Grab raises full-year profit forecast as Q1 revenue beats estimates on ride demand
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Grab saw an 18 per cent rise in revenue to US$773 million for the first quarter, surpassing the average analyst estimate of US$766 million.
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SINGAPORE – Grab Holdings raised its full-year earnings forecast after first-quarter sales beat estimates, a sign that the South-east Asian ride-hailing and food-delivery market might be a bright spot in a tech industry rattled by global trade tensions.
Adjusted earnings before interest, taxes, depreciation and amortisation will be as much as US$480 million (S$627 million) in 2025, rather than the up to US$470 million projected previously, Singapore-based Grab said in a statement on April 30.
The company saw an 18 per cent rise in revenue to US$773 million for the first quarter, surpassing the average analyst estimate of US$766 million.
Grab narrowed its operating loss to US$21 million from US$75 million. Net profit came to US$24 million, reversing from a US$104 million loss in the year-ago period, driven by the improved operating loss and higher net finance income, including foreign exchange gains.
Grab, the largest of South-east Asia’s ride-hailing and delivery firms, is trying to prove its cost-cutting drive is yielding results. Like its backer, Uber Technologies, it has slashed jobs and reined in spending to pivot towards profitability. Grab has also pushed into new areas through acquisitions while trying to maintain a healthy balance between profits and growth even as competition from rivals including GoTo Group weighs on its ride-share and food-delivery margins.
Shares of Nasdaq-listed Grab, which had been one of South-east Asia’s hottest start-ups, have lost about half their value since it went public through a US blank-cheque company in late 2021. Still, they have gained more than 30 per cent over the past 12 months as the company’s earnings improved, in line with the stock performance of GoTo, its main regional competitor. GoTo on April 29 reported its third straight quarterly profit on an adjusted basis, helped by cost cuts.
In a move that would upend the regional market, Grab is weighing a takeover of GoTo
Grab is also betting on new initiatives and products in areas from digital finance to its core delivery services, saying in 2024 that such efforts should help its revenue accelerate from 2025.
In April, it announced a slew of new products aimed at increasing spending, where users can open new family accounts, pool orders for food delivery with strangers and make advance bookings for airport pickups.
It comes as growth has cooled dramatically from triple-digit rates in years past as customers in the region curb spending to cope with elevated inflation and interest rates. BLOOMBERG
