Grab Falls Short of Quarterly Revenue Expectations, Witnessing a Drop in Shares
Grab's second-quarter revenue misses estimates due to slower food-delivery growth and currency challenges. The company's largest segment, food delivery, saw an 11% revenue increase, below expectations. Ride-share revenue also fell short of projections with a 14% growth.
The deceleration in growth within its primary food-delivery sector and currency challenges led to a 5% decline in its U.S.-listed shares on Thursday.
The tech giant in Southeast Asia experienced a slowdown following the peak in food-delivery demand during the pandemic, resulting in a significant restructuring last year that included a workforce reduction of 11% to mitigate losses.
The revenue from its delivery segment, the largest revenue contributor, increased by 11% to US$356 million, falling short of Visible Alpha's forecast of US$362.1 million. This growth rate was lower than the 19% reported in the previous quarter and the significant growth seen in specific quarters of 2023 and 2022.
However, ride-sharing revenue only increased by 14%, falling short of forecasts.
Grab's sales and gross merchandise value fell by more than 500 basis points due to the recent weakness of Southeast Asian currencies against the US dollar, as CFO Peter Oey told Reuters.
Despite the hurdles, Oey is optimistic about the business, citing a robust comeback in travel following the rainy season.
The company maintained its yearly revenue target of $2.70 to $2.75 billion.
Grab, a Gojek competitor that is now owned by Indonesia's GoTo Gojek Tokopedia, expects revenue growth to accelerate beyond 2024 as investments in new goods pay off.
According to LSEG data, revenue increased by 17% to US$664 million in the quarter ended June 30, falling short of analysts' forecasts of US$673.3 million.
Adjusted core earnings were US$64 million, a major improvement over the $17 million loss reported the prior year, and exceeded analysts' expectations of US$62.8 million.
Furthermore, Grab repurchased around $131 million in company shares by the end of June as part of a US$500 million buyback program launched in February.
Grab's second-quarter revenue misses estimates due to slower food-delivery growth and currency challenges.
The company's largest segment, food delivery, saw an 11% revenue increase, below expectations.
Ride-share revenue also fell short of projections with a 14% growth.
Source: REUTERS