Grab Holdings Limited (GRAB) Q2 Earnings call transcript Aug 15, 2024
AInvestThursday, Aug 22, 2024 12:01 pm ET
2min read
GRAB --

In Grab's Second Quarter 2024 Earnings Call, the company showcased a strong performance, reporting all-time highs in on-demand GMV, group monthly transacting users, and group revenues. The company achieved a 10th consecutive quarter of group adjusted EBITDA improvement, even as it invested in new products and faced foreign currency headwinds. This demonstrates Grab's relentless focus on generating sustainable and profitable growth at scale.

Key Strategic Achievements

Grab's strategic focus on being product and tech-led has been instrumental in unlocking platform growth. During the quarter, the company rolled out more affordable and high-value offerings across mobility and deliveries to meet the diverse needs of its users. The success of these initiatives is evident in the 22% year-on-year growth in on-demand transactions and the 14% year-on-year growth in deliveries GMV.

Operational Highlights

In the mobility segment, Grab's saver ride hailing product has been a game-changer, offering more affordable options alongside established Grab car or Grab bike products. This has enabled the company to expand its addressable market while upholding core value propositions of safety and reliability. Adoption of safety transport rights has also increased significantly, with 14% of group MTUs joining the Grab platform transacting on a saver mobility offering.

Grab's focus on innovating new ways to support large social gatherings and return to the office has led to the revamp and relaunch of group orders. This initiative has resulted in group orders driving basket sizes that were 2x higher than average Grab food orders and enabling users to connect seamlessly with each other on the platform, amplifying new user growth and leveraging scale to drive improvements in retention, basket sizes, and batching rates.

Financial Performance

Grab's financial services segment continues to grow rapidly, with revenues growing 61% year-on-year on a constant currency basis. The company's power lending business is scaling to serve ecosystem partners and users, driving cross-sell opportunities across its various services. Total loans disbursed in the second quarter grew to $500 million, with a loan portfolio of $397 million underpinned by the continued growth of ecosystem lending in GrabFin and growing flexi loan volumes from GXS Bank in Singapore.

Future Outlook

Looking ahead, Grab remains bullish on the long-term growth outlook of Southeast Asia, with economists forecasting midterm GDP growth rates in the region to be faster than the world average. The company is committed to scaling its ecosystem, leveraging its assets to capture this growth, and improving the selection of affordable or high-value offerings in its on-demand platform to drive cross-sell opportunities across its various services.

Grab's strategic decision to be AI-led in driving platform and profitable growth is expected to continue, with the company investing in the generative AI to drive efficiency gains across its business and deliver innovative customer and partner experiences. This focus on AI-driven initiatives, combined with cost discipline across its business, positions Grab for long-term success.

Conclusion

Grab's Second Quarter 2024 Earnings Call underscores the company's strategic focus on generating sustainable and profitable growth at scale. Its commitment to being product and tech-led has unlocked platform growth, with the rollout of affordable and high-value offerings across mobility and deliveries driving strong transaction volumes and user engagement. The company's financial services segment continues to grow rapidly, underpinned by the ability to leverage the scale of the Grab ecosystem. With a focus on AI-driven initiatives, cost discipline, and a bullish outlook on the long-term growth prospects of Southeast Asia, Grab is well-positioned for continued success.

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