With its impressive performance for both the fourth quarter and the full fiscal year, Grab has shared a positive projection for the current quarter and for 2023.
Singapore-based ride-hailing and food delivery service provider, Grab Holdings Ltd (NASDAQ: GRAB) has seen an uptick in its shares in the pre-market as it unveils a better-than-expected Q4 revenue. While the firm’s stock is currently pegged at $3.63 atop a 3.71% growth, it recorded an upsurge as high as 6% hours earlier.
The company, which has maintained dominance as the biggest food delivery company in Southeast Asia said its Q4 2022 revenue grew by a massive 310% year-over-year (YoY) to $502 million. As a complement to this growth, it said its 2022 fiscal year revenue shot up by 112% year-over-year to $1.433 billion.
Grab was one of the major beneficiaries of the COVID lockdowns, however, events in the broader global economy have seen it lose its grip over the past year. The company said its total loss for the fourth quarter was improved by 64% YoY to $391 million. The firm even recorded a better performance for the full year as the loss improved by 51% year-over-year to $1.740 billion.
“We achieved these results by focusing on capturing the rebound in Mobility demand, optimizing our costs, reducing our cost-to-serve, and innovating on products and services that drive stickiness and engagement within our ecosystem. As we look ahead, we will remain laser-focused on driving sustainable growth, and improving the efficiency of our ecosystem,” said Anthony Tan, Group Chief Executive Officer and Co-Founder of Grab.
The company also recorded significant milestones in its business for the period including a 14% growth in the number of monthly transacting users. The company has continued to face significant competition from key rivals including Indonesia’s GoTo Gojek Tokopedia PT Tbk (IDX: GOTO) which also attained profitability per its latest report.
With consumer spending notably slumping based on inflationary growth, competition for market share has been more daunting than before.
Grab and the Positive Revenue Forecast
With its impressive performance for both the fourth quarter and the full fiscal year, Grab has shared a positive projection for the current quarter and for 2023. According to the company, it now expects its total revenue to range from $2.20 billion to $2.30 billion for the fiscal year. Should this figure be achieved, it will represent a massive 54% to 60% growth YoY.
The company also expected its breakeven point to fall into the fourth quarter of this year while its estimated timeline for the Adjusted EBITDA is pegged at the second half of next year. For a firm in a highly competitive market, Grab has shed off some programs that are cash intensive in order to relieve its operating costs.
The company is now reducing its overall promotions while progressing cautiously with respect to incentives for drivers. While these cost reduction measures might appear drastic, the firm posits they will help power more sustainable growth overall.
“This sets us up for a strong 2023 as we continue to focus on growing in a sustainable manner,” Chief Financial Officer Peter Oey said.
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