Sea Ltd. Boosts E-Commerce Forecast Amid Strong Q2 Performance

SINGAPORE - Sea Ltd., the Singapore-based tech company, has raised its earnings forecast for its e-commerce platform Shopee, following a strong performance in the second quarter. The company's shares surged as much as 13% after it projected adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$1 billion for Shopee, up from a previous estimate of US$880.6 million. Analysts had expected a more conservative figure of US$980.7 million, according to the Straits Times.

The revised guidance reflects Shopee's ability to navigate intense competition from rivals like Alibaba's Lazada and ByteDance's TikTok Shop, as well as emerging players like Temu in Southeast Asia's rapidly evolving e-commerce landscape. Despite this positive outlook, the company faces challenges, including regulatory hurdles in Indonesia and rising operational costs linked to geopolitical tensions in the Middle East.

In the second quarter, Sea reported a 48% increase in overall revenue, reaching US$7.8 billion, surpassing the US$7.1 billion average analyst estimate. Adjusted EBITDA rose 11% to US$917 million, while Shopee's earnings on the same basis increased by 12% to US$255 million. This performance has allowed Sea to erase earlier losses for the year, as the stock had declined by 10% through August 10 due to concerns over competition and rising oil prices impacting operations.

Forrest Li, CEO of Sea, emphasized the company's strategy to increase its take rate, which is the share of merchandise sales earned as revenue. He noted that Shopee's advertising business saw a substantial increase, with revenue from ads rising by 70% in the second quarter compared to the previous year. Li stated during a conference call that there are still opportunities to increase the take rate.

“We still see opportunities to increase our take rate.”Forrest Li, CEO of Sea Ltd.

Sea's focus on artificial intelligence (AI) is also notable, as the company aims to leverage AI technologies to enhance its services. Earlier in 2026, Sea launched a generative AI chatbot named Migoo across various regions, marking a significant step into technology integration within its operations. The company has also partnered with Google to develop AI tools for Shopee and its gaming unit, Garena. Li expressed optimism about the potential of AI to drive growth, likening it to the transformative impact of PCs and smartphones in the past.

However, Sea's recent restructuring included cutting hundreds of developer jobs, approximately 8% of its workforce in that segment. While the company has not directly linked this move to its AI initiatives, it coincides with broader discussions about the impact of technology on employment.

As Shopee continues to expand, particularly in markets like Brazil, where it has established a significant logistics network, the company aims to enhance its operational efficiency and customer service capabilities. The growth in Brazil has been particularly strong, driven by a combination of local market strategies and increased seller participation.

With the competitive landscape intensifying, Sea's ability to adapt and innovate will be crucial in maintaining its market position and achieving its ambitious growth targets.