E-commerce and gaming company Sea (NYSE: SE) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 36.5% year on year to $5.99 billion. Its GAAP profit of $0.59 per share was 20.6% below analysts’ consensus estimates.
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Sea (SE) Q3 CY2025 Highlights:
- Revenue: $5.99 billion vs analyst estimates of $5.64 billion (36.5% year-on-year growth, 6.1% beat)
- EPS (GAAP): $0.59 vs analyst expectations of $0.74 (20.6% miss)
- Adjusted EBITDA: $874.3 million vs analyst estimates of $825.4 million (14.6% margin, 5.9% beat)
- Adjusted EBITDA: Digital Entertain and Digital Financial Services EBITDA beat, E-commerce segment EBITDA missed
- Operating Margin: 8%, up from 4.6% in the same quarter last year
- Paying Users: 65.9 million, up 15.7 million year on year (beat)
- Market Capitalization: $91.79 billion
“After a very strong first half of the year, our momentum has continued into the third quarter. Our focus remains the same: continuing to deliver high and profitable growth across all three of our businesses. With e-commerce and digital finance penetration in our markets still low but increasing, strong growth lays the best foundation to maximize our long-term profitability,” said Forrest Li, Sea’s Chairman and Chief Executive Officer.
Company Overview
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.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Sea’s sales grew at an impressive 20.4% compounded annual growth rate over the last three years. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, Sea reported wonderful year-on-year revenue growth of 36.5%, and its $5.99 billion of revenue exceeded Wall Street’s estimates by 6.1%.
Looking ahead, sell-side analysts expect revenue to grow 18.8% over the next 12 months, a slight deceleration versus the last three years. We still think its growth trajectory is attractive given its scale and implies the market is baking in success for its products and services.
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Paying Users
User Growth
As an online marketplace, Sea generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.
Over the last two years, Sea’s paying users, a key performance metric for the company, increased by 21.9% annually to 65.9 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. 
In Q3, Sea added 15.7 million paying users, leading to 31.3% year-on-year growth. The quarterly print was higher than its two-year result, suggesting its new initiatives are accelerating user growth.
Revenue Per User
Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns in transaction fees from each user. ARPU also gives us unique insights into a user’s average order size and Sea’s take rate, or "cut", on each order.
Sea’s ARPU growth has been strong over the last two years, averaging 6.3%. Its ability to increase monetization while quickly growing its paying users reflects the strength of its platform, as its users continue to spend more each year. 
This quarter, Sea’s ARPU clocked in at $90.83. It grew by 3.9% year on year, slower than its user growth.
Key Takeaways from Sea’s Q3 Results
We enjoyed seeing Sea beat analysts’ EBITDA expectations this quarter, although E-commerce segment EBITDA missed. We were also glad it expanded its number of users. On the other hand, EPS missed Wall Street's expectations. Zooming out, we think this was a mixed print with some key areas of upside. Investors were likely hoping for more, and shares traded down 7.6% to $143.35 immediately following the results.
Big picture, is Sea a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
