Grab's Dominance in Southeast Asia: A Finance Expert's Perspective

Grab Holdings, a Southeast Asian "everything app," has secured $1.5 billion for potential acquisitions and exhibits excellent growth potential. The company is dominating the region's ride-hailing, food delivery, and financial services markets.

Grab Holdings (NASDAQ: GRAB), the Southeast Asian "everything app," has secured $1.5 billion for potential acquisitions and continues to exhibit strong growth potential. The company is dominating the region's ride-hailing, food delivery, and financial services markets, with recent quarterly results showcasing robust performance.

In the second quarter of 2025, Grab reported a 23% increase in revenue, a positive profit, and a trailing twelve months (TTM) free cash flow of $229 million. This marks an inflection point into strong cash flows as the company's investments and development efforts begin to pay off. Although the adjusted FCF for Q2 2025 alone was $112 million, the company's growth potential suggests that this figure could significantly increase in the future.

Grab's mobility operations recorded notable growth, with a 16% year-over-year (YoY) increase in monthly transacting users, a 23% increase in mobility transactions, and an 18% growth in active driver-partners. However, the average user trip fare fell by 4%. Deliveries also experienced a significant 22% increase, driven by new product initiatives announced at the GrabX event in April 2025, including AI solutions for partners and users, as well as the GrabMart service.

The company's platforms are growing, attracting more users and generating more revenue and profits from advertising. Grab reported a 31% YoY increase in quarterly self-serve advertisers, a service that offers an average return on ad budgets spent of 9x. Grab's fintech, ride-hailing, food delivery, and other services are rapidly integrating, creating significant momentum and synergies.

Grab's financial position remains strong, with $5.69 billion in net cash liquidity and $3.88 billion in cash following the $1.5 billion note offering. This flexibility allows the company to invest in potential acquisitions and expansion, with the $1.5 billion intended for these purposes. Although the company has utilized its buyback program, focusing on acquisitions and expansion should be a priority.

Grab's outlook remains unchanged, with revenue expected to grow by 19% to 22% to $3.33 billion to $3.4 billion and Adjusted EBITDA expected to grow by 47% to 53% to $460 million to $480 million. The recovery in tourism post-COVID has fueled significant growth for Grab, with countries like Malaysia, Japan, China, India, Singapore, Indonesia, and Vietnam experiencing record-breaking tourist numbers.

However, competition remains, particularly from local players and companies like Sea Limited's ShopeeFood. Grab's market share in ride-hailing in countries like Malaysia and the Philippines is over 90%, reflecting its dominant position. The company's integration into local speech, with the phrase "take a Grab" becoming ubiquitous, further underscores its role as the primary choice for urban mobility.

Grab's valuation, based on a careful discounted cash flow (DCF) analysis, gives an enterprise value of $24.03 billion. After adding net cash, the equity value is $29.72 billion, or an intrinsic value per share of about $7.05. This valuation is slightly above the current price but reflects a conservative approach to the company's potential.

Overall, Grab remains a buy, with a solid balance sheet, rapidly improving financials, and excellent growth tailwinds from both internal and external factors. The country-related risks remain, but the company's track record and market position suggest significant potential for continued growth.