Grab, the Singapore-based super app, said it is ‘on track’ to achieve breakeven by the fourth quarter after its losses narrowed in the first quarter.
The group said in a statement on Thursday that it has revised up its full year adjusted EBITDA guidance range by $80 million to $90 million.
However, it maintained its forecast that its full year revenue will increase 54 percent to 60 percent $2.20 billion to $2.30 billion.
The group’s loss for the quarter was $250 million, a 43 percent improvement year on year, primarily due to the improvement in group adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and a reduction in net interest expenses.
The group’s revenue also grew 130 percent year on year to $525 million in the first quarter, attributed to growth across all its segments, a reduction in incentives and a change in business model for certain delivery offerings in one of its markets.
The group’s adjusted losses before interest, taxes, depreciation, and amortization stood a $66 million for the quarter, an improvement of 77 percent compared to $287 million for the same period in 2022 as it continued to grow gross merchandise value (GMV) and revenue while improving profitability on a segment adjusted EBITDA basis.
The firm has recorded sequential improvements in group adjusted EBITDA on a quarter-over-quarter basis for five consecutive quarters.
“This quarter, we reported another solid set of results which reflects our disciplined focus to drive sustainable growth and profitability,
“Our revenues for the quarter more than doubled year-over-year, while we reduced our adjusted adjusted losses before interest, taxes, depreciation, and amortization by 77 percent year on year,” said Anthony Tan, Group Chief Executive Officer and Co-Founder of Grab.
With five sequential quarters of adjusted EBITDA improvements, he said the firm remains on track on its path to profitability, and to achieve group adjusted EBITDA breakeven in the fourth quarter of this year.
“We are confident that we can drive growth for mobility and deliveries, and create more income opportunities for our partners to meet the growing demand from both travelers and domestic consumers,” he said.
On the back of the solid first quarter performance, Grab Chief Financial Officer Peter Oey said the firm is revising-up its adjusted EBITDA guidance range by $80 million to $90 million, to $(195) million to $(235) million for the full year 2023.
“We are pleased with our first quarter results, with strong revenue growth and profitability improvements across all of our segments, supported by a strong balance sheet,
“We remain focused on driving cost efficiencies across our organization and improving operating leverage,’ he said.
The group’s total GMV grew 3 percent year on year, primarily due to the continued growth in mobility, which offset softer deliveries demand as a result of Chinese New Year and Ramadan during the first quarter.
For its deliveries segment, GMV declined year on year against a first quarter 2022 comparison base where deliveries demand was supported by COVID restrictions on dine-in and social gatherings in Southeast Asia.
Additionally, fasting during the Ramadan period commenced during the first quarter of this year, which was earlier as compared to the prior year where it commenced in the second quarter.
The group’s total incentives also further reduced to 7.9 percent of GMV in the first quarter, compared to 11.6 percent in the same period in 2022 and 8.2 percent in the previous quarter, demonstrating its continued focus on optimizing its incentive spend and the health of its marketplace.
Meanwhile, Grab’s regional corporate costs for the quarter were $216 million, compared to $212 million in the same period in 2022 and $223 million in the prior quarter.
Overall headcount across its core segments and corporate functions has fallen sequentially over the past two quarters.
Management said it remains focused on driving cost efficiencies across its organization in order to further reduce regional corporate costs.
The group’s cash liquidity totaled $5.8 billion at the end of the first quarter, compared to $6.5 billion at the end of the prior quarter, with a substantial part of the cash outflow attributed to the prepayment of its term loan B in the aggregate principal amount of $600 million completed in February.
Its net cash liquidity was $5 billion at the end of the first quarter, compared to $5.1 billion at the end of the prior quarter.
Grab to breakeven earlier than expectation after recording narrowed losses