Southeast Asia’s Super App Grab Reports Steady Business Growth

Grab Holdings Limited (NASDAQ: GRAB) announced unaudited financial results for the first quarter ended March 31, 2024.

Anthony Tan, Group Chief Executive Officer and Co-Founder of Grab said:

“Our focus on product-led growth is bearing fruit, with On-Demand GMV scaling to new highs in spite of the seasonal impact we usually see in the first quarter of the year. 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. We continue to strengthen our category position and we will leverage this scale and our technological edge to serve our users and partners better.”

Peter Oey, Chief Financial Officer of Grab said:

“We continued to drive profitable growth in the first quarter, as we achieved another record Adjusted EBITDA. As we drive growth across our business, we remain focused on continued improvements in profitability as demonstrated by our ninth consecutive quarter of Group Adjusted EBITDA expansion while improving shareholder returns and managing our balance sheet. Pursuant to our $500 million share repurchase program, we have repurchased approximately $97 million worth of Class A ordinary shares in March, and also paid down the remaining $497 million balance of our Term Loan B.”

As noted in the update, Grab revenue grew 24% year-over-year (YoY) “to $653 million in the first quarter of 2024, or 29% on a constant currency basis4, driven by revenue growth across all segments amid a reduction in On-Demand incentives as a percentage of On-Demand GMV.”

Operating loss in the first quarter “was $75 million, “an improvement of $129 million YoY, attributable mainly to improvements in revenue and lower general and administrative expenses.”

Loss for the quarter “was $115 million, an improvement of $134 million YoY, primarily due to improvements in Group Adjusted EBITDA, and reductions in net interest expenses and share-based compensation expenses.”

Group Adjusted EBITDA was $62 million “for the quarter, an improvement of $129 million YoY compared to negative $67 million for the same period in 2023, as we continued to grow On-Demand GMV and revenue, while improving profitability on a Segment Adjusted EBITDA basis and lowering Regional corporate costs5.”

Deliveries revenue reportedly “grew 19% YoY, or 24% YoY on a constant currency basis, to $350 million in the first quarter from $294 million in the same period in 2023.”

Deliveries GMV grew 13% YoY, or 16% YoY on “a constant currency basis, to $2,695 million in the first quarter of 2024, underpinned by an increase in transactions, as well as growth in Deliveries MTUs.”

During the first quarter, the total number of monthly active advertisers “who joined our self-serve platform increased 46% YoY to 119,000 while average spend by monthly active advertisers on our self-serve platform increased 54% YoY, as we continued to deepen Advertising penetration among our merchant-partners.”

Revenue for Financial Services “grew 53% YoY, or 56% YoY on a constant currency basis, to $55 million in the first quarter of 2024.”

The YoY growth was driven “by increased contributions mainly from lending across GrabFin and Digibank, and improved monetization of GrabFin’s payment services.”

Segment adjusted EBITDA for the quarter “improved by 34% YoY to negative $28 million, attributable to the increase in revenues amid growing contributions from higher margin lending activities, coupled with a further reduction in overhead expenses.”

They continued to streamline their cost base “across GrabFin’s businesses, with total operating expenses improving by 15% YoY and 14% QoQ, with the YoY improvement driven by lower staff costs, and further optimization of cost of funds and credit and compliance costs as a percentage of revenues.”

Total operating expenses for Digibank “reduced 23% QoQ, as expenses lowered following the launch of GXBank, our Digibank in Malaysia, in November 2023, but also recorded a 48% YoY increase in total operating expenses due to the launch of GXBank.”

They continued to focus on lending to their ecosystem partners “across GrabFin and Digibank, with total loan disbursements during the quarter growing by 64% YoY and 9% QoQ, and loan portfolio ending the quarter at $363 million from $196 million in the same period last year.”

As of March 31, 2024, around 80% of GXS Bank’s FlexiLoan customers “were also Grab users.”

Deposits from customers in their Digibank business “were $479 million at the end of the first quarter 2024, growing from $36 million in the same period last year and $374 million in the prior quarter.”

QoQ growth was mainly driven “by an increased number of deposit customers for GXBank, their Digibank in Malaysia, which doubled to 262,000 customers as of March, from 131,000 customers at the end of 2023.”

Notably, over 90% of deposit customers of GXBank “are also Grab users.”

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