Southeast Asia superapp Grab said Thursday it has delivered the first adjusted earnings before interest, taxes, depreciation (EBITDA) profitable quarter as topline continues to grow.
The group said in a statement that its adjusted EBITDA turned positive for the first time at $29 million for the third quarter, an improvement of $190 million compared to adjusted losses before interest, taxes, depreciation of $161 million for the same period in 2022.
This was due to the firm continued to grow gross merchandise value (GMV) and revenue, while improving profitability on a segment adjusted EBITDA basis and lowering regional corporate costs.
The group is currently expecting adjusted losses before interest, taxes, depreciation of $20 million to $25 million, as compared to $30 million to $40 million previously.
It also revised up its full year revenue projection to $2.13 billion to $2.33 billion, from $2.2 billion to $2.3 billion.
According to Grab, the firm’s loss for the third quarter was $99 million, representing a 71 percent improvement year on year, primarily due to the improvement in group adjusted EBITDA and a reduction in net interest expenses, fair value losses on investments, and share-based compensation expenses.
The firm’s loss for the quarter included $70 million in non-cash share-based compensation expenses.
Meanwhile, the group’s revenue grew 61 percent year-over-year to $615 million in the third quarter, primarily attributed to growth across all its segments, continued incentive optimization and a change in business model for certain delivery offerings in one of its markets.
The group’s total GMV grew 5 percent year on year, primarily attributed to growth in mobility and deliveries GMV.
Its group monthly transacting users (MTUs) also climbed 7 percent year on year.
Notably, on-demand GMV grew 14 percent and 3 percent quarter-over-quarter.
Total incentives were 7.1 percent of GMV in the third quarter, compared to 9.4 percent in the same period in 2022, demonstrating the firm’s continued focus on improving the health and efficiency of its marketplace.
“We achieved our first positive group adjusted EBITDA this quarter as we reached another all-time high in group monthly transacting users (MTUs) and saw increased earnings for our driver-partners,” said Anthony Tan, Group Chief Executive Officer and Co-Founder of Grab.
“While this is an important milestone for Grab, it is just one of many steps in our journey as we continue to drive growth in a sustainable and profitable manner,
“Our progress forward remains anchored on improving our marketplace efficiency, building better and more affordable services for our users, and empowering the millions of everyday entrepreneurs on our platform to thrive,” he added.
Meanwhile, Grab Chief Financial Officer Peter Oey said that Grab’s third quarter results reflect the firm’s consistency and discipline in execution.
“Revenues grew 61 percent year-over-year while deliveries segment adjusted EBITDA margin expanded to 3.4 percent amid continued deliveries GMV growth,” he said.
On the back of the strong results, he said the firm is revising up its outlook on full year 2023 revenues and group adjusted EBITDA.
“As we look beyond 2023, we will continue to sharpen our focus on generating adjusted EBITDA and free cash flows, while maintaining cost discipline to drive further operating leverage,” he added.
According to the statement, the group’s deliveries revenue grew 79 percent year on year to $306 million in the third quarter from $171 million in the same period in 2022.
The strong growth was primarily attributed to a reduction in incentives, GMV growth, and a change in business model of certain deliveries offerings in one of its markets.
Its deliveries segment adjusted EBITDA as a percentage of GMV expanded to 3.4 percent in the third quarter of from 2.7 percent in the second quarter and 0.4 percent in the third quarter of 2022, amid further optimization of incentives spend, increased operational efficiencies and GMV growth.
The group’s mobility revenues also continued to grow strongly during the third quarter, rising 31 percent year on year to $231 million.
The increase was mainly attributed to our efforts to improve supply across the region, which enabled us to capture the recovery in tourism ride-hailing demand, and the growth in domestic demand.
Mobility segment adjusted EBITDA as a percentage of GMV was 12.8% in the third quarter, increasing from 12.5 percent in the same period last year.
Meanwhile, revenue for financial services grew 156 percent year on year to $50 million in the third quarter.
The growth was driven primarily by improved monetization of our payments business and higher contributions from other services such as lending.
The segment adjusted EBITDA for the quarter improved by 35 percent year on year as the firm continues to reduce overhead expenses, attributable to improved operational efficiencies in its GrabFin cost structure.
The group’s cash liquidity totaled $5.9 billion at the end of the third quarter, compared to $5.6 billion at the end of the prior quarter.
Its net cash liquidity was $5.2 billion at the end of the third quarter, compared to $4.9 billion at the end of the prior quarter.
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