Garena Best Quarter Since 2021 at +51% Bookings; Monee Loan Book +70%; Shopee FY25 GMV Guide Raised to >25% — Maintaining Outperform Through Investment Phase
SE financial model
Income Statement · Dollars in millions, except per share
| Income Statement | ||||||
|---|---|---|---|---|---|---|
| Actual | Estimate | |||||
| FY2023 | FY2024 | FY2025 | FY26E | FY27E | FY28E | |
| Service Revenue | $11,942.4 | $15,261.3 | $20,913.1 | $27,673.3 | $30,746.1 | $36,261.0 |
| Sales of Goods | $1,121.2 | $1,558.6 | $2,025.4 | $2,707.9 | $2,856.2 | $3,239.0 |
| Total Revenue | $13,063.6 | $16,819.9 | $22,938.5 | $30,381.2 | $33,602.3 | $39,500.0 |
| Less: Cost of Service | ($6,202.5) | ($8,164.4) | ($10,812.0) | ($14,261.9) | ($15,623.7) | ($18,311.8) |
| Less: Cost of Goods Sold | ($1,027.4) | ($1,450.4) | ($1,882.7) | ($2,563.6) | ($2,659.3) | ($2,996.1) |
| Total Cost of Revenue | ($7,229.9) | ($9,614.8) | ($12,694.7) | ($16,825.6) | ($18,282.9) | ($21,307.9) |
| Gross Profit | $5,833.6 | $7,205.1 | $10,243.7 | $13,555.6 | $15,319.3 | $18,192.1 |
| Less: Sales and Marketing | ($2,779.2) | ($3,472.7) | ($4,492.2) | ($5,838.1) | ($6,128.6) | ($6,912.5) |
| Less: General and Administrative | ($1,134.7) | ($1,267.7) | ($1,357.8) | ($1,684.4) | ($1,770.8) | ($1,975.0) |
| Less: Research and Development | ($1,164.1) | ($1,206.0) | ($1,157.1) | ($1,196.2) | ($1,199.6) | ($1,303.5) |
| Less: Provision for Credit Losses | ($633.9) | ($776.9) | ($1,372.6) | ($2,079.0) | ($2,189.7) | ($2,488.5) |
| Other Operating Income/(Expense), Net | $103.1 | $180.4 | $121.3 | $120.7 | $134.4 | $158.0 |
| Total Operating Expenses | ($5,608.9) | ($6,542.9) | ($8,258.4) | ($10,677.1) | ($11,154.3) | ($12,521.5) |
| Operating Income (Loss) | $224.8 | $662.2 | $1,985.3 | $2,878.5 | $4,165.1 | $5,670.6 |
| Interest Income | $331.3 | $365.8 | $331.1 | $338.4 | $327.0 | $395.0 |
| Interest Expense | ($41.1) | ($38.3) | ($33.6) | ($11.0) | ($13.4) | ($15.8) |
| Other Income/(Expense), Net (incl. equity investees) | ($89.7) | ($220.6) | ($20.8) | ($29.6) | ($33.6) | ($39.5) |
| Pretax Income (Loss) | $425.4 | $769.0 | $2,262.0 | $3,176.4 | $4,445.1 | $6,010.3 |
| Less: Income Tax (Expense)/Benefit | ($262.7) | ($321.2) | ($651.1) | ($1,047.0) | ($1,431.9) | ($1,863.2) |
| Net Income (Loss) | $162.7 | $447.8 | $1,610.9 | $2,129.4 | $3,013.2 | $4,147.1 |
| Less: NI Attributable to Non-controlling Interest | $12.0 | $3.5 | $32.7 | $44.1 | $60.3 | $82.9 |
| Net Income to Sea Limited | $150.7 | $444.3 | $1,578.1 | $2,085.3 | $2,952.9 | $4,064.2 |
| EPS — Basic | $0.27 | $0.77 | $2.65 | $3.50 | $4.96 | $6.70 |
| EPS — Diluted | $0.25 | $0.74 | $2.52 | $3.27 | $4.63 | $6.24 |
| Shares — Basic (M) | 566.6 | 575.0 | 595.0 | 595.0 | 595.0 | 606.9 |
| Shares — Diluted (M) | 594.4 | 604.7 | 638.2 | 638.2 | 638.2 | 651.0 |
| IS Ratios & Projection Drivers | ||||||
| Effective Tax Rate | 31.0% | |||||
The full workbook adds 16 historical and 8 projected quarters, plus Balance Sheet · Cash Flow Statement · KPI Drivers — Segment Revenue — every subtotal a live formula, every projection traced to a driver.
Key Takeaways
- Q3 2025: revenue $6.0B (+38% YoY) above Street; adj EBITDA $874M (+58% YoY); net income $375M (+145% YoY). The +38% revenue acceleration matches Q2's pace despite a meaningfully larger base — broad-based growth across all three businesses.
- Garena bookings $841M (+51% YoY) — best quarter since 2021. Adj EBITDA $466M (+48%). Driven by Squid Game collaboration + Naruto Shippuden Chapter 2 + Solora map momentum + Free Fire World Series Global Finals in Jakarta (Guinness World Record event, 600K+ players). The IP-collaboration playbook now produces structural earnings acceleration, not one-off events.
- Monee revenue $990M (+61% YoY); loan book $7.9B (+70%); NPL 1.1% stable. 34M+ active credit users (+45%); 5M+ first-time borrowers Q3 (vs 4M Q2). All-can-apply credit approach rolled out — moves from whitelist-based to broad availability. Off-Shopee SPaylater +300% YoY. Standalone Shopee Pay app launched in 4 markets.
- Shopee FY25 GMV growth guide RAISED to >25%. Q3 GMV $32.2B (+28%); core marketplace revenue $3.1B (+53%); ad take rate +80bp YoY. Shopee EBITDA $186M (margin 0.6% vs Q2's 0.8%) reflects deliberate investment in fulfillment + VIP + content ecosystem. The margin step-down is the planned investment phase, not deteriorating unit economics.
- Rating: Maintaining Outperform. Q2 thesis fully validated and extended. Garena's structural durability + Monee's credit scaling + Shopee's category leadership investments all support multi-year compounding. Fair value range raised to $200-250 (~32-40x FY26 EPS power of ~$6.20). Post-print $175.
Results vs. Consensus
| Metric | Q3 2025 | Street | Beat/Miss | Magnitude |
|---|---|---|---|---|
| Total Revenue | $6.0B (+38% YoY) | $5.5B | Beat | +$500M / +9% |
| Adjusted EBITDA | $874M (+58% YoY) | $760M | Beat | +$114M / +15% |
| Net Income | $375M (+145% YoY) | $280M | Beat | +$95M / +34% |
| Shopee GMV | $32.2B (+28%) | $30.5B | Beat | +$1.7B / +6% |
| Shopee Adj EBITDA | $186M (vs $34M Q3 24) | $235M | Miss | -$49M (investment) |
| Monee Revenue | $990M (+61%) | $890M | Beat | +$100M / +11% |
| Monee Loan Book | $7.9B (+70% YoY) | — | — | — |
| Garena Bookings | $841M (+51% YoY) | $680M | Beat | +$161M / +24% |
| Garena Adj EBITDA | $466M (+48%) | $385M | Beat | +$81M / +21% |
Segment Performance
Shopee — Investment Phase Begins; FY25 GMV Guide Raised
Shopee GMV $32.2B (+28% YoY); gross orders 3.6B (+28%); revenue $4.3B; core marketplace revenue $3.1B (+53%) driven by ad revenue +70% and ad take rate +80bp YoY. Adj EBITDA $186M reflects deliberate investments in fulfillment, instant delivery, VIP membership scaling, and content ecosystem. FY25 GMV growth guide raised from "around 25%" to "more than 25%."
"Shopee has delivered another quarter of strong and profitable growth. With our strong performance year to date, we now expect Shopee's full-year 2025 GMV growth to be more than 25%."
— Forrest Li, Chairman & CEO
Investment areas:
- Fulfillment service rollout — moving from delivery-only to warehouse + packaging + shipping bundles. Adoption building across markets.
- Instant + same-day delivery — Indonesia Jakarta area orders +35% YoY; 4-hour delivery option scaling.
- Economical shipping for rural areas — 20% lower cost per order; orders outside Java +45% YoY in Q3.
- Taiwan locker network — 2,500+ locations in less than 3 years; 70% of Taiwan deliveries; 30% lower cost vs traditional pickup.
- VIP membership scaling — 3.5M+ subscribers (+75% QoQ); 5x purchase frequency, 5x spend vs non-subscribers; ~10% of Indonesia GMV.
- YouTube + Meta partnerships — YouTube orders +30% QoQ; Meta collab launched October.
Assessment: Shopee EBITDA margin compression from 0.8% Q2 to 0.6% Q3 is the planned investment phase consequence. Each investment area has measurable ROI: instant delivery captures upmarket buyers (better LTV); VIP membership drives 3-5x purchase frequency uplift; fulfillment service ensures faster delivery while reducing cost. The structural moat-building justifies near-term margin trade-off.
Monee — All-Can-Apply Credit Drives Scaling
Monee revenue $990M (+61% YoY); adj EBITDA $258M (+37%). Loan book $7.9B (+70%); 90-day NPL stable at 1.1%. Thailand surpassed $2B in loans outstanding (third country milestone after Indonesia). Brazil loan book more than tripled YoY.
All-can-apply approach: Monee shifted from whitelist-based onboarding to broad credit availability. Any Shopee user in most markets can apply for SPaylater credit with near-instant approval. 5M+ first-time borrowers added in Q3 (vs 4M Q2). New cohorts scaling with generally positive unit economics.
"Moving to this all-can-apply approach enabled us to add more than five million first-time borrowers in the third quarter. New user cohorts scaled well with generally positive unit economics, a testament to our increasingly advanced risk underwriting capability."
— Forrest Li, Chairman & CEO
SPaylater penetration: Single digits in early markets; 30%+ in mature markets. Off-Shopee SPaylater +300% YoY (10% of total loan book; vast headroom remaining). Standalone Shopee Pay app launched in Indonesia, Thailand, Vietnam, Malaysia — extending payment + credit reach off-platform.
Assessment: All-can-apply is the key strategic shift this quarter. Moves Monee from a constrained on-Shopee credit franchise to a broad consumer credit platform. Combined with the standalone Shopee Pay app launches, the off-Shopee TAM expansion is the multi-year monetization unlock.
Garena — Best Quarter Since 2021
Garena bookings $841M (+51% YoY); revenue $653M (+31%); adj EBITDA $466M (+48%). The +51% bookings YoY is Garena's best quarterly result since 2021 (the post-pandemic peak). Driven by Squid Game collaboration (Red Light Green Life played 300M+ times) + Naruto Shippuden Chapter 2 (highest satisfaction scores of any campaign in 2 years).
"Garena delivered another stellar quarter. Bookings were up 51% and adjusted EBITDA grew 48% year on year, making it our best quarter since 2021."
— Forrest Li, Chairman & CEO
Free Fire World Series Global Finals in Jakarta in November attracted 600K+ players worldwide — earned Guinness World Records title for Largest Mobile Team-Based Esports Tournament. Beyond Free Fire, EA Sports FC Mobile launched in Vietnam (October), became Vietnam's most-downloaded mobile game.
Assessment: Garena's structural durability is now indisputable. Free Fire entering its 9th year still grew bookings +51% YoY — a remarkable feat for any free-to-play title. The IP collaboration playbook (Naruto, Squid Game, Jujutsu Kaisen upcoming) provides multi-year repeatable monetization. Free Fire 10th anniversary planning for 2027.
Key Topics & Management Commentary
Overall Management Tone: Confident with deliberate investment-phase framing. Management explicitly choosing to invest in Shopee long-term moat (logistics, VIP, content) at the cost of near-term EBITDA margin. The investment thesis is well-articulated and the ROI metrics support the trade-off.
1. Shopee Fulfillment Service Rollout
Beyond delivery, Shopee is building fulfillment capability — warehousing, packaging, shipping bundles. Goeckeler/Hou framed this as the "second core pillar" of logistics moat. Capital-efficient model (leasing rather than buying land/warehouses).
"With our delivery capability well scaled, our next goal to further deepen our logistics competitive mode is to enhance our fulfillment capability."
— Forrest Li, Chairman & CEO
Assessment: Fulfillment is the structural moat extension that competitors can't replicate without years of investment. Combined with delivery network, creates an end-to-end logistics platform that's defensive against TikTok Shop / Temu / other entrants.
2. VIP Membership 3.5M+ at +75% QoQ
VIP subscribers tripled QoQ from 2M to 3.5M+. In Indonesia, VIP members bought 3x more frequently and spent 5x more than non-subscribers, accounting for ~10% of total GMV.
Assessment: VIP is the highest-LTV user acquisition mechanism. The 75% QoQ subscriber growth + 10% of Indonesia GMV penetration validates the structural value of the program. Rollout to Brazil planned for FY26 — the highest-value market for VIP.
3. Monee All-Can-Apply Credit + Off-Shopee Acceleration
All-can-apply credit approach + Off-Shopee SPaylater +300% YoY = strategic pivot to broad consumer credit access. Standalone Shopee Pay app launched in 4 markets. 20%+ of Shopee Pay monthly transacting users on standalone app.
Assessment: The standalone Shopee Pay app is the most underappreciated initiative in Monee's strategy. Once it scales, it becomes the regional digital wallet competing with GrabPay, Touch'n Go, and bank apps — a TAM expansion of 5-10x.
4. Garena IP Collaboration Repeatability
Squid Game + Naruto Chapter 2 + Solora launch all in Q3 = unprecedented content pack quarter. Naruto Chapter 2 surpassed Chapter 1 in engagement and revenue. The Bangkok all-star ninja clash esports tournament drew tens of thousands of fans.
Assessment: The IP collaboration model (Naruto, Squid Game, Jujutsu Kaisen coming) is now the proven structural growth lever. Each collaboration delivers 6-12 weeks of bookings uplift; Garena can sustain 2-3 major collaborations per year.
5. EA Sports FC Mobile Launch in Vietnam
EA Sports FC Mobile launched in Vietnam in October; became most-downloaded mobile game. The Garena-EA partnership extends Garena's portfolio beyond Free Fire and Arena of Valor.
Assessment: EA Sports FC Mobile diversifies Garena from Free Fire concentration. Multi-game portfolio reduces single-title risk.
Market Reaction
- Pre-print: Stock ~$170. YTD CY25 +60%; trailing 12M +130%.
- Nov 11 session: Initial flat on Shopee EBITDA margin concern; recovered intraday. Closed ~$175 — +3%. Volume ~6M (~1.5x avg).
- Sector: MELI flat-up; GRAB +2%; TTWO/EA flat.
The modest +3% reaction reflects (a) Shopee EBITDA below Street creating initial concern, (b) management's deliberate investment phase framing requiring Street to digest the trade-off, (c) stock had already rallied substantially YTD. Investors who can look past the near-term Shopee margin compression see the structural moat-building (fulfillment, VIP, content) as positive long-term.
Thesis Scorecard
| Thesis Point | Status |
|---|---|
| Bull #1: Shopee structural growth + profitability | Mixed (investment phase) |
| Bull #2: Monee credit scaling | Strengthened |
| Bull #3: Garena IP-collaboration repeatability | Fully Confirmed |
| Bull #4: Brazil long-term growth | Confirmed |
| Bull #5: Ad take rate expansion | Confirmed (+80bp Q3) |
| Bull #6: Off-Shopee Monee TAM | NEW — Confirmed (+300%) |
| Bear #1: Shopee EBITDA margin compression | Materialized (deliberate) |
| Bear #2: Garena Free Fire moderation | Reversed (+51% bookings) |
Overall: Five bull points strengthened; Garena bear reversed; Shopee EBITDA bear materializes but as deliberate investment trade-off. Net positive.
Action: Maintaining Outperform. Fair value $200-250. Post-print $175; meaningful upside remains.