Core Viewpoint - Sea's recent performance shows significant growth in the gaming sector and a notable improvement in the e-commerce segment's profit margins, despite some indicators falling short of market expectations [3][10][12]. Gaming Segment - The gaming business experienced a remarkable revenue increase of nearly 51% year-on-year, significantly surpassing the sell-side expectations of around 11% [3][14]. - The surge in performance is attributed to the collaboration with the popular IP "Naruto," which boosted daily active users to near pre-pandemic levels, with active users increasing by 15 million and paying users by 4.7 million [3][16]. - The adjusted EBITDA for the gaming segment rose by 56.8%, with the profit margin increasing from 57.1% to 59.1% year-on-year [4][42]. - However, due to a significant portion of new revenue being recorded as deferred income, GAAP revenue growth was only 8%, which fell short of expectations [4][23]. E-commerce Segment - The Shopee e-commerce segment reported a GMV of $28.6 billion, with a year-on-year growth rate of 21.2%, slightly below the market expectation of 23% [5][26]. - Revenue growth for Shopee was 28%, a significant decline from the previous quarter's 41%, and also below the expected 33% [5][30]. - Despite the growth challenges, the e-commerce segment achieved approximately $200 million in operating profit, exceeding market expectations of $86 million, with a profit margin of 5.5% [5][42]. - The gross margin for the e-commerce segment improved from 10% to 16.5% year-on-year, contributing to the overall profit exceeding expectations [7][48]. Financial Segment - The newly renamed financial segment, Monee, reported revenue of approximately $790 million, a year-on-year increase of 58%, surpassing sell-side expectations of 48% [6][36]. - Total loan balances reached $5.8 billion, with a year-on-year growth of 76%, while the overdue loan ratio decreased to 1.1% [6][36]. - However, the provision for bad debts increased significantly, raising concerns about potential risks associated with rapid market expansion [6][35]. Cost and Expense Management - The overall gross profit reached $2.24 billion, with a gross margin improvement from 44.6% to 46.2%, exceeding market expectations [7][48]. - Operating expenses totaled approximately $1.82 billion, reflecting a year-on-year increase of 19%, indicating a continued optimistic expansion phase for the company [7][53]. - Marketing expenses surged by 21%, primarily driven by the financial segment's aggressive market expansion efforts [7][53]. Overall Performance - Sea's overall revenue growth was 30% year-on-year, but this was below the market expectation of 31%, primarily due to the e-commerce and gaming segments underperforming in terms of revenue recognition [8][46]. - The adjusted EBITDA for the entire company reached $950 million, significantly exceeding market expectations of $660 million by approximately 44% [8][12].

Group 1 - The core highlight of Sea's Q1 2025 earnings report is the significant growth in the gaming segment, with revenue increasing nearly 51% year-over-year, far exceeding the market expectation of around 11% [1][16][21] - The collaboration with the popular IP "Naruto" has greatly boosted the daily active users of Free Fire, bringing the active user count close to pre-pandemic levels [1][21] - The number of paying users reached 65 million, significantly surpassing the market expectation of 53 million, with the paying user ratio increasing from 8.2% to 9.8% [1][21][24] Group 2 - The adjusted EBITDA for the gaming segment surged by 56.8%, aligning with the revenue growth, and the EBITDA margin improved from 57.1% to 59.1% year-over-year [2][42] - However, due to a significant portion of new revenue being recorded as deferred income, the GAAP revenue and operating profit fell short of expectations [2][6] - The Shopee e-commerce segment reported a GMV of $28.6 billion, showing a year-over-year growth of 21.2%, but this was below the market expectation of 23% [2][28] Group 3 - The e-commerce segment's revenue growth was 28%, a notable decline from the previous quarter's 41%, and it also missed the market expectation of 33% [3][32] - The decline in revenue was attributed to a decrease in the monetization rate of the 3P marketplace model, which fell by nearly 0.3 percentage points [3][32] - Despite the growth challenges, the e-commerce segment achieved approximately $200 million in operating profit, significantly exceeding the market expectation of $86 million [3][42] Group 4 - The financial segment, recently rebranded as Monee, reported revenue of approximately $790 million, a year-over-year increase of 58%, surpassing the market expectation of 48% [3][38] - The total loan balance reached $5.8 billion, reflecting a year-over-year growth of 76%, while the overdue loan ratio decreased to 1.1% [4][39] - However, the provision for bad debts increased significantly, indicating rising credit risk as the business expands into new markets [4][39] Group 5 - Overall, Sea's total revenue grew by 30% year-over-year, but this was below the market expectation of 31% [6][45] - The company reported a gross profit of $2.24 billion, with a gross margin improving from 44.6% to 46.2%, exceeding market expectations [5][48] - Operating expenses increased by 19%, primarily driven by a significant rise in marketing expenses related to the financial segment [5][51]