SINGAPORE - Grab Holdings Limited (NASDAQ: GRAB) reported first-quarter financial results that exceeded analyst expectations, with revenue climbing 24% YoY to $653 million, surpassing the consensus estimate of $645.82 million. The revenue growth was also a 29% increase on a constant currency basis. Despite the revenue beat, the adjusted EPS for the quarter was at -$0.03, falling short of the analyst estimate of -$0.01.
The Southeast Asian super app's stock rose 2.6% following the announcement, indicating a positive market response to the company's financial performance and prospects. The driver behind the stock's upward movement was primarily the revenue beat.
Grab's first-quarter performance was marked by significant improvements across key financial metrics. The company's On-Demand Gross Merchandise Volume (GMV) grew 18% YoY, reaching $4.2 billion, and the operating loss saw a substantial year-over-year improvement, narrowing to -$75 million from -$204 million. Additionally, the adjusted EBITDA reached an all-time high of $62 million, a stark contrast to the previous year's negative $67 million.
The company's CEO, Anthony Tan, attributed the strong quarterly results to product-led growth, emphasizing that Grab's focus on affordability and reliability has increased platform usage and order frequency.
CFO Peter Oey highlighted the record adjusted EBITDA and the company's commitment to profitability and shareholder returns, noting the repurchase of approximately $97 million worth of shares and the full repayment of a $497 million Term Loan B.
Looking ahead, Grab has raised its 2024 adjusted EBITDA guidance to $250-$270 million, up from the previous forecast of $180-$200 million. The updated FY2024 revenue guidance of $2.7-2.75 billion fell slightly below the analyst consensus of $2.768 billion.
In terms of segment performance, Grab's Deliveries segment saw revenue grow 19% YoY to $350 million, with GMV increasing 13% YoY. The Mobility segment also reported robust growth, with revenues up 27% YoY and GMV growing by 27% YoY. The Financial Services segment experienced a 53% YoY increase in revenue, reaching $55 million.
Grab's strategic focus on reducing costs and optimizing marketplace health was evident in the reduction of On-Demand incentives as a percentage of GMV, down to 9.7% from 10.7% in the same period last year.
The company's solid financial position, with cash liquidity totaling $5.3 billion at the end of the first quarter, positions it well for continued growth and investment in its platform. Despite the challenging economic environment, Grab's performance and raised guidance reflect its resilience and potential for sustained profitability.
InvestingPro Insights
As Grab Holdings Limited (NASDAQ: GRAB) continues to navigate the competitive landscape of Southeast Asia's tech industry, the company's financial health and market performance offer insights crucial to investors. The latest data from InvestingPro underscores key aspects of Grab's financial standing.
InvestingPro Data reveals a market capitalization of $14.16 billion, reflecting the company's substantial size in the industry. Despite the impressive revenue growth of 64.62% over the last twelve months as of Q4 2023, the company's P/E Ratio remains negative at -35.85, indicating that Grab is not currently profitable. Additionally, the company's Price to Book ratio stands at 2.25, suggesting that the market values the company at just over twice its book value.
Two InvestingPro Tips that stand out for Grab are its solid liquidity position, as the company holds more cash than debt on its balance sheet, and the fact that its liquid assets exceed short-term obligations. This provides the company with a buffer to sustain operations and invest in growth despite not being profitable over the last twelve months and not paying dividends to shareholders. However, analysts do not anticipate the company will be profitable this year, which is an important consideration for potential investors.
For those interested in a deeper dive into Grab's financials and strategic positioning, there are additional InvestingPro Tips available at https://www.investing.com/pro/GRAB. To enhance your investment analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and unlock the full potential of InvestingPro's analytical tools.
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