Grab reports third quarter 2023 results | The Asian Banker
Sunday, 3 March 2024

Grab reports third quarter 2023 results

5 min read

SINGAPORE, November 9, 2023 - Grab Holdings Limited today announced its unaudited financial results for the third quarter ended September 30, 2023.

“We achieved our first positive Group Adjusted EBITDA this quarter as we reached another all-time high in Group 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.”

“Our third quarter results reflect our consistency and discipline in execution. Revenues grew 61% year-over-year while Deliveries Segment Adjusted EBITDA margin expanded to 3.4% amid continued Deliveries GMV growth,” said Peter Oey, Chief Financial Officer of Grab. “On the back of the strong results, we are revising up our 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.”

  • Revenue grew 61% year-over-year (“YoY”) to $615 million in the third quarter of 2023, and 62% YoY on a constant currency basis3 , primarily attributed to growth across all our segments, continued incentive optimization and a change in business model for certain delivery offerings in one of our markets1 .
  • Total GMV grew 5% YoY, and 6% YoY on a constant currency basis, primarily attributed to growth in Mobility and Deliveries GMV, and Group MTUs growing 7% YoY. Notably, On-Demand GMV2 grew 14% YoY and 3% quarter-over-quarter (“QoQ”).
  • Foreign exchange currency fluctuations impacted our results during the quarter. Total revenue and GMV grew 8% and 2% QoQ respectively, while on a constant currency basis, they grew by 10% and 3% QoQ, respectively. 
  • Total incentives were 7.1% of GMV in the third quarter, compared to 9.4% in the same period in 2022, demonstrating our continued focus on improving the health and efficiency of our marketplace.
  • Loss for the quarter was $99 million, representing a 71% improvement YoY, 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. Our loss for the quarter included $70 million in non-cash share-based compensation expenses. 
  • Group Adjusted EBITDA turned positive for the first time at $29 million for the quarter, an improvement of $190 million compared to negative $161 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. 
  • Regional corporate costs4 for the quarter was $192 million, compared to $208 million in the same period in 2022, as we continued to drive cost efficiencies across the organization. Overhead expenses declined 9% YoY, primarily driven by lower staff costs. 
  • Cash liquidity5 totaled $5.9 billion at the end of the third quarter, compared to $5.6 billion at the end of the prior quarter. Our net cash liquidity6 was $5.2 billion at the end of the third quarter, compared to $4.9 billion at the end of the prior quarter.
  • Deliveries revenue grew 79% YoY, or 82% YoY on a constant currency basis, 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 our markets7 .
  • Deliveries GMV continued to grow in the third quarter by 7% YoY, or 8% YoY on a constant currency basis, and 1% QoQ or 3% QoQ on a constant currency basis. Growth was underpinned by robust demand, as we improved affordability of our services and drove user engagement via GrabUnlimited. In particular, Deliveries transactions and average order frequency both increased 2% QoQ.
  • As we drive greater affordability of our services and expand Saver deliveries to more cities, adoption continues to track healthily, increasing average order frequency among existing users and enabling Grab to serve new users. In Malaysia and Singapore where the services were first launched, the penetration of Saver has reached over a third of Deliveries MTUs.
  • GrabUnlimited also continues to enhance user engagement on our platform. During the quarter, GrabUnlimited subscribers spent 4.2x more in Food Deliveries relative to non-subscribers and continued to have average retention rates8 that were approximately 2x higher than non-subscribers.
  • Deliveries segment adjusted EBITDA as a percentage of GMV expanded to 3.4% in the third quarter of 2023 from 2.7% in the second quarter of 2023 and 0.4% in the third quarter of 2022, amid further optimization of incentives spend, increased operational efficiencies and GMV growth.
  • During the quarter, we also focused on enhancing driver efficiency and earnings. Batching rates improved 330 basis points QoQ and 520 basis points YoY, while average driver-partner earnings per transit hour for batched orders were 5% higher compared to unbatched orders.
  • Mobility revenues continued to grow strongly, rising 31% YoY, and on a constant currency basis, during the third quarter. 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 30% YoY and on a constant currency basis, driven by frequency uplifts and more users adopting our economical Mobility offerings. Mobility transactions increased 37% YoY and 12% QoQ, and Mobility MTUs grew 24% YoY and 6% QoQ.
  • Mobility segment adjusted EBITDA as a percentage of GMV was 12.8% in the third quarter of 2023, increasing from 12.5% in the same period last year.
  • During the quarter, we continued to increase active driver supply while optimizing our existing driver supply to meet the strong demand growth. In the third quarter of 2023, monthly active driver supply increased by 9% YoY, while earnings per transit hour9 of driver-partners on our platform increased 8% YoY. Our efforts to improve supply have resulted in surged Mobility rides10 as a proportion of total rides reducing by 243 basis points YoY and 111 basis points QoQ.
  • Our efforts to drive frequency and bring new user segments onto our platform by improving the affordability of our services are gaining traction. During the quarter, Mobility MTUs and transactions in the Philippines grew 18% and 28% QoQ, respectively, primarily driven by the re-launch of the enhanced MOVE IT app in May, our two-wheel ride-hailing service in the country
  • Revenue for Financial Services grew 156% YoY and on a constant currency basis, to $50 million in the third quarter of 2023. The YoY growth was driven primarily by improved monetization of our payments business and higher contributions from other services such as lending.
  • GMV for Financial Services declined 15% YoY and 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 $68 million as we continue to reduce overhead expenses, attributable to improved operational efficiencies in our GrabFin cost structure. Cost of Funds, a variable cost that supports the payment platform, was higher YoY purely driven from increased transaction volumes. Cost of Funds represent 30% of our Financial Services segment cost structure. Digibank-related costs increased 11% QoQ as we prepare for the public launch of our Digibank outside of Singapore.
  • Loans disbursed to our ecosystem partners continued to gain traction. Year-to-date from January to September 2023, total loan disbursements grew 52% YoY to reach $1 billion, while total loans outstanding11 amounted to $275 million at the end of the third quarter. Customer deposits in GXS Bank, our digital bank in Singapore launched at the beginning of the year, stood at $362 million as at the end of the third quarter.
  • In September, our Malaysia digital bank, GX Bank Berhad (GXBank) was the first of the five digital bank license applicants to receive the approval to commence operations from Bank Negara Malaysia, following the successful completion of an operational readiness review.
  • In October, KakaoBank, South Korea’s leading digital bank, announced its investment of a 10% stake in Superbank, the Indonesian digital bank backed by Grab and Singtel, through the subscription of new shares. Through this strategic partnership, Superbank will be able to leverage on KakaoBank’s expertise and proven competitiveness in digital finance to collaborate in the development of products and services, and drive digital banking innovation in Indonesia.
  • Revenue from Enterprise and New Initiatives rose 83% YoY, or 84% YoY on a constant currency basis for the third quarter of 2023, primarily attributable to growing contributions from Advertising. During the third quarter, the total number of active advertisers who joined our self-serve platform increased 83% YoY, as we continued to deepen Advertising penetration among our merchant-partners.
  • Segment adjusted EBITDA grew 160% YoY in the quarter compared to the same period in 2022, while segment adjusted EBITDA margins expanded to 41.0% as we improved the monetization of our Advertising offering.

 

Re-disseminated by The Asian Banker

Diary of Activities
The Asian Banker Summit 2024
22 - 23 May 2024
Finance Vietnam 2024
18 July 2024