Sea Limited’s Shopee Posts $90.6B Orders While Finance Unit’s Provisions Surge
Sea’s Shopee platform processed 10 billion orders worth $90.6 billion during the first nine months of 2025, putting the company on track for over 30% revenue growth this year. However, Sea’s digital finance arm saw credit loss provisions more than double, and rising costs are weighing on its profitability.
1. Credit Loss Provisions Jump to Record Levels
In the third quarter of 2025, Sea Limited’s credit loss provisions surged to $1.18 billion, a 152% increase from the $466 million reported in Q3 2024. The provision hike reflects rising delinquencies in Sea’s digital lending portfolio, with the percentage of loans more than 30 days past due climbing from 3.2% to 5.4%. Management attributed the spike to slower consumer spending in key Southeast Asian markets and tighter underwriting criteria introduced mid-year. This record provision charge represented 18% of the digital finance segment’s revenues for the quarter, compared with 8% a year earlier, signaling mounting risk in the unit’s credit book.
2. Digital Finance Revenue Growth Remains Robust
Despite the credit headwinds, Sea’s digital finance arm continued to deliver strong top-line growth. Total digital finance revenues rose 68% year-over-year to $1.45 billion in Q3 2025, driven by a 74% surge in merchant loans and a 59% gain in consumer ‘buy now, pay later’ volumes. The segment processed $12.2 billion in new loan originations through September 30, up from $7.3 billion a year earlier. Average loan balances per account expanded to $420, versus $310 in the prior period, underscoring deeper penetration among existing customers. Management forecasts full-year digital finance revenue growth of at least 60%, underpinned by ongoing platform enhancements and new credit products slated for launch in early 2026.
3. Profitability Under Pressure as Costs Rise
Sea’s overall operating loss widened to $1.62 billion in Q3 2025, compared with $1.04 billion in the same period last year. Operating expenses climbed 25% to $2.9 billion, driven by a 32% increase in personnel costs and a 28% rise in technology and development spending as the company scales its lending analytics platform. The operating loss margin deepened to 23.4% of revenues, versus 17.1% a year ago. Sea’s CFO warned that profitability may remain under strain until credit loss provisions stabilize and cost efficiencies from recent organizational restructurings begin to materialize in mid-2026. Investors will be watching closely for progress on reducing provisions and narrowing the operating loss gap in the upcoming year.