Sea Limited (NYSE:SE) stock jumped on Tuesday after the company reported strong fiscal second-quarter 2026 revenue growth and raised its full-year profitability outlook for Shopee, offsetting an earnings miss.

The company reported quarterly revenue of $7.79 billion, up 48.1% year over year and above the analyst consensus estimate of $7.06 billion. Earnings came in at 70 cents per share, below expectations of 75 cents per share.

Shopee Drives E-Commerce Growth

Sea generates revenue through three main businesses: Garena, Shopee and Monee. Garena generates revenue from in-game purchases and advertising. Shopee earns revenue from transaction fees, seller services and advertising, while Monee generates income from transaction fees and financial products, including loans and insurance.

Shopee revenue rose 48.2% year over year to $5.6 billion. Gross orders increased 27.5% to 4.2 billion, while gross merchandise volume, or GMV, climbed 28.4% to $38.3 billion.

Adjusted EBITDA increased 12.2% year over year to $255.4 million.

Garena Posts Strongest Quarter Since 2021

Garena revenue rose 33.5% year over year to $746.6 million. Bookings increased 15.5% to $763.5 million, while adjusted EBITDA rose 16.7% to $429.8 million.

Quarterly active users rose 0.23% year over year to 666.3 million, while paying users increased 10.2% to 68.1 million. Average bookings per user climbed to $1.15 from $0.99 a year earlier.

Chairman and CEO Forrest Li said Sea carried its first-quarter momentum into the second quarter, helped by investments that strengthened Shopee and Monee while improving user penetration.

Sea Raises Shopee Profit Outlook

Li said Shopee delivered a strong first half of 2026, with second-quarter GMV, gross orders and revenue reaching new highs.

Improved operational efficiency and greater scale strengthened Shopee’s unit economics, giving Sea confidence that the business can reach $1 billion in adjusted EBITDA for the full year.

That compares with its previous forecast of at least $880.6 million and analysts’ average estimate of $980.7 million, Bloomberg reported Tuesday.

Li said Monee remains early in its growth cycle because only a fraction of Sea’s ecosystem users currently use its financial products.

Garena also delivered another strong quarter for bookings and profitability, led by Free Fire, which continued to attract more than 100 million average daily active users. Sea is also working to diversify Garena’s portfolio with Palworld Online and Monster Hunter Outlanders.

AI And Shopee Drive Growth Push

Sea is investing in artificial intelligence, expanding Shopee in markets such as Brazil and improving tools including product recommendations and seller services.

The company also released its generative AI companion chatbot, Migoo, across regions including the U.S., marking a bigger push into AI as competition intensifies with ByteDance Ltd.’s TikTok, Alibaba Group Holding Limited’s (NYSE:BABA) Lazada and PDD Holdings Inc.’s (NASDAQ:PDD) Temu.

Bloomberg Intelligence said Shopee remains Sea’s main revenue and earnings growth driver, while Garena supports group profits and Monee offers another long-term monetization opportunity inside and beyond Shopee’s ecosystem.

Cash Position And Stock Reaction

Sea generated $1.51 billion in operating cash flow during the quarter. As of June 30, the company held $5.99 billion in cash, cash equivalents and restricted cash.

Sea Price Action

SE Price Action: Sea shares were up 10.45% at $126.80 during premarket trading on Tuesday, according to Benzinga Pro data.

Photo via Shutterstock

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