Grab Q4 On-Demand Incentives Grow Due To Competition, Issues Cautious FY25 Outlook Despite Strong GMV And User Growth

Zinger Key Points

Grab's Q4 revenue jumps 17%, driven by mobility & financial services growth, as it eyes positive net income in 2025
Grab projects cautious FY25 outlook amid rising incentives, competition with GoTo Group in Southeast Asia’s ride-hailing market
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On Thursday, Grab Holdings GRAB reported fourth-quarter fiscal 2024 revenue growth of 17% year-on-year (15% year-on-year on a constant currency basis) to $764.00 million, beating the consensus of $757.61 million.

EPS of $0.01 beat the consensus loss of $(0.01). The stock price declined after the results.

Also Read: Grab Follows Uber’s Lead, To Add Over 1K BYD EVs to Indonesian Fleet for Green Rides

Total incentives were $512 million in the quarter, with On-Demand incentives as a proportion of On-Demand GMV at 10.1%, compared to 9.4% in the fourth quarter of 2023.

Revenue for the Deliveries segment rose 13% year-on-year (10% year-on-year on a CC basis) to $407 million, driven by GMV growth and higher contributions from Advertising.

Mobility revenue was $282 million, up 19% year-on-year (17% year-on-year on a CC basis). This was underpinned by more substantial demand levels, with Mobility MTUs increasing by 22% while average order frequency grew by 5%. Financial Services revenue rose 38% year-on-year to $74 million.

On-Demand GMV grew 20% year-on-year to reach $5.03 billion. Delivery GMV grew by 19% year-on-year, and Mobility GMV grew by 23% year-on-year.

Group MTUs grew by 17% year over year to 43.9 million, and the average spend per user increased by 1% year over year to $126.

Group Adjusted EBITDA grew to $97 million from $35 million year-on-year.

FY25 Outlook: Grab projects revenue of $3.33 billion – $3.40 billion vs. consensus $3.398 billion, implying caution around a Southeast Asian ride-hailing and food delivery market where GoTo Group remains a tough rival.

CFO Peter Oey told Bloomberg that it always takes a more conservative view when it gives guidance at the beginning of the year. The company expects to report a positive net income in 2025. Grab justified the surge in quarterly incentives, citing an intentional fluctuation.

Grab Holdings stock surged over 53% in the last 12 months.

Price Action: GRAB shares traded lower by 9.94% at $4.81 at the last check on Thursday.

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