E-commerce and gaming company Sea (NYSE: SE) announced better-than-expected revenue in Q1 CY2026, with sales up 42.8% year on year to $7.31 billion. Its non-GAAP profit of $0.81 per share was 5.1% above analysts’ consensus estimates.

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

StockStory’s Take

Sea’s first quarter saw a positive reaction from the market, as revenue surpassed Wall Street expectations, supported by expansion in e-commerce and robust growth in digital financial services. Management attributed the strong results to continued investments in Shopee’s delivery network, increased adoption of membership programs, and the integration of AI into logistics and content. CEO Forrest Li noted, “Our strong revenue growth reflects the effectiveness of these investments and we are already seeing unique economics start to improve for some of these initiatives.”

Looking forward, Sea’s outlook is shaped by ongoing investment in fulfillment capabilities, the expansion of its Shopee VIP program into new markets, and further integration of AI-driven tools across platforms. Management pointed to opportunities for deeper market penetration, particularly in Brazil and Southeast Asia, while emphasizing a disciplined approach to risk and cost management. CFO Tony Hou stated that Sea remains focused on “driving credit adoption and expanding new user segments,” and highlighted that the company is testing AI shopping assistants and virtual business advisers to accelerate growth and efficiency.

Key Insights from Management’s Remarks

Management highlighted that first quarter revenue growth was driven by Shopee’s competitive logistics network, increased VIP membership engagement, and Garena’s successful content collaborations.

• Shopee logistics scaling up: Shopee expanded instant and same-day delivery options, resulting in higher order volumes and lower per-order delivery costs. In Brazil, the company added three new fulfillment centers, supporting faster delivery and deeper product assortment, which improved customer retention and market share.
• VIP membership program traction: The Shopee VIP program saw rapid adoption in Asia, with over 10 million subscribers and strong retention rates above 80%. The program now drives around 20% of gross merchandise value (GMV) in the region and was recently launched in Brazil to enhance user engagement and spending.
• Content ecosystem enhancement: Shopee’s integration with platforms like YouTube and Meta, alongside growth in live streaming and short-form video orders, contributed to heightened user engagement. Orders from content-driven channels accounted for more than 25% of total physical goods in Southeast Asia.
• AI integration across operations: AI-powered tools improved product discovery, ad targeting, and customer service efficiency, with 80% of customer queries now handled by AI chatbots. These initiatives reduced customer service costs by about 30% year-on-year and boosted purchase conversion rates.
• Garena’s collaboration-driven momentum: Garena, Sea’s gaming arm, reported strong bookings due to global collaborations in Free Fire and record engagement from Arena of Valor. High-profile content partnerships, such as with the anime Jujutsu Kaisen, generated substantial user activity and supported double-digit growth in key gaming franchises.

Drivers of Future Performance

Management’s outlook for 2026 centers on expanding logistics capacity, scaling digital financial services, and leveraging AI to drive efficiency and user engagement.

• Regional expansion and fulfillment: Sea plans to continue building out its logistics and fulfillment networks, particularly in Brazil and Southeast Asia, to support higher order volumes and rapid delivery. Management flagged that ongoing investments in fulfillment infrastructure are expected to deepen market penetration and improve cost efficiency over time.
• Digital finance and credit penetration: The company targets growth in its Money segment by broadening credit offerings and increasing off-platform lending. Management sees significant room for loan book expansion in newer markets like Brazil, supported by localized products and access to alternative data sources, while maintaining risk discipline.
• AI-driven product and user engagement: Sea is testing AI-based shopping assistants and business adviser tools to personalize user experiences and streamline seller operations. These initiatives are expected to drive higher conversion rates, reduce operational costs, and support the rollout of value-added services as competition intensifies.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be monitoring (1) the pace of Shopee’s fulfillment expansion, especially in Brazil and Southeast Asia, (2) adoption of AI-driven tools and their impact on user engagement and cost efficiency, and (3) further growth in digital financial services, including credit penetration in new markets. Execution on these initiatives will indicate whether Sea can sustain its current growth trajectory.

Sea currently trades at $95.99, up from $84.21 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

Our Favorite Stocks Right Now

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.