Sea to focus on software and customer relationships in building up cloud business
Shopee, the group’s e-commerce arm, reports its most profitable quarter yet; adjusted Ebitda is up 44.7%
[SINGAPORE] The focus for Sea’s new cloud business will be on software and customers, rather than building up data centre infrastructure, said its chairman and CEO Forrest Li in the company’s Q3 2026 earnings call on Tuesday (Nov 10).
“When customers need dedicated computing capacity, we will only pursue opportunities with clear customer returns and attractive returns,” he added.
The decision to enter the cloud business is based on Sea’s capabilities in artificial intelligence, built up in the areas of infrastructure, model and agentic application layers over the last two years, he said.
Decline in token prices
He added that there is an opportunity to build a business around the decline in token prices and helping organisations with AI adoption.
This would entail running AI efficiently and adapting models to suit the data and language needs of prospective customers, and moving to newer cost-efficient models, including open models, without having to rebuild them afresh each time.
“We see this as an opportunity to turn our AI capabilities from a cost centre into a profit centre for Sea,” said Li.
The company’s cloud business is still in the formation stage, but he is optimistic about its prospects as the demand for AI from businesses grows.
As AI models improve and become more capable of making an impact in day-to-day uses – coupled with falling token costs – Sea is confident about the growth opportunity.
“We don’t know what we don’t know, but for each project, we’ll keep the financial discipline, we want to make sure that every project we work on generates attractive returns for us and minimises our potential financial risk if any,” said Li.
Sea’s Q3 earnings numbers
For Q3 2026, Sea reported a 34 per cent increase in net income to US$502.5 million, from US$375 million in Q3 2025.
Revenue in Q3 2026 grew 43.4 per cent to US$8.6 billion from US$6 billion in the year-ago period. This was mainly driven by the performance of its e-commerce arm Shopee, which had the most profitable quarter in its history.
Li said: “Shopee delivered another strong quarter, again achieving new record highs in both top and bottom line metrics.”
Shopee reported a 41.3 per cent increase in Q3 2026 revenue to US$6.1 billion from US$4.3 billion in the previous corresponding period. This came mainly from growth in its gross merchandise value (GMV) and improved monetisation.
GMV for Shopee in Q3 2026 grew 23.3 per cent on the year to US$39.7 billion; gross orders hit 4.5 billion in the quarter, a 25.5 per cent increase.
Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 44.7 per cent year on year to US$269.2 million.
Sea’s financial services arm, Monee, reported a 63.9 per cent increase in revenue to US$1.6 billion, from US$989.9 million in Q3 2025.
Its adjusted Ebitda for Q3 2026 hit US$298.3 million, up 15.5 per cent.
Li said: “We are reaching more users, deepening relationships with existing ones, and extending credit into more everyday spending scenarios, both on and off-Shopee.”
Monee’s results were mainly driven by the consumer and small and medium-sized enterprise (SME) credit business. Consumer and SME loans stood at about US$12.6 billion, up 60 per cent year on year as at Sep 30. This consisted of US$11.2 billion on-book and US$1.3 billion off-book loans.
Non-performing loans as a percentage of outstanding loans stood at 1.3 per cent in Q3 2026, a slight increase from 1.1 per cent in the year-ago period.
Separately, Li said that Monee could list within the next three years, based on market conditions, the macro environment and regulatory requirements.
A standalone listing would give Monee the dedicated capital base it needs to build its ecosystem and invest for growth, he said.
Gaming arm Garena reported bookings of US$890 million, up 5.9 per cent year on year. Revenue for Q3 2026 was US$840.1 million, up 28.6 per cent from US$653 million in Q3 2025.
Quarterly active users for Garena stood at 671.7 million in Q3 2026, up from 670.8 million in Q3 2025. Garena reported 68.6 million quarterly paying users, up 4.1 per cent on the year.
Under its US$1 billion share-repurchase programme, Sea has repurchased 11.1 million shares for about US$997.2 million. The board has approved an additional US$1 billion for the company’s programme, with no expiry.
Li said: “Our strong momentum from the first half of the year has continued into the third quarter. We are pleased with this solid performance, and will continue to focus on executing our priorities with discipline.”
