Sea’s Q3 PATMI jumps 32% as UOB KayHian lifts forecasts

By Amara Osei

Sea reported third-quarter revenue of $8.58 billion on Tuesday, up 43% year on year. Profit after tax and minority interests (PATMI) reached $491 million, up 32% from a year earlier.

What did UOB KayHian change?

UOB KayHian raised Sea’s revenue and earnings forecasts on Wednesday after strong third-quarter results. It said the results reinforced its growth outlook across all three operating segments.

• Revenue forecasts rose 3.9% for 2026, 2% for 2027 and 2% for 2028.
• Earnings forecasts rose 3.7% for 2026, 2.5% for 2027 and 0.4% for 2028.

“The upgrades reflect improved monetization at Shopee, continued growth in Monee’s loan book and sustained momentum at Garena, partly offset by higher marketing expenses and credit-loss provisions,” UOB KayHian said in a note.

How strong were Sea’s group results?

Nine-month revenue reached $23.47 billion, up 46% year on year, while PATMI rose 15% to $1.36 billion. The totals represented 79% and 80.5% of UOB KayHian’s forecasts, respectively, supported by growth across all three core businesses.

Adjusted EBITDA climbed 29% to $931.3 million. Gross margin rose 2.5 basis points year on year to 45.9%, despite higher marketing expenses and credit-loss provisions.

What powered Shopee’s upgrade?

Shopee’s third-quarter GMV reached a record $39.7 billion, up 23% year on year and 4% quarter on quarter. Revenue rose 41% to $6.07 billion. Core marketplace revenue increased 51% year on year, while advertising revenue grew more than 55%.

Shopee’s generally accepted accounting principles (GAAP) take rate improved to 15% from 13% a year earlier. ShopeeVIP membership exceeded 21 million and contributed nearly 25% of GMV. Adjusted EBITDA rose 45% to $269.2 million as unit economics improved.

UOB KayHian said improving advertising revenue, take rates and logistics efficiency offered a better balance between growth and profitability. Record GMV and stronger adjusted EBITDA supported management’s $1 billion adjusted EBITDA target for 2026. UOB KayHian said further monetization gains and ShopeeVIP adoption should support margins.

“The company remains on track to achieve approximately 25 percent GMV growth and $1 billion adjusted EBITDA in 2026,” UOB KayHian said.

Why is Monee’s credit risk rising?

Monee’s third-quarter revenue rose 63.9% year on year and 15.6% quarter on quarter to $1.62 billion. Loans outstanding expanded 60% year on year and 12.8% quarter on quarter to $12.6 billion. Active credit users grew about 28% year on year as engagement and credit use cases expanded beyond Shopee.

Monee’s adjusted EBITDA increased 15.5% year on year and 3.6% quarter on quarter to $298.3 million. Its non-performing loan ratio rose to 1.3% from 1% in the second quarter of 2026. UOB KayHian cited some softness in asset quality in Thailand and Brazil.

Management has proactively tightened underwriting criteria for selected customer segments to manage credit risks, UOB KayHian said. Higher non-performing loans and credit-loss provisions require disciplined risk management, according to the research house.

UOB KayHian said continued off-Shopee lending and deeper customer engagement could expand Monee’s addressable market. It could also strengthen Monee’s position as a standalone financial-services platform, the research house said.

How did Garena rebound?

Garena’s third-quarter bookings rose 5.9% year on year and 16.6% quarter on quarter to $890 million, recovering from the second-quarter 2026 moderation. Quarterly paying users grew 4.1% year on year to 68.6 million, and the paying-user ratio improved to 10.2% from 9.8% in the third quarter of 2025.

Garena revenue increased 28.6% year on year to $840.1 million. Adjusted EBITDA jumped 45.9% year on year and 11.9% quarter on quarter to $458.2 million. UOB KayHian linked the gains to stronger monetization and operating leverage.

Free Fire remained Garena’s key earnings driver, supported by successful collaborations including Naruto Shippuden. Arena of Valor maintained engagement through its 10th-anniversary celebrations. UOB KayHian said existing franchises remained the main earnings contributors, with content updates and user engagement supporting their resilience.

Successful diversification into new titles could reduce Garena’s dependence on Free Fire. The research house said new games could strengthen the sustainability of Garena’s longer-term earnings profile.

What does the higher outlook require?

UOB KayHian said the third-quarter results reinforced the growth outlook across all three businesses. Its higher estimates now depend on Shopee sustaining monetization gains, Garena diversifying beyond Free Fire and Monee containing credit losses.