3Q24 group adj. EBITDA of USD90mn (233% y/y, 41% q/q) surprised due to unexpected margin performance – premium products in mobility and saver products in deliveries. In 3Q24 (Dec YE), Grab Holdings (GRAB) recorded group adj. EBITDA of USD90mn (+233% y/y, +41% q/q), and adj. EBITDA excluding the financial services segment of USD178mn (+42% y/y, +20% q/q), 25% and 9% higher than the consensus’ USD72mn and USD163mn, respectively. Cost efficiencies in the deliveries and the mobility segments have led to a significant increase in group adj. EBITDA. Mobility segment’s adj. EBITDA was USD149mn (+17% y/y, +16% q/q), 7% higher than the street’s expectation of USD139mn, due to increased contributions from high-value mobility rides (30% y/y increase in GMV). Mobility recorded adj. EBITDA as a % of GMV of 8.8% in 3Q24 (9.0% in 3Q23, 8.1% in 2Q24) vs. consensus of 8.5%. This was driven by Grab offering premium mobility products such as advance bookings. Meanwhile, deliveries adj. EBITDA was USD55mn (+62% y/y, +31% q/q) vs. the street’s expectation of a 37% y/y increase to USD47mn (18% above consensus). Deliveries adj. EBITDA as a % of GMV in 3Q24 was 1.9% (1.3% in 3Q23, 1.5% in 2Q23) vs. consensus of 1.6%. The improvement in the delivery margin was driven by increased contributions from advertising, and cost efficiencies achieved in saver deliveries. Saver deliveries adoption increased to 32% of deliveries transactions, compared to 14% in 3Q23 (28% in 2Q24). Deliveries adj. EBITDA as a % of deliveries GMV has potential to double to 4% in two to three years, led by restaurant dining, advertising, and higher scale. Fintech adj. EBITDA losses decreased by 28% y/y (up 8.3% q/q) to USD26mn, compared to the street’s expectation of a 34% y/y reduction in losses to USD24mn, on growth and monetisation of the lending products that drove higher revenues and margins, along with reductions in overhead expenses. Regional corporate costs narrowed by 10% y/y (up 4.8% q/q) to USD88mn, mainly as staff costs included in regional corporate costs declined 14% y/y. GRAB’s on-demand GMV (mobility plus deliveries) of USD4,659mn (+15% y/y, +5.1% q/q) was in line with the consensus expectation of 13% y/y growth to USD4,572mn. The increase in deliveries GMV was driven by increases in transaction volumes and monthly transacting users (MTUs), with saver deliveries now accounting for 32% of total delivery transactions. Management mentioned that Grab Indonesia's revenue and GMV accelerated both y/y and q/q. Fintech continues to see increased contributions from GrabFin and the Digibank, with total loans disbursed growing 38% y/y (up 13% q/q) to USD567mn in 3Q24.

GRAB raises its group adj. EBITDA guidance to USD308-313mn, almost 12% higher than consensus and 3% below our estimate. For FY24, GRAB raised its group adj. EBITDA guidance to between USD308-313mn from USD250-270mn previously, 12% higher than the consensus estimates of USD278mn. GRAB anticipates FY24F revenue growth of 17%-18% and come in the range of USD2.76-2.78bn with the lower end of the guidance being in line with the consensus expectation of USD2,76bn. Additionally, GRAB’s FY24F adj. free cash flow (FCF) guidance remains positive. Regarding the USD500mn share buyback programme, GRAB repurchased an additional 17.7mn shares for USD58.2mn, bringing the total shares repurchased to 57mn for USD189mn.


Group adj. EBITDA was USD90mn (+233% y/y, +41% q/q), led by cost efficiencies in the deliveries and mobility segments

Source: Company, DBS
On-demand (delivery + mobility) GMV grew 15% y/y (up 5.1% q/q) to USD4,659mn

Source: Company, DBS

We revised our FY24F/25F group adj. EBITDA by +10%/-6%


RESTATED
PREVIOUS
REVISED
% change


2023
2024
2025
2026
2024
2025
2026
2024
2025
2026

Deliveries GMV
10,365
11,609
12,886
14,174
11,609
12,828
14,110
0%
0%
0%

Mobility GMV
5,420
6,233
6,981
7,679
6,504
7,284
8,013
4%
4%
4%

On-demand GMV
15,785
17,842
19,867
21,853
18,113
20,112
22,123
2%
1%
1%

























Deliveries
81
244
468
567
209
372
452
-14%
-20%
-20%

Mobility
466
549
638
699
572
670
745
4%
5%
7%

Financial Services
(170)
(131)
(85)
22
(101)
(66)
27
-23%
-22%
21%

Others
(1)
(4)
(4)
(4)
(4)
(4)
(4)
0%
0%
0%

Total Segment Adjusted EBITDA
376
657
1,016
1,284
676
950
1,219
3%
-7%
-5%

Regional Corporate Cost
(398)
(365)
(369)
(374)
(355)
(362)
(369)
-3%
-2%
-1%

Adjusted EBITDA
(22)
292
647
910
321
610
850
10%
-6%
-7













Adjusted EBITDA ex Fintech and Others
148
423
732
888
422
676
823
0%
-8%
-7%

Source: Company, DBS












Our FY25F/26F group adj. EBITDA are 23%/11% above consensus


RESTATED
REVISED
CONSENSUS
% change


2023
2024
2025
2026
2024
2025
2026
2024
2025
2026

Deliveries GMV
10,365
11,609
12,828
14,110
11,467
12,612
13,764
1%
2%
3%

Mobility GMV
5,420
6,504
7,284
8,013
6,465
7,372
8,354
1%
-1%
-4%













Deliveries
81
209
372
452
181
278
403
15%
34%
12%

Mobility
466
572
670
745
551
665
762
4%
1%
-2%

Financial Services
(170)
(101)
(66)
27
(99)
(64)
6
2%
39%
361%

Others
(1)
(4)
(4)
(4)
(4)
(4)
(4)
-225%
-193%
-187%













Adjusted EBITDA
(22)
321
610
850
278
496
763
16%
23%
11%


Source: Visible Alpha, DBS


Maintain BUY with a higher TP of USD5.16 (prev USD4.50). The higher target price (TP) stems from rolling forward our valuation by five months. We also lower our adj. FY25F EBITDA by 9%, which is above the consensus on the back of accelerated growth expected in the deliveries and financial segments. We raised the net cash balance to USD5.7bn from USD5.1bn previously, as per the 3Q24 net cash liquidity position of GRAB. We peg on-demand business at 21x FY25F EV/EBITDA (prev 20x) based on Uber’s multiple, although GRAB offers a 40% adj. EBITDA CAGR vs. Uber’s 30% over FY24F-26F. We value fintech at 4.6x FY25F revenue based on the peer average (prev 3.5x). Overall, including fintech, GRAB exhibits a 63% adj. EBITDA CAGR over FY24F-26F compared to Uber’s 30%.