The Revenue-to-Profit Gap From Last Quarter Didn't Close
Over these 12 quarters: share price $43.95 to $95.83 (+118%); operating income -128 to 650 US$ million; operating income margin -3.9% to 8.4%. One graph in actual numbers: bars are the quarter's operating income, over them the share price at quarter-end (left axis) and the operating income margin (right axis); each line is fitted to its own range, so read the timing, not the heights. Prices are adjusted for splits.
The revenue-to-profit gap did not close: Sea's revenue grew 48.1% in Q2 2026, but Adjusted EBITDA» and net income each grew only 10.6%, and Shopee, its largest segment, grew its own profit just 3.5%.
Last quarter's post found revenue up 46.6% against Adjusted EBITDA up 9.3%, anchored in Shopee's own profit falling. The complication is that the shape repeated: revenue reached a new high of $7.8 billion (see Trailing Quarters), yet Shopee's profit only stopped falling. Our reading is that growth is still being bought with marketing and loan-loss provisions faster than it turns into profit.
Marketing and loan-loss provisions took most of the extra gross profit
Most of the extra gross profit went to marketing and to money set aside for loans that may not be repaid. In plain words: sales and marketing is what Sea spends to win and keep users (the call cites brand-awareness campaigns and user acquisition); the provision for credit losses is an expense booked for loans that may not be repaid, and it grows with the loan book; and Adjusted EBITDA is Sea's own profit measure, which takes operating income and adds back depreciation and amortization, share-based compensation and, for Garena only, the net effect of changes in deferred revenue. Gross profit rose $1,140.1 million (+47.3%) to $3,549.9 million, but sales and marketing rose $650.6 million (+64.5%) to $1,660.1 million and the provision for credit losses rose $231.4 million (+71.5%) to $555.2 million, together $882.0 million or 77% of the rise, so operating income grew 33.3% to $650.3 million.
Adjusted EBITDA ($917.2 million) and net income ($458.1 million) grew less than operating income for two separate reasons. Garena's add-back shrank: the net effect of deferred-revenue changes added to Garena's Adjusted EBITDA was $20.3 million against $88.3 million a year earlier, and by our calculation, without it Total Adjusted EBITDA grew 21.1% (from $740.9 million to $896.9 million; Sea does not report this figure). And income tax expense rose 74.0% to $250.6 million, an effective rate of about 35.0% against 25.2% a year earlier (see Beyond the Usual).
Shopee's profit barely moved on much faster revenue growth
Shopee's revenue grew 48.2% to $5,587.6 million, but its segment operating income reached only $160.3 million, after falling 28.8% at Q1. Its cost of service grew 51.9% to $3,220.9 million against 48.9% growth in service revenue, and its sales and marketing spend grew 56.6% to $1,258.1 million. In plain words: Sea says its value-added services revenue, mostly logistics fees, fell 9.0% to $676.4 million "as a result of higher revenue net-off against shipping subsidies", which we read as the subsidy Shopee pays on a delivery coming off the revenue it books for that delivery. The full breakdown is in Segment Comparison.
Management still cites financial discipline, and now names a full-year Shopee profit goal
On the call Forrest Li called the results "a testament to our strong financial discipline and operational efficiency". The press release quote leaves that phrase out and says only that Sea will "continue to invest prudently in serving more users and serving them better, broadening our foundation for profitable growth into the future", which is a plainer description of what the segment table shows: continued reinvestment, not yet converted into proportional profit. He said he is optimistic that Shopee will reach "the milestone of US$1 billion in adjusted EBITDA for the full year"; Shopee's first-half Adjusted EBITDA is $478.6 million, so the second half has to deliver $521.4 million, or $260.7 million a quarter against Q2's $255.4 million. On Garena, he pointed to Free Fire, "continuing to draw in over 100 million average daily active users", and to two new mobile games, Palworld Online and Monster Hunter Outlanders, "both built on strong, globally recognized IP" (see The Prescription).
The ADS recovered 15.7% but still sits 48.6% below its August 2025 peak
The ADS closed Q2 2026 at $95.83, up 15.7% from Q1's $82.81, but still 48.6% below its August 2025 peak of $186.54 (month-end close). See Target Valuation Range below for the new peer comparison.
The Prescription
Sea should keep diversifying Garena's revenue base the way it just started to: Free Fire anchors the segment (management says it still draws over 100 million average daily active users), and bookings growth slowed to +15.5% year-over-year to $763.5 million, the slowest of the last five quarters (Q2 2025 to Q2 2026), and a single-game dependency is a real concentration risk. Announcing two more games built on outside IP this quarter (Palworld Online, which Garena develops and publishes under license from Pocketpair, and Monster Hunter Outlanders, which Tencent develops on Capcom's franchise) is the correct response: diversify the hit-driven business while it's still working, not after Free Fire's engagement curve turns. The same logic applies to Monee: the Philippines became the fifth market with a loan book above $1 billion this quarter (Brazil was the fourth, at Q1), and credit products off Shopee are now over 20% of the SPayLater portfolio, as high as 35% in some markets. Spreading loan-book growth across more markets and more kinds of borrower reduces the credit-cycle risk of resting on Shopee's own buyers.
What Sea should stop doing is treating Shopee's cost structure as a problem that resolves itself over time. This is now the second straight quarter Shopee's own segment operating income has badly lagged its own revenue growth — a 28.8% decline at Q1, essentially flat growth (+3.5%) at Q2, both against revenue growth above 45%. Shopee's cost of service grew 51.9% year-over-year this quarter, again outpacing the segment's own 48.9% service-revenue growth, on the same logistics-investment rationale management gave last quarter. If that investment doesn't start showing up as operating leverage by Q3 or Q4 — cost of service growing slower than service revenue, not just at a similar pace — Shopee's profit can only tread water: at Q2's level of $255.4 million a quarter, Shopee would finish the year near $989 million of Adjusted EBITDA, just short of the $1 billion management says it is optimistic about, with no margin gain behind it.
Key Financial Metrics
US$ billion; margin is operating income as a percent of net revenue, per quarter. Values are standalone quarters; 3 derived from annual, half-year or nine-month figures (Q4 2023, Q4 2024, Q4 2025).
Q2 2026 vs. Q2 2025, all figures in USD as reported (Sea reports in US dollars)
| Metric | Q2 2026 | Q2 2025 | YoY |
|---|---|---|---|
| Total GAAP revenue | $7,787.8M | $5,259.5M | +48.1% |
| Total gross profit | $3,549.9M | $2,409.8M | +47.3% |
| Operating income | $650.3M | $487.7M | +33.3% |
| Total Adjusted EBITDA» | $917.2M | $829.2M | +10.6% |
| Net income | $458.1M | $414.2M | +10.6% |
| Free cash flow | Not separately disclosed this quarter — six-month operating cash flow ($2,563.9M) and six-month capex ($495.0M) are disclosed only on a cumulative H1 basis, with no standalone Q2 breakout | — | — |
| Cash and cash equivalents | $3,529.3M | $2,165.8M | +63.0% |
| Total Sea Limited shareholders' equity | $12,911.3M | $9,676.8M | +33.4% |
Total Adjusted EBITDA growth slowed for four straight quarters through Q1 2026 (+135.9% at Q1 2025, then +84.9%, +67.7%, +33.2% and +9.3%) and ticked up marginally in Q2. Q1 2025's growth was about 4.6 times that quarter's revenue growth (+29.6%); by Q2 2026, Adjusted EBITDA growth (+10.6%) is running at less than a quarter of revenue growth (+48.1%), a gap of 37.5 percentage points against Q1's 37.3, the widest of the eight quarters in the Trailing Quarters table below (the gap was 43.7 points in Q1 2024, when Adjusted EBITDA fell 20.9% year-over-year). Net income growth matched Adjusted EBITDA's +10.6% this quarter, a closer match than Q1 (net income +6.7%, Adjusted EBITDA +9.3%), but the effective tax rate kept rising: income tax expense grew 74.0% year-over-year to $250.6 million against pre-tax income growth of roughly 25.4%, an effective rate of approximately 35.0% of pre-tax income against roughly 25.2% a year ago and 32.7% in Q1 2026 (25.0% in Q1 2025), with no explanation in this quarter's release, call remarks or 6-K. See Beyond the Usual.
Where Q2 2026's Revenue Went
Net revenue, and how much of it was left as operating profit and net income, in one view. Figures are the same standalone-quarter figures as the metrics table.
US$ billion, Q2 2026. Operating costs are net revenue less operating income; other items & tax are operating income less net income.
Segment Comparison
Sea reports three segments plus Other Services and unallocated corporate expenses, using bookings for Digital Entertainment and GAAP revenue for the other two, per the metric set established in Q3 2020.
| Segment | Q2 2026 | Q2 2025 | YoY | QoQ (vs Q1 2026) | Q2 2026 Op. Income | Q2 2026 Adj. EBITDA |
|---|---|---|---|---|---|---|
| Shopee | $5,587.6M revenue | $3,771.1M | +48.2% | +9.3% | $160.3M (+3.5% YoY) | $255.4M (+12.2% YoY) |
| Monee | $1,402.8M revenue | $882.8M | +58.9% | +13.0% | $279.0M (+14.8% YoY) | $288.0M (+12.8% YoY) |
| Garena | $763.5M bookings | $661.3M | +15.5% | -18.0% | $404.2M (+46.7% YoY) | $429.8M (+16.7% YoY) |
| Other Services | $50.8M revenue | $46.5M | +9.2% | — | -$51.5M (worse YoY) | -$46.2M (worse YoY) |
| Unallocated expenses | — | — | — | — | -$141.7M (improved YoY) | -$9.7M |
| Total | $7,787.8M revenue | $5,259.5M | +48.1% | +9.7% | $650.3M (+33.3% YoY) | $917.2M (+10.6% YoY) |
Garena is again the standout: the smallest of the three main segments by revenue delivered the fastest year-over-year operating income growth (+46.7%) of the three, even as its bookings fell 18.0% quarter-over-quarter from Q1, the quarter of Free Fire's Jujutsu Kaisen collaboration and, per the Q1 call, Garena's best quarter since 2021. We read that as a sequential normalization after a content peak rather than a reversal of the underlying trend, since bookings are still up 15.5% year-over-year. Monee posted the fastest revenue growth of the three core segments (+58.9%) and grew operating income faster than Adjusted EBITDA, a healthier combination than the reverse. Shopee remains the outlier for a second straight quarter: the second-fastest revenue growth among the segments (48.2%, behind Monee's 58.9%), but the slowest operating income growth by a wide margin — the segment that's supposed to be Sea's scale engine is still the one least converting growth into profit.
Not attributed to any segment
The table above ends at each segment's own profit. The table below starts from the Adjusted EBITDA the company reports for its segments and shows every step to operating income, as Sea's own reconciliation lists them (US$ million, three months ended June 30; press release lines 428-450).
| Step | Q2 2026 | Q2 2025 |
|---|---|---|
| Shopee Adjusted EBITDA | 255.4 | 227.7 |
| Monee Adjusted EBITDA | 288.0 | 255.3 |
| Garena Adjusted EBITDA | 429.8 | 368.2 |
| Other Services Adjusted EBITDA | (46.2) | (13.8) |
| Total segment Adjusted EBITDA | 926.9 | 837.4 |
| Unallocated expenses, not attributed to any segment | (9.7) | (8.1) |
| Total Adjusted EBITDA (the group figure on the same measure) | 917.2 | 829.2 |
| Net effect of changes in Garena's deferred revenue and its related cost | (20.3) | (88.3) |
| Depreciation and amortization | (114.7) | (91.3) |
| Share-based compensation, which Sea holds in unallocated expenses | (131.9) | (161.9) |
| Operating income | 650.3 | 487.7 |
In the press release and its segment note, Sea shows no elimination line between the segments and the group: the only amount it leaves outside every segment is the unallocated column, which it describes as "mainly related to share-based compensation, and general and corporate administrative costs such as professional fees and other miscellaneous items". In Adjusted EBITDA terms that is only $9.7 million of corporate costs, because share-based compensation is added back; in operating-income terms it is $141.7 million (the $131.9 million of share-based compensation plus the $9.7 million), which takes the segments' combined operating income of $792.0 million to the group's $650.3 million. Neither the press release, its segment note nor the call remarks itemise the $9.7 million beyond "professional fees and other miscellaneous items", and the unallocated column in the press release carries no depreciation. In one sentence, group operating income is $141.7 million below the sum of the segments because share-based compensation and corporate costs sit outside every segment, while Total Adjusted EBITDA sits $266.9 million above operating income because it adds back depreciation and amortization, share-based compensation and Garena's deferred-revenue effect.
Shopee
US$ million; margin is segment operating income as a percent of segment revenue, per quarter. Revenue is the segment revenue (segment note, GAAP total incl. goods sales); profit is the segment operating income. Values are standalone quarters; some are derived from half-year, nine-month or full-year figures in the filings.
GAAP revenue was $5,587.6 million, up 48.2% year-over-year, on GMV» of $38.3 billion (+28.4% YoY) and gross orders of 4.2 billion (+27.5% YoY), both new highs by Sea's account — revenue again growing faster than volume, evidence of continued monetization gains (an implied marketplace take rate» of roughly 12.9%, using the $4.9 billion of marketplace revenue against GMV). Segment operating income was $160.3 million, up just 3.5% year-over-year from $154.9 million — a marked improvement on Q1's outright 28.8% decline, but still badly lagging the segment's own revenue growth. The mechanism repeats from last quarter: Shopee's cost of service grew 51.9% year-over-year to $3,220.9 million, faster than its 48.9% service-revenue growth, which Sea attributes to higher logistics costs as order volume grew and to investment in its logistics capabilities. Within Shopee's own revenue mix, core marketplace revenue (transaction fees plus advertising) grew a strong 65.6% year-over-year to $4,255.5 million, while value-added services revenue (mostly logistics fees) fell 9.0% to $676.4 million — Sea's own explanation is "higher revenue net-off against shipping subsidies," which we read as Shopee absorbing more of the delivery cost itself rather than passing it through, the same dynamic flagged at Q1. Segment sales-and-marketing spend rose 56.6% year-over-year to $1,258.1 million, faster than revenue (22.5% of segment revenue against 21.3% a year ago), where at Q1 it had grown more slowly than revenue (+40.4% against +45.1%). On guidance, the 2026 targets were given at the Q4 2025 results and repeated at Q1: Shopee GMV growth of around 25% and full-year Shopee Adjusted EBITDA no lower than 2025's $881 million. The Q2 press release and call remarks do not repeat them; management says instead that it is optimistic Shopee will reach $1 billion of Adjusted EBITDA for the full year. Shopee's first-half Adjusted EBITDA is $478.6 million, 54% of the 2025 figure, so the second half needs about $402 million to hold the old floor and $521.4 million for the $1 billion; GMV growth was 28.4% in Q2 and 30.2% in Q1, above the 25% target.
Monee
US$ million; margin is segment operating income as a percent of segment revenue, per quarter. Revenue is the segment revenue (segment note, GAAP); profit is the segment operating income. Values are standalone quarters; some are derived from half-year, nine-month or full-year figures in the filings.
GAAP revenue was $1,402.8 million, up 58.9% year-over-year, the fastest of the three core segments — and, unlike Shopee, operating income (+14.8% to $279.0 million) grew faster than Adjusted EBITDA (+12.8% to $288.0 million), a genuinely healthier combination. Consumer and SME loans principal outstanding reached $11.1 billion as of June 30, 2026, up 62.5% year-over-year ($10.0 billion on-book, $1.1 billion off-book). The NPL»90+ ratio was 1.0%, which Sea calls stable quarter-on-quarter, and is back to its Q2 2025 level after holding at 1.1% from Q3 2025 through Q1 2026. What's notable this quarter is the cost side: Monee's sales-and-marketing spend jumped 139.8% year-over-year to $293.9 million — more than double the pace of the segment's own 58.9% revenue growth — while its segment provision for credit losses rose 75.4% to $553.7 million, also outpacing revenue growth (the group line, which includes a small amount outside Monee, rose 71.5% to $555.2 million). On the call management links growth to new-user acquisition (around 5.3 million unique first-time borrowers, more widely offered interest-free one-month SPayLater loans and promotional rates on first-time personal cash loans), to off-Shopee SPayLater (over 20% of the SPayLater portfolio) and to the Philippines becoming the fifth market with a loan book above $1 billion (Brazil was the fourth, at Q1). Neither cost line shows up yet as a deterioration in asset quality — but a marketing-spend growth rate more than double the segment's revenue growth rate is worth tracking into Q3, since it's the kind of gap that either resolves into new-user payoff or becomes a recurring drag on Monee's own margin. See Beyond the Usual below.
Garena
US$ million; margin is segment operating income as a percent of segment revenue, per quarter. Revenue is the segment revenue (segment note, GAAP); profit is the segment operating income. Values are standalone quarters; some are derived from half-year, nine-month or full-year figures in the filings.
Bookings were $763.5 million, up 15.5% year-over-year but down 18.0% quarter-over-quarter from Q1's $931.4 million — which we read as a normalization after Q1's Jujutsu Kaisen collaboration quarter rather than a reversal of the underlying growth trend. GAAP revenue was $746.6 million (+33.5% YoY), and Adjusted EBITDA was $429.8 million, up 16.7% year-over-year, representing 56.3% of bookings, up modestly from 55.7% a year ago. Free Fire continues to anchor the segment with over 100 million average daily active users. Quarterly active users» were 666.3 million, roughly flat year-over-year (664.8 million a year ago); quarterly paying users grew 10.2% to 68.1 million, lifting the paying-user ratio to 10.2% from 9.3% a year ago, and average bookings per user (Sea's measure is per user, not per paying user) rose to $1.15 from $0.99 — deeper monetization of a roughly stable user base, the healthiest read of the three metrics together. The quarter's real news for Garena is forward-looking: Sea announced two new mobile titles, Palworld Online and Monster Hunter Outlanders, both built on strong, globally recognized IP, which management frames as part of diversifying the portfolio beyond Free Fire. Garena also disclosed a methodology change taking effect next quarter — see Beyond the Usual below.
Beyond the Usual
Sea's Q2 2026 quarterly report is the unaudited press release furnished as a 6-K exhibit; Sea, as a foreign private issuer, has no 10-Q-equivalent filing, so no interim footnote package exists for this quarter. The call transcript on file holds management's prepared remarks only, with no question-and-answer session, so what was asked and answered live can't be confirmed here. The findings below come from the segment table, income statement, balance sheet and those prepared remarks.
Shopee's segment profit stopped falling, but it's still barely growing against 48% revenue growth
Shopee's segment operating income grew just 3.5% year-over-year to $160.3 million, an improvement on Q1 2026's outright 28.8% decline but still a fraction of the segment's own 48.2% revenue growth. The mechanism is the same as last quarter: Shopee's cost of service (mostly logistics) grew 51.9% year-over-year, faster than the segment's 48.9% service-revenue growth. This is now two straight quarters where Shopee's headline growth metrics (GMV, gross orders, revenue) all hit new highs while the segment's own profit line badly lagged — worth watching whether Q3 shows operating leverage or a third consecutive quarter of the same gap, with management's $1 billion full-year Shopee Adjusted EBITDA ambition needing $260.7 million a quarter in the second half.
The effective tax rate was higher than a year earlier for a second straight quarter, with no explanation given again
Sea's effective tax rate rose to roughly 35.0% of pre-tax income in Q2 2026, up from roughly 25.2% in Q2 2025 and up further from Q1 2026's already-elevated 32.7% (25.0% in Q1 2025) — income tax expense grew 74.0% year-over-year to $250.6 million while pre-tax income grew only around 25.4%. As at Q1, no jurisdictional or one-time-item breakdown is available in this quarter's unaudited press release, call remarks or 6-K to explain the increase. Two consecutive quarters of a higher effective tax rate than a year earlier, with no disclosed explanation, is in our reading a pattern now rather than a one-off — worth specifically checking against FY2026's eventual 20-F footnote once it's available.
Monee's marketing spend is growing more than twice as fast as its own revenue
Monee's sales-and-marketing expenses rose 139.8% year-over-year to $293.9 million, against the segment's own revenue growth of 58.9% — a gap wide enough that, with the provision for credit losses, it is one of the segment's two largest cost increases ($171.3 million for sales and marketing and $238.1 million for the provision, against a $520.0 million rise in revenue), which is why Monee's Adjusted EBITDA growth (+12.8%) trails its revenue growth by more than four-to-one, even though operating income still grew faster than Adjusted EBITDA. The segment's provision for credit losses also outpaced revenue growth (+75.4% to $553.7 million), continuing the pattern flagged at Q1, while the NPL90+ ratio was 1.0%, the same as a year earlier (1.1% at Q1). None of this is alarming on its own — Monee is funding real growth in new borrowers and new markets, per the call — but a marketing-spend growth rate more than double the segment's own revenue growth rate is worth tracking for whether it converts into proportional loan-book growth next quarter or becomes a recurring margin drag.
Garena is changing how it calculates Adjusted EBITDA starting next quarter
Sea disclosed that, beginning with its Q3 2026 earnings release, it will exclude the net effect of changes in Garena's deferred revenue from Adjusted EBITDA — a figure it has included up to and including this quarter. The effect on this quarter's level is small ($20.3 million of the $917.2 million, with the change in deferred revenue itself $16.9 million against $102.2 million a year ago), but the year-ago add-back was large ($88.3 million), which is why Total Adjusted EBITDA grew 10.6% as reported and 21.1% without it (told in the opening). Sea says it will continue disclosing the deferred-revenue effect as supplemental information, so the underlying number won't disappear, but the headline Adjusted EBITDA figure itself will shift definitions between Q2 and Q3 2026 — a real comparability break worth flagging now, before it shows up as an unexplained-looking change in Garena's reported profitability next quarter.
Garena announced two games built on outside IP to diversify beyond Free Fire
Sea announced two new mobile titles this quarter — Palworld Online, which Garena develops and publishes under license from Pocketpair, and Monster Hunter Outlanders, which Tencent develops on Capcom's franchise — both built on globally recognized IP and described by management as part of diversifying Garena's portfolio, with Free Fire still drawing over 100 million average daily active users on its own. Diversifying a hit-driven games business while the anchor title is still performing, rather than after it declines, is the harder and more useful time to do it.
Target Valuation Range
In line with its peers on revenue, and richer than its own Q1. At $95.83 Sea trades at about 2.1x EV/Revenue and 16.1x EV/Adjusted EBITDA (up from ~14.1x at Q1), richer than Alibaba, PDD and Coupang and cheaper than MercadoLibre, Nu and Grab on EV/Revenue. Market cap rose 15.4% while trailing Adjusted EBITDA grew only 2.5%, so part of the re-rating is the stock catching up from Q1.
In plain words: the price-to-earnings ratio (P/E) divides the market value of the shares by a year of profit; price-to-book (P/B) divides it by the shareholders' equity on the balance sheet; and enterprise value (EV) is the market value of the shares plus the debt Sea owes less the cash it holds, which EV/Revenue and EV/Adjusted EBITDA divide by a year of sales and a year of Adjusted EBITDA so that companies of different size can be compared. The takeaway: at $95.83 Sea is priced at about 2.1 times a year of revenue and 16.1 times a year of Adjusted EBITDA, richer than Alibaba, PDD and Coupang on revenue and cheaper than MercadoLibre, Nu and Grab, and its P/E (about 36 times) is above Alibaba's, Nu's and PDD's and below MercadoLibre's.
| Company (latest post) | Period and basis | EV/Revenue | EV/Adjusted EBITDA | P/E |
|---|---|---|---|---|
| Sea (this post) | Q2 2026, June 30, 2026 close; EV = market cap + convertible notes - cash and cash equivalents; trailing four quarters (Q3 2025 to Q2 2026); P/E = market cap / trailing net income | ~2.1x | ~16.1x | ~36.1x |
| MercadoLibre | Q2 2026, June 30, 2026 close; EV = market cap + total debt incl. operating lease liabilities - unrestricted cash and investments; trailing four quarters | ~2.6x | ~23.8x | ~46.2x |
| Alibaba | Q1 FY2027 (quarter ended June 30, 2026), June 30, 2026 ADS close; EV = market cap + total debt - cash and short-term investments, non-controlling interests not added; trailing twelve months; P/E on net income attributable to Alibaba | ~1.42x | ~13.9x | ~20.7x |
| PDD | Q2 2026, June 30, 2026 ADS close; EV = market cap + total liabilities - cash and cash equivalents; trailing four quarters | ~1.88x | not in that post | ~8.28x |
| Coupang | Q2 2026, June 30, 2026 close; EV = market cap - net cash (cash and equivalents less total debt); trailing twelve months of revenue | ~0.78x | not in that post | not in that post |
| Nu | Q2 2026, June 30, 2026 close; EV = market cap + total liabilities (interest-bearing borrowings, financing, leases) - cash; trailing twelve months (Q3 2025 to Q2 2026) | ~2.9x | not in that post | ~17.9x |
| Grab | Q2 2026, June 30, 2026 close; EV = market cap - net cash liquidity; trailing four quarters of revenue; the EBITDA multiple is on the FY2026 guidance midpoint ($730M), not trailing | ~2.7x | ~13.7x (on guidance) | not in that post |
The comparison is not exact: the companies differ in business mix, country and risk, their EVs are built differently (Sea adds only its convertible notes, PDD and Nu add all liabilities, MercadoLibre adds lease liabilities), Grab's EBITDA multiple rests on the company's guidance where the others use trailing Adjusted EBITDA, and Sea's P/E uses net income before non-controlling interests where Alibaba's uses net income attributable to its shareholders.
Using 634,487,453 weighted-average diluted shares (the six-month figure disclosed this quarter — Sea's Q2-only diluted share count isn't separately broken out) and the June 30, 2026 close of $95.83, Sea's implied market capitalization rose roughly 15.4% quarter-over-quarter, broadly tracking the ADS's own 15.7% rally.
| Market cap → enterprise value | Q2 2026 |
|---|---|
| Share price (period-end) | $95.83 |
| Shares outstanding (weighted-average diluted, six-month basis) | 634,487,453 |
| Market capitalization | ~$60.80B |
| Plus: convertible notes (debt) | $996.3M |
| Less: cash and cash equivalents | $3,529.3M |
| Enterprise value | ~$58.27B |
| Peer-multiple sanity check | Q1 2026 (TTM) | Q2 2026 (TTM) | Change |
|---|---|---|---|
| Market capitalization | ~$52.68B | ~$60.80B | up 15.4% |
| Revenue (TTM) | ~$25,195M | ~$27,723M | up 10.0% |
| Price/Sales | ~2.09x | ~2.19x | up |
| Price/Book | ~4.10x | ~4.71x | up |
| Total Adjusted EBITDA (TTM) | ~$3,525M | ~$3,613M | up 2.5% |
| EV/EBITDA» | ~14.1x | ~16.1x | up |
All three multiples in the table re-expanded this quarter as the price recovered faster than the underlying trailing fundamentals did — TTM Adjusted EBITDA grew only 2.5% quarter-over-quarter while market cap grew 15.4%, so some of the re-rating is genuinely just the stock catching back up from Q1's overshoot to the downside, not new fundamental strength.
Sea's Stock Recovered Sharply, But Is Still Far Below Its August 2025 Peak
The ADS closed Q2 2026 at $95.83, up 15.7% from Q1's $82.81 — its first quarterly gain since Q3 2025 (quarter-end closes: Q2 2025 $159.94, Q3 2025 $178.73, then $127.57, $82.81 and $95.83), after Q4 2025's 28.6% drop and Q1 2026's 35.1% drop. Even with the bounce, the stock remains 48.6% below its August 2025 peak of $186.54, and the two-year window still shows a much flatter picture than the headline recovery suggests: from $65.70 on July 31, 2024 to $95.83 on June 30, 2026 is up 45.9% over two years, but that's almost entirely a story of 2025's run-up and 2026's partial round-trip, not a steady climb (month-end closes). Sea's Q2 materials don't identify a specific cause for either the Q1 crash or the Q2 recovery, and none is asserted here — what's verifiable is that this quarter's price move arrived alongside a new high in quarterly revenue and a Shopee segment profit that's still not proportionally improving, the same disconnect as last quarter, now moving in the opposite direction.
Trailing Quarters: Total GAAP Revenue and Total Adjusted EBITDA
| Quarter | Total GAAP Revenue | Total Adjusted EBITDA |
|---|---|---|
| Q3 2024 | $4,328.2M | +$521.3M |
| Q4 2024 | $4,950.4M | +$590.9M |
| Q1 2025 | $4,841.1M | +$946.5M |
| Q2 2025 | $5,259.5M | +$829.2M |
| Q3 2025 | $5,986.0M | +$874.3M |
| Q4 2025 | $6,851.9M | +$787.1M |
| Q1 2026 | $7,097.5M | +$1,034.3M |
| Q2 2026 | $7,787.8M | +$917.2M |
Revenue has grown year-over-year in each of the eighteen quarters from Q1 2022 to Q2 2026. Total Adjusted EBITDA's year-over-year growth rate has slowed in five of the last six quarters shown (+135.9% at Q1 2025 down to +9.3% at Q1 2026, each lower than the quarter before, starting from +366.4% at Q4 2024), and while Q2 2026's +10.6% is a marginal uptick from Q1's own reading, it's still running at about a fifth of Q2's own 48.1% revenue growth rate — the underlying gap this table has tracked since early 2025 hasn't meaningfully closed, even where the growth-rate trend has flattened out rather than kept worsening.
Sea Limited's Second Quarter 2026 Results press release, furnished as an exhibit to its Form 6-K filed with the SEC on August 11, 2026, including the unaudited interim condensed consolidated statements of operations, balance sheets, cash flows, and segment information; Sea's Q2 2026 earnings presentation; and the prepared remarks from its Q2 2026 earnings call (the transcript on file has no question-and-answer session). No interim footnote package exists for a non-fiscal-year-end quarter, per Sea's status as a foreign private issuer.