Ladies and gentlemen, thank you for joining us today. My name is Catherine, and I will be your conference operator for this session. Welcome to Grab's Second Quarter 2022 Earnings Presentation. After the speakers' remarks, there will be a question-and-answer session. I will now turn it over to Vivian Tong to start the call.

Good day, everyone, and welcome to Grab's second quarter 2022 earnings presentation. I’m Vivian Tong, Head of U.S. Investor Relations at Grab and joining me today are Anthony Tan, Chief Executive Officer; Peter Oey, Chief Financial Officer and Alex Hungate, Chief Operating Officer. During the call today, Anthony will discuss our key business updates and Peter will share details of our second quarter 2022 financial results. Following prepared remarks, we'll open up the call to questions, where Anthony, Peter, and Alex will provide responses for the Q&A. As a reminder, today's discussion contains forward-looking statements about the company's future business and financial performance. These comments are based on our beliefs and expectations as of today. Actual events and results could differ materially due to a number of risks and uncertainties, including those macroeconomic, industry-specific, regulatory, and other risks, which are described in our Form F-1 registration statement and other filings with the SEC. We do not undertake any obligation to update any forward-looking statements. The discussion today also contains non-IFRS financial measures, which should be considered together with rather than as substitutes for IFRS financial measures. A reconciliation of non-IFRS to IFRS financial measures is included in this quarter's earnings materials. For more information and additional disclosures on recent business performance, please refer to our earnings press release and supplemental presentation for a detailed second quarter 2022 financial review, which can be found on our IR website. Should you have any questions after this presentation, please reach out to [email protected]. And with that, I will turn the call over to Anthony to deliver his opening remarks.

Thank you everyone for joining us today. I'm pleased to report strong second quarter results underpinned by robust rebounding in our mobility segment and increased focus on cost management along with a reduction of our incentive spend. For the second half, we're focused on accelerating our path to profitability. This means we will focus on increasing high-quality GMV transactions on our platform, so that over time, it will continue to lead to higher revenue, better margins, and an improved profitability profile for all of our segments. We'll do this by continuing to innovate our products to increase engagement on our platform and reduce our cost to serve. As we ride out the remaining months of this year, there are a number of key call-outs that are consistent with our overall execution strategy. First, we will concentrate on increasing high-quality GMV transactions. This will come with a trade-off of slower GMV growth, thus we're lowering our GMV growth forecast for the year. Second, we will be pulling forward our core food deliveries and our overall delivery segment breakeven timelines by one quarter and two quarters, respectively. Third, we're also narrowing our 2022 revenue guidance range to the upper end of the previously announced range. We expect quarter-on-quarter improvements in our group-level adjusted EBITDA. And fourth, as we have demonstrated over the past two quarters, we can grow sustainably. In the second quarter, we reduced our incentive spend as a percentage of GMV, delivered record revenues, and strengthened our category leadership across our key verticals in Southeast Asia. We also took action to exit some lines of businesses that do not lead to long-term and sustainable growth. As the macroeconomic situation continues to remain uncertain, we are committed to streamlining our business on the cost front, adjusting our services to meet changing consumer preferences, and continuing to be good stewards of capital. Our team is committed to growing sustainably and accelerating our path to profitability. I'll now give an overview of our performance before turning it over to Peter, who will give details of our outlook and financials. In the second quarter, our mobility business saw strong recovery as Southeast Asia opened up and lifted most travel and movement restrictions. We anticipate mobility demand to rebound further in the second half. We also expect fulfillment rates, a measure of how well we match demand and supply on our platform to continue to trend higher. In terms of mobility supply, we anticipate further stabilization as average driver partner earnings continue to increase as demand recovers. In the second quarter, for example, average driver earnings per online hour was up by 12% quarter-on-quarter and 31% year-over-year. On the product side, we continue to make several improvements to reduce our cost to serve and increase partner productivity. For example, we expanded a zone scheduling feature from Singapore to more countries in the quarter. This feature allows drivers to focus on trips within selected zones, allowing us to better match demand in supply crunch areas. As of June, scheduled drivers completed an average of 44% more trips per online hour compared to non-scheduled drivers. We also improved average passenger wait times for rides in July to near 2020 levels. This indicates we are getting better at matching demand and supply on our platform despite our mobility supply lagging pre-COVID levels. While we have made progress in getting our mobility business closer to pre-COVID levels, there's still much work to be done to give our consumers and driver partners a better experience. So we will continue to innovate with product enhancements, introduce new affordable services, and onboard more drivers to help us get there. Let's now shift to our deliveries business. We saw strong revenue growth tripling compared to the same period a year ago and an improvement in our margins from previous quarters. This was driven by a reduction in total incentives as a percentage of GMV and contributions from Jaya Grocer. We did experience a softening in food delivery demand toward the second half of Q2, impacted by dining out as economies reopened. Looking ahead for the year, we expect dine-out trends to continue to soften food delivery demand and for our focus on high-quality GMV transactions to spur our path to profitability by moderating our rate of GMV growth. Our long-term thesis on our options within the delivery space has not changed. We continue to be focused on building a rich and diversified deliveries ecosystem anchored on product innovation and delighting our consumers. This approach allows us to drive segment profitability while growing our category leadership position in the region. In the quarter, there were a number of initiatives we took to reduce our cost to serve and improve consumer and partner experiences. We ramped up a feature to reduce the wait times of driver partners at food merchants when they pick up food. By reducing their wait times, they can increase the number of deliveries they make per hour, thereby boosting their productivity and reducing our cost to serve. In July, for example, we estimate that this feature together with other platform innovations saved drivers 12 million minutes compared to February. On a consumer end, we expanded our pilot subscription program called GrabUnlimited to five of our major markets. GrabUnlimited is an ecosystem subscription plan that aims to bring greater value to our consumers while building brand loyalty. Early results from our GrabUnlimited pilots indicate that subscribers are more engaged on our platform and they order more frequently. We also rolled out features that focus on affordability to give price-conscious consumers more options. For example, we launched differentiated delivery time windows in some markets to allow users to choose delivery times that have lower fees. We did this because at certain off-peak periods we have an oversupply of drivers. So by doing this, we create more demand because consumers enjoy lower fees, and drivers get more jobs with much lower or no incentives from us. As a result of these innovations, we improve platform efficiency and drivers' earnings potential, with a number of batch orders rising by 71% in a quarter compared to Q2 2021. Looking ahead, we will continue to focus on growing our third-party marketplace and integrating Jaya Grocer into GrabMart in Malaysia to scale our delivery segment profitably. Our Jaya Grocer integration is going well. As of July, we onboarded all Jaya stores on the GrabMart, and in June, our Jaya grocery store became one of the top performing Grab merchants in all of Malaysia. This achievement gives us confidence that our approach to embed technology solutions and experiment with online to offline fresh grocery experiences will benefit Jaya and our consumers. Moving on to financial services. In the second quarter, we continued to optimize our business by focusing on on-platform growth to reduce our cost base and drive more sustainable growth. On digital payments, we'll reduce our spend on consumer incentives while reducing costs associated with off-platform use cases. We also seek options to offer more lending and insurance products to Grab ecosystem participants, with whom we have built a deep relationship. For example, in lending, we saw strong growth in our ecosystem loan book over the past few quarters. In the second quarter, total loan disbursements were up nearly three times year-on-year, while NPL ratios have remained steady at low single-digit ranges. We're strong believers that financial services can enable our super app flywheel to spin faster. We've seen over the quarters that GrabPay users have higher levels of retention rates, spending, and cross-segment usage compared to cash users. In the second quarter, one-year retention rates for GrabPay users were 1.5 times higher than cash users, while driver partners with loans exhibited higher satisfaction with our platform than those without. We will share more details on our financial services strategy in our upcoming Investor Day and how it ties with our digital banks. On a digibank front, we're on track to publicly launch our Singapore GXS bank in the fourth quarter of this year. Lastly, I want to go over our enterprise segment. In the second quarter, our enterprise revenue rose 30% year-over-year, driven by gains in our advertising business. The bedrock of our enterprise segment is our focus on out-serving our merchants and other players within our ecosystem. Through GrabAds, we make merchants more discoverable, thus helping them grow their business. This also provides our users with delightful embedded ad experiences that shape their buying behavior. We will also invest in developing our own advertising platform to give businesses of all sizes access to data-driven insights to help them create, shape, and launch impactful advertising campaigns. In the second quarter, we also announced the launch of GrabMaps as an enterprise solution. We developed GrabMaps as a cost-efficient way to address a need for hyper-local mapping solutions in the region. We plan to further expand GrabMaps as a B2B solution to help other organizations with their location intelligence needs. By focusing on all of these strategies, we are confident we can meet the challenges ahead. We'll continue to grow our revenue sustainably, improve our margin profile, and accelerate our path to profitability. I'll now turn the call over to Peter to deliver a review of the financials.

Thanks, Anthony. We're pleased to report a strong set of results with revenues growing by 79% year-on-year and 41% quarter-on-quarter to reach $321 million, an all-time high. We saw strong revenue growth across all our segments. Our mobility revenues grew by 37% underpinned by the continued recovery in ride-hailing demand. For deliveries, revenues nearly tripled on the back of GMV growth, lowered incentives as a percentage of GMV, and contributions from Jaya. Financial services and our enterprise segments grew revenues 94% and 30%, respectively. For GMV, we recorded growth of 30% year-on-year to reach $5.1 billion, also an all-time high. I do want to emphasize that our top-line results were impacted by foreign exchange translations given the stronger US dollar. Hence, on a constant currency basis, our GMV grew by 34%. Relative to our second quarter guidance ranges, we recorded stronger than expected performances for our mobility GMV and financial services TPV, so we came in just below our guidance range for deliveries. We note that delivery growth rates have started to moderate towards the back half of the second quarter, driven by dining trends as economies reopen, coupled with our focus to drive higher quality GMV transactions as we taper our incentive levels. We also saw FX translation impacts. On a reported currency basis, our deliveries GMV grew at 19% year-on-year, but on a constant currency basis, it grew 24%. For our commission rates, we saw an overall increase year-on-year. Deliveries commissions were up from 18% to 20.8%. Financial services commissions increased from 2.4% to 2.7%, while mobility commissions were down slightly from 23.7% to 23.2%. The movements in delivery and mobility commission rates were driven by product and country mix, while financial services commissions improved on the back of higher contributions from our lending business. For our segment adjusted EBITDA, our margins remained fairly flat year-on-year, but improved quarter-on-quarter by over 100 basis points. A key driver of this was our reduction in incentives as a percentage of GMV, which declined to 10.4% from 11.6% in the prior quarter. On a segment basis, mobility EBITDA exhibited strong improvement in margins quarter-on-quarter from 9.8% to 12.1%, a 224 basis point improvement. More importantly, this is in line with our expected longer-term steady-state margins of 12% for the mobility segment. In addition, our delivery segment adjusted EBITDA margins improved quarter-on-quarter from negative 2.2% to negative 1.4%, an 82 basis point improvement. Looking ahead, we will continue to remain focused on growing sustainably by being strategic in how we deploy our resources. Turning to group adjusted EBITDA, our margins improved from negative 5.5% in the second quarter of 2021 to negative 4.6% in the second quarter of 2022. This represents an improvement of 90 basis points year-on-year. We also reported strong improvements in group adjusted EBITDA margins of 136 basis points from the prior quarter. Our regional corporate cost for the second quarter of 2022 was relatively flat quarter-on-quarter at $214 million, while as a percentage of GMV, it declined to 4.2% from 4.4% in the last quarter and 5.2% in the second quarter last year. I want to assure you that we are very focused on our overall cost management and on driving greater internal efficiencies. In the first half of 2022, we initiated several actions to reduce fixed costs in our core segments and to be more strategic in our incentives. In the second quarter, we took actions to exit our dark store presence in some countries while deepening our focus on platform transactions in our financial services segment. And on regional costs, we have slowed down our pace of hiring, streamlined certain functions, and reduced other overhead expenditure. As a management team, we are focused on spending wisely and continually reinforcing a lean cost culture without compromising our focus on driving sustainable growth. We are striving to accelerate our path to profitability. For the second half of 2022, we are expecting to drive sequential improvements in our adjusted EBITDA compared to the first half of this year. As for our IFRS loss, we reported a second-quarter loss for the period of $572 million, representing a 29% improvement from a loss of $801 million in the prior year period. The improvement was primarily due to the elimination of non-cash interest expenses of Grab’s convertible, redeemable preference shares, which were no longer incurred when we became a public company. I do also want to point out that our IFRS loss of $572 million includes $317 million of non-cash expenses below our adjusted EBITDA line. Of this, $173 million was from the revaluation of Grab's equity investments, which are marked-to-market each quarter, and $111 million from stock-based compensation. Turning to our balance sheet, our liquidity and cash position continues to be strong and robust. We ended the second quarter with $7.7 billion of gross cash liquidity, including our $1.8 billion term loan B facility. Our cash liquidity declined by $476 million from the end of the first quarter of 2022, predominantly attributed to net EBITDA losses for the second quarter and the repayment of borrowing and interest payments. Our net cash liquidity was $5.6 billion as of the end of the second quarter. We will maintain a prudent stance in how we allocate and deploy our capital. Cash preservation is top of mind, and as I mentioned in previous earnings, the strength of our balance sheet is not something that we take for granted. As we look ahead to the third quarter and to the rest of the year, for the third quarter, we expect deliveries GMV of $2.4 billion to $2.5 billion, third-quarter mobility GMV of $1.05 billion to $1.1 billion, and financial services TPV of $3.8 billion to $3.9 billion. We expect to see continued improvement in the mobility segment with the normalization of ride-hailing demand as economies reopen. Segment margins from mobility have recovered back to 12% as of the second quarter, and we will aim to maintain margins at these levels, which are in line with our steady-state assumptions. In deliveries, we have baked in the FX impact into our GMV growth estimates for the rest of the year. We expect demand levels to remain firm, but year-on-year GMV growth rates to moderate from prior quarters as restrictions on dining out remain relaxed, and as we focus on driving higher-quality GMV transactions. We expect our incentive levels to continue to taper down as we accelerate our path to profitability. We are updating and bringing forward our profitability timeline for deliveries. We now expect for delivery segment adjusted EBITDA to break even by the first quarter of 2023, and our overall delivery segment breakeven by the second quarter of 2023. This revised outlook is one and two quarters earlier, respectively, than previously announced. For financial services, we will also aim to optimize our cost base as we prepare for our Digibank launches. We will continue to deepen our focus on platform transactions and drive ecosystem benefits by growing partner lending and partner insurance products. We believe this can enable us to grow in a sustainable manner and improve segment margins. Looking at the full year of 2022, we have confidence that revenue can come in at the upper end of our initial guidance range to be between $1.25 billion to $1.3 billion, as we focus on optimizing our incentive spend. We also expect to drive a sequential quarter-on-quarter improvement in our adjusted EBITDA in the second half. Our efforts to streamline our fixed costs, focus on product innovation to reduce our cost to serve, and also improve ecosystem engagement will enable us to improve and accelerate our profitability profile in terms of our group adjusted EBITDA. Finally, we have revised our GMV growth year-over-year estimates to be between 21% to 25% year-on-year. On a constant currency basis, our GMV growth estimates would be 25% to 29% year-on-year. This compares to our previous growth estimate, which was 30% to 35% year-on-year. As I mentioned earlier, we have baked in foreign exchange impacts, and we do expect a moderation in growth rates, particularly for deliveries on the back of normalization of demand from dining out trends and from our focus to drive high-quality GMV transactions to spur our path to profitability. Nonetheless, we remain confident about the longer-term outlook in deliveries, and we will continue to focus on building a rich and diversified deliveries ecosystem, anchored on product innovation and delighting our consumers. In conclusion, Anthony and I are continually inspired by our team and what they've been able to achieve in the first half of this year. We want to thank Grabbers for their hard work in making these results possible. And we want to express our deep appreciation for our driver and merchant partners who make our platform what it is. As Anthony has said, we are very focused on accelerating our path to profitability. While there is still a lot of work ahead of us, we are confident that our strong balance sheet, cost discipline, and strategies will enable us to grow our segments sustainably in order to capture the opportunities ahead and tackle the challenges that come our way. We also look forward to sharing more details on our strategy and outlook at our Investor Day on the 27th of September. Thank you very much for your time, and we will now open up the call to questions.

Our first question comes from Pang Vittayaamnuaykoon with Goldman Sachs. Your line is open.

Thank you very much for the opportunities, and congratulations on the strong set of results. So question for me; firstly, on your guidance, why are you bringing down your GMV guidance by adjusting your low-end revenue guidance higher? How do we push the gap here? What is the basis and the assumption for the changes that you make? And what do you currently see in the market? Any color around the current industry competitive landscape would be helpful. Secondly, around the mobility margins, strong performance here. Can you comment on the driver supply issue that we seem to have in the earlier part of the year if you still see any lasting impact still? Specifically, why is the base incentive for your partner rise, but excess incentives are down, consumer incentives are down materially as well. So are we at a steady state now? Overall, it also appears that you are already reaching the margins where you previously guided as long-term margins. So does that mean no more upside here and you're just going to maintain your current margins?

I'll take this one. It's Peter Oey here. Thanks for the question. Let me address the first one around guidance. Yes, we are lowering our guidance, and I'll break down what's driving that. We've discussed the FX impact earlier. Also, as we look ahead in Southeast Asia, we expect some moderation in delivery growth as consumer behavior shifts with economies reopening. We're also focusing more on acquiring high-quality GMV users at the top of our funnel, which has been our priority since the beginning of this year. All of these factors will impact our GMV for the remainder of the year. However, regarding our revenue, we're still very confident and have tightened our guidance, aiming for the higher end of the range between $1.25 billion and $1.3 billion. Regarding macro factors, we're not currently seeing inflation in Southeast Asia, and we're optimistic about our expectations across all business lines. Your second question is about mobility. We're at 12%, and I commend our teams for reaching this milestone earlier in the second quarter than expected. We're maintaining this 12% outlook, which reflects a lot of behind-the-scenes efforts to achieve this margin. We've worked hard to bring drivers back onto our platform. I'll have Anthony elaborate on that, especially regarding the balance between base and excess incentives. We're focused on increasing driver numbers, and while we still have work to do, we're making significant progress. Additionally, we've been reducing consumer incentives, which is also part of improving our unit economics and margins in the mobility business. We're pleased to have reached this steady state. I'll let Anthony provide more details on our driver supply.

Thanks so much, Pang. On driver supply, we added more than 50,000 drivers in the quarter, and we're actually getting much better at managing the demand and supply dynamics because of all the platform innovations we've made. We see fulfillment rates trend higher than near pre-COVID levels. As we improve these fulfillment rates and onboard more drivers, as Peter shared, we actually drove down our incentives at the same time. How did we do this? We did this by focusing on a much more efficient onboarding process while enhancing our platform to allow drivers to fulfill more trips and maximize their earnings potential. So just to give you a sense, in the second quarter, average driver earnings per online hour was up by 12% quarter-on-quarter and 31% year-over-year. So we're going to continue to add drivers. We're getting better at managing demand and supply on our platform just through constant product innovation.

Thanks, Pang. Operator, next question please.

Our next question comes from Mark Mahaney with Evercore ISI. Your line is open.

Okay. Thank you. Could you talk a little bit more about the path to reducing incentives going forward? And maybe a little bit more on what's allowing you to do that? Is there just less competitive intensity? Have you reached enough scale, and the operational metrics are good enough that drivers and providers don't need as many incentives as they did in the past? Just spend a little bit more on whether it's competitive, structural, or scale factors that are allowing those incentives to come down and continue to come down. And then could you also just talk about this kind of low-quality GMV? How big is that in the delivery segment? And it sounded like you're talking about lower-quality consumers. So maybe just a little bit more explanation of what's a lower-quality GMV consumer versus one that's higher quality?

Certainly, Mark. Let me start with the incentives and then discuss the quality of the GMV segment and our approach to it. Regarding the incentives, you are correct that we've been reducing them. This quarter, our incentives were 10.3% of GMV, down from 11.6% in the previous quarter, and we were at 13% in the fourth quarter. This represents a significant decline of nearly 300 basis points in the percentage of GMV, indicating improvements in our incentivization strategy. What’s driving this change? To be honest, we’re simply getting better at managing it. We're evaluating the platform comprehensively and enhancing our products simultaneously. Additionally, the market is becoming more rational, which all contributes to making our incentive spending more efficient, allowing us to reduce it in the second quarter, with plans to continue this trend in the latter half of the year. When it comes to our perspective on GMV, we're focusing on attracting the right users at the beginning of our sales funnel. By high-quality GMV users, I mean those who are less prone to being influenced by incentives. This connects back to the earlier question on incentives. Why is this approach important? We recognize that there are greater opportunities for cross-selling to these users. Data indicates that users we can cross-sell to demonstrate higher retention and spending levels. In the second quarter, 62% of our users utilized two or more offerings, increasing from 56% at the end of last year. We are steadfast in enhancing our cross-selling efforts, focusing on users that have a significantly higher-than-average lifetime value. Therefore, we are strategically targeting these users to foster greater engagement, partly through our pilot of the Grab Unlimited subscription product.

Okay. Thank you, Peter.

And our next question comes from Alicia Yap with Citi. Your line is open.

My question is on deliveries. So could management share with us specifically which countries you are seeing more significant slowdown in user demand post the economy reopening? And among food delivery and grocery delivery, is the demand for grocery declining more? Or is it mainly coming from food delivery? And within the food delivery, do you have color or details on what type of restaurant or what kind of cuisine we are seeing the biggest impact? And then my second question is a follow-up on the full-year GMV guidance. In addition to the slower deliveries GMV, will any business segment also see slower growth?

Thanks, Alicia. I'll talk a bit more about deliveries, especially on growth. I won't go into specific cuisine types, but I'll just share what we are seeing with some of the growth trends and consumer behavior; dining out has taken place. And we actually anticipate a softening of the food delivery demand. That's why we lowered our GMV estimates to 25% to 29% on a constant currency basis. Now we are optimistic on the long-term potential of our diversified deliveries business, given the huge market opportunity and the relative use of our grocery segment. If you look just as an example, our mart business is only about two years old. And GrabMart grew close to 200% year-on-year. Regarding the changes in consumer behavior, how we think about it is what levers we have within deliveries to meet these user needs. One lever we've been focusing on is diversification. For example, customers want to save money. By not ordering food delivery, they may actually show a preference to order groceries to cook for themselves, and we have that on our platform. We've also introduced differentiated delivery time windows to let users choose a time that has a cheaper delivery fee when we have cheaper off-peak supply. We are seeing this despite the headwinds, but we remain optimistic about the long-term opportunities in the delivery space, and we will continue to invest and innovate our product offerings to adapt to these consumer preferences.

And on your question around the guidance for GMV, you asked specifically around which segments — actually, if you look at it, the mobility segment is performing strongly. As the economy has been reopening in Southeast Asia, you saw that we grew 50% year-on-year on a GMV basis. We're seeing organic demand continue to be very strong. So we feel very bullish on mobility. If you look at it, we're only at 67% of pre-COVID levels for mobility, so we still have some way to go there. If borderline rates are up close to about 9% now also as a percentage of GMV, there's still a lot of room and headroom for growth there. So we're pretty strong there. We said that deliveries would be impacted, as Anthony just mentioned, and that's tied to just the behavior of consumers, but within all these, we've got FX that we baked in also. We're taking a more conservative stance on the FX side.

Our next question comes from Mark Goodridge with Morgan Stanley. Please go ahead.

Two questions from me. First one is just on the GrabUnlimited subscription product. It's really quite interesting. Could you give us a bit more detail specifically, what percentage of GMV is this currently? And also, can you share a little bit more on what evidence you guys have that customers are ready to take up these subscription products, particularly in markets like Indonesia and Vietnam? I know you did mention increasing order frequency; if you could maybe give us a bit more details on the percentage changes of some of that order frequency would be helpful. Second question is on your capital allocation priorities. So when we look at your balance sheet, you highlighted almost $8 billion of cash liquidity. Can you give us a little bit of understanding of the priorities over the next couple of years? Clearly, funding losses is going to be number one. You need some capital there for your banking licenses. I know in the past, you've mentioned potential industry consolidation in deliveries. Can you sort of run us through what are the capital priorities over the next couple of years?

Thanks, Mark. I’ll take the GrabUnlimited question. We're actually very excited about GrabUnlimited because it's unique; it offers users ecosystem-wide benefits for a subscription fee. It’s still in the pilot phase, Mark. Right now, it's rolled out in 5 of our 8 markets. We actually see that it should be viewed as a profit-per-user play and not a profit-per-order play because GrabUnlimited is useful in driving user stickiness. It's been useful in driving retention, order frequency, and larger basket sizes on our platform. As you know, it's a commissions business. With larger basket sizes, it translates into higher commissions that we are able to generate. In Q2, the average number of transactions by GrabUnlimited subscribers was more than double that of non-subscribers in food delivery and mobility. So we are excited about the potential of GrabUnlimited. We believe it strengthens our super app and will become a key differentiator for us compared to monoline food delivery or mobility companies.

Mark, I'll take the other capital allocation question. Yes, we do have a lot of cash in the balance sheet. But like I said in my prepared remarks, we don't take that for granted. So we're going to be very careful how we deploy our capital. And cash is king; cash preservation is very much top of mind for us. So in terms of how we think over the next couple of years, definitely, our digibank is important for us, and we're about to launch in Singapore for example. We've got Malaysia and Indonesia ahead of us, so it's important for us to continue to ensure we have adequate resources there and allocate capital. In terms of our lending business, you've heard from Anthony that our lending business is scaling up. We're aware of the credit risk profile on those; and it's been encouraging. Our NPL is a very low single digit. We're managing to balance risk carefully while using equity to spread lending within our ecosystem. And as we continue to scale that, there are opportunities for us to look at outside our balance sheet. We'll continuously invest in R&D; we continue to focus on product innovation to look at opportunities in Southeast Asia. It is still an untapped market, and there are opportunities across all our core business segments that we will continue to double down on.

Our next question comes from Venugopal Garre with Bernstein. Please go ahead.

My first question is on ride-hailing. We're clearly seeing improving momentum in the business. We're still at 65% of pre-COVID levels that you mentioned. When I look at your next quarter guidance, which is Q3, looking at almost a similar number compared to Q2 for, of course, a modest growth. So is it like a seasonality element to Q3 versus Q2? Or is it more like a conservative sort of a number that you're heading towards? Or is it driven by the driver supply, which you don't want to accelerate quickly, given that you're still focusing on profitability?

Sure, Venu. Yes, there's still a lot of upside in mobility, and we did bake in FX into our forecast there. We're taking a more conservative stand there. Our driver supply is coming back, so we're continuing to make sure that the marketplace is calibrated on demand and supply. But we're very bullish in terms of where mobility is heading, and there's still a lot of headroom for growth.

Got it. On the second thing is that 12% EBITDA to GMV is, of course, something you had guided for that to go sort of fit in the second half. You've done that in the second quarter for ride-hailing. Food delivery as well, there's pretty substantial improvements in EBITDA to GMV, even sequentially. At the same time, you continue to intend to reduce incentives and improve or reduce losses overall from an EBITDA point of view. What I want to understand is that incrementally, would a lot of EBITDA improvements come from overhead moderation? Or is it a very sticky number that overheads may not necessarily decline on an absolute basis given your investments, especially on the focus towards expansion on the fintech side? So perhaps I'm uncertain about elements of cost that sit there as well.

Yes. So we're going to continue to focus on overhead, and I'm going to refer to regional costs specifically here. You've seen the regional costs come down in the quarter. Yes, you saw that our regional costs went down from 4.4% last quarter down to 4.2%. It's about a 100 basis points improvement on a year-over-year basis. So we're chopping away at it, and we're making good progress. We still have work to do, for sure. The mobility margin of the 12%, we’re continuing that. We are focusing on the other levers within our business to improve the profitability path. We’ve also other discretionary spend we’re looking at, and incentives are a significant component of that.

Our next question comes from Piyush Choudhary with HSC. Please go ahead.

And congrats on a good set of numbers. Two questions. Firstly, can you share or talk about what prompted you to exit the dark store operations in Singapore, Vietnam and various other locations? What were the key learnings for the company from operating these dark stores? And secondly, on financial services, could you talk a little bit about the profitability or EBITDA timeline going forward, given we are going to launch Digibank in Singapore and then Malaysia, Indonesia, and any kind of ideal long-term EBITDA targets you can share for financial services?

This is Alex Hungate. On your first question on dark stores, we realized that the customer experience of receiving groceries is a key factor for us to drive. We realized also that we can drive some of that through partnerships in certain markets, and of course, in the case of Malaysia through owning Jaya Grocer directly. The reason for this is because the infrastructure, the supply chain, and the points of presence around cities are already there for the partners and for our own Jaya Grocer stores as well. We believe this is a better cost structure for delivering first-party groceries in the longer run. I know there are some players out there building dark store networks, but from our experience, we took the decision that we thought that existing infrastructure leveraged through grocery store technology was a better formula for long-term cost leadership. Regarding financial services, we're creating value from our own platform payments and lending, and we want to continue to grow that. We find, though, that off-platform is trickling down the results, and you can see some of that in the second quarter numbers. Going forward, we will go through all those off-platform transactions and try to bring them to neutral or better transaction economics. But if we can't do those, then we will limit the off-platform and just grow those areas on-platform where we know we can create value. The reason we can create value is we have low distribution costs. We've gained exceptional data advantages for our credit models, which we've historically seen can outperform, and we also have a collections advantage where we're lending to people who are getting income from our platform. We believe that these advantages can also extend to the digital banks, which have the key advantage of being able to gather deposits as well, therefore reducing the cost of funds. It's a very similar strategy for our existing non-bank financial operations as we have for our future banking operations. This means we can maximize relationships with customers and the trust they have in Grab and hopefully drive us to have quicker break-even and returns from those digibank build-outs than others starting without any ecosystem to work with. In terms of more details, I'm not going to share those with you today, but Anthony mentioned earlier, we will have an Investor Day where we hope to give a few more details on our strategy for financial services overall. I hope you can join us for that.

Our next question comes from Navin Killa with UBS. Please go ahead.

Congrats on the strong results. I actually had a couple of questions. Firstly, I know you talked about the regional headquarters costs a little bit. I mean, the growth rate, I'm looking at it more from an absolute perspective rather than as a percentage of GMV, but the growth rates have come down quite a bit compared to 20-plus percent to, I think, high single digits this quarter. Can you talk a little bit about some of the initiatives you're taking to drive these growth rates lower? And is that how we should look at the trajectory of these costs going forward? And then secondly, within the delivery segment, trying to understand both the weakness in the second quarter and the lower guidance for the third quarter. I'm trying to understand whether your dark store shutdowns would be a driver of that. So just trying to understand like food delivery versus grocery, would the trajectory be different? And with food delivery, if I were to understand AOV versus the number of orders, where are you seeing the pressure points in terms of the growth outlook going forward?

Sure, Navin. So let me take the first one on regional costs first. In terms of growth rates for regional costs, we're continuing to chop away at this, both on an absolute basis as well as a percentage of GMV. I outlined a few things we're working through, including slowing down the pace of hiring. We've continued to streamline certain functions within our corporate structure. We're looking at other non-headcount-related costs within the business as well. There's a lot of work ongoing. We're looking at all cost optimization opportunities, so you will see a continued trend there. As I mentioned earlier in my prepared remarks, part of this will fuel our sequential improvement in our EBITDA from Q2 onward. Around deliveries, we indeed saw strong delivery growth. A quarter-over-quarter comparison takes into account some seasonality. We had Ramadan in the second quarter, and we saw some FX headwinds kicking in. As we continue to focus on the high-quality users at the top of the funnel, that has some impact. We're still seeing strong delivery performance, but we are cautious given the environment. The results from dark store shutdowns will have more of a reflection in the second half of this year rather than Q2.

And our last question comes from Thomas Chong with Jefferies. Please go ahead.

I have one strategic question. I want to get some more color about the cost management based upon the balance between growth and profitability. Given that we are seeing some macro headwinds, we're focusing more on the profitability side and reducing incentives. However, as the macro recovers, how should we think about our strategies looking into growth versus profitability and market share?

Thanks so much, Thomas. We appreciate the question. When it comes to profitability versus growth, what we saw in the quarter is that we are able to manage to grow sustainably. We grew our top line while improving some of our key profitable metrics. GMV went up by 34%, revenues went up by 85% on a constant currency basis, while we improved EBITDA margins. So looking ahead, we're focused on increasing high-quality transactions so that we can drive growth sustainably. This means we'll focus on profitable loyal customers who have higher net average order value transactions and who order with better unit economics and higher order frequencies. How do we do this? By doubling down on product innovation to engage consumers and reduce our cost to serve. I'll give you an example: we rolled out a feature that reduces wait time for drivers and merchants when they collect food, and we estimate this feature continues to deliver time savings of about 12 million minutes for our drivers compared to February. Another quick example is that we increased the number of batch orders in a quarter, with a number of batch orders rising by 71% in the quarter compared to Q2 2021. So we are focused on driving growth in a sustainable, profitable manner, and we will do this via product innovations to reduce our cost to serve and increase engagement for our profitable users.

This concludes our question-and-answer session. I'd like to turn the conference back over to Peter for any closing remarks.

Sure. I thank you, everyone, for taking the time to join our call today. If you have any questions, just feel free to reach out to our Investor Relations team or visit our Investor Relations website. Thanks again, everyone, and we look forward to seeing you at our Investor Day, which is on the 27th of September.

This concludes today's conference call. Thank you for participating. You may now disconnect.