Grab Holdings Ltd Q4 FY2025 Earnings Call

Like Trip.com and AliPay to enhance brand visibility even before users land in the region. As a result of these initiatives, travelers MTUs have grown over 10x over the last 3 years, with airport rides driving over 10% of our Mobility GMV today. GrabMart is growing 1.7x faster than GrabFood, thanks to three important improvements to the customer proposition. First, deepening integration with major supermarkets to ensure that handling of fresh produce deliveries is reliable and consistent. Next, curating our merchant selection to shift user behavior from daily essentials to weekly stock-ups. And lastly, GrabMore has been launched, where users can add groceries to their food order at no additional cost. As a result, we've seen a 30% year-on-year increase in GrabMart users in 2025 while usage frequency continues to improve. There is still plenty of upside with GrabMart, only accounting for 10% of our Deliveries GMV today. The success of our merchants has always been at the heart of our mission. The powerful integrated suite of offerings that we built for them is intended to take them and the Grab platform to the next level. First, Grab offers merchants enterprise-level digital tools that help them maximize their return on advertising spend. Next, we provide integrated point-of-sale and payment systems to widen payments acceptance for them. We embed lending to improve cash flow and transform their transaction data into actionable insights to help them scale their businesses. With these capabilities, Grab will be able to deliver the one outcome that matters most to our merchant partners, which is, of course, sustained earnings growth. In 2025, total active Deliveries merchants increased 9% year-over-year, while their earnings have seen a corresponding increase of 11%. Our Financial Services strategy is centered on embedded distribution that lowers customer acquisition costs with personalized offerings. For the majority of our users, drivers, and merchants, GrabPay is their initial entry point into a range of Financial Services. As they build a transactional history with us, we can also offer lending, insurance, and even digital banking services in Singapore, Malaysia, and Indonesia. In just 3 years, we have grown to 7.4 million deposit customers across our 3 banks. We have not had to invest heavily in acquiring new users or offering high deposit rates as we are converting the users who are already on our platform. This also drives our lending business because we see high-frequency daily transaction data on our platform. We can predict risk more accurately, allowing us to scale our loan portfolio rapidly while risk-adjusted returns continue to track above our cost of capital and credit costs remain well within our risk appetite. In 2025, our gross loan portfolio surpassed $1 billion for the first time, ending the year at $1.3 billion. Our goal is to exit 2026 with a gross loan book of over $2 billion. I also want to touch on this morning's announcement on our acquisition of Stash, a U.S.-based digital investing platform. While we remain firmly committed to Southeast Asia and the growth of our regional lending business, this acquisition achieves two specific objectives. First, it accelerates our wealth management roadmap with the addition of new capabilities and talent. Second, it has an attractive financial profile. Stash has the potential to grow into a high-margin subscription revenue stream, contributing over $60 million in adjusted EBITDA by 2028. The last part of our strategy is potentially the most important for the long-term. That is how we harness technology, including AI, for efficiency gains. We leverage AI to improve conversion at every stage of the funnel. For example, we automate menu translations to enhance conversion of high-value segments such as travelers. Over 97% of our merchant listings regionally are now available in English and Chinese. Our credit scoring models are increasingly robust as we whitelist a greater proportion of ecosystem partners. We have also improved real-time personalization by collating a database of over 1,000 attributes and segmenting our users and ecosystem partners into 200,000 distinct segments. Finally, we have improved our search and basket conversion with AI semantic search and real-time personalization. Our tech investments are helping us to gain operating leverage. We continue to lower our cloud costs per transaction by proactively retiring idle resources and transitioning to more cost-efficient solutions. Payment processing costs as a proportion of total payment volumes are declining as we increase volumes through our wallets. Finally, we are maximizing headcount efficiency by deploying in-house AI models. For example, how are we able to double the amount of cities in which we offer services with a reduction in operations headcount at the same time? The answer is that we have been deploying auto-adaptive technology to optimize our core marketplace in each city, enabling us to scale in a lean and agile fashion. In fact, today, more than 90% of our Mobility rides are dispatched using AI. Looking ahead, we are investing in the next structural shift in On-Demand services: autonomous vehicles and robotics. In partnership with WeRide, we launched our first AV shuttle service for the public in Singapore. Our position as Southeast Asia's leading on-demand marketplace makes us the preferred commercialization partner for global autonomous technology leaders. We are committed to serving two critical functions: acting as a key thought partner for regulators to help define safety standards and operational frameworks for driverless transport and supporting our driver partners through the transition to our hybrid fleet by uplifting them to take on specialized roles in safety and fleet management within the autonomous ecosystem. In closing, I have updated on the strong progress we are making as we execute towards our strategy and share our priorities for the future. We will work closer than ever with our merchant and driver partners, government agencies, corporate partners, and Grab-ers to execute this strategy. Thank you for your continued support. I will now turn the call over to Peter, who will discuss how these developments support our financial roadmap over the next 3 years.

Thanks, Alex. Anthony and Alex just laid a powerful strategic roadmap, focused on affordability, ecosystem-led lifetime values, and Gen AI efficiency. I will now show you how that strategy translates into our financial roadmap, driving durable, profitable growth at scale. What makes it energized is how our execution over the past few years is setting foundations to drive the financial outlook that we are setting today. Let me first deep dive into our fourth quarter and 2025 results, which set us up for the next chapter of our financial roadmap. We delivered a strong finish for the year in the fourth quarter, characterized by product-led demand-driven growth. Our On-Demand GMV increased 21% year-over-year or 20% on a constant currency basis, with transactions outpacing GMV growth at 24% year-over-year. The strong volume growth is underpinned by our affordability and ecosystem expansion strategies that drive both user acquisition and higher transaction frequency. Our group revenue grew 19% or 17% year-over-year on a constant currency basis to $906 million. This is fueled by this GMV momentum and driven by increasing contributions from our Financial Services. Financial Services also achieved our goals, with our gross loan portfolio hitting $1.3 billion, and our net loan portfolio reaching $1.2 billion, well above our guidance of $1 billion, while maintaining healthy risk-adjusted returns. Adjusted EBITDA reached $148 million for the fourth quarter, marking our 16th consecutive quarter of EBITDA expansion. On a full year basis, adjusted EBITDA grew by 60% year-on-year to $500 million. This profitability is powered by our robust top of the funnel growth and our relentless focus on driving operating leverage as we scale. Finally, we generated $76 million in adjusted free cash flow for the quarter and $290 million for the full year, underscoring the efficiency of our platform. The scalability of our ecosystem is delivering a clear trend of accelerating top-line growth, coupled with expanding profitability. When we review 2025, we hit several key milestones. First, we drove strong acceleration in growth with On-Demand GMV growing by 21% year-over-year. We achieved this as a result of years of effort to widen the top of the funnel and execute on the product-led strategies Alex described. Our confidence in this momentum remains high because we see product-led and ecosystem-focused initiatives driving higher transaction frequency and attracting a broader user base than ever before. As we continue to scale the ecosystem, it translates into operating leverage as we benefit from greater network scale efficiencies. From our first quarter of adjusted EBITDA profitability achieved in the third quarter of 2023, we subsequently recorded positive adjusted free cash flow for the full year 2024. I am proud to announce that in 2025, we achieved our first full year of net profit. As we look ahead, there are four core principles of our financial roadmap that will guide our execution in the medium term and serve as a framework for how we create long-term shareholder value. Firstly, we remain focused on growing in a sustainable and durable manner. We're not chasing growth at any cost. Instead, we are driving relentless improvements to the affordability and reliability of our core offerings to capture a larger share of our addressable market while employing a product-led and ecosystem-focused approach to cross-sell high-margin services like Financial Services. Secondly, we will continue to drive improvements to operating leverage. Our priority is now to build on this foundation and compound the earnings growth of our ecosystem as we benefit from the network efficiencies we've spent the last decade building. Third, we are laser-focused on free cash flow conversion. We expect our adjusted free cash flow conversion rates to improve as our profitability grows and we achieve operating leverage. Finally, we will maintain a strong disciplined balance sheet. Our capital allocation framework prioritizes organic growth with high returns, remaining disciplined on M&A, and returning excess capital to shareholders. Looking at our guidance for 2026, we expect group revenues to grow between 20% to 22% year-over-year to $4.04 billion and $4.1 billion, accelerating from the 20% growth in 2025. This is not just a byproduct of a larger base; it's a direct result of our sustained growth in our On-Demand GMV, with Financial Services continuing to be our fastest-growing segment as we scale our loan portfolio. On adjusted EBITDA, we expect to grow by 40% to 44% year-on-year, reaching $700 million to $720 million in 2026. This step-up in profitability reflects the network scale efficiencies and cost leverage we've been building into the platform, supported by the continued growth in On-Demand EBITDA and our Financial Services segment moving towards EBITDA breakeven in the second half of the year. As we lean into technology and Gen AI to drive corporate efficiency and operating leverage in the business, we expect robust momentum in revenue growing at a 20% CAGR from 2025 to 2028, with adjusted EBITDA tripling from 2025 to reach $1.5 billion in 2028, and for adjusted free cash flow conversion to expand to 80% by then. For our On-Demand segments, we are focused on new user growth by expanding our footprint into non-capital cities while broadening our product suite to capture untapped market segments, which provides a larger foundation for retention and frequency. Moreover, we expect a gradual increase in basket sizes. For our Financial Services engine, we expect it to become an increasingly larger contributor to our total revenue base. By leveraging our proprietary ecosystem data, we can scale lending disbursement with high confidence in our credit costs, creating a high-margin revenue stream. Finally, on MSME and merchant solutions, we see significant upside from merchant-focused initiatives specifically in advertising and omni-commerce solutions like dining, which enhance our value proposition to merchants. Collectively, these strategic pillars provide a clear trajectory towards our 2028 revenue targets.

Sure. We now open the call to questions. As a reminder, to our audience, please submit your questions via investor.relations@grab.com. With that, our first question comes from the line of Pang Vitt from Goldman Sachs and Horng Han from CLSA. The question is about our 2028 EBITDA guidance. Can you outline the key assumptions by segment, and what are the biggest drivers to this step-up?

Let me take this one, Horng Han and Pang. There are really two key themes. If you look at the last 40 minutes, we've actually outlined what they are. The first is sustainable growth. You're seeing the momentum in revenue growth that translates to what you see in the guide, the 2026 guide in terms of revenue, the 20% to 22%, and then also beyond that to 2028, where you see the 20% revenue CAGR growth from 2025 to 2028. The second theme is operating leverage in the business and the cost structure. Regarding how we think about profitability, the $1.5 billion EBITDA target that we're aiming for has four key components. The first is On-Demand revenue. The On-Demand engine is working, driving continued momentum in user growth at the top of the funnel. This translates into both absolute margin expansion and absolute margin dollars in the business. We are driving costs down to lower the cost of serving the business. The affordability that we're focusing on is working, and we're going to continue to extend that. To do this and drive margin, we must also lower our cost to set up. The second is Financial Services, where we're seeing momentum in loan book growth. We've clipped $1 billion in terms of the loan book, and once the business turns breakeven in the second half of 2026, we will see profitability continue to grow. The Financial Services segment and the On-Demand business are working together to improve operating margins. The third and fourth components depend on operating leverage in the business, particularly in corporate costs. Corporate costs in 2023 were roughly about 17% as a percentage of revenue. In 2025, it has gone down to 11%. With the continued drive in costs in the business, you will see absolute margins improve overall as our business scales.

Our second question, which also relates to capital allocation, comes from Venugopal from Bernstein. This question is for Peter as well. What prompted us to provide a 2025 to 2028 guidance? How predictable is the business model? Is this all going to be driven by organic growth?

Yes, it's all organic growth. That's what we've outlined here today. If you look at our strategy, it really hasn’t changed in terms of maintaining growth momentum. The last time we provided a 3-year guidance was back in September 2022. Since then, the business has continued to scale and show momentum, which is now an inflection point. We have been building ingredients for growth over the last 2 years, and 2025 is a testament to that. We want to provide our investors with a longer-term financial roadmap as we sustain our growth. We have over 50 million MTUs currently, and there are still many more we can reach in Southeast Asia. In the last 4 years alone, we've added over 400 cities. These cities are non-capital cities, and there are still many more that we wish to serve in Southeast Asia. We want to maintain growth, while also focusing on profitability and free cash flow conversion. The management team has set targets for EBITDA of $1.5 billion by 2028, along with free cash flow conversion improvements—all indicators of our progress and confidence moving forward.

All right. We'll move on to a few questions on Indonesia. The next question comes from Navin Killa from UBS and Pang Vitt from Goldman Sachs. A question for Alex. Is there any update on Indonesia's proposal to lower ride-hailing commissions? And if implemented, how would this impact take rates and segment margins? What levers do you have to offset that potential pressure?

Thanks for this question, Navin and Pang. This is a great opportunity to clarify because there's been a lot of speculation about what might happen in Indonesia. We can confirm that the government has not proposed any changes in commission caps. We're in close consultation with them. We are aligned and committed to their ultimate goal of improving the welfare of drivers in Indonesia. Those who have been following closely will know that we have unveiled social security initiatives for our hardworking drivers, plus a Hari Raya bonus coming up. We can leverage technology, particularly AI and a product called Ride Guide, to help them become more productive and earn more during their working hours. Both the government and we have an aligned interest to develop a sustainable platform operating reliably for our customers while being affordable for them, enabling us to continue to create and enhance livelihoods for driver partners and micro SMEs across Indonesia. Regarding margins, we have driven affordability as a key part of our strategy and product-led growth in Indonesia. We have demonstrated sustainable double-digit GMV growth. Despite macroeconomic headwinds, we have expanded profitability year-on-year. We do not expect margins to be impacted by social programs.

So Divya asked a follow-up question as well. Also for Alex, could you provide updates on Grab's GMV growth and market share trends in Indonesia in the fourth quarter? Do you expect margins for Indonesia to be impacted by higher driver welfare costs in 2026?

Yes, Divya, thanks. Despite macroeconomic headwinds, we improved affordability as a key part of our strategy and product-led growth in Indonesia. We've driven category leadership across all verticals. Our growth aligns with the overall group and is faster than the market in Indonesia. We are demonstrating sustainable double-digit GMV growth for our On-Demand segment while expanding profitability year-on-year. Regarding margins, we don't expect them to be impacted by the social programs I described because we are achieving operating leverage as we scale up in the country.

We now have a question from Piyush Choudhary from HSBC. So Piyush, we'll take this as a two-pronged question. The first question is for Anthony on our AV initiatives. Grab has done various partnerships with cutting-edge AV companies. Can you provide an update on the progress of your various pilots? Besides Singapore, do you see commercial rollout in other ASEAN countries in the next few years?

Great question, Piyush. Our long-term strategy is centered on building supply resilience. We view Autonomous Vehicles (AVs) not as a replacement for our driver partners but as a critical buffer to ensure 100% reliability, which is key for customer retention during peak hours or in underserved areas. You may have seen us make small minority investments, which position us in Southeast Asia to have a geopolitical and technological advantage by partnering with global leaders across both U.S. and China ecosystems, from WeRide to May Mobility in the States and Momenta, even hardware leaders in LiDAR. This agnostic approach allows us to leverage our unique position to take the best technology from the world and adapt it to the specific nuances of Southeast Asian infrastructure. Over the next 3 years, we see Singapore as our blueprint. Ai.R, our first public AV shuttle service in Singapore's Punggol district, has covered over 25,000 kilometers with zero safety-critical incidents or near misses, recording the most data collected by any AV operator in Southeast Asia. Our in-house fleet operations tooling enables real-time alerting for AV issues, allowing our operations center to respond quickly to potential incidents. We’re committed to transitioning our driver partners into new roles as we move toward a hybrid human and autonomous fleet. We are retraining our Grab driver partners to form a pool of qualified safety operators during this pilot. They are part of our growing AV fleet operations ground team, which includes customer support and depot operations. This ensures we maintain our operational heart while lowering our long-term cost per kilometer. We will continue to work with regulators like Singapore's Ministry of Transport to define safety standards and operational frameworks that allow driverless transport to coexist with traditional traffic. We see this transition as future-proofing our platform and network while ensuring that we remain the most efficient marketplace as we lead Southeast Asia into its next chapter of mobility.

Thank you, Anthony. The second part of Piyush's question is about the performance of the various new product initiatives launched in 2025. What are the key learnings, and what new products might we anticipate in 2026?

Thanks, Piyush. At the start of 2025, we focused on user growth and frequency, which was a key driver of our growth acceleration that year. We're currently at 1 in 15 Southeast Asians using Grab, compared to 1 in 20 previously. Though we're experiencing rapid growth, we're still scratching the surface, with lots of upside left in this dynamic region. Our GMV growth accelerated by 21% year-on-year, with a transaction growth growing even faster at 24% year-on-year in the last fourth quarter. The MTU to ATU penetration stands at 37%, an increase from last year, while ATUs have grown to 129 million users. Our product strategy has been effective. We updated our new product initiatives in Deliveries and found that they now contribute almost half—46% year-on-year GMV growth—from our new products, a massive contribution. Our ladder pricing strategy is driving better frequency, with Saver yielding 1.5 higher frequency than the average. High-value customers here in Southeast Asia are less price-sensitive, seeking limousine rides to airports, etc. We will continue to grow at the top end of the ladder, which allows us to manage the margin mix successfully. Additionally, we've built viral products that enhance user engagement. Group Order, for instance, offers double retention and frequency than the average. Other initiatives like Family Account and GrabMore are operating exceptionally well, helping to build long-term value. Our integrated solutions for merchants further drive growth. We're the only provider in Southeast Asia that can bring all of this together. The more successful these merchants are with Grab, the more successful Grab will be in the long run. Going forward, we're looking not only at MTUs as a percentage of ATUs but discussing daily usage as a goal we want to achieve in 2026. Our focus is on embedding Grab in the daily lives of users in Southeast Asia.

Next question comes from Alicia Yap from Citi, a three-part question on our 3-year revenue guidance. Firstly, could you provide us with the breakdown by segment of how this will contribute to your revenue growth?

Okay, Alicia. If you look at the top line over the next 3 years, Financial Services will grow much faster than On-Demand. The product is scaling, and our banks are actively building the loan book. We're expecting to double the loan book by exiting 2026. The banks will increase their penetration of the marketplace, and they have products designed to accelerate growth. On-Demand will continue to grow as well, but Financial Services will outpace that growth due to the strength of the emerging financial products and a rapidly expanding user base.

Second part to the question: could you provide color on Deliveries EBITDA margin by 2028?

You will see margin expansion in both segments. Our On-Demand business will continue to grow, and you'll see Financial Services margins growing faster than On-Demand, giving strong support to the overall financial performance.

The third part to the question: will you still achieve Financial Services breakeven by the second half of 2026?

Yes, I can confirm that we will achieve breakeven in the second half of 2026.

We have a question from Alicia again on AI from both Alicia from Citi and Navin from UBS. Given the rapid evolution of AI models, how does management view the positioning of Grab's Superapp strategy in light of this?

Great question, Navin and Alicia. We view the evolution of AI not as a threat to the Superapp model, but as a high-velocity engine that will scale our model. Regarding disruption, we see three strategic pillars that strengthen our position rather than posing a threat. First, LLMs are exceptional at discovery and digital commerce. Grab has become embedded in the everyday lives of Southeast Asians. This hyperlocal physical infrastructure gives us a strong moat, and we own the real-time mapping, merchant relationships, and fleet logistics across Southeast Asia, making us indispensable. Second, our partnerships with OpenAI are for internal efficiency and ensuring that when a user interacts with a third-party AI, Grab remains that integrated fulfillment engine. Lastly, users want deep personalization and efficiency. We’re deploying semantic search and generative AI to personalize the Superapp into a concierge. We’re not waiting for search; we’re utilizing our data and generative AI to predict user intent, powering merchants with our AI agent, and improving credit underwriting with AI. This translates into higher retention and improved unit economics. From 2022 to 2024, we managed to double our revenues while maintaining a flat headcount. We've seen the power of AI and continue to build the AI-led operating system for Southeast Asia and are excited to showcase the next generation of these tools.

There’s a question on our recent acquisition of Stash. Could you share some of the financial metrics of this business, including its burn as well as near-term earnings?

Our long-term strategy focuses on Southeast Asia. Stash is a unique asset with strong IP and talent that we do not currently possess. With a positive EBITDA and free cash flow, we expect this business to generate $60 million in EBITDA by 2028. It serves our user base today and allows us to extend services to underserved populations. The acquisition will close in Q3 or Q4 this year, and we're confident in the potential for Stash to grow both in the U.S. and later in Southeast Asia.

We have several questions now on our grocery strategy from various analysts. Could you provide an update on our grocery growth trends and the competitive landscape?

In ASEAN, modern retail penetration is under 40% and online grocery penetration is even lower, indicating a significant opportunity. GrabMart is only 10% of our Deliveries GMV but is growing 1.7x faster than food year-on-year. We are adding selections adjacent to food consumption, using customer behaviors to guide our SKU selection. This improves reliability and customer experience. Higher engagement due to improved supply and increased demand in the grocery sector reinforces our conviction to invest here while leveraging on-demand capabilities for better financial performance. We can also enhance monetization through Financial Services capabilities.

Lastly, we have a question from Divya from Morgan Stanley on capital allocation. The cash on our balance sheet is notable, and it will build up further with our improving free cash flow outlook. While we welcome the share repurchase, what other areas do you expect to allocate capital if there are no inorganic growth opportunities?

Our capital allocation principles remain consistent. We prioritize organic growth, maintaining a very disciplined perspective on any inorganic opportunities. This involves maintaining a strong balance sheet for flexibility. Excess capital will be returned to shareholders, and the $1 billion share repurchase program demonstrates that commitment to returning value.

As we approach the end of our Q&A session, I will turn it over to Peter for his closing remarks.

I know this has been longer than our traditional calls, but I thought it was important for Anthony, Alex, and I to share details on our business's strategy over the next 3 years. We are entering an inflection point, and the business you see today is much different from 4 years ago when we went public. In 2025, we achieved significant growth, profitability, and our first year of net profit. Our 3-year guidance reflects our confidence in sustaining profitable growth. I want to thank all the partners, drivers, merchants, and over 50 million monthly transacting users for your support. My team and I will be on the road over the coming weeks, visiting multiple locations across Asia and the U.S. We would love the opportunity to meet and discuss our progress, as well as our 3-year guidance. Thank you for your time, and see you at the next quarter.