Margin compression was driven by fulfilment centre ramp-up costs, elevated festive promotions and continued logistics investments to defend market share, explains CGS International (CGSI) analyst Jacquelyn Yow. She emphasises that these pressures are short-term and investment-led rather than structural.
Despite delivering a strong year on earnings and scaling ebitda by over 75% over the past 12 months, Sea’s share price is currently hovering below where it began in the year. While investors’ short-term patience may be tested, analysts remain positive on Sea, acknowledging its growing pains and maintaining their long-term thesis.
In 4QFY2025 ended Dec 31, 2025, Sea reported revenue of US$6.9 billion ($8.83 billion), up 38% y-o-y, while gross profit rose 36% y-o-y to US$3 billion. Net profit jumped 73% y-o-y to US$410.9 million on the back of sustained operating leverage despite higher tax and credit provisions. Total adjusted ebitda grew 33% y-o-y but declined 10% q-o-q to US$787 million, mainly due to softer e-commerce margins despite stronger-than-expected gross merchandise value (GMV) growth.
