Maybank Investment Bank has increased its revenue and adjusted EBITDA forecasts for Singapore tech company Sea by 6% to 8% for 2025 to 2027 after the company reported strong results in the first quarter.
On Wednesday, the research firm said Sea’s adjusted EBITDA for the first quarter was $947 million. This is 2.5 times higher than the same time last year and 60% higher than the previous quarter. It was also 29% above their forecast and 44% higher than most analysts expected.
According to Maybank, Sea’s strong first quarter was boosted not only by long-term growth potential and low competition but also by seasonal events like Chinese New Year and Lebaran, which especially helped its gaming business.
Sea’s Garena bookings increased by 51% compared to last year and 43% compared to the previous quarter. This was 35% higher than what Maybank and other analysts had expected.
Sea’s e-commerce gross merchandise value (GMV) grew by 21% compared to last year and stayed the same as the previous quarter, which was mostly what analysts had expected.
However, the big surprise came with the adjusted EBITDA, which was $286 million higher than last year. This was a 74% increase from the previous quarter and 69% higher than analysts predicted.
Sea’s seller take rate increased because of more ads and the seasonal changes in the first quarter. Lower spending on sales and marketing helped increase their profit margins, but the company expects these margins to drop slightly in the next few quarters.
The company’s digital financial services business continued its strong growth, rising 58% compared to last year and 7% compared to the previous quarter, beating expectations by 4% to 7%.
“We expect e-commerce GMV and Garena bookings to decline 2 percent and 20 percent quarter on quarter (in the second quarter), but on a year-on-year basis still grow at 20 percent and 15 percent year on year respectively – along its full-year guidance,” said Maybank.
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