Grab outperforms guidance with growth across all business units

Singapore-based mobility and delivery brand Grab reports Q1 2022 gross merchandise volume and total payment volume outperformed its guidance for deliveries, mobility and financial services.

Gross merchandise volume (GMV) was $4.8 million, up 32% year-over-year.

Revenue in the first quarter was $228 million, a 6% increase compared to the same period in 2021, and loss in the quarter also improved by 35% year-over-year to $435 million. 

“Our first quarter results are a testament to the resilience of Southeast Asia’s economy as we move past the worst of the pandemic restrictions. We are optimistic that our business will continue to strengthen as more countries pivot to living with COVID-19,” says Anthony Tan, co-founder and group CEO of Grab.

“In the quarter, we delivered strong top-line growth in deliveries as we expanded our merchant selection to give users more reasons to choose Grab. Our mobility business also rebounded, and we expect it to gradually recover as COVID restrictions ease further and our active driver base increases.”

Adjusted EBITDA in Q1 was negative $287 million – more than double the $111 million loss of Q1 2021. The company says the decline is due to “higher regional costs and incentive investments.” The Q1 adjusted EBITDA was a $17 million improvement compared to the prior quarter, Q4 2021.

Grab says it expects to break even on adjusted EBITDA by the first half of 2023 for its core food deliveries segment and by the end of 2023 for its overall deliveries segment. One parts of its growth plan is to “leverage technology, partnerships and our super app ecosystem to grow our user base, improve efficiency and increase user stickiness.”

“Looking ahead, we are focused on growing sustainably by being disciplined with our capital, optimizing our fixed cost base and tapering our incentive spend as the market rationalizes. We believe these actions will put us on a path to achieving segment adjusted EBITDA breakeven for deliveries by the end of 2023,” says Peter Oey, Grab CFO.

Grab’s monthly transacting users rose 10% year-on-year to reach 30.9 million in the first quarter this year and average spend per user rose 19% to $155.

In its mobility service, Grab says its active driver base increased in Q1 but is still below pre-COVID levels. 

For deliveries, Grab says it is working to improve “the driver and user experience through tech and product enhancements and strengthening our moat by offering users a wide selection of merchants to meet their needs.” The company also plans to expand its deliveries segment and its “buy-now-pay-later” products into more markets in the next year.

Last week Grab announced three new sustainability goals: to double the number of marginalized individuals earning income on its platform by 2025, to expand the proportion of women in its leadership ranks by 40% by 2030 and to achieve carbon neutrality within its ecosystem by 2040.