Grab Holdings Limited Q2 FY2025 earnings call

• Product and tech-led innovations drove the ecosystem flywheel, resulting in 14th consecutive quarter of adjusted EBITDA growth and trailing 12 months adjusted free cash flow of $229 million.
• Focus on affordability, rolling out more affordable services to expand the addressable market. Financial services loan disbursals reached close to $3 billion on an annualized run rate basis in Q2.
• Collaborated with governments: In Indonesia, participated in the Makan Bergizi Gratis program, delivering nutritious meals to students; in Thailand, established a private-public tourism task force for the grand tourism year 2025.
• AV initiatives: Partnerships with A2Z and Megaworld, with pilots in Singapore (autonomous shuttle bus) and Philippines (drone-powered delivery); working closely with regulators to roll out AV services safely.

Mobility: MTUs scaled to an all-time high, with transactions growing 23% year-on-year. GMV grew 19% year-on-year (16% constant currency). Margin was 8.7% this quarter, close to the steady-state target of 9%+. Premium rides reached double-digit as a percentage of Mobility GMV. Deliveries: GMV accelerated to 19% year-on-year (constant currency) due to product-led initiatives like Saver, Dine Out, Family Accounts, and Group Orders. Saver contributed 34% of Deliveries transactions in Q2 (vs 28% prior year). Segment margins expanded 34 basis points, and absolute EBITDA grew 50% year-on-year. GrabMart GMV grew faster than the core business.

• Expect on-demand GMV growth in 2025 to accelerate from 2024 levels. Adjusted EBITDA in the second half to be substantially stronger than the first half.
• Deliveries margin expected to improve sequentially in the rest of 2025. Ads penetration is expected to contribute to margin improvement.
• Financial services loan book aims to hit $1 billion by the end of 2025. Financial services overall expects to break even in the second half of 2026, and 3 banks expect to break even in the fourth quarter of 2026.

• Macro environment uncertainties, including situations in Thailand and Indonesia, and trade tariffs.
• Credit risks in financial services, though currently within risk appetites.

Q: With macro uncertainty and situations in Thailand/Indonesia, what's the outlook for Grab?

A: Emphasized affordability investments since 2023, working with governments, and being countercyclical. Collaborated with governments in Indonesia and Thailand to navigate uncertainty.

Q: Mobility transaction growth, what strategies drive it?

A: Reinvesting scale economies, driving frequency of usage, attracting new user cohorts and improving retention. Margin trade-offs are sustainable with growth potential in Southeast Asia.

Q: Deliveries margin with lower AOV from products like Saver?

A: Product-led growth with viral products (e.g., Dine Out, Family Accounts) and affordable products driving GMV. Segment margins expanded despite Saver, with ads penetration contributing to margin improvement.

Q: When will AV vehicles be commercially rolled out in Southeast Asia?

A: Pilots ongoing, with partnerships and work with regulators. Expect more announcements in the coming months as pilots are expanded.

Q: Capital allocation and buybacks?

A: Prudent capital allocation, prioritizing organic growth. No immediate plans for new buyback programs; will explore with Board when appropriate.

Q: Deliveries margin outlook?

A: Sequential margin improvement expected in the rest of 2025, with ads penetration contributing. Long-term target of 4%+ margins in steady state.

Q: Fintech loan portfolio growth and outlook?

A: Loan book to hit $1 billion by end of 2025. Strong product lineup, including supply chain financing, driving growth. Financial services aims to break even in 2026.