Grab jumped 9.6% as revenue more than doubles.
Revenue for the company grew 143 per cent to US$382 million in Q3, lifted by a doubling in mobility revenue and 250 per cent growth in deliveries’ revenue year on year. This came as gross merchandise value (GMV) was up 26 per cent to US$5.1 billion.
With this set of earnings, Grab’s deliveries segment has hit positive adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) for the first time, three quarters ahead of previous guidance. This was possible due to the optimisation of incentive spend and contributions from its Malaysian retail chain, Jaya Grocer.
The food-delivery sub-segment also turned adjusted-Ebitda positive in Q3, two quarters ahead of previous guidance.
On the back of the positive showing, Grab has lifted its FY2022 revenue guidance to between US$1.32 billion and US$1.35 billion, up from the US$1.25 billion-to-US$1.3 billion range. It has aso revised its H2 2022 adjusted Ebitda guidance to negative US$315 million, an improvement from negative US$380 million.
Under its cash-preservation strategy, Grab will repurchase up to US$750 million of an outstanding US$2 billion term loan. The facility was issued in January 2021 and has a tenor of five years.
The repurchase is expected to create significant interest expense savings, Grab said, adding that it had US$5.3 billion in net cash liquidity as at end-September, providing an “ample net cash buffer”. The company expects to hit group adjusted Ebitda break-even in the second half of 2024.
The continued easing of Covid-19 restrictions, as well as efforts to improve driver supply, lifted Grab’s Q3 mobility revenue 101 per cent to US$176 million. The segment’s adjusted Ebitda was likewise up 112 per cent to US$135 million.
Driver numbers are, however, still short of pre-pandemic levels, with the monthly average number of active drivers in Q3 at 80 per cent that of Q4 2019.
In the deliveries segment, the company’s focus on higher-quality GMV transactions and contributions from Jaya Grocer sent revenue up 250 per cent to US$171 million. Grab also posted a higher commission rate of 21.2 per cent, up from 18.2 per cent a year ago.
This brought the segment into the black, with an adjusted Ebitda of US$9 million, in contrast to the US$22 million adjusted Ebitda loss a year ago.
The financial-services segment, however, sank deeper into the red, with a US$104 million adjusted Ebitda loss, wider than the year-ago US$76 million adjusted Ebitda loss. This came despite revenue having risen 44 per cent to US$20 million. The bottomline was weighed down by expenses in digibank operations.
Nevertheless, Grab highlighted that its loan disbursements are up 121 per cent year on year. The number of active drivers with a loan from Grab has more than doubled, while non-performing loans are in “low single digits”.
Revenue for the company’s enterprise and new initiatives unit, which includes its nascent GrabMaps business, more than doubled to US$15 million, driven by contributions from advertising services. The segment’s adjusted Ebitda stood at US$8 million, up from US$1 million a year ago.
Grab chief Anthony Tan said that the Q3 results show the company’s ability to drive growth and profitability at the same time, with deliveries’ break-even coming earlier than expected.
“We accomplished this by staying laser-focused on our cost structure and incentives, while innovating on services that increase synergies within our superapp ecosystem to promote transaction frequency, user retention and engagement,” he said.