Southeast Asian super app Grab on Thursday reported a net loss of $572 million for the second quarter ending June 30, 2022, a 29% improvement over $801 million recorded in the same period last year, on the back of strong deliveries growth.
Grab also disclosed that its revenue during the quarter reached an all-time high of $321 million, up by 79% YoY, driven by strong growth in mobility and delivery revenue. On a constant currency basis, revenue grew 85%.
Grab noted that the smaller net loss in Q2 was “primarily due to the elimination of non-cash interest expense of Grab’s convertible redeemable preference shares that converted to ordinary shares in December 2021”.
The loss in the quarter also included a $173 million non-cash expense from the revaluation of Grab’s equity investments that are marked to market each quarter and $111 million in stock-based compensation expense.
Meanwhile, adjusted EBITDA was negative $233 million in Q2, declining slightly from negative $214 million a year ago. Grab attributed the slight decline to investments in product and platform development in preparation for its digibank launches in Singapore in H2 2022 and Malaysia and Indonesia in 2023.
Its total gross merchandise value (GMV) grew 30% YoY to $5.1 billion in the April-June quarter.
Grab’s cash liquidity stands at $7.7 billion as of June 30, 2022, down from $8.2 billion in Q1, while net cash liquidity was $5.6 billion.
“Our second quarter results showed that we can grow sustainably. We delivered strong revenue and GMV growth while improving our unit economics and strengthening our category leadership position across key segments in the region,” the company’s co-founder and chief executive Anthony Tan said.
Looking ahead, Tan said Grab will focus on increasing high-quality GMV transactions, optimising its fixed cost base, and reducing its incentive spending to drive sustainable growth and improve the profitability profile for its segments.
Grab also said it is accelerating breakeven timelines for its core food deliveries and overall deliveries segment by one quarter and two quarters, respectively, to the first quarter of 2023 and the second quarter of 2023.
It also expects revenue for 2022 to come in between $1.25 billion and $1.3 billion, at the higher end of its previously announced guidance range of $1.2 billion to $1.3 billion.
Deliveries
During the April-June quarter, Grab said its deliveries segment accounted for the largest share of the group’s adjusted net sales, tripling compared to the same period a year ago and up 48% quarter-on-quarter.
The strong revenue growth in the segment was driven by contributions from Jaya Grocer and a 47 basis points decline in total incentives as a percentage of GMV, it added.
The segment’s adjusted EBITDA declined $15 million year-on-year to a negative $34 million but improved by 39% from the previous quarter as total incentives spend moderated quarter-on-quarter.
“Deliveries GMV came in below our guidance range impacted by foreign exchange currency translation and as dine-out resumption softened food delivery demand,” Grab said.
During the April-June quarter, Grab said its deliveries segment accounted for the largest share of the group’s adjusted net sales, tripling compared to the same period a year ago and up 48% quarter-on-quarter.
The quarter also saw Grab closing down its dark store operations in Singapore, Vietnam and the Philippines as it seeks to optimise its first-party marketplace presence. “By streamlining our deliveries ecosystem, we will be able to scale deliveries more sustainably through a third-party marketplace model and, in Malaysia, via Jaya Grocer,” it said.
Mobility, the second-largest segment in terms of revenue, logged a 37% increase in revenue to $161 million while adjusted EBITDA increased by 40% to $125 million on the back of strong demand and a steadily increasing driver base.
The company said it continues to make progress on the driver acquisition front with mobility supply starting to stabilise in Q2. The number of active drivers on its platform during Q2 2022 was at its highest point since Q1 2020.
“In terms of mobility supply, we see further stabilization in the second half of the year driven by higher attainable earnings as demand recovers,” the company said.
In the mobility space too, Grab exited some business lines that do not support sustainable growth. It closed down GrabWheels support operations in Singapore and Malaysia and merged its Indonesia GrabWheels operations with its car rental business in the country.
Financial services
Grab’s financial services segment posted a 94% growth in revenue to $13 million while GMV was up 38% to $1.49 billion. The segment’s adjusted EBITDA declined in the quarter to a negative $115 million due to its continued investment in its digital bank upcoming launches.
“We are streamlining our financial services segment to focus on platform growth to expand our ecosystem network effects and reduce our cost base; while also strengthening synergies with our upcoming digital banks,” the company said.
Revenue of its enterprise segment – including its cybersecurity and advertising services – improved by 30% to $14 million while GMV was up 51% to $52 million. Grab attributed the growth to the gains in its advertising segment. The division raked in a small adjusted EBITDA profit of $5 million from $1 million a year earlier.
In June, Grab launched GrabMaps, a new enterprise service for mapping and location-based services. It plans to expand GrabMaps as a B2B solution to help other organizations with their location intelligence needs.
Also during the quarter, in July, Grab increased its equity interest in Indonesia bank PT Bank Fama International to 33.6% upon approval by the Indonesian financial services authority.