally native users seeking entertainment, shopping, and financial services in underbanked regions with growing internet penetration. Sea Limited is a leading digital platform operator in Southeast Asia with TTM revenues of $25.2 billion, demonstrating significant scale across three core business verticals. The company leverages its integrated ecosystem to capture value across the digital entertainment, e-commerce, and fintech sectors, positioning itself as a comprehensive digital services provider for emerging markets. With operations spanning multiple geographies, Sea Limited benefits from network effects and cross-platform synergies that enhance customer acquisition efficiency and lifetime value. Once several senior people at a company sell in the same few days, the instinct is to look for a warning, but the pattern at Sea points the other way, since these are preset plans executing into one of its best quarters. Wang, the company's top lawyer, sold a small block through a holding entity and kept more than 1.1 million shares, which fits that reading rather than cutting against it.The results behind the selling were broadly strong. Sea grew revenue 48% to $7.8 billion, with e-commerce, fintech, and gaming all expanding, and net income rose to $458 million. CEO Forrest Li called the fintech unit's progress a sign it can "serve more users, serve them better, and reach further." One blemish stood out, though, since earnings per share came in below what analysts expected even as revenue sailed past, a reminder that Sea is still spending heavily to grow. That gap between soaring revenue and a per-share profit miss is the tension for shareholders, because the market has rewarded Sea's return to growth, and it will want to see that growth start converting into bottom-line earnings that keep pace. Before you buy stock in Sea Limited, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sea Limited wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,511!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,381,960!* Now, it’s worth noting Stock Advisor’s total average return is 981% — a market-crushing outperformance compared to 216% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 15, 2026. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Sea Limited. The Motley Fool has a disclosure policy. Sea Limited Insiders Trimmed Into a Strong Quarter. Here's What to Know was originally published by The Motley Fool

Li Xiaodong, the chairman and CEO of Sea Limited (NYSE:SE), reported a sale of about 1.1 million Class A ordinary shares on August 11, according to a recent SEC Form 4 filing. Transaction value based on SEC Form 4 weighted average sale price ($129.80); post-transaction value based on the August 11 market close ($131.51). How does the transaction timing relate to the stock's performance?The sale occurred while the stock was priced at $129.80 per share; shares have fallen over 30% this past year. Who manages the indirect equity involved in this filing?About 288,000 remaining indirectly held shares are maintained through a BVI entity. This entity was also the vehicle for the current disposition of ~1.1 million shares, emphasizing the insider's use of separate legal structures for portfolio management. Is this activity part of a broader liquidity strategy?The use of a Rule 10b5-1 plan, adopted nearly a year prior to execution, indicates the transaction was a structured liquidity event rather than a discretionary response to immediate market conditions or internal corporate developments. Sea Limited operates a diversified digital platform ecosystem spanning digital entertainment through its Garena brand, e-commerce operations, and digital financial services across Southeast Asia, Latin America, and other international markets. The company generates revenue through multiple channels, including in-game monetization and eSports events within its gaming platform, transaction fees and marketplace commissions from e-commerce operations, and financial services offerings, including payments and lending solutions. Sea Limited serves a broad base of consumers and merchants across emerging markets, with particular strength in Southeast Asia, targeting digitally native users seeking gaming entertainment, online shopping, and financial services solutions. Sea Limited is a leading digital platform operator with a market capitalization of $70 billion, generating $25.2 billion in TTM revenue across three core business segments. The company leverages its diversified portfolio to capture multiple revenue streams within high-growth emerging markets, establishing a competitive moat through integrated digital services that drive cross-platform user engagement and ecosystem stickiness. Li's sale ran on a plan set nearly a year ago, so its timing has nothing to do with the strong quarter that just landed, and the roughly 1.1 million shares that moved came through a BVI holding entity while he keeps far more. This is one of multiple Sea insiders trimming into the results, and none of it reads as conviction fading, given how the business is performing.The quarter was a standout. Sea grew second-quarter revenue 48% to $7.8 billion, with all three arms firing, Shopee lifting e-commerce GMV to $38.3 billion, its Monee fintech unit growing revenue 59% as its loan book expanded 62% to $11.1 billion, and Garena bookings up 15%. Management reaffirmed its target of $1 billion in full-year Shopee profit. On the fintech engine, Li said Monee's risk improvements mean "each improvement helps us serve more users." For long-term investors, one caution worth holding is credit. Monee's loan book is growing fast, past $11 billion, including a push into Brazil, and while soured loans sit at just 1%, aggressive lending in newer markets is where a fast-growing fintech's risks tend to surface if the economy turns. Before you buy stock in Sea Limited, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sea Limited wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,511!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,381,960!* Now, it’s worth noting Stock Advisor’s total average return is 981% — a market-crushing outperformance compared to 216% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 15, 2026. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Sea Limited. The Motley Fool has a disclosure policy. A Sea Limited Insider Sold Into a Strong Quarter. Here's What to Know was originally published by The Motley Fool

Sea Limited’s SE adjusted earnings were 86 cents per share in the second quarter of 2026, missing the Zacks Consensus Estimate by 14%. On a reported basis, earnings per share rose 7.7% year over year to 70 cents.Revenues of $7.8 billion increased 48.1% year over year and beat the Zacks Consensus Estimate by 6.39%, led by Shopee and Monee. Service revenues increased 48.6% year over year to $7.13 billion, while sales of goods rose 42.8% to $657.7 million. The mix continued to favor services, which include e-commerce marketplace activity, digital financial services and gaming.Gross profit advanced 47.3% to $3.55 billion. However, gross margin edged down to 45.6% from 45.8% a year earlier as total cost of revenues increased 48.7% to $4.24 billion. Sea Limited Sponsored ADR price-consensus-eps-surprise-chart | Sea Limited Sponsored ADR Quote E-commerce (Shopee) generated revenues of $5.59 billion, up 48.2% year over year in the reported quarter. Marketplace revenues rose 48.9% to $4.93 billion, supported by GMV growth and improved monetization.Core marketplace revenues, mainly transaction-based fees and advertising, surged 65.6% to $4.26 billion. Value-added services revenues fell 9.0% to $676.4 million due to higher revenue net-off against shipping subsidies.Gross orders rose 27.5% to 4.2 billion, while adjusted EBITDA increased 12.2% to $255.4 million. Average monthly active buyers increased 18% year over year, and purchase frequency rose 8%. Ad revenues grew more than 70%, with ad take rate improving by more than 90 basis points. Digital Financial Services (Monee) revenues climbed 58.9% year over year to $1.40 billion, primarily reflecting growth in the credit business as lending activity increased. Adjusted EBITDA rose 12.8% to $288.0 million.Consumer and SME loans principal outstanding reached $11.1 billion at quarter-end, up 62.5% year over year. The total included $10.0 billion of on-book loans and $1.1 billion of off-book loans. Loans past due by more than 90 days remained 1.0% of principal outstanding, stable sequentially. Management said it added around 5.3 million unique first-time borrowers during the quarter, while active credit users grew around 34% year over year to more than 40 million. Digital Entertainment’s (Garena) revenues increased 33.5% year over year to $746.6 million, driven by a larger active user base and deeper paying-user penetration. Bookings grew 15.5% to $763.5 million.Adjusted EBITDA advanced 16.7% to $429.8 million and represented 56.3% of bookings, up from 55.7% a year earlier. Quarterly paying users increased 10.2% to 68.1 million, lifting the paying-user ratio to 10.2% from 9.3%. Sales and marketing expenses jumped 64.5% year over year to $1.66 billion, reflecting higher spending across Shopee, Monee and Garena. Provision for credit losses increased 71.5% to $555.2 million as Monee's lending activities expanded.Operating income still rose 33.3% to $650.3 million, but operating margin narrowed to 8.4% from 9.3%. Net income increased 10.6% to $458.1 million, while income tax expense climbed 74.0% to $250.6 million. As of June 30, 2026, Sea Limited had cash and cash equivalents of $3.53 billion, compared with $4 billion as of March 31, 2026.During the second quarter, the company repurchased 4.7 million shares for $416.8 million under its $1 billion share repurchase program.Net cash generated from operating activities totaled $2.56 billion for the first six months of 2026. SE reported $1.1 billion in cash from operating activities in the first three months of 2026. Management remains confident in Shopee's full-year GMV growth outlook of around 25%, while acknowledging foreign-exchange headwinds and tougher GMV comparisons in the second half. The company is also optimistic that Shopee will reach $1 billion in adjusted EBITDA for 2026. Management said the competitive environment remained relatively stable, while fulfillment economics continued to improve quarter over quarter. It also sees further room to raise the overall take rate through advertising and seller efficiency. Currently, Sea Limited carries a Zacks Rank #4 (Sell).Marvell Technology MRVL, Analog Devices ADI and NVIDIA NVDA are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Each stock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Marvell Technology’s shares have surged 155.5% year-to-date. MRVL is set to report its second-quarter fiscal 2027 results on Aug. 27, 2026.Analog Devices’ shares have gained 41.8% year-to-date. ADI is scheduled to report its third-quarter fiscal 2026 results on Aug. 19.NVIDIA shares have returned 19.8% year-to-date. NVDA is scheduled to report its second-quarter fiscal 2027 results on Aug. 26, 2026. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sea Limited Sponsored ADR (SE) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Sea Limited SE used its Q2 2026 earnings call to emphasize a central balance: keep investing in Shopee growth while improving unit economics and protecting profitability. Revenue of $7.8 billion beat the Zacks Consensus Estimate of $7.34 billion, while reported earnings of $0.86 per share missed the $1.00 estimate. Management focused on Shopee's outlook, Monee credit growth and Garena's pipeline. Sea Limited Sponsored ADR price-consensus-eps-surprise-chart | Sea Limited Sponsored ADR Quote Chief financial officer Hou Tianyu said Shopee remains on track for full-year GMV growth of around 25%, despite potential foreign-exchange headwinds and tougher third- and fourth-quarter comparisons. Founder, chairman and CEO Forrest Li reiterated the goal of more than $1 billion in Shopee adjusted EBITDA for 2026. He said absolute second-half EBITDA should exceed the first half as GMV grows. A Barclays analyst pressed management on margins. Li said the balance between monetization and investment will depend on market growth, competitive conditions and internal efficiency. Li said Shopee ad revenue rose more than 70% year over year and ad take rate improved by more than 90 basis points. Ad-paying sellers increased around 45%. A Daiwa analyst asked how AI could extend those gains. Li cited personalized vouchers, Shop GMV Max, Brand Max, improved ad matching and AI-generated content, with further ad take-rate upside still seen. A Morgan Stanley analyst asked about commission increases. Hou said fixed commission growth may slow, but overall take rate can still rise through paid ads, seller efficiency and better buyer conversion. Li said fulfillment volume grew more than 20% quarter over quarter and remains in a ramp-up phase. He highlighted Sea's light-capital model, SPX integration and early automation efforts. A Citigroup analyst asked whether Shopee was nearing the end of the fulfillment investment cycle. Li said penetration still has substantial room to rise as cost structures and scale benefits improve. In Brazil, Li said Shopee remained ahead of broader market growth. Average buyer waiting time fell 15% year over year, fulfillment-order penetration doubled and nearly 500 new official brands joined. Li said Monee's loan book reached $11.1 billion and its 90-day nonperforming-loan ratio held at 1%. Sea added around 5.3 million first-time borrowers during the quarter. Li also highlighted risk models that improved approval rates by around 10% at a similar risk level. AI-based income-document verification cut review time by around 95%. A Morgan Stanley analyst asked about margins and credit guardrails. Hou said stable NPLs and positive returns are required. Later, responding to JPMorgan, he said higher provisions reflected more off-Shopee SPayLater and Brazil lending. Forrest Li said Free Fire continued to draw more than 100 million average daily active users and anchored Garena's growth. Bookings rose 15.5% year over year. Garena announced Palworld Online, developed and published by Garena under license from Pocketpair, and Monster Hunter Outlanders, developed by Tencent based on Capcom's franchise. A JPMorgan analyst asked about launch regions. Li said Palworld Online is planned globally, while Monster Hunter Outlanders is targeted for Southeast Asia, Latin America, Taiwan and potentially the Middle East this year. Li's overarching message was that Sea will keep investing where user penetration, service quality and scale can improve without abandoning financial discipline. Shopee's growth-profit balance remained the clearest example. Monee's expansion is being paired with credit-quality guardrails, while Garena is leaning on Free Fire and new titles to diversify. Management's posture remained centered on disciplined expansion. SE carries a Zacks Rank #5 (Strong Sell). Its Growth Score of A, Momentum Score of B and VGM Score  of B are favorable style readings, while its Value Score is C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Under the Zacks framework, Style Scores complement rather than override the Zacks Rank, which gives priority to earnings-estimate revisions. The current Rank tempers the favorable style readings and can change as analysts revise estimates after the results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sea Limited Sponsored ADR (SE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 11, 2026 at 7:30 a.m. ET Chairman and Chief Executive Officer - Forrest Li President - Chris Feng Chief Financial Officer - Tony Hou Investor Relations - Khang Chuen Ong Operator: Good morning and good evening to all, and welcome to the Sea Limited Second Quarter 2026 Results Conference Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Mr. KC Ong to begin the conference. Please go ahead. Khang Chuen Ong: Hello everyone, and welcome to Sea's 2026 Second Quarter Earnings Conference Call. I am KC from Sea's Investor Relations team. On this call, we may make forward-looking statements, which are inherently subject to risks and uncertainties and may not be realized in the future for various reasons as stated in our press release. Also, this call includes the discussion of certain non-GAAP financial measures such as adjusted EBITDA. We believe these measures can enhance our investors' understanding of the actual cash flows of our major businesses when used as a complement to our GAAP disclosures. For a discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures, please refer to the section on non-GAAP financial measures in our press release. I have with me Sea's Chairman and Chief Executive Officer, Forrest Li; President, Chris Feng; and Chief Financial Officer, Tony Hou. Our management will share strategy and business updates, operating highlights and financial performance for the second quarter of 2026. This will be followed by a Q&A session in which we welcome any questions you have. With that, let me turn the call over to Forrest. Forrest Li: Hello everyone, and thank you for joining today's call. Our strong momentum from the first quarter has continued into the second. Sea generated $7.8 billion in revenue, up 48% year-on-year, and over $917 million in adjusted EBITDA. Our investments have enabled Shopee and Monee to continue to strengthen our market leadership while improving our user penetration. Many of our initiatives unit economics continue to improve, a testament to our strong financial discipline and operational efficiency. We will continue to invest prudently in serving more users and serving them better, broadening our foundation for profitable growth into the future. With that, let me take you through each business' performance. Starting with Shopee. Shopee continued its strong momentum into the second quarter. GMV grew 28% year-on-year, marking eight consecutive quarters of sequential growth, and we again achieved new highs in gross order volume and revenue. We generated an adjusted EBITDA of more than $250 million during the second quarter. Our improving operational efficiency and growing scale have strengthened our unique economics. We can now profitably serve a wider range of users, enabling us to lean further into user acquisition. We have engaged and reengaged several user groups through brand awareness campaigns, expanding our content channels and broadening our logistics offerings to cater to different preferences. This drove remarkable new buyer growth in the second quarter. Average monthly new active buyers grew more than 35% year-on-year, a significant acceleration from previous quarters. Average monthly active buyers increased 18% year-on-year and overall buyer engagement also continued to improve with purchase frequency increasing by 8% year-on-year. Our monetization strengthened further in the second quarter. Ad revenue was up more than 70% and ad take rate improved by over 90 basis points year-on-year. We continued to make advertising simpler and smarter for sellers. For example, pairing ads with vouchers that are personalized to buyers to increase purchase conversion and improve the efficiency of sellers' ad spend. Ad adoption and spend continued to improve across our seller base. The number of ad paying sellers rose around 45%, while average ad spend per seller increased more than 15% year-on-year. Our operational priorities remain consistent, improving price competitiveness, service quality and our content ecosystem. To keep strengthening our execution across these priorities, we continued to deepen our structural moats across logistics, ShopeeVIP and content. Strong logistics capabilities continue to be a key contributor to Shopee's reputation for excellent service. We continue to make delivery faster and more reliable across a wider product assortment in the second quarter. Instant and the same-day delivery gained strong traction as we captured more LED purchases. Our instant service initiative can now deliver in as fast as 1 hour in urban areas. We continue to expand our presence in high-frequency categories such as groceries and pharmacy items to serve our buyers better. Other volumes using instant delivery rates grew around 80% year-on-year in initial while cost per order fell by around 20%, driven by economies of scale and efficiency gains. Beyond delivery, we also made good progress in fulfillment with other volumes up more than 20% quarter-on-quarter. Fulfillment benefits both sides of our marketplace. Sellers offload operational complexity and scale more efficiently while buyers enjoy faster, more reliable delivery. In some markets, more than 60% of our fulfilled parcels arrive the next day meaningfully higher than the platform average. The gains are especially noticeable in places where geography makes delivery challenging. For example, in Mindanao, a mountain region in the Philippines, fulfillment has buyer waiting time by 1 to 3 days, buyers can feel the difference. These teams have converted to fulfillment saw more than a 20% customers uplift in orders on average in Southeast Asia. Second, our ShopeeVIP program continued to scale strongly. Now live across Asia and Brazil, total membership exceeded 15 million at the end of June, up 25% from the previous quarter. Across Asia, VIP members contributed 24% of GMV in the quarter. Average monthly retention remained strong at around 80% and members continue to show higher engagement spending meaningfully more after subscribing. In Brazil, early adoption has been encouraging since our April launch with membership already surpassing 1 million. Beyond buyers, we are seeing encouraging support among both Shopee sellers and external partners for our ShopeeVIP program. We have brought the number of benefits across travel, dining and entertainment, improving the program's value proposition. More sellers and partners have come on board to co-fund benefits, demonstrating the value they see in engaging our ShopeeVIP buyer base. This has helped improve the program's unique economics in Asia. Third, we have continued to improve our content ecosystem to make product discovery more engaging. Orders from live streaming and short-form video grew more than 50% year-on-year, accounting for more than 25% of physical good orders in Southeast Asia. Unit economics also improved sequentially as we further optimize our marketing spend. We have deepened our relationships with YouTube and Meta to drive order growth. Shopee affiliate orders generated by linked creators on Facebook increased by more than 85% quarter-on-quarter, with Facebook Reels proving to be a very popular channel to drive purchases. We have now extended our Instagram collaboration to all eight of our core markets, and we are seeing promising early results from Indonesia, the first market where we launched the partnership. I'm particularly happy with our progress in Brazil, which remain our fastest scaling market in the second quarter. We once again outpaced the broader market on GMV growth supported by increases in active buyers, purchase frequency and average basket size. We continue to invest in and optimize our end-to-end logistics capabilities, expanding our network while ramping up utilization. We improved the delivery speed, reducing average buyer waiting time by 15% year-on-year and doubled our penetration of fulfillment orders year-on-year. These logistics improvements are also supporting our expansion upmarket. We onboarded nearly 500 new official brands during the quarter, while GMV from Shopee Mall sellers more than doubled year-on-year. We still see significant headroom for growth in Brazil, and we will continue to invest in this market in a disciplined and profitable manner. I'm pleased that Shopee has delivered a strong first half of 2026. With this solid momentum we are optimistic that Shopee will achieve the milestone of $1 billion in adjusted EBITDA for the full year. Next, moving to Monee. Monee delivered another great quarter with continued strong growth in both revenue and adjusted EBITDA. Credit remained the primary driver of growth. Our loan book reached $11.1 billion at the end of June, up 52% year-on-year. Asset quality remained stable with our 90-day NPL ratio at 1.0%. The Philippines has become our feed market with a loan book exceeding $1 billion. We continue to expand our credit business on three fronts: acquiring new users; deepening our relationships with existing users; and expanding our credit use cases. One key enabler of our credit business growth has been the ongoing advances we have made in our credit risk capabilities. Our latest risk models are pretrained on our broad set of behavioral and transactional data across our ecosystem using transformer architecture similar to those following today's large language models. The model learns from the full sequence of the users' actions over time, capturing richer context around how customers interact with our platform. Recent enhancements to our underwriting models have helped lead approval rates by around 10% when compared to previous models while maintaining a similar level of risk. This further reinforces the scale of our ecosystem as a durable advantage. To further strengthen this capability, we are also drawing on more external data sources to better assess users who are newer to our ecosystem. For instance, through partnerships with local mobile operators in Indonesia and Open Finance data in Brazil. We have also used AI to build tools to efficiently verify a diverse range of user submitted income documents across markets, languages and formats. Review time reduced by around 95% while maintaining a very high level of accuracy, letting us respond to credit limit requests from users almost instantly. Supported by this improvement in risk underwriting, we have been pushing harder on new user acquisition. We have found that many users begin using SPayLater for convenience and subsequently generate more value through repeat transactions, installment conversion and adoption of our other credit products. So we have broadened the rollout of 1 month interest-free SPayLater loans, giving forward the option to either settle their balances within the month or easily convert purchases into interest-bearing installments. Similarly, we have been more widely offering promotional interest rates for first-time personal cash loans. Taken together, these efforts contributed to strong new user growth during the quarter. We added around 5.3 million unique first-time borrowers and our active credit users grew around 34% year-on-year to over $40 million at the end of the quarter. We also saw deeper user engagement, average loans outstanding per user grew around 20% year-on-year. Shopee SPayLater has continued to scale well, driven by integration with national QR payment infrastructure and continued merchant onboarding. By the end of the quarter, Shopee accounted for over 20% of our total SPayLater portfolio with this figure as high as 35% in some markets. In Thailand, we are testing a new product to ShopeePay unlimited card. It lets users pay with their SPayLater balance at any merchant that accepts our payments, further expanding at a later use cases. The stand-alone ShopeePay app remains a key pillar of our strategy to grow Monee beyond Shopee, serving as a one-stop platform for user payments, credit, insurance and broader financial needs. In the second quarter, monthly transacting users on the map more than doubled. The ShopeePay app is currently live in Indonesia, Thailand, Malaysia and Vietnam, and we will launch a similar stand-alone app in Brazil soon. In summary, Monee delivered another strong quarter with broad-based growth across our products and markets, the advances in our risk capabilities are compounding. Each improvement helps us serve more users serve them better and reach further beyond Shopee. We are still at the early stage of growth. Only a fraction of the users across our ecosystem are using Monee's financial products today and the credit penetration remains low across our markets. This gives us great confidence in Monee's long-term growth and earnings potential. Next, turning to Garena. Garena delivered another strong quarter with bookings growing 15% year-on-year with profitability remaining healthy and growing well year-on-year. Free Fire anchored this strong performance, now in ninth next year, it is still expanding its reach and scale globally, continuing to draw in over 100 million average daily active users. Free Fire's longevity comes from a single discipline: we keep the experience fresh with the new game play and the content and we make it feel both local to the communities who play it and enjoyable for a global audience. A great example this quarter was Undersea Mystery, an ocean-themed campaign inspired by Songkran, Thailand's water festival. We integrated the theme in the map itself, creating a gateway into a new undersea realm. This extended battle ground gave players a fresh territory to explore and fight over and the opportunity to hunt for powerful gear hidden in the hydro zone and fishing pond across the map. This continued reinvention of the core game play keep players engaged over time. We also rode the World Cup wave to build excitement and engagement with our players. Our Fire kickoff campaign wove football into the map itself, turning part of it into a football field. Eliminated players were sent to a one-on-one football showdown for chance at redoing the match. And the new football form that players turned themselves into a football to speed across the map and pull off surprise plays. The campaign also resonated well beyond games, the original campaign song, Booyah Olé, became a standard organic driver of social engagement, generating over 350 million social media views. I'm also very excited about what lies ahead for our portfolio. We announced the two mobile games, both built on strong globally recognized IP, Palworld Online is an open-world multiplayer survival adventure game developed and published by Garena and their license from Pocketpair, and Monster Hunter Outlanders is a survival hunting action game developed by Tencent based on Capcom's iconic franchise. Taken together, these titles show how Garena expanding into new genres, strengthening our development and publishing capabilities and deepening our relationships with top global partners. In summary, Garena delivered another strong quarter. Free Fire is still proving itself as an evergreen franchise, and we continue to work towards diversifying our portfolio. We remain committed to delivering the high-quality experiences our players know us for. In conclusion, this quarter's strong results underscore both our financial discipline and the strength of our business. This promising momentum gives us greater confidence for the rest of the year. With that, I invite Tony to discuss our financials. Hou Tianyu: Thank you, Forrest, and thanks to everyone for joining the call. For Sea overall, total GAAP revenue increased 48% year-on-year to $7.8 billion in the second quarter of 2026. This was primarily driven by growth in Shopee and Monee. Our total adjusted EBITDA was up by 11% year-on-year to $917 million in the second quarter of 2026. On Shopee, gross orders increased 27% year-on-year to $4.2 billion in the second quarter of 2026, and GMV increased by 28% year-on-year to $38.3 billion in the second quarter of 2026. Our second quarter GAAP revenue of $5.6 billion included GAAP marketplace revenue of $4.9 billion, up 49% year-on-year, and GAAP product revenue of $0.7 billion. Within GAAP marketplace revenue, core marketplace revenue, mainly consisting of transaction-based fees and advertising revenues was $4.3 billion, up 66% year-on-year. Value-added services revenue, mainly consisting of revenues related to logistic services was $0.7 billion. Shopee adjusted EBITDA was up by 12% year-on-year to $255 million in the second quarter of 2026. Non-GAAP revenue was up by 59% year-on-year to $1.4 billion in the second quarter of 2026. Adjusted EBITDA was up by 13% year-on-year to $288 million in the second quarter of 2026. As of the end of June, our consumer and SME loans principal outstanding reached $11.1 billion, up 62% year-on-year. This consists of $10 billion on book and $1.1 billion off book loans principal outstanding. Nonperforming loans past due by more than 90 days as a percentage of total consumer and SME loans was 1% at the end of the quarter. Garena bookings grew 15% year-on-year to $764 million. GAAP revenue was up by 34% year-on-year to $747 million. The growth was primarily due to the increase in our active user base and deeper paying user penetration. Garena adjusted EBITDA was up by 17% year-on-year to $430 million. Returning to our consolidated numbers. We recognized a net nonoperating income of $66 million in the second quarter of 2026 compared to a net nonoperating income of $83 million in the second quarter of 2025. We had a net income tax expense of $251 million in the second quarter of 2026 compared to net income tax expense of $144 million in the second quarter of 2025. As a result, net income was up by 11% year-on-year to $458 million. Khang Chuen Ong: Thank you, Forrest and Tony. We are now ready to open the call to questions. Operator? Operator: [Operator Instructions] Our first question comes from the line of Piyush Choudhary with HSBC. Piyush Choudhary: Congratulations, management, on great set of results. Two questions. Firstly, on Shopee, your investments are delivering results on the growth, so can you talk a little bit about outlook for GMV growth? And are we behind peak investments as margins have improved sequentially? Is the unit economics improving across VIP and content? And should we expect Shopee margins to improve? Or there could be volatility in second half due to seasonality? That is first question. Secondly, can you give us an update on AI initiatives like last time you mentioned about AI shopping assistant for buyers, how have been the pilots? And for sellers on your platform, what initiatives you have taken and benefits observed? Hou Tianyu: I will take this question. If you look at the Shopee outlook for GMV growth, we still see quite good growth in Q2 as we shared in the opening. We still see the trend continues in the coming quarter. The growth has been doing well across our markets in South Asia, Taiwan and also Brazil. If we look forward for the full year, we remain well on track and confident of achieving our full year growth outlook of around 25%. And that said, we want to make sure that we also anticipate the potential ForEx headwind as well. As you can observe that many of our market has weaker currency against U.S. dollars. Q3 and Q4 also have a higher GMV base. But again, we still believe that we are able to achieve the guidance we gave before of around 25%. In terms of investment we are doing for the few initiatives that we shared before on the VIP, on the fulfillment, on our logistics, et cetera. In general, we see our unit economics have been improving quarter-on-quarter. I think for our content businesses, which we shared that we did an investment for a period of time. If you look at the unit economic has been as good as the platform already. The new initiative, although we're still in the investment phase, but in general, we do see a positive trend on the economic improvement. And also in general, what we are doing is less very CapEx-heavy investment even with the fulfillment, we usually take a CapEx-light approach that we don't own the for fulfillment centers. But usually, we rent the place with relatively light CapEx to enable the growth there. In terms of the margins, I think we shared our full year ambition of achieving $1 billion in adjusted EBITDA. For the AI initiatives, we are doing quite a lot of work over the past few quarters, both on buyer and seller side, as you mentioned. We are launching the IM assistance for sellers in quite a few of the markets. Essentially, instead of the seller talk to key account managers, the IMs as we call it. There is a digital IM that they can talk to, which can help them to answer many questions or many analysis they want to do with their shops. This is also 24 hours available, of course, compared to key account manager, usually not available 24 hours by 7. I think just one of the examples that we're working with the sellers among many others. On the buyer side, we spend a lot of effort on both helping the ads have better conversions, which reflects in our ad take rate improvement over time, but also just general conversion for our search recommendations. We have been rolling out our new GR algorithm, generative algorithm for recommendation and search, which gives us a meaningful improvement on the conversion rate that we observed. We're also doing pilot work on AIGC on content. If you look at our platforms, we have a lot more content can be generated by AI now, which can be used to do a personalized targeting for our buyers to improve the conversion as well, and many other work that we are doing. I'm just sharing with you on top of my mind. Operator: Your next question comes from the line of Alicia Yap with Citigroup. Alicis a Yap: Congratulations on the strong set of results. I wanted to follow up a little bit on the e-commerce Shopee question. So can management elaborate a little bit the outperformance this quarter and also the profitability trend for Brazil, Taiwan and Southeast Asia and also the latest competitive landscape there? And then on your guidance. I know that you mentioned the 25% is unchanged for the GMV growth, so in the case that if the GMV were to further exceed the guided growth rate, is it suggested that there is also further upside on the EBITDA for the second half? And then lastly, on the fulfillment investment cycle. Just wondering where are we in the time frame? Are we getting closer to what we wanted to invest? Or are we still in the early stage of the investment cycle for the fulfillment center? Forrest Li: Across the market, we see relatively good performance, both on growth and profitability. But I don't think it's a single market trend, but relatively across the market. Regarding the competitive situations, we do observe the competitive situation to be relatively stable at this point in time. And we are able to maintain our market share. In certain markets, we are able to gain market shares as well over the quarters for South Asia and Taiwan. For Brazil, we also observed that our growth is well above the market growth levels. And we believe we're growing faster than our close competitors as well there. Regarding the balance between growth and EBITDA, it's always a question on what's the best balance between the growth and EBITDA, and I don't think there is simple answer there. I think something we always observe both on how much we can optimize internally and also look at how fast is the market growing, and of course, look at the competitive landscape to do this balancing. At this point in time, we have been seeing the competitive situation to be relatively stable, as I shared. So the main driver of how the balancing work will lie on how we see the market growth rate look like in the rest of the year and how much we can improve our efficiency internally for this. For the fulfillment, we believe there's still quite a lot of room for us to improve, to further penetrate on the fulfillment businesses. I think right now, both in South Asia and Brazil and Taiwan, we are still ramping up the fulfillment sizes. For example, I think we shared that our fulfillment grew more than 20% quarter-on-quarter. In quite a few markets, it's more than double-digit already of our businesses. But still, if you compare the size of our procurement with some of the other players in our market, especially in Brazil, or compared with the sizes of the peers in other markets, if you look at the few players with fulfillment businesses and marketplace, we're still much smaller as the size compared to them. And with the good benefits we see from a fulfillment both on reducing the speed of deliveries and enhance the buyer conversion and also reduce the effort of sellers selling our platform, we do believe this is a good investment we are taking for the -- for our platform. And also, as I shared in the earlier questions, our fulfillment economy has been improving quarter-on-quarter, driven both by the fact we are able to optimize the cost structure. I think it's a learning process and also just take time to optimize the operations just in general. That's one. Also, as we grow the scale with more and more seller joining the fulfillment businesses, it's actually, we have better scale advantage on that. And number three is also because there are more and more buyers recognize the fulfillment businesses that we are offering. This gives us a better economics over time. Another thing that's important to point out is that we are also doing a lot more integration between fulfillment and SPX. So essentially to reduce the frictions between how the warehouse -- the items in our warehouse moves across the entire value chain. So it's -- so we can realize the cost synergies and cost benefits by running both the warehouse and the logistics together. And all these things help us to build the fulfillment businesses and helping us to gain the advantage of the overall platform. Yes, again, we run fulfillment business in relatively light CapEx fashion that we don't own the land, we don't own the warehouses. When we start a new fulfillment center, we do relatively light CapEx to enable that. We are also experimenting more automation with our fulfillment centers, which actually reduce our cost to run as well, but that's still in the early stage. We will share more when we scale more to our fulfillment centers over time. Operator: Your next question comes from Divya Kothiyal with Morgan Stanley. Divya Kothiyal: My first question is on the e-commerce side. We've noticed that both Shopee and TikTok shop have raised commissions in several ASEAN markets this year. Could you talk about how much more upside do you think there is for this? And can you confirm if ASEAN e-commerce is now profitable? And is that something that has specifically driven the guidance upgrade for e-commerce overall for this year? And my second question is on fintech. Where do you expect Monee's margins to really stabilize? We did see sales and marketing expenses continue to rise. When should we expect Monee's EBITDA growth to reaccelerate to more healthy levels? And could you maybe just talk about any guardrails we should be mindful of in terms of NPLs, provisioning, especially as you're acquiring new users. Hou Tianyu: When we look at the take rate, we look at take rates from multiple angles. I think one is how much the take rate is reinvesting to grow the ecosystem, which is very important for us to look at. That's number one. Number two is we look at how our price competitiveness is in our platform. So essentially after take rate, do we still maintain a similar gap of price leadership or not compared to the other platforms. Number three is we also look at the price of e-commerce essentially on our platform versus the offline pricing. Number four, we also look at what does it mean for sellers' profitability. I think we put all the things together in terms of consideration for the take rate. From what we observed so far, we have been saying very healthy ecosystem even with the increase of take rate. And the reason for that is that we reinvest a large part of the take rate to the ecosystem growth as well, and also that we're able to help the seller to operate online more efficiently over time with the combination of other things, our price is still very competitive, not only compared to the other marketplaces in our market, but also compared to the offline alternatives in the market. And going forward, we still see opportunities to increase our take rate, not only from commission, but also from the paid ads we have been able to penetrate more and more over time. Although you can argue that the fixed commissions probably has -- the pace of the fixed commission increase probably will be less than we observed before. But again, there is still room for us to increase the overall take rate by both helping the sellers to operate more efficient, but also helping the sellers grow their volumes by reinvesting part of the things to the ecosystem and also increase the conversion potential from the buyer side. With all the things together I think we're able to grow this even more over time. On the Monee margin question, if you look at individual countries of the Monee businesses, if you look at the EBITDA over the balance -- over the outstanding ratios, it's been relatively consistent. Our NPL has been relatively stable as well over time. I think the -- but typically, when we operate, we look at by product, by countries, by segment. And the shift of the retail assets is primarily driven by the mix of these things. For example, the certain countries, for example, let's say, in Thailand or in Malaysia, which is a later country that grows more than the previous countries, the overall ROA is slightly lower, so which kind of like we mix together, it reflects to the overall numbers. For example, some of the off-Shopee SPL lending growth, which is quite meaningful, more than 20% of the total SPL already, as Forrest shared in the opening, has naturally lower ROA compared to the on-Shopee SPLs. For example, we have been trying to penetrate more to prime segment users, which naturally have slightly lower interest rate, et cetera, and all those growth are intentional. And as you observed from the numbers that it does require some investment, sometimes when we grow into the segment and sometimes, it does mean that we are able to grow the outstanding a lot more, but we're slightly lower ROA compared to the previous segment or countries or products we focus on. So we actually see this as a positive movement rather than the negative view out of this. Our guardrail is very simple. We want to maintain stable NPL for the segment, the product, the countries when we look at it. And when we grow new segments, new product, new countries, we wanted to make sure it brings a positive return of the assets to us. That's why as a consequence, we always see that our absolute EBITDA, absolute profit from Monee has been growing quarter-on-quarter. Operator: Your next question comes from John Choi with Daiwa. John Choi: Congrats on a very strong quarter. I want to focus on a little bit on Shopee's advertising take rate. I think Forrest also mentioned in his prepared remarks, that ad take rate was pretty strong for a few reasons. But I think it was up by more than 90 basis points. Like how further upside do we see? And I think you guys also mentioned the advertisers seem to be more keen and then taking up more of this. So what are like the AI technologies that we're implementing to further improve this ad take rate? And how much more room do we see? And my second question is on Monee, particularly for Brazil. I think also in the slides, you also said you guys are going to launch something, a standalone app in Brazil. What will be the strategy? Should we be expecting somewhat similar to the Southeast Asia market?. Forrest Li: On the ad growth we do see a pretty good growth on the ads as we shared in the remarks. I think there are a few things helping the ad growth. I'm just listing some of the examples. One of the things smart voucher, which is we kind of combine a personalized voucher from a buyer together with ads, so we enhanced the seller's ad traffic, increasing the purchase conversion. Another example is we have the Shop GMV Max smart diagnosis tools. So essentially this AI technology reports and tools to help the sellers to analyze how can they have better return on the ad. It's leveraged on the AI capability to analyze the ad's performance and drive improvement. We also have in-depth all these insights for Brand Max. This feature essentially allows the more seller to view the number of shoppers in each stage of their purchase journey, and how does the shopper move between stages. This will give them a more robust and algorithm-driven branding solutions to capture the buyers better across their life cycles with the seller. And on top of that, there's also quite a lot of fundamental improvement on the algorithm for the ads, both on how can we match the buyer's intention to the app products better. I think that's where the AI-based algorithm, the GR algorithm helps quite a lot when we come to the matching part. The other part is the content presentation. We are using a lot of AI tools to create better personalized content for the user when they see the ads. So all this in combination helps our asset rate to improve. In the coming quarters, we still see that meaningful potential to increase the ad take rate, given that many of the tools, many of the algorithm we're implementing are still in progress. We still -- we can see a meaningful optimization potential while we are doing more experiments, while we are optimizing everything further in the coming quarters. For Brazil, on the Monee side, we do believe that Monee has a big potential in Brazil. We are seeing very good growth in Brazil for our lending businesses in the past two quarters. We were launching an app which is similar to ShopeePay app in Brazil with the CFI license, which means we will be similar to what Mercado Pago or other players in the market can offer in Brazil. We believe that Brazil is quite a big market for financial service businesses, which is proven by a few other players in the market with our e-commerce user base, our e-commerce data and also with our better credit scoring algorithm that's proven in Asia already, but of course, we customize for Brazil flavor. We are able to broaden our product in Brazil over time. If you compare what we offer and what the other play offer, there are many low-hanging fruits that we believe that we can capture just by doing the right product structures, integrating the right data in our platforms to better credit scoring users. And just also with the license we acquired, which is kind of as good as the others already in the market. Operator: Your next question comes from Navin Killa with UBS. Navin Killa: Two questions from me. Firstly, on the e-commerce business. So obviously, we have seen the margins have stabilized over the last couple of quarters after inching down through the later part of last year. I just wanted to understand from here on and back to your medium-term kind of aspiration of 2% to 3%. If you could help us understand the path, the time frame and how you get there. So that's, I guess, just a question on longer-term margin evolution for e-commerce. And secondly, on Monee, you did mention, for example, that the average loan size is up some 20-odd percent compared to last year. Now as your loan ticket size increases, does the credit risk also increase? Or if I could also just understand what the time frame of these loans is, the duration of the loans is to get a better sense of how the credit risk is being managed with a larger loan book for a customer. Forrest Li: We still believe that 2% to 3% is quite within our reach for the year. EBITDA percentage. I think in fact, the sum of markets are well above that. I think the balance between growth and profitability is something I shared in the previous answer. We do believe this is still a dynamic process on how do we make sure we capture the potential of the growth of the market versus taking more profit out of the ecosystem. I think this is something we'll balance over time. But the path -- if you look at the numbers, the path from where we are to 2% to 4% is relatively straightforward. Now we are 0.67% or so, and we're talking about 1-plus percent to get where we are. And part of that will come from -- over time, we don't need to invest so much in many of things we invest in. Like many of the programs we are doing right now, it will get mature over time. So I think we just invest less into it. Part of that comes from our cost improvement, fundamental cost structure improvements, for example, our logistics, our fulfillment, cost structure improvements over time. Part of that comes from better take rates from either ads or other forms. I think if you put that number together, we are really not too far. And we have found this in some markets already for this. We do see, as you mentioned, the outstanding per user increase year-to-year. I think part of that is because we are reaching out to a new prime segment of users who naturally take bigger ticket sizes. Part of that is also our country expansion. Some of the country we grow more recently faster than the others, has a higher income capital in the market. With all that, we do see a stable credit risk within the country, within the segment, within the product. So we didn't see any correlation between the increase of the outstanding per user and the increase of credit risk here. The duration of the large loan -- I mean it depends on the product and countries. Some can be as long as 18 months, some of them can be 12 months, et cetera. But that's a relatively small percentage for very good client users or for some specific lending products like the offline motorcycles that require a longer period. Operator: Your next question comes from Jiong Shao with Barclays. Jiong Shao: Please let me add my congrats as well. I have two follow-up questions around e-commerce. The first one is that you talked about a full year '26 EBITDA to be over $1 billion. That would suggest a higher EBITDA for the second half than the first half, which is different from last year. I think last year, the second half EBITDA was lower than the first half, so I was hoping you can talk about the drivers behind that phenomenon this year compared to last year. Does that also imply that perhaps your margins may be better in the second half than the first half as well? My second question is back to Brazil. One of your key competitors in Brazil talked about the momentum they are seeing by lowering some of the take rates there and lowering the free shipping threshold. But that clearly hasn't stopped you from growing very, very fast. Could you just talk about sort of your profitability outlook in Brazil in the coming quarters and years? Forrest Li: As you rightly pointed out, we share the goal of more than $1 billion EBITDA this year. If you do the math, it does mean that in the absolute terms, our EBITDA for second half of the year will be higher than the first of the year. Of course, partially because of the growth of the market. It's actually the overall GMV, we believe that we still see quarter-over-quarter growth. So the second half of the year, GMV base will be better than the first half of the year. Part of that comes from the continued work on the initiative we talked about. But again, e-commerce is a businesses that kind of we adjust the pace, adjust the monetization based on many parameters, as I shared earlier, based on how we are optimizing businesses based on how the overall business growth of the country and also based on the competitive business. For Brazil, the -- yes, I think your observation is absolutely correct. We still see that our growth is well above the market in the country. And if you look at the price competitiveness, we are still very price competitive, a lot stronger than the competitors in the region, even after their change on the take rate and free shipping threshold. So we believe that for e-commerce businesses, the fundamentals still holds. It's the price competitiveness of our assortment, it's the completeness of our assortment. It's a fundamental structure of cost to serve and its experience on how the buyers can discover the product and our platform and all those things help us to grow faster than the market in Brazil. And if you look forward, we still believe that Brazil has a long way to go in terms of e-commerce growth. We are hoping to grow in Brazil in a profitable fashion with the growth rate outpaced the market in the coming quarters. Operator: Your next question comes from the line of Ranjan Sharma with JPMorgan. Ranjan Sharma: Two questions from my side. Firstly, on the gaming. We discussed new publishing rights. Can you also help us understand which geographies do they cover? And then also early in the year, we talked about a possible Naruto collab coming back. If you can remind us when that's going to be? The second question is on fintech. We noticed that the provisions for credit losses have increased quite a bit this quarter. What are the trends that you are seeing in delinquencies? And how does that affect your loan growth going forward? Forrest Li: Ranjan, thank you for your question. I think for the new publishing games, like we specifically talk about two games this quarter, one is powered online and since this game is our self-developed game, so we're going to publish it globally. And then we probably were going to launch the game like market by market and gradually, but like the plan is we're going to -- this will be like a global publishing opportunity for us. And for the Monster Hunter Outlander, this is a great collaboration between Garena and the Tencent. Tencent developed game and also work together with this fantastic IP owned by Capcom. We turned to launch in the market in like a market we are very familiar, like Southeast Asia, Latin America, like Taiwan, and potentially, we're going also to launch the game in Middle East and some more markets in the pipeline. So the target launch time it will be this year. Hou Tianyu: Yes. I think for the provision, it's primarily driven by the loan mix I think there are two components of our loan mix, we naturally have high provisions. One is the off-Shopee SPL and second one is the Brazil loan outstanding. Although Brazil, we have a very good ROA there, but it's a high interest, high risk market, so the higher mix of this two components contribute to the higher provision that you see. Operator: This concludes our question-and-answer session. I would like to turn the conference call back over to Mr. KC Ong for any closing remarks. Khang Chuen Ong: Thank you all for joining today's call. We look forward to speaking to all of you again next quarter. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Sea Limited, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sea Limited wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Sea Limited. The Motley Fool has a disclosure policy. Sea Limited (SE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Sea Limited Sponsored ADR? Here are five stocks we like better. SEA delivered strong Q2 growth: Revenue rose 48% year over year to $7.8 billion, while net income increased 11% to $458 million and adjusted EBITDA exceeded $917 million. Shopee and Monee expanded significantly: Shopee GMV grew 28% to $38.3 billion, with advertising and buyer engagement supporting profitability, while Monee’s loan book surged 62% to $11.1 billion with a 1.0% 90-day nonperforming loan ratio. Garena maintained momentum and broadened its pipeline: Bookings increased 15% to $764 million, and the company announced upcoming titles Palworld Online and Monster Hunter Outlanders. 3 Defense Stocks Under $20 With Massive Upside SEA (NYSE:SE) reported second-quarter 2026 revenue of $7.8 billion, up 48% from a year earlier, while adjusted EBITDA rose 11% to more than $917 million. Net income increased 11% year over year to $458 million, as growth in its Shopee e-commerce and Monee financial-services businesses helped offset a higher income tax expense. Chairman and Chief Executive Officer Forrest Li said the company’s first-quarter momentum continued through the second quarter, supported by investments intended to expand user penetration while improving operating efficiency. “We will continue to invest prudently in serving more users and serving them better,” Li said. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat Up Over 20% in 2025, These 3 Stocks Are Boosting Buyback Capacity Shopee’s gross merchandise value increased 28% year over year to $38.3 billion, while gross orders grew 27% to 4.2 billion. The platform generated $5.6 billion in GAAP revenue, including $4.3 billion in core marketplace revenue, up 66% from a year earlier. Shopee adjusted EBITDA increased 12% to $255 million. Li said Shopee recorded its eighth consecutive quarter of sequential GMV growth and reached new highs in cross-border volume and revenue. Average monthly new active buyers rose more than 35% year over year, while monthly active buyers increased 18%. Purchase frequency rose 8%. → 3 Dividend Champion Utilities for a Market That Can't Sit Still 5 EV Battery and Lithium Stocks Charging the Future Advertising was a significant contributor to monetization. Ad revenue increased more than 70%, and ad take rate improved by more than 90 basis points year over year. The number of ad-paying sellers increased about 45%, while average ad spending per seller rose more than 15%. The company continued to invest in faster delivery, fulfillment services and content-led commerce. In Indonesia, instant-delivery order volume grew about 80% year over year, while cost per order declined about 20%. Across Southeast Asia, orders from livestreaming and short-form video rose more than 50% and represented more than 35% of physical-goods orders. → Is Wingstop's Growth Story Losing Steam? Shopee VIP membership exceeded 15 million at the end of June, up 45% from the prior quarter. In Asia, VIP members generated 24% of quarterly GMV, while average monthly retention was about 80%. Brazil’s VIP program, launched in April, surpassed 1 million members. Brazil remained Shopee’s fastest-growing market in the quarter, according to Li. The company said it outpaced broader market GMV growth, reduced average buyer waiting time by 15% year over year and nearly added 500 official brands. GMV from Shopee Mall sellers more than doubled. Chief Financial Officer Tony Hou said Sea remained confident in its full-year target for Shopee GMV growth of about 25%, while noting potential foreign-exchange headwinds and a higher GMV comparison base in the fourth quarter. The company also expects Shopee to generate more than $1 billion in adjusted EBITDA for the full year. Monee, Sea’s financial-services business, reported GAAP revenue of $1.4 billion, up 59% year over year, and adjusted EBITDA of $288 million, up 13%. Consumer and small- and medium-sized enterprise loans outstanding reached $11.1 billion at the end of June, a 62% increase from a year earlier. The 90-day nonperforming loan ratio stood at 1.0%. The loan book included $10 billion of on-book loans and $1.1 billion of off-book loans. Li said improvements to Monee’s underwriting models lifted approval rates by around 10% compared with prior models while maintaining a similar risk level. The company added approximately 5.3 million first-time borrowers during the quarter, and active credit users increased about 34% to more than 40 million. Average loans outstanding per user rose about 20%. Off-Shopee SPayLater accounted for more than 20% of the total SPayLater portfolio at quarter-end and reached as much as 35% in certain markets. Monee also said monthly transacting users of its standalone ShopeePay app more than doubled during the quarter. The app is available in Indonesia, Thailand, Malaysia and Vietnam, and Sea plans to launch a similar standalone application in Brazil. Hou said higher provisions for credit losses primarily reflected changes in loan mix, including growth in off-Shopee SPayLater and Brazilian lending. He described Brazil as a higher-interest-rate, higher-risk market. Garena bookings increased 15% year over year to $764 million, while GAAP revenue climbed 34% to $747 million. Adjusted EBITDA rose 17% to $430 million. Li said Free Fire continued to draw more than 100 million average daily active users in its ninth year. The company credited new gameplay, localized content and campaigns for sustaining engagement. Its “Booyah Olé” campaign song generated more than 350 million social-media views, according to Li. Garena also announced plans for two games based on established intellectual property: Palworld Online, an open-world multiplayer survival-adventure game developed and published by Garena under license from Perfect World, and Monster Hunter Outlanders, a survival hunting action game developed by Tencent using Capcom’s Monster Hunter franchise. President Chris Feng said Palworld Online is expected to be published globally on a gradual, market-by-market basis. Monster Hunter Outlanders is targeted for launch this year in markets including Southeast Asia, Latin America and Taiwan, with potential expansion into the Middle East and additional markets. Looking ahead, management said it expects to balance Shopee’s growth investments with profitability while continuing to improve advertising, logistics, fulfillment and artificial-intelligence capabilities. Hou said the company sees a relatively stable competitive environment and believes Shopee’s fulfillment operation still has room to expand across Southeast Asia, Taiwan and Brazil. Sea Limited (NYSE: SE) is a Singapore-based consumer internet company that operates a trio of interconnected businesses across digital entertainment, e-commerce and digital financial services. Founded in 2009 as Garena and later rebranded as Sea, the company is headquartered in Singapore and listed on the New York Stock Exchange. Sea positions itself as a technology platform focused on enabling online consumers, merchants and developers primarily across Southeast Asia and adjacent markets. Sea's digital entertainment arm, Garena, is a game developer and publisher that also organizes esports initiatives and operates online gaming platforms. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "SEA Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Total Revenue: $7.8 billion, up 48% year-on-year. Total Adjusted EBITDA: $917 million, up 11% year-on-year. Net Income: $458 million, up 11% year-on-year. Shopee GMV: $38.3 billion, up 28% year-on-year. Shopee Gross Orders: 4.2 billion, up 27% year-on-year. Shopee GAAP Revenue: $5.6 billion, including $4.9 billion in marketplace revenue (up 49% year-on-year) and $700 million in product revenue. Shopee Core Marketplace Revenue: $4.3 billion, up 66% year-on-year. Shopee Value-Added Services Revenue: $700 million. Shopee Adjusted EBITDA: $255 million, up 12% year-on-year. Monee GAAP Revenue: $1.4 billion, up 59% year-on-year. Monee Adjusted EBITDA: $288 million, up 13% year-on-year. Monee Loan Book: $11.1 billion in consumer and SME loans principal outstanding, up 62% year-on-year. Monee Non-Performing Loans: 1.0% for loans past due by more than 90 days. Garena Bookings: $764 million, up 15% year-on-year. Garena GAAP Revenue: $747 million, up 34% year-on-year. Garena Adjusted EBITDA: $430 million, up 17% year-on-year. Warning! GuruFocus has detected 2 Warning Sign with SE. Is SE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sea Ltd (NYSE:SE) delivered strong Q2 2026 results with total revenue up 48% year-on-year to $7.8 billion and adjusted EBITDA of $917 million, reflecting robust growth across all business segments. Shopee's GMV grew 28% year-on-year, marking eight consecutive quarters of sequential growth, with new active buyers up over 35% year-on-year and ad revenue surging more than 70%. Monee's loan book reached $11.1 billion, up 62% year-on-year, with stable asset quality (90-day NPL at 1.0%) and the addition of 5.3 million new first-time borrowers in the quarter. Garena's bookings grew 15% year-on-year to $764 million, driven by Free Fire's continued popularity with over 100 million average daily active users, and the company is expanding its portfolio with new IP-based games. Management expressed confidence in achieving Shopee's full-year adjusted EBITDA target of $1 billion, supported by improving unit economics and a stable competitive landscape. The company is leveraging AI to enhance credit risk models, improving approval rates by around 10% while maintaining risk levels, and to optimize advertising algorithms, boosting ad take rates. ShopeeVIP membership surpassed 15 million, up 45% quarter-on-quarter, with strong retention and higher engagement, contributing to improved unit economics. Brazil remains the fastest-growing market for Shopee, with GMV growth outpacing the market, supported by logistics improvements and expansion into upmarket segments. Monee's off-Shopee SPayLater is scaling well, now accounting for over 20% of the total portfolio, and the company is expanding its standalone ShopeePay app to new markets. The company maintains a disciplined, CapEx-light approach to investments, such as fulfillment centers, which are improving cost structures and operational efficiency. Sea Ltd (NYSE:SE) faces potential foreign exchange headwinds due to weaker local currencies against the US dollar, which could impact GMV growth in the second half of the year. Monee's adjusted EBITDA growth slowed to 13% year-on-year, partly due to increased investments in new user acquisition and expansion into lower-return segments, which may pressure margins. Provisions for credit losses increased in Q2, driven by a higher mix of off-Shopee SPayLater and Brazil loans, which are inherently higher-risk and could impact profitability if asset quality deteriorates. Shopee's adjusted EBITDA margin remains relatively low at around 0.67% of GMV, and the path to the medium-term target of 2-3% requires continued cost improvements and take rate increases, which may take time. The competitive landscape, while stable, could intensify, especially in Brazil where competitors are adjusting take rates and free shipping thresholds, potentially requiring Sea Ltd (NYSE:SE) to invest more to maintain growth. Garena's growth is still heavily reliant on Free Fire, and the success of new game launches (Palworld Online, Monster Hunter Outlanders) is uncertain, with potential delays or underperformance. The company's aggressive expansion in credit, particularly in new markets like Brazil, carries inherent risks of higher default rates and regulatory challenges, which could lead to increased provisions. Shopee's fulfillment and logistics investments are still in early stages, and while unit economics are improving, they may not reach optimal efficiency in the near term, limiting margin expansion. The increase in take rates, while beneficial for revenue, could face pushback from sellers if not balanced with value-added services, potentially affecting seller retention and ecosystem health. Sea Ltd (NYSE:SE) faces seasonality in Q4 with a higher GMV base, which could make it challenging to sustain the same growth rates, especially if consumer spending weakens. Q: On Shopee, your investments are delivering results on growth. Can you talk about the outlook for GMV growth, whether we are past peak investments as margins improved sequentially, and if unit economics are improving across VIP and content? Should we expect Shopee margins to improve, or could there be volatility in the second half due to seasonality? A: Tony Hou (CFO): We remain on track to achieve our full-year GMV growth outlook of around 25%, despite potential Forex headwinds and a higher Q4 base. Our unit economics have been improving quarter-on-quarter across initiatives like VIP, fulfillment, and logistics. We are taking a CapEx-light approach to investments, and we maintain our full-year ambition of achieving $1 billion in adjusted EBITDA for Shopee. Q: Can you elaborate on the outperformance and profitability trends for Brazil, Taiwan, and Southeast Asia, and the latest competitive landscape? If GMV were to exceed the guided growth rate, is there upside on EBITDA for the second half? Also, where are we in the fulfillment investment cycle? A: Tony Hou (CFO): We see relatively good performance across all markets, with a stable competitive situation. We are maintaining or gaining market share in Southeast Asia and Taiwan, and growing well above market in Brazil. The balance between growth and EBITDA depends on market growth and internal efficiency. For fulfillment, we are still in the early stages of penetration with significant room to grow, and we are seeing improving economics driven by scale, cost optimization, and integration with our logistics arm (SPX). Q: Both Shopee and TikTok Shop have raised commissions in several Southeast Asia markets. How much more upside is there for this? Can you confirm if Southeast Asia e-commerce is now profitable? Also, where do you expect Monee's margins to stabilize, and what guardrails should we be mindful of regarding NPLs and provisioning as you acquire new users? A: Tony Hou (CFO): We see opportunities to increase take rates further, not just from commissions but also from advertising, while ensuring our platform remains price-competitive. For Monee, the margin mix is shifting intentionally towards new segments and products (like off-Shopee SPayLater) which have slightly lower returns but offer significant growth. Our guideline is to maintain stable NPLs for each segment and ensure positive returns, which has resulted in growing absolute EBITDA for Monee. Q: On Shopee's advertising take rate, which was up by more than 90 basis points, how much further upside is there? What AI technologies are being implemented to improve this? Also, what is the strategy for launching a standalone app in Brazil for Monee? A: Tony Hou (CFO): We see meaningful potential to increase the ad take rate further, driven by AI-powered tools like Smart Vouchers, diagnostic tools for sellers, and improved matching algorithms. For Brazil, we believe Monee has big potential. We are launching a standalone app similar to ShopeePay, leveraging our e-commerce data and proven credit scoring algorithms to capture low-hanging fruit in the market. Q: E-commerce margins have stabilized after inching down. What is the path and timeframe to reach your medium-term aspiration of 2% to 3% margins? Also, as the average loan size increases, does credit risk also increase, and what is the duration of these loans? A: Tony Hou (CFO): The path to 2% to 3% is straightforward, coming from maturing investments, fundamental cost structure improvements in logistics and fulfillment, and better take rates. We are already above that level in some markets. For Monee, we do not see a correlation between increased outstanding per user and credit risk. Credit risk remains stable within each country and segment, and loan durations vary by product, ranging from 12 to 18 months for larger loans. Q: Your full-year 2026 EBITDA target of over $1 billion implies a higher second half than the first half, which differs from last year. What are the drivers behind this? Also, one of your key competitors in Brazil is lowering take rates and free shipping thresholds. Has this impacted your growth, and what is your profitability outlook there? A: Tony Hou (CFO): The higher second-half EBITDA is driven by continued GMV growth and ongoing optimization of our initiatives. In Brazil, despite competitor actions, we remain very price-competitive and continue to grow well above the market. We believe Brazil has a long way to go in e-commerce growth, and we plan to grow profitably while outpacing the market. Q: On gaming, can you help us understand which geographies the new publishing rights cover? Also, can you remind us when the Naruto collab is coming back? A: Forrest Li (Chairman and CEO): Palworld Online is self-developed and will be published globally, market by market. Monster Hunter Outlanders, developed by Tencent, will launch in markets we are familiar with, such as Southeast Asia, Latin America, and Taiwan, with potential expansion to the Middle East. The target launch is this year. Q: Provisions for credit losses have increased quite a bit this quarter. What trends are you seeing in delinquencies, and how does that affect loan growth going forward? A: Tony Hou (CFO): The increase in provisions is primarily driven by the loan mix, specifically the growth in off-Shopee SPayLater and Brazil loan outstanding, which naturally have higher provision rates due to being higher-risk, higher-interest segments. This is an intentional part of our growth strategy, and we maintain stable NPLs within each segment. For the complete transcript of the earnings call, please refer to the full earnings call transcript.