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01/10 19:48
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows strong financial performance with record On-Demand GMV, increased revenues across segments, and improved Adjusted EBITDA. The Q&A reveals optimism about macro trends and margin improvements. Despite some unclear responses, the overall sentiment remains positive, supported by raised EBITDA guidance and a robust share buyback program. The stock is likely to see a positive movement of 2% to 8% over the next two weeks.
Group Revenues $664 million, up 17% year-on-year (23% on a constant currency basis). Growth driven by strong performance in Mobility and Financial Services.
Mobility Revenue Up 19% year-on-year (23% on a constant currency basis). Strong growth in Mobility MTUs and transactions.
Deliveries Revenue $2.9 billion, up 11% year-on-year (17% on a constant currency basis). Growth attributed to increased food deliveries and advertising.
On-Demand GMV $4.4 billion, up 13% year-on-year (18% on a constant currency basis). Growth driven by strong demand across Mobility and Deliveries.
Segment Adjusted EBITDA $148 million, up 84% year-on-year. Significant improvement driven by revenue growth across segments.
Mobility Segment Adjusted EBITDA $129 million, up 14% year-on-year. Margins declined from 8.6% to 8.2% due to product mix and investments in new services.
Deliveries Segment Adjusted EBITDA $42 million, up over 4 times year-on-year. Margins improved by 110 basis points to 1.5% due to lower overhead and better incentive spend.
Financial Services Revenue Up 54% year-on-year (61% on a constant currency basis). Growth driven by lending across GrabFin and GXS Bank.
Total Loans Disbursed $500 million, up 43% year-on-year, with an annualized run rate of $2 billion.
Customer Deposits $730 million, up 52% from $479 million in the prior quarter. Growth driven by increased deposit customers in GXBank.
Adjusted Free Cash Flow $36 million, an improvement of $56 million year-on-year. Driven by increased profitability and reduced CapEx.
Net Cash from Operating Activities $272 million, an improvement of $323 million year-on-year. Attributed to reduced losses before income tax and positive deposit momentum.
Gross Cash Liquidity $5.6 billion, up $267 million from the prior quarter. Growth attributed to increased customer deposits.
Net Cash Liquidity $5.3 billion, up from $5 billion in the prior quarter.
Regional Corporate Costs $84 million, down 14% year-on-year. Cost efficiencies achieved across fixed and variable components.
Operating Loss Improved by $121 million to negative $56 million year-on-year, driven by increased revenue and lower restructuring expenses.
IFRS Net Loss Improved by $79 million to negative $68 million year-on-year, mainly due to improved operating losses.
New Product Offerings: Grab rolled out more affordable and high-value offerings across mobility and deliveries, including family accounts, advanced booking, group orders, and dine-out deals.
GrabUnlimited Subscribers: GrabUnlimited, the subscription program, hit a new all-time high in total subscribers.
Saver Delivery: Saver deliveries gained traction, reaching 28% of delivery transactions, attracting new users and increasing order frequency.
Saver Ride-Hailing: Saver ride-hailing was launched in five markets, expanding the addressable market and increasing transaction volumes.
AI-Powered Features: AI-powered DISH descriptions were rolled out in five markets, improving checkout rates for long-tail merchant partners.
Superbank Launch: Grab launched Superbank, its digital bank in Indonesia, in June, with all three digital banks now fully operational.
Financial Services Growth: Total loans disbursed grew 43% year-on-year to $500 million, with a loan portfolio of $397 million.
Deposit Growth: Deposits in GXS Bank and GX Bank grew over 50% quarter-on-quarter to $730 million.
GXBank Customer Base: GXBank in Malaysia reached over 750,000 deposit customers in less than a year.
Superbank Customer Base: Superbank crossed 1 million deposit customers in August, less than two months post-launch.
Operational Efficiency: Regional corporate costs declined 14% year-on-year, demonstrating cost discipline.
Driver Supply Increase: Monthly active driver supply increased by 13% year-on-year, improving fulfillment rates.
Advertising Revenue Growth: Revenue from advertising as a percentage of Deliveries GMV was 1.5%, recovering to previous levels.
Three-Pronged Growth Strategy: Grab will focus on scaling its ecosystem, being AI-led for growth, and maintaining cost discipline.
ESG Commitment: Grab published its latest ESG report, emphasizing its commitment to community welfare and environmental health.
Foreign Currency Headwinds: Southeast Asian currencies weakened against the U.S. dollar, impacting On-Demand GMV growth rates by 528 basis points and revenue growth rates by 549 basis points.
Regulatory Challenges: Regulatory caps on deposits were raised again, affecting the operations of GXS Bank and GXBank.
Adverse Weather Conditions: The third quarter is typically impacted by adverse weather conditions in Southeast Asia, such as Typhoon Gaemi, which can affect demand levels.
Competitive Pressures: The company faces competitive pressures in the mobility and delivery sectors, necessitating continuous innovation and investment in new products.
Economic Factors: While Southeast Asia is expected to see mid-term GDP growth rates faster than the world average, the company must navigate economic uncertainties that could impact growth.
Cost Management: The company is focused on maintaining cost discipline, with regional corporate costs declining 14% year-on-year, but must continue to manage these effectively to ensure profitability.
Credit Risk: The company maintains a prudent stance on credit risk, with 90-day non-performing loans stable at around 2%, but must remain vigilant to avoid potential increases.
On-Demand GMV Growth: On-Demand GMV, group monthly transacting users, and group revenues hit new all-time highs with On-Demand transactions growing 22% year-on-year.
Adjusted Free Cash Flow: Achieved second quarter of positive adjusted free cash flow, with expectations to turn positive for the full year of 2024.
Product and Tech-led Strategy: Focused on product and tech-led initiatives to unlock platform growth, including affordable offerings and tailored solutions.
Digital Banking Expansion: Public launch of Superbank in June, with all three digital banks now operational, driving financial inclusion.
AI Investment: Continuing investment in generative AI to drive efficiency gains and improve customer experiences.
Cost Discipline: Regional corporate costs declined 14% year-on-year, aiming to build a lean organization.
Revenue Guidance 2024: Maintaining full year 2024 revenue guidance of $2.7 billion to $2.75 billion.
Adjusted EBITDA Guidance 2024: Adjusted EBITDA guidance of $250 million to $270 million, expecting to land at the upper end.
Revenue Growth Outlook: Revenue growth outlook of 14% to 17% year-on-year, assuming a 3.5 percentage point currency headwind.
Adjusted Free Cash Flow Guidance: Expecting to achieve positive adjusted free cash flow for the full year 2024.
Long-term EBITDA Margin Goals: Committed to achieving long-term segment adjusted EBITDA margin guidance of 9% plus for mobility and 4% plus for deliveries.
Share Repurchase Program: Grab has an authorized $500 million share repurchase program. In the second quarter, they repurchased an additional 9.6 million shares for a total of $34.6 million. Cumulatively, they have repurchased and retired 40 million shares for a total of $131 million.
The earnings call highlights strong growth in on-demand GMV, increased high-value rides, and success in affordability strategies. Management's guidance is optimistic, expecting sequential growth and improved margins. Investments in strategic areas like autonomous vehicles and financial services, along with a countercyclical strategy, bolster resilience. However, management's lack of specific guidance details and competitive landscape insights slightly temper optimism. Overall, the positive outlook on growth and strategic investments suggest a positive stock price movement.
The earnings call highlights strong financial metrics, including record monthly transacting users and consistent EBITDA improvement. The raised EBITDA outlook and strategic focus on growth and cost efficiency are positive indicators. Despite some uncertainties in management responses, the overall sentiment is positive, supported by strong market position and potential in advertising and financial services.
The earnings call highlights strong financial performance with positive adjusted EBITDA and free cash flow, along with raised guidance. The Q&A section indicates management's confidence in demand resilience and profitability improvement despite macroeconomic concerns. The company is also experiencing growth in transacting users and has outperformed competitors in key markets. However, global macroeconomic uncertainty and competitive pressures pose risks. Overall, the positive financial outlook and management's strategic focus on growth and efficiency suggest a positive stock price reaction.
The earnings call revealed strong financial performance with positive adjusted EBITDA and free cash flow, as well as 20% growth in on-demand GMV. Despite competitive pressures and regulatory risks, the company maintains a focus on growth and profitability. The Q&A session highlighted ongoing efforts to optimize costs and grow margins, especially in mobility, with a positive outlook on cross-selling and AI enhancements. The sentiment is positive due to robust financial metrics and strategic growth initiatives, suggesting a likely stock price increase of 2% to 8% over the next two weeks.
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