Monday, 15 April 2024

Grab revenues up 77% to $567M in 2Q 2023

5 min read

Grab Holdings Limited announced unaudited financial results for the second quarter ended June 30, 2023, posting $567 million in revenues, an increase of 77% year-over-year (YoY).

Anthony Tan, group CEO and co-founder of Grab, said: “We had a strong set of results for the second quarter. Deliveries gross merchandise value (GMV) grew YoY to hit record highs, supported by our continued push on key affordability initiatives and an expanding GrabUnlimited subscriber base. More people are using Grab today than ever before, as we achieved our highest monthly transacting users to date.”

“Looking ahead, we will focus on making our platform more valuable to our driver and merchant partners by providing them with tools and services to become more productive and engaged. Our aim is to continue fostering a flourishing ecosystem that enables them to thrive while delivering sustainable growth for Grab.”

Peter Oey, chief financial officer of Grab, said: “We continued on our path to profitability, with group revenues growing 77% YoY, while delivering our sixth consecutive quarter of group adjusted EBITDA improvement. Against the backdrop of a strong first half along with our focus on driving cost efficiencies and maintaining a strong balance sheet, we are revising our group adjusted EBITDA guidance range up by $165 million to $195 million, to $30 million to $40 million for the full year 2023. We are on track to achieve group adjusted EBITDA breakeven in the third quarter of 2023, ahead of our prior target of the fourth quarter of 2023.”

Revenue grew 77% YoY to $567 million in the second quarter of 2023, or 81% on a constant currency basis, attributed to growth across all our segments, continued incentive optimisation and a change in business model for certain delivery offerings in one of our markets.

● Total GMV grew 4% YoY, or 6% YoY on a constant currency basis, attributed to the growth in mobility and deliveries GMV, and group maximum transmission units (MTU) growing 7% YoY. Notably, our second quarter 2023 group MTU and deliveries GMV were at all-time highs.
● Total incentives were 8.0% of GMV in the second quarter, compared to 10.4% in the same period in 2022, demonstrating our continued focus on improving the health and efficiency of our marketplace.
● Loss for the quarter was $148 million, a 74% improvement YoY, primarily due to the improvement in group adjusted EBITDA and a reduction in fair value losses on investments, net interest expenses, and share-based compensation expenses. Our loss for the quarter included $65 million in non-cash share-based compensation expenses and a $50 million restructuring charge that largely consisted of costs from the restructuring exercise we conducted in June 2023.

Group adjusted EBITDA was negative $20 million for the quarter, an improvement of 92% compared to negative $233 million for the same period in 2022 as we continued to grow GMV and revenue while improving profitability on a segment adjusted EBITDA basis and lowering regional corporate costs. Notably, we recorded sequential improvements in group adjusted EBITDA on a quarter-over-quarter (QoQ) basis for six consecutive quarters.

● Group adjusted EBITDA margin was 0.4% for the quarter, an improvement from 4.6% in the second quarter of 2022 and 1.3% in the first quarter of 2023.
● Regional corporate costs for the quarter were $192 million, compared to $214 million in the same period in 2022 and $216 million in the prior quarter, as we drove greater cost efficiencies across the organisation. Variable expenses declined 31% YoY and 18% QoQ from increased operational efficiencies, specifically driven by lower cloud and direct marketing costs. Staff costs declined 6% YoY and 13% QoQ, attributable to lowered headcount levels across various functions including technology and development, marketing, and general and administrative functions. Additionally, in the second quarter, there were certain fixed cost reversals recognised from the restructuring exercise conducted in June.
● Cash liquidity totaled $5.6 billion at the end of the second quarter, compared to $5.8 billion at the end of the prior quarter. Our net cash liquidity was $4.9 billion at the end of the second quarter, compared to $5.0 billion at the end of the prior quarter.

Deliveries revenue grew 118% YoY, or 126% YoY on a constant currency basis, to $292 million in the second quarter from $134 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 our markets.

● Deliveries GMV grew 4% YoY, or 7% YoY on a constant currency basis, in the second quarter. On a QoQ basis, deliveries GMV grew 10%. Growth was underpinned by robust demand for deliveries, amid our continued focus on improving the affordability of our services and drive user engagement.
● Deliveries segment adjusted EBITDA as a percentage of GMV expanded to an all-time high of 2.7% in the second quarter of 2023 from 2.6% in the first quarter of 2023 and negative 1.4% in the second quarter of 2022, amid robust GMV growth, further optimisation of incentives spend and increased operational efficiencies.
● Adoption of GrabUnlimited, our subscription programme, continues to remain strong, with total GrabUnlimited subscribers increasing 43% YoY and 25% QoQ. Users subscribed to GrabUnlimited had average retention rates that were approximately 2x higher than non-subscribers over the first half of 2023.
● In the second quarter 2023, GrabUnlimited users accounted for almost a third of deliveries GMV and on average, spent 3.8x more on food deliveries services relative to non-subscribers.

Mobility revenues continued to grow strongly, rising 29% YoY, or 31% YoY on a constant currency basis, in the second quarter 2023. 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 GMV increased 28% YoY, or 30% YoY on a constant currency basis, supported by the YoY growth in mobility MTUs and transactions.
● Mobility segment adjusted EBITDA as a percentage of GMV was 12.4% in the second quarter of 2023, increasing from 12.1% in the same period last year, and in line with our steady-state target of 12%.
● During the quarter, we remained focused on increasing active driver supply while optimising our existing driver supply to meet the strong demand growth. In the second quarter of 2023, monthly active driver supply increased by 10% YoY and 3% QoQ, while earnings per transit hour of our driver-partners increased 9% YoY and 4% QoQ. Our efforts to improve supply have resulted in surged Mobility rides as a proportion of total rides reducing by 460 basis points YoY.
● In the second quarter, Grab rolled out car-pooling mobility services in Malaysia and Indonesia amid our efforts to improve affordability of our services for users. Today, we have car-pooling mobility services in Singapore, Philippines, Malaysia and Indonesia. We have also launched the enhanced MOVE IT app in the Philippines, our two-wheel ride-hailing service in the country, which now integrates Grab’s technology to enhance its operational efficiency and improve its safety and service quality standards.

Revenue for financial services grew 223% YoY, or 230% YoY on a constant currency basis, to $40 million in the second quarter of 2023. The YoY growth was driven primarily by improved monetisation of our payments business and higher contributions from other services such as lending.

● GMV for financial services declined 13% YoY or 11% on a constant currency basis, consistent with our efforts to focus on ecosystem transactions.
● Segment adjusted EBITDA for the quarter improved by 35% YoY to negative $75 million, as an increase in digibank-related costs was more than offset by lowered spend in GrabFin.
● Loans disbursed to our ecosystem partners continued to gain traction, with total loan disbursements growing by 47% YoY and 19% QoQ.
● In July, our digital bank in Singapore, GXS Bank announced that it opened up the GXS savings account to all eligible individuals in Singapore, and increased the maximum deposit amount for individual savings accounts to SGD 75,000 ($55,493) from SGD 5,000 ($3,699) prior. Ecosystem linkages are healthy, with one in two GXS users linking their GXS accounts to Grab.

Revenue from enterprise and new initiatives rose 95% YoY, or 99% YoY on a constant currency basis for the second quarter of 2023, primarily attributable to growing contributions from advertising. Advertising revenues in the second quarter were approximately $100 million on an annualised basis, as we focused on improving the monetisation of our advertising offering and deepening advertising penetration among our merchant-partners.

● GMV for the second quarter declined 3% YoY and remained flat on a constant currency basis as we continued to drive profitable transactions.
● Segment-adjusted EBITDA grew 203% YoY in the quarter compared to the same period in 2022, while enterprise segment-adjusted EBITDA margins expanded to 30.3% as we improved the monetisation of our advertising offering.

Re-disseminated by The Asian Banker

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