Grab Q1 2025 Earnings Report

Grab EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.02
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Grab Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $765.57 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Grab Announcement Details

• Quarter: Q1 2025
• Date: 5/21/2025
• Time: Before Market Opens
• Conference Call Date: N/A
• Conference Call Time: N/A

Grab (NASDAQ:GRAB) engages in the provision of superapps in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The company offers its Grab ecosystem, a single platform with superapps for driver- and merchant-partners and consumers, that allows access to mobility, delivery, digital financial services, and enterprise sector offerings. Grab Holdings Limited is headquartered in Singapore.

Grab Q1 2025 Earnings Call Transcript

Key Takeaways

• Grab delivered 17% year-on-year on-demand GMV growth in Q1, with record monthly transacting users and revenues, marking its 13th consecutive quarter of group adjusted EBITDA improvement and expanding trailing 12-month free cash flow to $157 million.
• The company raised its full-year 2025 adjusted EBITDA guidance to $460–480 million (from $440–470 million), while reiterating its commitment to maintaining on-demand GMV and revenue growth alongside disciplined cost control.
• Despite seasonal headwinds from Lunar New Year and Ramadan fasting, management reported no signs of demand weakness, emphasizing Grab’s self-adjusting, countercyclical model and ongoing focus on affordability and reliability to bolster user growth and retention.
• New AI-powered products showcased at GrabEx—such as automated merchant menu generation (adding 70,000 items), Ride Guide (0.25 million weekly driver users), Shared Saver and Food for One—are driving network efficiencies and volume without eroding margins.
• Grab’s FinTech arm achieved 56% year-on-year loan book growth across three banking subsidiaries with stable NPL levels, prudent ECL provisions and an already profitable Financial Services segment, aiming for collective bank profitability by Q4 2026.

Presentation

[Operator]

Ladies and gentlemen, thank you for joining us today. My name is Nora, and I will be your conference operator for this session. Welcome to Drup's First Quarter twenty twenty five Earnings Results Call. After the speakers' remarks, there will be a question and answer session. I will now turn it over to Douglas Yu to start the call.

[Douglas Yu, Director of IR & Strategy at Grab]

Good day, everyone, and welcome to Grab's First Quarter twenty twenty five Earnings Call. I'm Douglas Yu, Director, Investor Relations and Strategic Finance at Grab. And joining me today are Anthony Tan, Chief Executive Officer Alex Hungate, President and Chief Operating Officer and Peter Oi, Chief Financial Officer. During this call, we will be making forward looking statements about future events, including our future business and financial performance. These statements are based on our current beliefs and expectations.

[Douglas Yu, Director of IR & Strategy at Grab]

Actual results could differ materially due to a number of risks and uncertainties as described on this earnings call in the earnings release and our Form 20 F and other filings with the SEC. We do not undertake any duty to update any forward looking statements. We will also be discussing non IFRS financial measures on this call. These measures supplement, but do not replace IFRS financial measures. Please refer to the earnings materials for a reconciliation of non IFRS to IFRS financial measures.

[Douglas Yu, Director of IR & Strategy at Grab]

For more information, please refer to our earnings press release, remarks and supplemental presentation available on our IR website. And with that, I will turn the call over to Anthony to deliver his opening remarks before we open it up for questions.

[Anthony Tan, Chief Executive Officer, Co-Founder & Chairman at Grab]

Our first quarter results were strong as we achieved profitable growth despite the seasonal impacts to demand from the Lunar New Year and Ramadan fasting period. We grew on demand GMV by 17% year on year and achieved yet another record number of monthly transacting users on our platform, translating to another quarter of record revenues. As we drove strong top line growth, we continue to harness the scale of our ecosystem to drive greater network efficiencies and maintain a disciplined stance on costs. As such, we achieved our thirteenth consecutive quarter of group adjusted EBITDA improvement, while our trailing twelve month adjusted free cash flow also expanded to $157,000,000 We're cognizant that there are increased levels of uncertainty in the global macroeconomic landscape. We remain committed to the mission of our company and believe that it is more important than ever before to continuously drive improvements to the reliability and affordability in our offerings.

[Anthony Tan, Chief Executive Officer, Co-Founder & Chairman at Grab]

This will increasingly position us as a countercyclical company, enabling us to stay resilient and continue driving new user growth and improvements to usage frequency and retention regardless of the macroeconomic landscape. Looking ahead, we reiterate our expectation to maintain our on demand GMV and revenue growth momentum compared to 2024 growth rates, while maintaining a highly disciplined stance on costs. Given the strong performance of the first quarter, we are raising our adjusted EBITDA outlook for the full year 2025 to $460,000,000 to $480,000,000 from $440,000,000 to $470,000,000 previously.

[Douglas Yu, Director of IR & Strategy at Grab]

Good day, everyone, and welcome to Grab's First Quarter twenty twenty five Earnings Call. I'm Douglas Yu, Director, Investor Relations and Strategic Finance at Grab, and joining me today are Anthony Tan, Chief Executive Officer Alex Hungate, President and Chief Operating Officer and Peter Oi, Chief Financial Officer. During this call, we will be making forward looking statements about future events, including our future business and financial performance.

[Operator]

Ladies and gentlemen, we'll now start the question and answer portion of the call. Your first question comes from the line of Panjai S. Operator,

[Peter Oey, Chief Financial Officer at Grab]

can we just check that the audience can hear the current live call right now? We seem to be getting signals that they're not hearing anything.

[Operator]

Yes, I can hear you loud and clear, sir.

[Peter Oey, Chief Financial Officer at Grab]

Okay. Let's take the first question, please.

[Operator]

Okay. Once again, I would like to call on Ms. Pang Bhutayam Wan Koon from Goldman Sachs. Your line is now open.

[Peter Oey, Chief Financial Officer at Grab]

Operator, I don't think the audience actually able to hear. This is why I think we're not getting any responses.

[Operator]

Let me just go ahead and call on once again for Ms. Pangs of Goldman Sachs. Your line is now open. Please ask your question. Hello?

[Peter Oey, Chief Financial Officer at Grab]

Can you hear us?

[Operator]

Hello? I can hear you but can you hear me? Hello? Hello?

[Peter Oey, Chief Financial Officer at Grab]

Yes. Yeah. We're having some sort of technical challenges this morning, so apologies to the audience. So let's let's get the other q and a going so we can hear you pinging. Yes. Can

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

you just wanna make do a sound check.

[Peter Oey, Chief Financial Officer at Grab]

You can hear us. Right?

[Operator]

Great. Great. Yes. Yes. I can

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

hear you loud and clear.

[Peter Oey, Chief Financial Officer at Grab]

Alright. Okay. Alright. Now we're we're back on.

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

Alright. Seem to be some sort of technical challenges. Yes. Morning, everyone. And thank you very much for yeah.

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

Sure, sure, sure. So congratulations for the great results. And two questions from me. Number one, just on the macro, have you seen any changes in consumer behavior amid sight of weakening macros, especially in Indonesia. How resilient do you think is Grab in this environment?

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

And how do you plan to position Grab to be more countercyclical? That's question number one. Question number two, you have announced several new products at your Grab X Day last month. Could you share how you expect these products to drive your operational performance? As this new product rollout, how should we foresee some margin weakness as you launch all the product as well? Thank you.

[Alex Hungate, President & COO at Grab]

Hi, Peng. It's Alex here. Thanks very much for both of those questions. So the first one on consumer behavior, we haven't seen yet any signs of consumer weakness. Of course, we're monitoring very closely.

[Alex Hungate, President & COO at Grab]

So in Q this last quarter, we had delivery MTUs continuing to grow sequentially, particularly with a strong performance from Grab Mart demand in March. April trading update for you, we're trending healthily in line I would say with our expectations. So we do expect a rebound in quarter on quarter growth rates across Mobility and deliveries for quarter two. At the same time, of course, because of the news flow, we continue to work closely with government partners to support local economies, particularly making sure our marketplace is healthy so that we continue to generate the earning opportunities for our partners on that platform going forward. I would just make an observation that in the past where there has been a turndown in economic conditions, the partner the platform that kind of works on a self adjusting basis in the following way.

[Alex Hungate, President & COO at Grab]

A number of new drivers will join the platform as a cushion against potential job losses, etcetera. And therefore, we tend to get an improvement in supply conditions, which in turn will reduce surge at key moments, therefore encourage more consumption, more use of the platform by consumers. So you can see it's kind of a self correcting, almost countercyclical approach that we see from the platform during those types of downturns. But so far, no signs of downturn. So we'll keep monitoring that.

[Alex Hungate, President & COO at Grab]

The second question is about the GrabEx Product Day, where we talked about harnessing AI to improve user and partner centric services going forward. We called it AI with heart for those of you that missed it. So a lot of the products that we launched did have affordability in mind. So it very much relates to your first part of your question. So we are positioning ourselves to continue to grow through any kind of a weakness in the macros.

[Alex Hungate, President & COO at Grab]

So for merchants, for example, we've used the merchant assistance to add something like 70,000 menu items without human intervention. So that's merchants scanning and delivering generating descriptions now. So 2,800,000 different items if you go across all merchants. And then we're getting we're using Ride Guide to help the driver earnings to improve. So we've got now already zero two five million drivers using this feature on a weekly basis.

[Alex Hungate, President & COO at Grab]

And we have seen from those drivers higher income, higher productivity. So it keeps the marketplace healthy even under difficult conditions. I noticed that you asked about margin weakness from this push for affordability. We don't actually anticipate a margin loss from these new products and we're not seeing it so far. And let me explain why because something like Shared Saver, for example, which is a lower cost for consumer and therefore drives good volume improvements is actually amortizing the same delivery cost across multiple customers by inviting multiple people to join the same order.

[Alex Hungate, President & COO at Grab]

So it's actually no extra cost to Grab or to the marketplace. And even Grab Food for One, which has a lower cost per meal is actually benefiting the merchants from allowing them to batch up a lot of meal production into the same cooking batch. And as some of you know, I used to be in the food industry, so I know that this is much more cost effective and more productive for merchants to cook in large batches. And then we generate the demand for those special offer meals at that particular window and they're able to package up the large batch into multiple meals and sell them all together. So in that case, we're amortizing the merchants' costs into a very productive production batch for them and there's no additional cost to grab also.

[Alex Hungate, President & COO at Grab]

So you can see that that kind of approach is just making the marketplace more efficient, but it should not drive our it should not put pressure on our margins. The key point for us is that we want to drive the penetration of our annual transacting units users up further, so our MTUs, our monthly transacting users increases. And then within that, we want to continue to drive up our daily transacting users as well. So these kinds of affordable products and viral products that we announced at the GrabEx will help us do both of those. So on margin, we're going to continue to focus on balancing this with the growth.

[Alex Hungate, President & COO at Grab]

But the key focus for us obviously is driving absolute profit growth. And it's just worth just remembering that we're now in our thirteenth quarter of improving EBITDA in a row. So you can see that that's very much a focus for us. Thank you, Pang.

[Operator]

Thank you.

[Peter Oey, Chief Financial Officer at Grab]

Next question, operator.

[Operator]

Your next question comes from the line of Alicia Yap at Citigroup. Your line is now open.

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

Hi, good morning. Can you hear me?

[Peter Oey, Chief Financial Officer at Grab]

Yes, loud and clear.

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

Hi. Okay. All right, thank you. Good morning management. Congrats on the solid quarter and also thanks for taking my questions.

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

Two questions here. First, think on your guidance, especially on the higher EBITDA guidance. Can management elaborate the reasons for your confidence on the profitability improvement? Are you seeing decent cost optimizations coming from your AI technology enhancement? Even though if right in the case of the second half, if the top line actually face on macro headwinds?

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

And then second question is that I understand you mentioned you have not seen any demands slowdown with the tariff concerns and all that. But in the coming months, just in case, right, if you were to see some softness on the deliveries, demands or even mobility demands, would you actually let what would be your plans? Would you actually let the volume naturally slow down or would you actually introduce some subsidies or rebates or promotion to actually encourage the demand and also the spending to keep up the volumes and also the engagement? Thank you.

[Peter Oey, Chief Financial Officer at Grab]

Great. Alicia, let me take this question and maybe Alex also if you can add some color especially around on the demand side. If you look at the macro situation, we're definitely watching and monitoring that from the sideline. We can't ignore it, but we're also keeping a close eye on it. But the guidance that we're giving out is something that we feel very comfortable at.

[Peter Oey, Chief Financial Officer at Grab]

And let me kind of step back as to why we are giving this level of confidence in our EBITDA guidance. We're doing two things, right? We're doing reiterating our revenue guidance and we're actually increasing our EBITDA guidance. So what happened in Q1? So Q1 is usually slower season on the back of coming out of a high season from Q4.

[Peter Oey, Chief Financial Officer at Grab]

But what we saw actually in Q1 actually was a couple of really unique things in our business. Demand did not slow down despite the Ramadan and the Lunar New Year. If you look at our on demand GMV grew at 17% on a year over year basis. But if you look at what's unique is we had another all time high when it comes to monthly transacting users. So the MTU is continuing to be at an all time high.

[Peter Oey, Chief Financial Officer at Grab]

We hit another record revenue quarter for us. And really what's really for us actually was a very interesting data point was that the number of transactions that occurred on our platform was up 19% on a year over year basis, which means that the number of engagement and the number of transaction grew faster than our on demand GMV business overall. And if you look at April and Alex mentioned to Peng's earlier question, what are we seeing in April? We're seeing a strong rebound also coming on the back of Ramadan in terms of on demand GMV growth and it's coming in line with our expectation. So if you look at all those different components, we're looking at for the rest of the year, we see demand continuing to be strong and we're continuing to see well from our perspective, from our lens continuing growth and our on demand business for the rest of the year on a year over year basis but also across all the revenue lines, on the FinTech side of the business.

[Peter Oey, Chief Financial Officer at Grab]

Cost is another component that we're also watching very closely. The cost structure of our business continues to be optimized. You saw what the regional copper cost number was. It was slightly down on a Q on Q, it was down 5% on a year over year basis. And we're continuing to make sure that we're optimizing that cost.

[Peter Oey, Chief Financial Officer at Grab]

Yes, there are some components of costs that we're deferring to later given seasonality. And there will be some components of that as variable as the variable cost component goes up with volume. But we are managing our cost base also at the same time. With all those different components, Alicia, what we are seeing is that we're confident that the EBITDA guidance that we're giving out, we feel very comfortable and we're seeing confidence in making sure we can execute that for the rest of this year. So Alex, maybe you want to add a little bit around the on demand side of the business?

[Alex Hungate, President & COO at Grab]

Yes. I think as Peter said that this quarter should have been a seasonally weak quarter, but we were able to continue to grow deliveries MTUs sequentially. A lot of that is because of the way we operationalized March during the Ramadan fasting period to replace dining out with providing groceries and food for people at home. The productivity gains from AI came through already in the quarter in the way that we manage the direct marketing costs during those campaigns. And that's a capability which I think will serve us well if there is the kind of downturn that you're asking about.

[Alex Hungate, President & COO at Grab]

I think the way in which we can fine tune our promotions and our incentives using AI is demonstrably better than it was even six months ago. So we can get a benefit from as well. Cross sell continues to be a big focus for us. And you can see that in particular the Financial Services business has benefited from excellent cross sell with the majority of the new to Financial Services customers coming from Grab's platform, but also the cross sell that we're getting between the verticals like food to mobility and food to mart continue to perform well. And all of these are increasingly powered by auto adaptive AI campaigns.

[Alex Hungate, President & COO at Grab]

The focus that you heard about at GrabEx is on tech and product innovation and not therefore, we're less and less reliant upon promotions and incentives. In particular, what I really like about the new products coming out now is they have a viral component. So things like family orders. We've got family units who are bringing in other family members into platform and booking rides on behalf of other family members. This is all part of the kind of viral component that helps the platform to grow itself.

[Alex Hungate, President & COO at Grab]

So you'll see our strategy increasingly focused on that as well. I think Peter covered some of the ways in which we're thinking about demand. It's worth just highlighting one more time that our MTU number is only still only 6% of the total population of Southeast Asia. So as a management team, we're very focused on the other 94%. We think there's a lot of opportunity.

[Alex Hungate, President & COO at Grab]

And particularly with these new affordable products, we intend to keep expanding the perimeter of our ecosystem as our main focus. And I think you can be having seen us deliver 13 quarters of improving EBITDA in a row, hopefully you feel confident that we'll get the balance right between that focus on growth and yet also continuing to improve the bottom line as well.

[Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs]

Thank you.

[Peter Oey, Chief Financial Officer at Grab]

Next question?

[Operator]

Our next question comes from the line of Binukhopal Gare at Bernstein Society General Group. Your line is now open.

[Venugopal Garre, Analyst at Bernstein]

Thank you. Good morning management and congratulations on a good quarter. Two questions from me. Firstly, as far as the delivery, industry is concerned, we are seeing further consolidation, such as Foodpanda, for example, shutting down their Thailand business even though it was relatively smaller. And, Deliveroo, looking to sell, their business to DoorDash.

[Venugopal Garre, Analyst at Bernstein]

So how do we see industry consolidation shaping up in this segment in ASEAN? Is there room for more, or is it done? And I'm asking this because you already have a fairly strong category position. That's the first question. The second question is more centered around, if you could share a bit on how your Indonesia business has performed compared to your closest competitor who also ended up reporting yesterday.

[Venugopal Garre, Analyst at Bernstein]

And, even that there's a lot of questions centered around macro, I want to just get a perspective on your thoughts around capital allocation in light of not today's macro risk, but potential macro risk that might emerge when tariffs reappear? So essentially, do we still have an appetite for further inorganic M and A, namely Go to, as we have seen, in the recent quarters in terms of news flow? Thank you.

[Peter Oey, Chief Financial Officer at Grab]

Thanks, Venu. Let me take the first one around consolidation. Maybe Alex, if I can ask you to take the Indonesian specific question there and what you're seeing, maybe you can share a little bit more color there. Look, Vaneu, I think when it comes to consolidation, it's hard to predict. I can't comment really in terms of how the delivery market will shape up in the future.

[Peter Oey, Chief Financial Officer at Grab]

We've been focusing a lot in going continue to growth our delivery segment of our business. It grew at 17% on a year over year basis. We feel it's underpenetrated. So there's still ways to go in growing that business. So we're heads down executing that.

[Peter Oey, Chief Financial Officer at Grab]

And Alex spoke about some of the products that we've been sharing and also through our GrabEx also that you're seeing to continue to bolster that growth in the business. We also want to drive more engagement also at the same time with our set of deliveries products. So we're going to continue to make sure that we increase the number of users on our platform on deliveries. Organic has been working nicely for us and we're going to continue to execute that business. Competitors come in, competitors go as you've said also.

[Peter Oey, Chief Financial Officer at Grab]

But we're continuing to make sure that in this environment that we're in, we have to continue to make sure our products are affordable, which is really important for our users. And the selection also continues to widen, which is where we've been focusing around for an example around areas of bolstering our marked products as well as continuing to bring traffic to our merchants in store at the same time. So that's how we see the market landscape whether you'll see some more consolidation who knows, but we're going to continue to grow our market share.

[Alex Hungate, President & COO at Grab]

Thanks Anu. Yes, let me pick up on Indonesia, a key market for us obviously. We can confirm that similar to the last quarter, the fourth quarter, in the first quarter we did outgrow our closest competitor once again. So I think our product led approach is helping particularly to offset in what should have been a weaker seasonal quarter. We continued in spite of Ramadan to grow deliveries MTUs in Indonesia.

[Alex Hungate, President & COO at Grab]

We grew sequentially and particularly as I mentioned earlier on the back of a strong performance from Grab Mart where people can do instant shopping on Grab. I have a great example of what I was talking about earlier in terms of fine tuning costs at the same time because our direct marketing costs within Indonesia in the same period declined actually 12% quarter on quarter. So that helps contribute to adjusted EBITDA as a percentage of GMV improving quarter on quarter despite the fact that we outperformed on category position. So I think our Indonesian business is performing very, very well and we'll continue to stay very focused on making sure that continues. They we'll continue to look opportunistically to see if there are opportunities for value add and synergies into our existing businesses.

[Alex Hungate, President & COO at Grab]

Ita talked about the high bar that we have, but it's worth pointing out that we have made a number of bolt on acquisitions that where we thought there was really good opportunities to have immediate impact on our either capabilities or to extend our ecosystem further. So just to summarize, we purchased Choke, the reservation application, which we have now reproduced as native inside the Grab app. So that is helping the customers in their workflow as they identify where they want to dine out, which is a new capability that we're growing on the platform. They can now also take the next logical step, which is to make a reservation. We also purchased Everrise, which is a retailer in East Malaysia, which extends the Jaya footprint into a nation now a nationwide leading grocer, which is helping to strengthen the frequency and the reach of our offerings of the ecosystem in East Malaysia.

[Alex Hungate, President & COO at Grab]

And then finally, GXS Bank, our banking subsidiary here in Singapore purchased Validus, which is supply invoice financing capability, which would have probably taken us a while to build on our own, but is a logical extension to support the small businesses that operate on our platform and to extend credit to them in a risk managed way because it's based on the payment credit of much larger companies in the that can operate in the ecosystem. So those are all great examples of how we are seeing in this environment that there are indeed undervalued acquisition opportunities that we can bolt onto the platform that can help us to generate value right away and accelerate our time to market. Thank you, Vinit.

[Peter Oey, Chief Financial Officer at Grab]

Thank you.

[Operator]

Our next question comes from the line of Piyush Chardhary at HSBC. Your line is now open.

[Piyush Choudhary, Analyst at HSBC]

Yes. Good morning. Thanks for the opportunity. Can you hear me?

[Alex Hungate, President & COO at Grab]

Yes, you can. Yes. Go ahead.

[Venugopal Garre, Analyst at Bernstein]

Yes. Hi.

[Piyush Choudhary, Analyst at HSBC]

Thanks management. Congrats for strong first quarter results and raising the guidance. On the user base, thanks for sharing that chart on DTU MTU trends. DTU is around 16% of MTU as of first quarter. With new product initiatives, you expect DTU to rise, which is logical.

[Piyush Choudhary, Analyst at HSBC]

But I wanted to check if there is any two, three year kind of target where you would like DTU penetration over MTU to reach? And which segment between mobility and delivery do you expect penetration to rise at a faster clip? Second question was on order frequency. Can you share what's the monthly order frequency in both delivery and mobility segments? And how has it changed over last one year and your outlook for the same? Thank you.

[Alex Hungate, President & COO at Grab]

Thanks, Piyush. Let me take your question about DTUs. You're right. We also believe that DTUs can grow and catch up the MTU space. So we are very focused on frequency and retention.

[Alex Hungate, President & COO at Grab]

We haven't disclosed targets externally for those things, but the fact that we're highlighting them on the presentation is an indication to you that it's something that we are focused on and that we're confident that we can make a real difference. A lot of the GrabEx initiatives, whether they were viral or affordability based are designed to drive up the frequency use case, particularly on a daily basis. So basically highlighting that here to you today is a way of us saying as a management team that we're confident that we can show you some progress. Today, the DTU to MTU penetration is about 16% of MTU. So lots room to grow up in that space.

[Alex Hungate, President & COO at Grab]

But we also think that the MTU penetration of ATUs can continue. And indeed our ATU as a percentage of total Southeast Asia population also has headroom. So I think the investment thesis is still very intact that there's lots of upside growth for us in terms of frequency and overall penetration as well. In terms of order frequency, I can tell you that both deliveries and mobility have been improving year on year. So for deliveries, we hit a new quarterly record despite the seasonal softness.

[Alex Hungate, President & COO at Grab]

So usually Q1 is weaker than the other quarters. In this particular quarter, we had both Chinese New Year and Ramadan entirely in the first quarter. So it should have been a particularly challenging seasonally weak quarter. But as Peter indicated earlier, we've because of the various new product launches, we have managed to manage that get through that seasonally weak situation pretty well. And for Mobility, we did share that frequency grew 5% year on year even though the MTU growth continued during that same period.

[Alex Hungate, President & COO at Grab]

So we're confident that we can keep this push on frequency and retention going and we'll share future updates and future data with you as we go forward.

[Piyush Choudhary, Analyst at HSBC]

Thank you, Alex.

[Peter Oey, Chief Financial Officer at Grab]

Thanks, Piyush.

[Operator]

Our next question comes from the line of Wei Fang at Mizuho Securities. Your line is now open.

[Wei Fang, Director at Mizuho Securities]

Great. Thank you for taking the questions. First one on competition. It's kind of a follow-up to the previous questions, right? Do you see markets getting a little bit more competitive given both the development of The U.

[Wei Fang, Director at Mizuho Securities]

S. Tariffs and also some of the global MA initiatives? And how do you plan to navigate on that? It would be great if you can have a comment on both the delivery and mobility separately. And secondly, can you help also talk about your thoughts about why not integrating your mobility rewards to your Grab Unlimited package yet? Yes. Thank you.

[Alex Hungate, President & COO at Grab]

Okay. Thanks, Wei. Yes. I guess the recent departure of one global competitor from the Thai market is, let's see, it's the fourth departure of a competitor from a country over the last eighteen months. And so I think it does signal the continued consolidation of the market.

[Alex Hungate, President & COO at Grab]

In this kind of a platform business, there are natural returns to scale. The density that you have allows you to continue to drive reliability and price performance at the same time, which over time means that consumers and partners will prefer the platform. So we are starting to see this. Smaller players do still exist. Those with weaker balance sheets may struggle to raise money in this kind of a macro environment.

[Alex Hungate, President & COO at Grab]

So that may be to answer your question about the environment and how that might impact competitive behaviors. I imagine that shareholders will be less inclined to subsidize kind of promotion driven campaign and we'll be looking for more sustainable returns. We continue to hold the category leadership position across mobility and deliveries. You asked about you asked us to talk about that situation separately, But to be honest, we don't think about it separately. We do like to think of our relationship with our both our customers and our partners, driver partners as being multi vertical where we can really help them to optimize their relationship with them.

[Alex Hungate, President & COO at Grab]

And that's why Grab Unlimited is being expanded to include mobility benefits. And also we have launched a VIP service which reflects the relationship the very special relationship we have with our most loyal, highest spending customers across both mobility and deliveries. And increasingly, we will expand those that type of multi vertical thinking about the relationship to financial services as well. And now that we have the banks in three markets and of course a very vibrant and fast growing Grab Financial FinTech business across all markets. So we fully agree with you that mobility is a key part of the Grab Unlimited relationship going forward.

[Alex Hungate, President & COO at Grab]

I would think that in terms of the competitors that we see, there are quite often smaller local competitors in each market plus there's a number of smaller multi market competitors. Most of those are single vertical. Therefore, don't have the many levers that we have to grow the relationship with our customers and partners. And in the market where we do have a multi vertical competitor, as I mentioned earlier, we are growing our CP share for the second quarter in a row at the same time as expanding our margins. So I feel like we respect our competitors, but we feel like the formula that we have where we continue to invest in multi vertical relationships, we're continuing to improve the technology and the reliability and pricing of our network, we feel that we can concentrate on improving those services and growing through the relationship with our consumers and partners rather than getting too distracted by competitors.

[Wei Fang, Director at Mizuho Securities]

Great. Thank you so much.

[Anthony Tan, Chief Executive Officer, Co-Founder & Chairman at Grab]

Our

[Operator]

next question comes from the line of Divya Gavrahar of Morgan Stanley. Your line is now open.

[Divya Gangahar, Executive Director at Morgan Stanley]

Thank you very much. Good morning. My first question is on the margin drivers for this quarter. Could you elaborate the drivers for the deliveries margin improvement besides advertising? And specifically on GrabMath, how big is this now?

[Divya Gangahar, Executive Director at Morgan Stanley]

And how are the unit economics versus the deliveries business? Also

[Operator]

on

[Divya Gangahar, Executive Director at Morgan Stanley]

the margin question, just on Mobility, we did see a year on year drop in margins. Could you just help us understand the reasons for that? My second question is on the FinTech business. The loan book growth was going only about 5% to 6% quarter on quarter. And you've also noted higher credit provisions as the loan book is scaling.

[Divya Gangahar, Executive Director at Morgan Stanley]

Could you comment on what the NPL currently is? And what are the indicators that are being tracked to monitor credit quality? Are you also being a bit more conservative on loan disposals going forward? And given that you've had some traction now in Singapore, what kind of target markets are you attracting for these loans?

[Peter Oey, Chief Financial Officer at Grab]

Right, Divya, you got a lot of questions there. So let me take the margin ones. And Alex, maybe you can take the FinTech on the loan book since you're so close to it also, you've been seeing that portfolio growing. Look, on the margin side on I think your first question was around deliveries. Look, there's a lot of product mix that goes on in the first quarter.

[Peter Oey, Chief Financial Officer at Grab]

And I had a question also how big is MART as a business of ours. Mart is still roughly still less than 10% of our deliveries to GMV. But having said that, it's growing much faster also than our other product portfolio within deliveries. The margin in food continues to be very healthy for us as a business overall. Matt also was a star performer in the first quarter for us that we spoke about earlier.

[Peter Oey, Chief Financial Officer at Grab]

So there's a lot of product mix that you saw coming in into the quarter in terms of margin. You saw also incentives were relatively flat on a year over year basis for us. And that also helped some of the margin growth in our business. And our advertising also was 1.7% penetration rate that also contributed to some of the margin improvement that you saw in the business. So again, very much is all moving pieces, Divya.

[Peter Oey, Chief Financial Officer at Grab]

Product mix is part of that, which is really important. And you'll see the fluctuations on those product mix from quarter on quarter depending also on the seasonality of the business itself. Mobility margin was lower on a year over year basis. And that was for us intentional to some degree because there was a critical path that we wanted to really make sure we build up, which is on the driver side. If you look at where the level of incentives was higher for us, delivers us flat in terms of mobility in terms of incentive was around the mobility.

[Peter Oey, Chief Financial Officer at Grab]

And what we saw in Q1 was that the number of rides was just outpacing the number of growth that we saw in the GMV. So we were seeing a 25% rides increase on a year over year basis versus a GMV of a 17% growth on a year over year basis. And we saw MTU also growing at over 20% on a year over year basis. So we wanted to make sure that we have enough supply of drivers out there to make sure that reliability continues to be high and also affordability for our customers also continues to be maintained at the same time. So and that's why you saw some of degradation in terms of margin expansion for us in the mobility space. So Alex on the FinTech?

[Alex Hungate, President & COO at Grab]

Yes. Thanks Peter. And I would just comment that on advertising was a big driver as you said Devi. It's particularly gratifying that in a week what is normally a week quarter for advertising, we managed to increase our penetration of GMV for ads from 1.3% to 1.7%. And a lot of that, which I'm delighted to talk to you about is that small merchants that usually don't have access to these kinds of sophisticated tools are really flocking to the self serve capabilities.

[Alex Hungate, President & COO at Grab]

So in the quarter, we had a growth of 49% year on year of the self serve adoption of the advertising platform. And the average spend by those active advertisers on the self serve platform increased by 30%. So that shows that those tools are really working. They're getting the return on advertising sales, which is helping them grow their businesses, which in turn makes the marketplace even more healthy. And then the other driver for improved margins was the direct marketing performance.

[Alex Hungate, President & COO at Grab]

As I mentioned, I gave you the example for Indonesia, but it's true across all the countries that our direct marketing accuracy and performance is improving because of the use of AI in how we do the targeting. Okay. So quickly on to the FinTech. Yes, this last quarter Q1 was the first quarter in which we had loan products from all three banks in the marketplace. So they've just started to grow those loan books.

[Alex Hungate, President & COO at Grab]

We are not seeing any deterioration yet in the loan quality. So NPL is stable quarter on quarter. However, as we grow the volume of loans, we do want to make sure the balance sheet is reinforced. So we are running expected credit losses through the P and L in order to strengthen the balance sheet. And so that's why you see a small increase in the overall

[Peter Oey, Chief Financial Officer at Grab]

loss for

[Alex Hungate, President & COO at Grab]

the Financial Services segment because it's driven by that big buildup in ECLs on the balance sheet growing in tandem with the loan book, which is about 56% year on year. So you can see why that would be a large number. So we'll maintain that prudent stance. It's a great time for us to drive growth now that we have the products in the market. But we are aware that the credit models need to develop and mature.

[Alex Hungate, President & COO at Grab]

So we're running those now and we'll keep monitoring that. But for the time being, we're very happy with the performance. We're on track with the plan and we do not see a deterioration in the non performing loans.

[Operator]

Our next question comes from the line of Mark Mahaney at Evercore. Your line is now open.

[Mark Mahaney, Senior Managing Director at Evercore ISI]

Hey, thanks. I just wanted to ask a kind of a separate line of questioning. It has to do with these AV partnerships. I think there's something like MOUs with four autonomous vehicle companies that you've signed. So it just I know it's early I know will be very early days, but just talk about the anticipated benefits from these.

[Mark Mahaney, Senior Managing Director at Evercore ISI]

When might we see pilot deployments? And anything at all you could share about the economics? Thank you very much.

[Alex Hungate, President & COO at Grab]

Thanks, Mark. Yes, I think we are very excited also about the potential for AVs. That's why we wanted to lean into this space and take a very early stance working with partners. You can see a lot of partners need to work with us. I think our leading position in the region obviously makes us an attractive partner.

[Alex Hungate, President & COO at Grab]

But also the fact that we're leaning into AI at the same time. So I think we're hopefully a knowledgeable partner for them to work with also. Our intention is to really be at the forefront of the exploratory use of this new technology. We I won't give you a timeline for pilots because we obviously have to be in discussion with various governments to get that going. But our intention is to be at the absolute forefront because we want to understand what it's going to take to make this successful.

[Alex Hungate, President & COO at Grab]

Obviously, fleet operations is something we're very familiar with because of the way we manage our own fleets today. But what will fleet operations look like for AVs, for example? We're also at the forefront of insurance. We have our own general insurance license. We've been distributing insurance in every market for some years now and that's a very successful profitable and growing business.

[Alex Hungate, President & COO at Grab]

But also but that helps us to become a good partner for these companies also in understanding what the insurance capabilities would be necessary to make them successful also. So I would say, as you said, early days, but you can think of Grab as one of the companies globally that's really leaning into this space.

[Mark Mahaney, Senior Managing Director at Evercore ISI]

Thank you very much.

[Operator]

Our next question comes from the line of Zheng Shao at Barclays. Your line is now open.

[Song Zhang, Director at Barclays]

Thank you very much for taking my questions. A lot of questions have been asked. I do have two follow ups, please. The first is back to FinTech. So I understand your model is slightly different from two of your peers in the region in FinTech.

[Song Zhang, Director at Barclays]

But one of your peers is making a lot of money and the other is making a little bit of money. So could you perhaps elaborate a bit, sort of tell us the difference in the models you are using adopting in FinTech that created sort of a near term losses in your FinTech. And that will be helpful. Related to FinTech also is that I believe you have talked about the revenue growth reacceleration in the second half. And could you please sort of reiterate and remind us what are some of the key drivers behind that order look?

[Song Zhang, Director at Barclays]

My second question is back to the food delivery business. I think you talked about in your prepared remarks about like foodrestaurant discovery. If you can share with us some of your early thoughts around the monetization of this kind of in store food restaurant discovery business as some of your global peers seems

[Piyush Choudhary, Analyst at HSBC]

to be making quite a bit

[Song Zhang, Director at Barclays]

of money in that particular segment? And then on the margins for food, I know you have 4% plus target, given you have had a lot of success in bringing that to 2% now. Could you remind us if that 4% is sort of two, three year target, the trajectory or that's really, really longer term target? Thank you so much.

[Alex Hungate, President & COO at Grab]

Thanks, John. Let me take the first two and I'll let Peter take the last one on margin expectations. So you're right, our FinTech model is different than the two peers that I think you're referring to. That we have focused initially on supporting partners on the platform, partners that we know very well where we have both a credit underwriting advantage, but also a collections advantage because of the fact that we're providing them. And therefore, we can pre deduct the debt repayment from them.

[Alex Hungate, President & COO at Grab]

And that's one of the reasons why you see our NPLs are very stable and we've been able to manage them very accurately. We want to extend that philosophy as we think about how to lend to consumers as well. So we our credit models are most accurate where we know the most about the consumer also. So the same philosophy applies, but that means that we have spent some time developing and deepening the credit modeling for consumers to extend the lending to the consumer market. You can see us starting to do that as we grow our lending, particularly through the banks because the banks have access to even deeper data and obviously have a lower cost of funds advantage as well.

[Alex Hungate, President & COO at Grab]

So in 2025, an increasing proportion of the lending will be to consumers, but we'll continue to deepen and enhance the relationship we have with lending to partners. I would say our penetration of drivers is the highest. We're still improving the models there and working on ways to facilitate smaller quanta and different tenures to more drivers. But I think that is starting to plateau. And therefore, that will grow only at the rate at which the number of drivers in the GMV they support and it comes on to the marketplace.

[Alex Hungate, President & COO at Grab]

In terms of merchants, we are much less penetrated. And as we develop more and more capabilities for merchants like enhancing our payments, enhancing our dine out discovery, which is the second part of your question. That allows us to see more of their GMV and allows us therefore to extend our credit models and extend more lending to them. And then as I mentioned, the consumer models are the ones which we're very focused on developing now. We're very conscious of the macro environment for that one.

[Alex Hungate, President & COO at Grab]

So we'll do it in a prudent way, but there will be an increase in the proportion of lending to consumers during the year. In terms of profitability, our FinTech business is already profitable like the peers that you mentioned. The increase in the losses is due to the fact that the banks basically all launching at the same time, particularly Malaysia and Indonesia, which have only just kind of launched their lending products last quarter. So that I think that's to be expected. It's in line with our plan.

[Alex Hungate, President & COO at Grab]

So the investment in starting a new bank is there and it's something we've been flagging over the last several years. But we are retaining our guidance that the banks overall, so all three of the banks collectively will be profitable by the fourth quarter of twenty twenty six. So it's very much in line with our investment plans for getting those banks up and running. Moving on to your second question. Dine out discovery allows us to tap into a much larger TAM than food delivery.

[Alex Hungate, President & COO at Grab]

So although we're the CPE leader on food delivery, we all know that most restaurants will make the majority of the GMV from having people dine in at their stores. We want to be a part of making them successful in attracting people into the stores and they recognize that our relationship with consumers on an increasingly frequent and loyal basis is a very great asset for them to do that. And so we've been extending the capabilities that we have to enhance dine out discovery in line with that kind of marketing trusted marketing relationship that we have with the consumer. We have a lot of data on consumer reviews, for example, for delivery, but we can easily expand that to the adjacent space of consumer reviews for dining out. The merchants are keen on working with us in terms of creating deals to encourage consumers to eat with them.

[Alex Hungate, President & COO at Grab]

And as they do that, we uniquely can close the loop on those campaigns that they put out there. It's the first party data that we have linking back to loyalty plans or payment that allows them to establish that those consumers come in as they redeem those discounts. So it's a fully transparent closed loop advertising performance for dine out in exactly the same way as we delivered that for delivery in the past. So the merchants understand very well what the proposition is and they seem to like it. So it fits beautifully with what we do already on payments.

[Alex Hungate, President & COO at Grab]

And so we'll be enhancing the payments capabilities we have for merchants and enhancing the loyalty capabilities as well, all of which help us close that loop. The monetization opportunity therefore is primarily driven by an increase in the TAM against which we can generate advertising dollars. And that's a very clear partnership model that merchants are used to and that we will push. We're in the very early stages of this. So in many ways, this ramp up stage is an investment stage.

[Alex Hungate, President & COO at Grab]

And so but we'll begin to monetize in future years rather than in 2025.

[Wei Fang, Director at Mizuho Securities]

And John, on your question on

[Peter Oey, Chief Financial Officer at Grab]

the margin for food, you alluded the 4% plus timeframe, etcetera. We're not really tied to any specific timeline to get to the 4%. The good news is that in certain countries we're already seeing 4% plus. So we know how to get there. What we are managing the business for our food is to for absolute dollar expansion, EBITDA expansion versus a certain margin percentage because we see the opportunities in growing the food business even more.

[Peter Oey, Chief Financial Officer at Grab]

We talked a lot about daily transacting users to monthly transacting users today and that's just another catalyst for us that we got to do more in the food section for us to actually grow into the TAM that we still have a lot ways in terms of penetrating in all the countries that we're in here today, especially around also the what Alex talked about when it comes to dine out capabilities also as well as complementing that with Ma. So that's how we view our margin for our food business. Thanks, Jean for your question. I appreciate it. Thank you.

[Peter Oey, Chief Financial Officer at Grab]

We are up against the hour here. So I want to thank all the calls here. Look, we know we had some technical difficulties earlier on. So I don't know how much of Anthony's opening remarks was captured. Maybe if I can just sum it up here in the next sixty seconds and I'll close the call here.

[Peter Oey, Chief Financial Officer at Grab]

It was a great set of results for Q1. And this is despite of the seasonal headwinds. And now as we're entering in the second quarter, what we are seeing is the continuing sequential growth in our across all our businesses today and we expect to maintain this momentum of growth from 2024 into 2025. EBITDA guidance upgrade also it's a reflection of our confidence in achieving this strong performance even after thirteen consecutive quarters of EBITDA improvement. There's a lot of questions today around macro and slowing down on demand, etcetera.

[Peter Oey, Chief Financial Officer at Grab]

I hope we've addressed those questions. Our business, we built this business to be countercyclical and we are well positioned to weather any downturn or any slowdowns of economies and the investments that we're making around the product set which some of you got to see also in GrabEx a few weeks ago is an example of where we're to continue to double down. We've got more products that we need to build across the food as well as MAT and mobility and the FinTech side especially on our loan book and also making our products more affordable, which is really important, especially if we are going to see some economic implications down the line here. But we're very confident in what we're seeing so far and we're executing also right on strategy. So in closing, I want to thank all the partners that and the merchant drivers that we continue to support and they're supporting us.

[Peter Oey, Chief Financial Officer at Grab]

So thank you very much. And also to all our customers who continue to use our product day in and day out. We are continuing to see engagement, which is great to see. And also we continue to see the lifetime value of customers going up. And also thank you for all our shareholders for your support on our business.

[Peter Oey, Chief Financial Officer at Grab]

So the IR team and myself will be on the road again over the next few weeks. I'll be on the East Coast in Boston and New York. Alex will be in Hong Kong in a couple of weeks time. So we'd love to get together with you all. I'm sure you have more questions that we can dialogue on.

[Peter Oey, Chief Financial Officer at Grab]

But thank you for coming out the hour. And with this, I'll close the call. Till next quarter. Thanks everyone.

[Operator]

Thank you, ladies and gentlemen. This concludes Brub's first quarter twenty twenty five earnings conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Douglas Yu, Director of IR & Strategy
• Anthony Tan, Chief Executive Officer, Co-Founder & Chairman
• Peter Oey, Chief Financial Officer
• Alex Hungate, President & COO

Analysts

• Pang Vittayaamnuaykoon, Executive Director at Goldman Sachs
• Venugopal Garre, Analyst at Bernstein
• Piyush Choudhary, Analyst at HSBC
• Wei Fang, Director at Mizuho Securities
• Divya Gangahar, Executive Director at Morgan Stanley
• Mark Mahaney, Senior Managing Director at Evercore ISI
• Song Zhang, Director at Barclays