Singapore-based Grab announced its first-ever profitable quarter, reporting a $11 million profit in its fourth-quarter earnings report on Thursday. This marks a significant turnaround from a $391 million loss recorded in the same period a year ago. The company attributed this improvement to enhanced Group adjusted EBITDA, fair value adjustments in investments, and reduced share-based compensation expenses.
Quarterly revenue reached $653 million, surpassing estimates from LSEG analysts of $634.86 million. For the full year 2023, Grab reported losses of $485 million, marking a 72% reduction from $1.74 billion the previous year.
In addition to its core ride-hailing services, Grab also operates in financial services such as payments and insurance, and offers deliveries for food, groceries, and packages.
“We exited 2023 with mobility surpassing pre-Covid levels. We are witnessing robust demand in the mobility sector,” said Grab CFO Peter Oey in an exclusive interview with CNBC on Friday. He highlighted a record 13% year-over-year growth in the deliveries business and noted an increase in platform users.
Grab also announced a $500 million share repurchase program, its first such initiative. The company, which launched in 2012, had historically prioritized growth over profitability, resulting in substantial losses. However, global economic uncertainties have prompted a shift towards profitability and cost management.
During the fourth quarter, Grab reduced total incentives — including partner and consumer incentives — to 7.3% of the total value of goods sold, down from 8.2% a year ago, as part of efforts to strengthen its marketplace health.
Looking ahead, Grab forecasts revenue for 2024 to range between $2.70 billion and $2.75 billion, slightly below analysts’ consensus of $2.8 billion.
Grab’s shares closed 8.41% lower following the announcements on Thursday, with its share price declining 75.8% from its Nasdaq debut price of $13.06 in December 2021.
