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Shares of Grab Holdings (NASDAQ:GRAB) fell after the company reported disappointing second-quarter earnings, with the stock down 5.9% as of 1:20 p.m. ET.
Quarterly Performance
In the latest quarter, Grab Holdings experienced a 17% rise in revenue, or a 23% increase when adjusted for constant currency, reaching $664 million. This outcome fell short of the forecasted $673.2 million. Gross merchandise volume (GMV), reflecting the total value of all transactions, increased by 13% to $4.4 billion, indicating slower growth compared to previous periods.
NASDAQ Technology stock, keeping an eye on future revenue growth and profitability will be crucial for evaluating the company’s performance and potential in the competitive ride-sharing market.
The company's user base continued its expansion, with 41 million monthly transacting users. Profit margins also showed some improvement, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising from $64 million to $81 million. On a generally accepted accounting principles (GAAP) basis, Grab's per-share loss decreased from $0.03 to $0.01, aligning with market estimates.
Future Outlook
For the remainder of the year, Grab Holdings maintained its full-year guidance, targeting revenue growth of 14% to 17%, aiming for a range between $2.7 billion and $2.75 billion. However, this guidance is below the analyst consensus of $2.77 billion. The company continues to project adjusted EBITDA in the range of $250 million to $270 million and anticipates positive free cash flow for the year.
In comparison, Grab's growth rate lagged behind that of Uber, which reported a 19% increase in gross bookings. Although the earnings report did not reveal any critical issues, the slower-than-expected growth contributed to the decline in the stock.
CEO Anthony Tan noted that the Southeast Asian economy remains robust, and Grab will leverage its key product initiatives to serve more users while maintaining cost discipline.
