E-commerce and gaming company Sea (NYSE: SE) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 38.6% year on year to $7.10 billion. Its GAAP profit of $0.67 per share was 4.5% below analysts’ consensus estimates.
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Sea (SE) Q1 CY2026 Highlights:
- Revenue: $7.10 billion vs analyst estimates of $6.66 billion (38.6% year-on-year growth, 6.6% beat)
- EPS (GAAP): $0.67 vs analyst expectations of $0.70 (4.5% miss)
- Adjusted EBITDA: $1.03 billion vs analyst estimates of $777.5 million (14.6% margin, 33% beat)
- Operating Margin: 8.4%, in line with the same quarter last year
- Free Cash Flow Margin: 14.9%, down from 21.6% in the previous quarter
- Paying Users: 72.6 million, up 8 million year on year
- Market Capitalization: $51.98 billion
“We have had a strong start to the year. 2026 is a year where we are leaning in to deepen our competitive moats, while maintaining financial discipline. Our strong revenue growth reflects the effectiveness of these investments, and we are already seeing unit economics start to improve for some of these initiatives. We believe this is the right approach to maximize long-term value, given the significant runway for growth still ahead of us in our markets,” said Forrest Li, Sea’s Chairman and Chief Executive Officer.
Company Overview
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Sea grew its sales at an exceptional 29.6% compounded annual growth rate. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, Sea reported wonderful year-on-year revenue growth of 38.6%, and its $7.10 billion of revenue exceeded Wall Street’s estimates by 6.6%.
Looking ahead, sell-side analysts expect revenue to grow 23.5% over the next 12 months, a deceleration versus the last three years. Still, this projection is eye-popping given its scale and suggests the market is baking in success for its products and services.
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Paying Users
User Growth
As an online marketplace, Sea generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.
Over the last two years, Sea’s paying users, a key performance metric for the company, increased by 22.7% annually to 72.6 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. 
In Q1, Sea added 8 million paying users, leading to 12.4% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.
Revenue Per User
Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns in transaction fees from each user. ARPU also gives us unique insights into a user’s average order size and Sea’s take rate, or "cut", on each order.
Sea’s ARPU growth has been exceptional over the last two years, averaging 12.1%. Its ability to increase monetization while growing its paying users at an impressive rate reflects the strength of its platform, as its users are spending significantly more than last year. 
This quarter, Sea’s ARPU clocked in at $97.76. It grew by 23.3% year on year, faster than its paying users.
Key Takeaways from Sea’s Q1 Results
We were impressed by how significantly Sea blew past analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 8% to $90.93 immediately after reporting.
Sea put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
