Sea’s first quarter results were met with a notably positive market reaction, despite the company missing Wall Street’s revenue and non-GAAP profit expectations. Management attributed the strong operational momentum to improved unit economics in e-commerce, robust growth in its digital financial services arm, and a resurgence in its gaming segment. CEO Forrest Li highlighted cost optimization, scale-driven efficiencies, and the growing contribution of advertising revenues, stating, “Our businesses are now all self-sufficient and cash-generating, positioning us well to capture future opportunities.”

Is now the time to buy SE? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Sea’s Q1 Earnings Call

• Pang Vitt (Goldman Sachs) inquired about the sustainability of Shopee’s margin improvement and the risks to GMV growth amid macro uncertainty. President Chris Feng explained that improved take rates, cost optimization, and local market focus have supported margins, while low e-commerce penetration still provides runway.
• Piyush Choudhary (HSBC) asked about capital allocation for the credit business and funding diversification. CFO Tony Hou replied that Sea prefers to partner with external financial institutions for loan growth rather than rely solely on internal cash.
• Alicia Yap (Citigroup) questioned Shopee’s growth drivers in Brazil and the impact of VIP memberships on monetization. CEO Forrest Li pointed to pricing leadership, logistics investments, and positive feedback from VIP members, while noting ongoing adjustments to monetization strategies.
• Divya Kothiyal (Morgan Stanley) probed the e-commerce competitive landscape, especially in ASEAN and Brazil, including the effects of new entrants like TikTok Shop. Li described the competitive environment as stable, with Sea’s cost structure and ad take rate improvements driving margins.
• John Choi (Daiwa) sought clarity on investments needed for Monee’s off-platform growth and the role of AI in operational efficiency. Li emphasized targeted, ROI-driven investments and outlined how AI is improving both consumer-facing features and internal productivity.

Catalysts in Upcoming Quarters

Over the coming quarters, our team will be monitoring (1) Shopee’s ability to maintain profitability while expanding in Brazil and Southeast Asia, (2) the pace of Monee’s off-platform credit adoption and funding diversification, and (3) Garena’s execution on its new game launches and content collaborations. The evolution of AI-driven efficiencies and macroeconomic developments will also be important markers for Sea’s ongoing performance.

Sea currently trades at $159.93, up from $142.62 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

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