Grab Holdings Limited Q2 FY2024 earnings call

Management Statement and Operational Highlights

• Platform Growth: On-Demand GMV, group monthly transacting users, and group revenues hit new highs. 10th consecutive quarter of group adjusted EBITDA improvement. Second quarter of positive adjusted free cash flow.
• Product and Tech Initiatives: Rolled out affordable/high-value offerings, AI-powered DISH descriptions in five markets, GrabUnlimited subscriptions hit new highs. Superbank launched in Indonesia.
• Cost Discipline: Regional corporate costs declined 14% year-on-year. Focus on AI-led growth and cost efficiency.
• ESG Commitment: Published ESG report, responded to Typhoon Gaemi by activating assistance programs and partnering for recovery.

Segment Performance

• Deliveries: Deliveries GMV grew 14% year-on-year on a constant currency basis, with food transactions up 11% year-on-year. Saver deliveries reached 28% of deliveries transactions. Advertising revenue from deliveries was 1.5% of Deliveries GMV. Segment adjusted EBITDA margins were stable despite investments.
• Mobility: Mobility GMV grew 25% year-on-year on a constant currency basis, driven by 38% year-on-year growth in transaction volumes and 26% growth in MTUs. Saver ride-hailing is available in five markets, and adoption of safety transport rides increased. Segment adjusted EBITDA margins declined due to strategic investments.
• Financial Services: Revenue grew 61% year-on-year on a constant currency basis. Total loans disbursed in Q2 grew 43% year-on-year to $500 million. Customer deposits across GXBank and GXS expanded to $730 million. Segment adjusted EBITDA losses narrowed by 44% year-on-year.

Guidance

• Group revenues grew 17% year-on-year to $664 million, 23% on constant currency. Expect sequential On-Demand GMV and group adjusted EBITDA growth in H2 2024. Maintaining full-year 2024 revenue guidance of $2.7 billion to $2.75 billion and adjusted EBITDA guidance of $250 million to $270 million, expecting to land at upper end. Adjusted free cash flow expected to be positive for full year 2024.

Risks

• Foreign exchange headwinds impacting headline growth. Competitive landscape in markets. Potential disruptions from new entrants and social media partnerships.

Question and Answer

Q: Impact of FX weakness and macro outlook?

A: FX headwinds in Q2, but Q3 sees tailwinds. Southeast Asia macro outlook strong. Maintaining category leadership via scale, product, and tech.

Q: Mobility EBITDA margin dip?

A: Dip due to new product rollouts and product mix. Expect margins to improve sequentially in H2.

Q: Competitive landscape and delivery incentives?

A: Incentives for new product launches. Competitive activity present but not intensifying.

Q: Stock-based compensation and free cash flow?

A: SBC pacing lower as percentage of revenue. Free cash flow improvement due to profitability and CapEx reduction.

Q: Group MTU growth drivers?

A: Affordability push via Saver products, attracting new users and increasing transaction volumes.

Q: Regional cost outlook and social media partnerships?

A: Regional corporate costs expected to remain optimized. Work with social media platforms for demand generation.