Grab's Q3 2025: Contradictions Emerge on Consumer Behavior, Financial Services, and Grocery Expansion

Guidance:

• Raised full-year adjusted EBITDA guidance to $490–$500 million.
• Expect on-demand GMV to grow sequentially in Q4 and to exit 2025 at record GMV levels.
• Financial services loan portfolio expected to exceed $1 billion by year-end 2025.
• Maintain profitable growth into 2026; Financial Services segment expected to breakeven in H2 2025.
• Note Q1 is seasonally softer.

Business Commentary:

* Record Financial Performance and User Growth: - Grab Holdings Limited reported a 24% year-on-year increase in on-demand GMV and a 51% year-on-year rise in group adjusted EBITDA to $136 million. - The growth was driven by product-led innovations that led to an increase of 6 million in monthly transacting users to 48 million, improving accessibility, affordability, and reliability.

• Regional and Product Growth Dynamics:
• Indonesia remains a key growth market, with strong performance in GrabBike and GrabCar Saver services, contributing to on-demand GMV growth.

• The introduction of high-value rides and premium services, along with GrabMart, fueled elevated delivery GMV growth.

• Financial Services Expansion:

• The financial services loan portfolio is expected to exceed $1 billion, with a 56% year-on-year increase in loan dispersals on an annualized basis.

• Growth is attributed to successful credit models and financial inclusion strategies, allowing for the expansion of credit to underbanked and unbanked populations.

• Product Innovation and Cost Management:

• Grab maintained cost discipline with regional corporate costs increasing only 8% year-on-year, while improving operating leverage by 150 basis points.
• This strategic cost management was supported by disciplined spending and leveraging ecosystem scale to enhance profitability.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted strong operating momentum: "Group adjusted EBITDA rose 51% year-on-year to a new record of $136 million" and "15th consecutive quarter of sequential profitability improvement." Leadership reiterated confidence: "we are confident in our ability to drive sustainable long-term value" and raised full-year EBITDA guidance to $490–$500M.

Q&A:

• Question from Pang Vittayaamnuaykoon (Goldman Sachs Group, Inc., Research Division): Can you discuss the competitive landscape in Indonesia (your growth there and drivers of outperformance) and explain why you increased guidance and the segment-level drivers?
  Response: Product-led growth in Indonesia (affordability products, GrabMart, GrabExecutive) is driving strong MTU and margin improvement; company raised full-year adjusted EBITDA guidance to $490–$500M citing deliveries (+26%), mobility (+20%), financial services growth and improved operating leverage/cost discipline.

• Question from Alicis a Yap (Citigroup Inc., Research Division): Can you elaborate on MTU growth (demographics, city tiers) and how to think about delivery GMV growth for Q4 and into 2026, and the margin trade-off if growth stays above 20%?
  Response: Product-led initiatives (Saver, GrabMart, GrabUnlimited) delivered 14% MTU growth and 27% transactions growth with GMV/MTU +7% YoY; management expects Q4 GMV to accelerate sequentially and to continue margin expansion while pursuing sustainable growth (delivery target 4%+, mobility 9%+).

• Question from Navin Killa (UBS Investment Bank, Research Division): How will you use the strong cash balance over the next 12–18 months, and how should we split this year's growth between macro, market-share gains and product initiatives?
  Response: Capital allocation priorities are organic growth (notably expanding the loan book — Q3 annualized dispersals ~$3.5B yielding above cost of capital), selective high‑bar M&A (e.g., AV partnerships), and returning excess capital; macro demand appears resilient and product-led initiatives are a primary driver of current growth.

• Question from Venugopal Garre (Sanford C. Bernstein & Co., LLC., Research Division): Which regions are driving GrabMart growth, what incremental initiatives are needed to scale grocery, and are AV investments strategic or financial — plus rollout progress?
  Response: GrabMart (~10% of deliveries) is outpacing food (1.5x growth) via GrabMore cross-sell and quick-commerce pilots (Malaysia, Indonesia); AV investments are strategic partnerships to build hybrid fleets with a long ramp, regulatory engagement and driver upskilling rather than pure financial plays.

• Question from Wei Fang (Mizuho Securities USA LLC, Research Division): What have you learned about newly acquired financial-services customers and how are you fine‑tuning risk provisions?
  Response: Financial services is accelerating (Q3 annualized dispersals ~$3.5B); higher upfront expected credit losses reflect provisioning for rapid growth, but underlying adjusted EBITDA improved and repayment behavior from previously unbanked customers has been encouraging as models mature.

• Question from Mark Stephen Mahaney (Evercore ISI Institutional Equities, Research Division): How should we think about consumer incentives going forward (sustainable level) and the advertising ramp/strength?
  Response: Consumer incentives have been reduced to a sustainable current level (may fluctuate quarter-to-quarter); driver incentives rose slightly to support fulfillment; advertising is scaling — active advertisers +15% YoY, average spend +41% — and is an important long‑term margin driver.

• Question from Divya Kothiyal (Morgan Stanley, Research Division): How do delivery margins differ across countries and affect the path to 4%, and what are the milestones/risks and use cases for Financial Services as you approach breakeven?
  Response: Margins vary by market (Malaysia ~4% steady-state; Indonesia growing strongly though margin stable), Mart is currently dilutive but improves with scale; Financial Services breakeven expected in H2 as loan dispersals accelerate, credit models mature and operating leverage improves — key risks are ECL volatility and model performance.

• Question from Jiong Shao (Barclays Bank PLC, Research Division): Can you confirm Q4 delivery margins are up sequentially from Q3 and outline the pace of margin expansion into 2026 and any update on in‑store/offline monetization trials?
  Response: Deliveries are managed as a portfolio and are expected to be sequentially stronger in Q4 with continued upward margin trajectory depending on product mix, advertising and GrabMart scale; no broad new in‑store offline monetization rollout aside from Jaya grocery experiments and omni‑commerce/dine‑out integrations.

Contradiction Point 1

Macro Environment and Consumer Behavior

It involves differing perspectives on the resilience of consumer behavior amidst macroeconomic challenges, which can impact business strategy and growth expectations.

How do you plan to use cash over the next 12 to 18 months, and how might the macroeconomic environment affect growth? - Navin Killa (UBS Investment Bank, Research Division)

2025Q3: Consumer behavior remains resilient across our key markets. Despite macroeconomic uncertainties, our key markets show growth momentum in consumer spending with strong performance in our delivery and mobility segments. - Ping Yeow Tan(CEO)

Has consumer behavior in Indonesia changed due to weak macroeconomic conditions, and how is Grab positioning itself to be more counter-c - Pang Vittayaamnuaykoon (Goldman Sachs Group, Inc., Research Division)

2025Q1: We haven't seen any signs of consumer weakness yet. Delivery monthly transacting users (MTUs) continue to grow sequentially, particularly with strong performance from GrabMart in March. - Alex Hungate(COO)

Contradiction Point 2

Financial Services Growth and Profitability

It involves differing expectations and timeline for the profitability of the financial services segment, which is crucial for overall company strategy and investor confidence.

What factors contributed to your strong outperformance versus peers in Indonesia's competitive landscape? Also, provide updated guidance and estimates by segment? - Pang Vittayaamnuaykoon (Goldman Sachs Group, Inc., Research Division)

2025Q3: Financial services continue to grow strongly, with the loan book dispersal hitting $3.5 billion annually. The financial services segment adjusted EBITDA improved quarter-on-quarter and year-on-year. The guidance raises the annual EBITDA forecast to $490 million to $500 million, with expected profitability entering 2026. - Peter Oey(CFO)

How does your fintech model differ from peers, and what are the key drivers for fintech revenue reacceleration in the second half? - Jiong Shao (Barclays Bank PLC, Research Division)

2025Q1: Our fintech business is profitable. But even as we start to turn SME lending profitable, we expect that our consumer lending business will be profitable by Q4 of 2026. - Alex Hungate(COO)

Contradiction Point 3

Delivery Margins and Advertising Growth

It involves the sustainability of delivery margins and the growth prospects of advertising, which are critical for understanding Grab's financial sustainability and revenue diversification.

How should we view consumer incentives forward, and what is the growth outlook for advertising? - Mark Stephen Mahaney(Evercore ISI Institutional Equities, Research Division)

2025Q3: Advertising growth is driven by increased merchant penetration and higher returns on investment. We see opportunity for higher GMV penetration, with examples exceeding 4% in some markets. - Alexander Charles Hungate(COO)

How sustainable is advertising revenue growth, and what’s the long-term ceiling for advertising as a percentage of GMV? - Mark Mahaney(Evercore ISI)

2025Q2: Advertising growth is driven by increased merchant penetration and higher returns on investment. We see opportunity for higher GMV penetration, with examples exceeding 4% in some markets. - Alexander Charles Hungate(COO)

Contradiction Point 4

Growth Strategy and Business Model Evolution

It involves the long-term strategy and business model evolution, which are crucial for understanding Grab's competitive positioning and future growth prospects.

What are the growth drivers for GrabMart and any new business models for scaling the grocery business? What are the updates on investments in autonomous vehicles? - Venugopal Garre(Sanford C. Bernstein & Co., LLC., Research Division)

2025Q3: We believe Grab has the potential to reach a revenue run rate of $10 billion within the next 2 years. - Ping Yeow Tan(CEO)

Can you outline Grab's robotax plans for the region and the expected regional costs for H2 this year? - Jiong Shao(Barclays Bank PLC, Research Division)

2025Q2: We are committed to leveraging AV technology for safe and affordable transport. - Ping Yeow Tan(CEO)

Contradiction Point 5

Grocery Expansion and Market Penetration

It involves differing expectations and strategies regarding the growth and market penetration of GrabMart, which is a key growth area for the company.

Can you elaborate on the key drivers behind the sequential revenue growth in your North American segment during Q2? - Venugopal Garre (Sanford C. Bernstein & Co., LLC., Research Division)

2025Q3: GrabMart growth is driven by GrabMore functionality which allows users to buy groceries in high frequency. GrabMart gross merchandise value penetration of Grab's total grocery market is now above 2%. And we believe there is a lot of room for us to grow GrabMart. - Alexander Charles Hungate(COO)

Can you discuss Grab's robotaxi plans in the region and the expected costs for the second half of this year? - Jiong Shao(Barclays Bank PLC, Research Division)

2025Q1: GrabMart penetration of grocery orders is below 10% of GMV, but it's growing faster than food delivery. GrabMart saw strong double-digit growth in March, which was a 100 basis points acceleration from February. - Peter Oey(CFO)