Sea shares tumble as high costs overshadow quarterly revenue beat (updated)

Sea

03/03/2026 11:55

Updates share movement in paragraph 1, details from conference call in paragraphs 4, 5 and 8

March 3 (Reuters) - Singapore's Sea Ltd SE.N reported a sharp rise in quarterly operating expenses on Tuesday, amid heavy spending to fend off competition in the Southeast Asian ecommerce industry, sending its U.S.-listed shares down around 25% in early trading.

The costs reflect the conglomerate's efforts to attract consumers to its platform, Shopee, through incentives such as discounts, offers and loyalty benefits, as rivals such as TikTok Shop expand their businesses as well.

The company expects Shopee's annual gross merchandise value - a measure of the total value of products sold on the platform - to grow by 25% this year, which is lower than its 26.8% increase in 2025.

Sea is investing in its logistics and delivery services to capture more market share and enhance user experience, company executives said during the earnings call.

The company is also working to grow its fulfillment network to maximize speed and reduce the time it takes for users to receive orders.

    Sea's total operating expenses grew over 28% to $2.43 billion in the fourth quarter from a year ago.

Sales and marketing expenses rose 25.4% for Shopee and 96.2% for financial services platform Monee during the quarter.

As its expenses rise, Sea has been betting on artificial intelligence as a way to bolster its operations further. The company is investing in the technology to improve search recommendations and advertising systems, executives said.

The company reported quarterly revenue of $6.85 billion, surpassing analysts' average estimate of $6.45 billion, according to data compiled by LSEG.

 (Reporting by Zaheer Kachwala in Bengaluru; Editing by Shreya Biswas)

 ((Zaheer.Kachwala@thomsonreuters.com;))