Grab reported a net loss of US$115 million for the first quarter of 2024, narrowing 54 per cent from its loss of US$250 million a year prior.
This was primarily due to better group adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), as well as improved share-based compensation expenses, said the ride-hailing giant on Thursday (May 16).
The latest quarter’s results also included a US$31 million foreign exchange loss, along with US$94 million in non-cash share-based compensation expenses.
The company added that it will raise its full-year adjusted Ebitda guidance to between US$250 million and US$270 million, up from US$180 million to US$200 million.
Asked if the company has been conservative in its estimates, Grab chief financial officer Peter Oey said at its earnings call on Thursday that the company has made a meaningful increase on its last guidance, and that the company is confident that it will get to the latest target.
The group’s adjusted Ebitda stood at US$62 million for the quarter, as opposed to a loss of US$67 million in the previous year.
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Grab said its adjusted profit was due to growth in on-demand gross merchandise value (GMV) and revenue, along with improved profitability on a segment-adjusted Ebitda basis and lower regional corporate costs.
It also noted this marked the ninth consecutive quarter of sequential improvements in group adjusted Ebtida.
Revenue for Q1 grew 24 per cent on the year to US$653 million, driven by revenue growth across all segments amid a reduction in on-demand incentives as a percentage of on-demand GMV. Revenue for the quarter exceeded analysts’ consensus of US$642 million.
On-demand GMV grew 18 per cent year on year, which the group attributed to strong underlying demand growth across its deliveries and mobility segments.
It also noted on-demand monthly transacting users rose 19 per cent on the year “despite seasonal headwinds”, amid Chinese New Year festivities and the Ramadan fasting period in the first quarter.
Anthony Tan, co-founder and group chief executive of Grab, said: “Our push on affordability and reliability is pulling more people onto our platform and driving up order frequency. We also continue to see our partner earnings trending up.”
Within the company’s on-demand segment, both the mobility and deliveries segments notched revenue and segment adjusted Ebitda gains as well.
In the mobility segment, revenue grew 27 per cent to US$247 million from a year earlier, while segment adjusted Ebitda grew 41 per cent to US$138 million.
Grab chief operating officer Alex Hungate said that the company’s efforts to optimise driver supply and enhance driver efficiency to meet user demand continued to gain traction.
Monthly active driver supply grew 11 per cent year on year in Q1, while total online hours grew 13 per cent over the same period, he said, adding that the proportion of surge mobility rides fell by 622 basis points as a result.
Meanwhile, the company’s delivery segment posted a 19 per cent year-on-year rise in revenue to US$350 million in Q1, while segment adjusted Ebitda stood at US$42 million, reversing from a loss of US$19 million a year earlier.
Hungate said that going into a typically weak first quarter, the delivery segment performed well as the company’s strategy to make the service more affordable appeared to bear fruit in attracting new monthly transacting users (MTU), with MTUs only “slightly down” quarter on quarter.
The company’s Saver delivery product accounted for 26 per cent of transactions, and users of the product typically ordered 1.8 times more frequently than non-Saver users, he added.
Meanwhile, the company’s financial services segment also improved in performance. Revenue climbed 53 per cent on the year to US$55 million in Q1, while segment adjusted loss before interest, tax, depreciation and amortisation narrowed to US$28 million, from US$43 million a year earlier.
When asked if the worst of the financial services segment’s burn was over, and if the company would bring forward its segment breakeven forecasts, Hungate maintained that the company’s segment breakeven target of no later than the second half of 2026 remains.
He said that it is still “pretty early days” for the company as it has yet to fully launch its digibank in Indonesia, and its lending product in Malaysia is still not launched.
“Before we really accelerate the growth of lending, we want to steadily improve our approval rates, and then test the models for different user segments, different tenors, different (quantums), et cetera.
“This is something that I think is prudent for any lending business that is growing as fast as we are,” he said.
As for the company’s liquidity position, the company ended Q1 with gross cash liquidity of US$5.3 billion, down from US$6 billion in the prior quarter.
Oey said Grab in March repurchased about US$97 million worth of Class A ordinary shares under its US$500 million share repurchase programme.
The group also paid down the remaining US$497 million balance of its Term Loan B.
