Grab Holdings Limited Q1 FY2025 earnings call

• Anthony Tan highlighted strong first quarter results with profitable growth despite seasonal impacts, record on-demand GMV, monthly transacting users, and revenues. The company achieved 13th consecutive quarter of group adjusted EBITDA improvement and expanded trailing 12 months adjusted free cash flow to $157 million.
• Alex Hungate discussed that consumer behavior showed no signs of weakness, with deliveries MTUs continuing to grow, and GrabX products leveraging AI to drive operational performance without margin weakness. He also mentioned Indonesia business outperforming competitors, with direct marketing costs declining in Indonesia, and AV partnerships being explored for future benefits.
• Peter Oey talked about the strong Q1 performance, with on-demand GMV growth, record monthly transacting users, and continued cost optimization in the business.

Grab achieved strong on-demand GMV growth of 17% year-on-year, with record monthly transacting users leading to another quarter of record revenues. The company saw its 13th consecutive quarter of group adjusted EBITDA improvement, and trailing 12 months adjusted free cash flow expanded to $157 million. On-demand GMV grew, and segments like deliveries (with GrabMart showing strong performance in March) and mobility contributed to the overall top-line growth.

• Grab reiterates expectations to maintain on-demand GMV and revenue growth momentum compared to 2024 growth rates while maintaining a disciplined cost stance.
• The company raised its adjusted EBITDA outlook for the full year 2025 to $460 million to $480 million from $440 million to $470 million previously.

• Global macroeconomic uncertainty is a key risk, as mentioned by Anthony Tan, which could impact the business despite Grab's efforts to be countercyclical.

Q: Congrats on the great set of results. Two questions: on macro and consumer behavior in Indonesia, and new products from GrabX. How do you expect new products to drive operational performance and avoid margin weakness?

A: Alex Hungate responded that consumer behavior showed no signs of weakness, with deliveries MTUs growing, and new products from GrabX using AI to improve services without margin weakness. Shared Saver and GrabFood for One examples show these products are efficient and don't put pressure on margins.

Q: On your guidance, especially on the higher EBITDA guidance, can management elaborate the reasons for confidence on profitability improvement? And plans if demand softens?

A: Peter Oey and Alex Hungate answered that Q1 showed strong on-demand GMV growth, record monthly transacting users, and continued cost optimization. They expect demand to remain strong, with April trends healthy, and have a disciplined cost management approach. If demand softens, the platform has self-adjusting mechanisms like new drivers joining to support consumption.

Q: On delivery industry consolidation in ASEAN and Indonesia business performance vs competitor?

A: Peter Oey said they focus on growing their delivery segment, which grew 17% year-on-year, and Alex Hungate confirmed Indonesia business outperformed the closest competitor again, with deliveries MTUs growing and direct marketing costs declining in Indonesia.

Q: On user base, DTU penetration, and order frequency?

A: Alex Hungate stated that DTU has room to grow compared to MTU, with GrabX initiatives driving frequency. Monthly order frequency in deliveries and mobility has been improving year-on-year, with both segments showing growth despite seasonal challenges.

Q: On competition, markets getting more competitive, and Grab Unlimited integration?

A: Alex Hungate said the market is seeing consolidation, but Grab holds category leadership, and Grab Unlimited is being expanded to include mobility benefits, with a focus on multi-vertical relationships with customers and partners.

Q: On margin drivers, deliveries margin improvement, fintech loan book, and NPL?

A: Peter Oey and Alex Hungate explained that deliveries margin improvement was due to product mix, incentives flat, and advertising penetration. Fintech loan book is growing, NPLs are stable, with expected credit losses managed prudently to strengthen the balance sheet.

Q: On AV partnerships?

A: Alex Hungate said Grab is excited about AV partnerships, with MOUs signed with four companies, focusing on being at the forefront of AV exploration, though pilots are in early stages and economics are yet to be detailed.

Q: On fintech model, revenue growth reacceleration, and food delivery monetization?

A: Alex Hungate explained Grab's fintech model focuses on supporting platform partners, with credit models developing, and revenue growth reacceleration driven by expanding TAM. For food delivery monetization, dine-out discovery is in early stages, with monetization expected in future years rather than 2025.