good day everyone and welcome to grab's first quarter 2026 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 oe chief financial officer during this call we will be making forward-looking statements regarding future events including our business and financial performance these statements are based on our current beliefs and expectations Actual results could differ materially due to a number of risks and uncertainties as described on this earnings call, in the earnings release, and in our Form 20F 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 reconciliation of non-IFRS to IFRS financial measures. For more information, please refer to our earnings press release, remarks, and supplemental presentation available on our IR website. For today's call, Anthony will deliver opening remarks, after which we will open the floor to questions. As a reminder, we are accepting questions via our email at investor.relationsatgrab.com. Do submit your questions ahead of time, and we will add them to the Q&A queue. And with that, I'll hand it over to Anthony.
Great. Thanks, Doug. Good day, everyone, and thank you for joining us. we set out to start 2026 strongly and we delivered against the backdrop of our seasonally softest quarter due to ramadan and chinese new year on demand gmv growth accelerated to 24 year-on-year while group mtus increased to 52 million in financial services loan dispersals grew 67 percent to exceed one billion dollars for the first time and we remain on track for our financial services segment to achieve adjusted EBITDA breakeven in the second half of this year. We also delivered our 17th consecutive quarter of adjusted EBITDA growth, expanding our trailing 12-month adjusted free cash flow to $489 million. These results demonstrate the compounding nature of our strategy, which is increasingly being accelerated by our investments in AI. What truly sets our AI capabilities apart, however, is the proprietary data foundation we spent the last 14 years building to power them. Today, Grab operates as a system of record for local commerce across Southeast Asia. We capture highly localized, real-time data on how over 50 million users and partners interact across eight markets over the years this has generated a proprietary data set of over 20 billion transactions we feed these multimodal signals from hyperlocal mapping to in-store payment terminals into our ai grab intelligence layer to optimize our marketplace efficiency from dynamic pricing to last mile routing Crucially, we pair this data advantage with our massive physical fulfillment network. That closed-loop system or ecosystem is our biggest competitive mode, which is why our AI investments translate directly into measurable financial outcomes. We are already seeing significant tangible returns on these initiatives. For instance, I'm pleased to share driver partners who adopted Turbo, our AI-powered driving mode in our GrabDriver app to optimize driver earnings and efficiency, saw a 23% uplift in earnings per online hour compared to driver partners who have not adopted the feature. This has contributed to mobility transactions growth, outpacing mobility GMV growth with transactions up 28% year-on-year. within over a year of launch our merchant ai assistant my has been adopted by approximately half of our active single store merchant base driving a 15 percent uplift in gmv for engaged users this deepened engagement directly supports our ability to improve monetization with average advertisers spend growing 44 percent year-on-year as merchants see increasing measurable returns following the launch of 13 new ai-powered experiences at grabx this year we are turning external ai interfaces into our newest growth engines by acting as the essential fulfillment layer for southeast asia we ensure that whenever customers use ai agents to navigate their day Those interactions act as top-of-funnel leads that drive transactions directly back to grab. We're also making steady progress on autonomous vehicles. In April, we successfully transitioned our private trials to full-paying public operations. Our AIR service, deployed in partnership with WeRite, is the first autonomous passenger service ever deployed within a Southeast Asian residential estate. The fleet has clocked over 40,000 kilometers and has safely served several thousand public rides. That said, the adoption of AVs in Southeast Asia remains nascent. We see governments and regulators taking a measured approach in implementing AVs, which we believe is the right approach for our region. We will continue to incorporate AVs in our platform at a pace that reflects the trust us, communities placed in us, and our emphasis on customer safety. To be clear, we do not expect anyone to be able to deploy impactful disruption to our human driver network in the near future, yet we remain firm believers in the technology. This has shaped how we have made small investments ahead of the curve to forge international partnerships while doubling down on ensuring our Singapore pilots succeed. We intend to be the most experienced local hybrid AV and human operator in Southeast Asia. One able to amplify the efforts of any AV software player in bringing the smoothest, safest, and most cost-efficient service when we eventually scale up in partnership with governments in this region. now beyond ai and avs the structural health of our driver partner supply base remains our top priority when fuel price volatility emerged in early march we acted decisively to protect partner livelihoods by deploying targeted fuel rebates and proactively engage with regulators across our markets in april we also launched the digital earnings tracker to provide driver partners with greater transparency over their earnings. In 2025, partners earned over $15 billion on our platform, up 19% year-on-year. Looking ahead, our record start to the year is a testament to the resilience of our ecosystem. Whether we are leveraging AI to drive greater marketplace efficiencies today or piloting the autonomous networks of tomorrow, all, our focus remains on compounding sustainable growth and out-serving our communities. Despite macroeconomic uncertainties, particularly regarding inflation and fuel prices, our platform is structurally stronger than ever. Against that backdrop, we reiterate our 2026 full-year guidance. Group revenue of $4.04 billion to $4.10 billion, an adjusted EBITDA of $700 to $720 million. Our first quarter provides us with a strong foundation.
In March, we announced that we are advancing our buyback mandate with a $400 million accelerated share repurchase program. this is a reflection of our conviction in grabs long-term value at these dislocated prices thank you so much let's open it up for questions thank you anthony we will now transition to the q a session as a reminder for those of you who would like to ask a question please submit an email to our investor relations uh inbox and we'll take them in the queue as well our first and most asked question comes from the line of several analysts uh davia morgan stanley Venu of Bernstein and Pius of HSBC. And to regard to the fuel crisis. So the question is, what's the impact of the ongoing Middle East conflict and higher fuel prices across your various operating countries? Has it started to impact business performance in the second quarter? And can you quantify the impact? And what is our strategy to manage long-term fuel risks? So this is a question for Alex.
Thanks, Divya, Venu, Pius. This is a critical topic. And as I said in my prepared remarks q1 results actually give us a good solid foundation entering the year and as you saw from the slide pack at the demand trends in april have remained resilient our mobility business in april has seen weekly average transaction volumes sustained at plus 32 percent year on year and our deliveries business continues to see record high daily transacting users in april so it's a good start to the year the business in fact is in a structurally more resilient position today than it has been through our history. Product innovations we have made have really targeted affordability and reliability. Group orders, for example, has GMV up 74% year-on-year. And we launched group rides at GrabX last month, which is a similar concept for sharing rides to reduce pricing for individual consumers. And that's now available across all six of our core markets. GrabUnlimited, of course, is very good value for for high frequency customers and it continues to account for a third of our deliveries gmv so all of these are highly affordable products which keep the the demand strong even when consumers are stretched we're monitoring the fuel situation extremely closely and of course we will not hesitate to act further if needed in the medium term we are committed to accelerate the ev transition to reduce our driver partner's exposure to fuel price volatility so for example in thailand and philippines we have a drive to own program that connects our drivers with oems like byd and gac where we have deals of up to 70 000 vehicles available across six markets with accessing to financing so they can own those more easily in vietnam we've secured preferential charging rates also through our charging network partners, eBoost and Charge Plus, which helps our drivers in the transition also. And finally, in Thailand, I am pleased to say that our total fleet supply has crossed 30,000 EVs on the platform, and demand for those from consumers is also strong, where they can select that EV option, and that demand has grown by over 35% year-on-year. So this fuel crisis has become an opportunity in the sense that it helps us to accelerate that EV transition.
Thank you, Alex. So we'll move on to the next question. The next question is on financial services and comes from Joey of Macquarie and Venu of Bernstein. So for the financial services segment, your loan portfolio showed modest quarter-quarter growth, but there was a step improvement to your segment-adjusted EBITDA. Could you describe the factors that led to these improvements and what can we expect in coming quarters and how do you intend to drive that? So this is a question for Alex again.
Thanks, Joven Vanu. Yes, you're right. Strong EBITDA improvement in financial services, both quarter-on-quarter and year-on-year. So that is the operating leverage that we've been talking about starting to come through very strongly now as we scale up our loan portfolio. Revenue growth accelerated 43% year-on-year and 38% on a constant currency basis. And more than a third of that incremental revenue dropped straight to the bottom line for financial services. demonstrating that operating leverage that we've been speaking about. The loan book growth is strong year-on-year, and importantly, the credit quality is improving alongside that. So loan dispersals grew 67% year-on-year to over a billion, but the growth was modest, you're right, this quarter because of seasonal factors, and that's a normal factor for first quarter. The ECLs as a percentage of our gross loan portfolio has improved year-on-year. That does show i think the improving quality of our credit models we've been proactive on risk risk management though so we've been tightening for some sectors and in other sectors where conventional lenders have stepped away we've seen more opportunity in q1 we applied those additional ecl overlays to account for that macroeconomic uncertainty with that selective tightening also part of our change in the in the risk appetite looking ahead we do have some experience of course of managing these kinds of uh shocks uh to the to the macroeconomic situation so our underwriting models have already been through the similar fuel price shock that we saw at the start of the ukraine conflict not to mention covet as well and in both instances our credit quality remained within our risk appetite throughout so we continue to monitor the portfolio performance super carefully we aim to generate healthy returns on risk-adjusted returns for our loan portfolio and we are reiterating our second half 2026 break-even target for financial services thank you alex so this next question is also another highly asked question and it comes from several analysts so from alicia from city divya from morgan stanley chihuahua macquarie joan from Barclays and Peuge of HSBC as regarding recent news in Indonesia.
So in Indonesia's cap on writer commissions to 8%, can you clarify if that is applicable to four wheels? What are the levers available to cushion the key negative impact from lower writer commission? What's the likely impact of profitability due to the proposed change? And what's the impact in the delivery segment, if any, from the proposed change? And if you can help to quantify it. So this is a very long questions. We'll pose another question for Alex.
Okay, thank you to all of you, all five of you for the question. Let me see if I can cover section by section. Okay, so it does appear that the immediate regulatory exposure is highly specific. So the recent announcements have explicitly focused on OJOL drivers, OJEC online drivers, who are our two-wheel ride hailing partners. So two-wheel ride hailing partners, the OJOL. The four-wheel drivers earn well above the minimum wage, and so we believe that they're less of a concern for government and regulators in Indonesia. That said, of course, we're engaging very proactively with the relevant ministries, and we try to seek absolute clarity and technical aspects of how the decree will be implemented. It's essential, we believe, that together with regulators, we shape a balanced implementation of this decree so that our Indonesian mobility marketplace remains healthy and that driver partners' earnings remain well-supported. It's worth noting, as I mentioned in my prepared remarks, that two-wheel mobility, so the odd all drivers that the decree referred to in Indonesia, is less than 6% of our total mobility GMV. So the Odril drivers in Singapore represent less than 6% of our total mobility GMV. So we are therefore reiterating our expectations for mobility margins to stabilize within the historical range and not to go outside of that range.
Thank you, Alex. So we'll move on to a related topic as well.
This comes from the line of Venu from Bernstein, Sajun of DBS, and Alicia of Citi. in relation to the eight percent commission cap in indonesia is the likelihood of consolidation now looking higher in indonesia as well does the shift in policy in indonesia change your near to medium-term investment or resource and capital allocation priority so just a question for peter sure yeah look i won't comment on specific m a speculation and but i'll speak to how we view our position in this evolving landscape with any m a we always take into account the regulatory environment it's really critical and we want to work with the relevant agencies there also because there's always synergies and dissynergies that we could accrue from any transactions and as I've always spoken in many many quarterly earnings we always have a very high bar when it comes to M&A transaction itself when it's specifically to Indonesia and also just our m a portfolio we've always been taking a very diversified approach and you see that in the lines of our businesses and you see that our product continues to expand also broadly we're entering our ninth market which also shows our diversification also in terms of geographies so the way we always position the lens that we take is diversification and that's really important So, specifically, though, for Indonesia, as Alex just mentioned, it's really important that we have a very constructive and very healthy ecosystem, both for our driver partners, consumers, as also for our restaurants. So, specifically to Indonesia, our strategy for Indonesia remains fundamentally unchanged, despite what we've seen over the weekend and also the way we approach the strategies in Indonesia. our Indonesia mobility business continues to grow double digits year over year. It remains very stable quarter on quarter in spite of the seasonal headwinds. And as I'm always reiterating that we're very highly disciplined in our capital allocation. So when we evaluate any strategic opportunity, it's strictly through the lens of long-term shareholder value and also how can we diversify our grab business.
Thank you, Peter. so the next question comes from alicia of city and way of bizuho so the question topping now moves back to the fuel crisis as well given a step up in partner incentives to offset elevated fuel costs how does this impact the demand elasticity and translate it into revisions to your near-term financial outlook for mobility should we expect levels to remain elevated or do you see offsetting levers such as ev adoption and cross-border rides that could bring incentives back down in the second half and support the sequential EBITDA ramp-up implied by your four-year 700 to 720 million guidance.
Thanks Alicia Wei great question so yes Q1 you can see that driver incentives was elevated to specific drivers though one is and most importantly was the confluence of like Lunar New Year and Ramadan within the first quarter both in the first quarter this year creating acute supply pressures as usual during those two festive periods so it's a deliberate the second the second factor was of course the fuel crisis so towards the end of the quarter um during march we started a deliberate decision to support our driver partners with uh the elevated fuel prices across some countries in the region so as we move into the second quarter of course the festive driven incentive pressure normalizes but fuel does remain an important variable that we're watching very very closely the targeted earning support was will continue through through into the second quarter but it no longer with the the seasonal impact we expect this first quarter to be a peak in the driver incentives we are reiterating the full year guidance therefore of 700 to 720 million for adjusted EBITDA assuming that peak and not that it's a run rate but it's more like a peak but i would say we've got multiple levers available to us including if necessary more emphasis on advertising and financial services monetization to defend the overall margin trajectory for the full year if those fuel pressures persist through the full year in the medium term if those elevated fuel prices continue we would have to pass some more of the costs on to consumers but of course we'll do that very judiciously because we want to maintain healthy demand for our driver partners through this difficult time finally i think it's worth emphasizing we saw that the impact of ai marketplace optimization this quarter was very powerful and we did use it to manage for example incentive spend for consumers you can see that
the incentive spend for consumers became more efficient during this quarter and so going into the full year we will also have that powerful capability at our disposal to try and manage some of the volatility and incentive spends thank you alex so the next question the topic will now move into ai this comes from david morris stanley and waya mizuho on ai monetization are you building toward a merchant and driver sas revenue stream that sits outside the current commission rate structure or are these going to be remaining bundled into the existing take rate what ai tools are you investing in mainly into this quarter so this is a question for anthony thanks so much davian we appreciate the question look our approach to tools like merchant ai and driver ai assistant
coach has been to solve everyday problems that our drivers and merchant partners face there's no reason why our partners should not have access to these tools that will enable them to grow their customers and earnings if we get that right the tools and a partnership right we build something competitors can't easily replicate and it creates high loyalty high engagement which results in them choosing us as your primary platform not just because of the tech but because of the trust and of course growing earnings for them this is translated into concrete results within our ecosystem on a year-on-year basis not only do we see the growth in the number of active merchant partners but their earnings also grew 12 during the quarter for our mobility business total active driver partners increased four percent quarter and quarter and 16 year-on-year to reach another all-time high in spite of macroeconomic uncertainty so when we build these ai tools well and when we genuinely partner and outserve them the economics tends to follow naturally thank you anthony so another highly asked question is on regional corporate costs and also related to ai so this
comes from uh several analysts uh giong barclays way of mizuho divya morgan stanley and ranjan of jb morgan so regional corporate costs increased year in year to 114 million for the first quarter can you help us understand how much of the step up is ai infrastructure costs whether it's tokenization cloud versus general inflation as well as fx and how should we expect the ai spend to start translating into measurable cost savings elsewhere in a pnl that can offset this higher regional corporate cost run rate so this is a question for peter sure let me start by saying that the step up that you saw in the first quarter of regional corporate costs was a conscious decision We made that decision as a management team to invest in the AI infrastructure that we've been talking about for many quarters.
And Anthony just answered a question regarding AI and what we will be deploying to our partners, as well as now we're starting to deploy to our consumers also at the same time. And that really underpins to the Grab intelligence layer that we spoke a lot about actually a few weeks ago at the GrabX event regarding the new 13 new product AI experience features that we're rolling out. So we are investing now in the AI specifically towards tokenization stack that we saw in the first quarter and also the cloud capacity that needs to run and powers those tokenization at the same time. now the early returns on those investment is critical also we can't discount because that's also showing up in the numbers and anthony just also shared some of those on the driver's side and the merchant assist by where they're seeing the impact on earnings which is really a critical part of that healthy ecosystem if you look at the adoption of these driver ios system which is now over 50 percent uh and we've generated over 1.25 million interaction in just two months since we roll that out we've seen also for merchants they are using the ai assistant their gmv is also up double digits on a year-over-year basis so they're thriving as a merchant and we're benefiting also as a platform from that and this is the type of things that we want to see more and more coming out from these ai rollouts which is really critical now if you strip out all these ai investments and we saw some fx headwind also from the weaker usd the us dollar and our underlying cost base which is really important remains lean and disciplined and that's been a mandate that how we run grab so i am not expecting any further step ups from regional corporate costs we expect the regional copper cost to stabilize around the levels that you saw in the first quarter for the rest of 2026.
Thank you, Peter. So the next question now moves to the share repurchase, and this comes from Runjen of J.B. Morgan and Divya of Morgan Stanley. So Grab has announced that acceleration to repurchase $4 million of shares, you know, at the end of March itself. Nevertheless, the basic and diluted shares have increased quarter and quarter. So what is the impact of dilution from stock-based compensation?
And with regard to the share repurchase program, would you consider upsizing this given the current stock price okay so i'll take this one uh if you step back we announced a 500 million dollar share buyback program earlier this year and i announced also a 250 million dollars accelerated share repurchase and an additional 150 in contingent forward purchase on the 24th of march so for total of 400 million dollars has been accelerated um which means only in the market for five to five trading days in q1 itself so you can't look at it in isolation now both these programs are expected to be executed over the next four months so i'll share a lot more in the next quarterly earnings when we look at the q2 results now in terms of share count it would amount to roughly around two percent of our total share count which will more than offset for the dilution from stock-based compensation. So that's how we're viewing it. As a reminder there's still another $100 million left to go in the share buyback program and we'll continue to have discussions around capital allocations with our board.
Thanks Peter. So the next question now moves to groceries. This question comes from Way of Mizuho. So regarding to grocery contribution, you've mentioned that GrabMart is only 10% of deliveries GMV, but growing 1.7 times faster than food. When you look at the grocery TAM in Southeast Asia and the economics of the GrabMart model itself, where does GrabMart need to be to basically contribute to the deliveries GMV by 2028 to underpin the $1.5 billion EBITDA target?
At what point does grocery become margin accretive, the segment rather than the drag to the blended deliveries economics so this is a question for alice so grab mart is an exciting segment i mean the term is very large arguably larger than food delivery altogether so we are doing a lot to accelerate the product innovation particularly the front end the ai powered shopping agent which we think will transform the ease with which consumers can for example create a weekly shopping basket and then improve the targeting for grab more cross sell as well and by the way grab more is grew more than double digit quarter on quarter so i think very very good signs for both of those things overall as a result the mtu is going into grocery are 2.6 times the rate of food mtu growth on a year-on-year basis so that shows you that it's really expanding the top of our funnel, which is extra important in the age of AI in terms of generating data and deepening the long-term value relationships that we have with our consumers. And then the order frequency that we saw were 1.8 times higher than the food-only users, which illustrates that long-term value enhancement that I was speaking about. So over the long term, the North Star is very clear. we've got global peers who have achieved like 20 to 40 percent mark penetration as a percentage of their delivery business overall so it's definitely the right model that we're pursuing and with regards to the three-year guidance that you asked about we expect the grab mark will maintain its current growth momentum and outpays delivery's growth throughout and therefore the higher basket sizes the engagement and the lifetime value we can achieve reinforce our conviction to achieve a long-term sustainable economics alongside it as part of a comprehensive super app LTV relationship with customers powered by AI. So that's how we think about it rather than standalone vertical by vertical. That's the power of our approach. And that power becomes enhanced in the AI world where our optimization across all those verticals to get to the right LTV customers is particularly powerful.
Thanks, Alex. So the next question, we'll move to financial services. This comes from Ranjan of JD Morgan. So a two-part question. So the first question is regarding the deposits. Deposits have remained flat quarter and quarter. The question is, what are the challenges that Grab is facing in growing its deposit base? The second part of the question is on the loan book and securitization. So would Grab consider securitizing its loan book to free capital to grow the business forward as well? So perhaps the first question would be for Alex on deposits and Peter, the question of securitization.
Okay. Well, first of all, we actually don't have any issue at all in raising deposits. We've been really gratified at the trust that consumers have in the Grab brand, the Grab ecosystem, our capabilities to protect their money. And if you look at the pricing of deposits we are never the most aggressive in the market we're able to actually gather sufficient deposits to create the right shape of balance sheet so there's no point having excess deposits particularly in this yield curve environment so what you're saying is us carefully managing the level of deposits to make sure that we optimize for p l purposes if we needed to raise more deposits we're very confident that we can do that now on the topic of securitization it's a potential tool for us to be able to recapital recycle on a long-term basis particularly as the loan book grows just to remind everyone we have two parts of our lending book we
have the banks piece also which are backed by the customer deposits and then you've got also our grant financial services non-bank site which is on balance sheet equity wise if you look at our current priority through scaling the lending through our digital banks we have deposits of roughly 1.6 billion dollars there's still a lot of headroom in terms of their loan to deposit ratio that we could deploy towards those loans we are still on target to get to the two billion dollar loan book by the end of the year so our priority now is to use make sure that our digital banks capital structure is efficient and those deposits are an important component of that
but long term there could be options for us to recycle that's not an immediate priority right now thank you so now we'll move on to the the final question for today this comes from piush hsbc so regarding to food panda taiwan recently announced acquisition can you share the progress and what are the key milestones to watch and likely timings of those milestones. So final question for Alex.
Well, maybe a very brief final answer then, Piers. So we're in the middle of the approval process for regulators. So no real updates today, but we'll make sure we provide updates as soon as we get any further feedback.
Okay, so thanks very much, everyone, for the questions. That concludes today's earnings call. Let me hand over the time to Peter to deliver the closing remarks.
Thanks, everyone. Hey, look, there's a lot going on, typically, in Southeast Asia and in Grab. I hope you got a flavor in terms of how our performance are. Q1's up to a fantastic start for us across all the financial fundamentals of our business. A lot of questions around fuel prices, obviously, which we hope we've addressed that. We are leaning in. We want to make sure our driver community are also benefiting and also I will be helping them along the way. And we are continuing to make sure that EV acceleration also happens within Southeast Asia. It's a great catalyst for that as far as to lean in on EV adoption. A lot of questions around Indonesia also are on the 8% commission. Just to reiterate, our demand or two wheels business for Indonesia is less than 6% of our GMV. We continue to reiterate our four-year guidance for the rest of the year. What makes us confident is the traction that we're seeing across the portfolios of our businesses today. So all the hard work, thank you very much for all the grabbers. Thank you for all the support you gave us in the first quarter. To all our driver partners, to all our merchants, for all the things that we want to serve and help you also thrive. Thank you very much for the first quarter and also to our shareholders for our support. As usual, the IR team, Ken, Doug, and I will be on the road over the next few weeks. We'll be in the U.S., we'll be across Asia, Singapore, Hong Kong, and also in Australia. Don't feel down. Please reach out to us if you want to meet with us or have a chat, have a coffee. We're more than happy to sit down with you. See you all next quarter.
