Grab Earnings: Guidance Shows Both Revenue Growth and Profitability Improvement in 2024

We maintain our fair value estimate of $4.40 for Grab after the company reported fourth-quarter revenue of $653 million that was in line with our estimate. The company provided upper-range revenue guidance of $2.75 billion for 2024, which represents a 17% year-on-year growth but a deceleration from 65% in the year before. The company also guided to $180 million-$200 million adjusted EBITDA in 2024, which will be an improvement from a $22 million loss in 2023. Profitability will be driven by EBITDA margin expansion of 100-200 basis points in the delivery business in the medium term due to operating leverage and lower incentives. We believe Grab’s 2024 guidance represents a milestone where it can both increase revenue and see greater visibility for profitability at the same time, a benchmark that has eluded other Southeast Asia internet giants such as Sea and GoTo.