Sea doubles annual earnings, yet profitability worries drag shares down in worst drop in 2 years

Fortune

by Angelica Ang

March 4, 2026

AI-Generated Deep Dive Summary

Sea, a leading Southeast Asian tech company, reported a remarkable 260% surge in annual net profits for 2025, driven by its rapidly expanding fintech division, Monee, which grew by an impressive 60%. Despite this strong financial performance, concerns over profitability led to a significant 16.5% drop in the company’s shares—its worst decline in two years. The slide came despite record revenue of $22.9 billion, a 36.4% year-over-year increase, and a robust showing from its e-commerce division, Shopee, which saw a 35.8% rise in Q4 revenue. However, the company’s quarterly profits fell short of expectations at $410.9 million, with rising logistics costs and increased competition in key markets like Brazil and Vietnam weighing it down. This underperformance, coupled with challenges from Chinese e-commerce platforms such as TikTok Shop and Temu, contributed to investor unease. Despite these near-term hurdles, analysts suggest that Sea’s strategic moves—such as scaling its logistics capabilities, integrating AI across its business segments, and deepening market presence in Brazil—position it for long-term growth. Forrest Li, Sea’s CEO, emphasized the company’s focus on strengthening market leadership in emerging regions like Taiwan and Brazil. In Q4, Shopee onboarded 300 local Brazilian brands onto its platform, reducing buyer waiting times by 1.5 days—a testament to its commitment to improving customer experience. Additionally, Sea’s partnership with Google to develop AI tools for e-commerce, fintech, and gaming underscores its vision to leverage technology for sustained growth. While the short-term pain of the share drop may concern investors, many view these strategic investments as critical steps toward building a resilient and scalable business model. The company’s ability to adapt to market dynamics and innovate through initiatives like AI-driven shopping agents and digital banking solutions highlights its potential to maintain its competitive edge in Southeast Asia and beyond. This story is significant for business readers as it illustrates the delicate balance companies must strike between

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Originally published on Fortune on 3/4/2026