Q4 2023 Grab Holdings Ltd Earnings Call

February 22, 2024

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Hello, and thank you for your patience today cool begin in approximately two minutes time.

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Hello, all and thank you for joining us today.

Douglas Yu: Good day everyone, and welcome to Grab's fourth quarter and full year 2023 earnings call. I'm Douglas Yu, Head of Asia Investor Relations at Grab, and joining me today are Anthony Tan, Chief Executive Officer, Alex Hungate, Chief Operating Officer, and Peter Oe, Chief Financial Officer. During the call today, Anthony will discuss our key strategic and business achievements, followed by Alex, who will provide operational highlights, and Peter will share details of our fourth quarter and full year 2023 financial results. Following these prepared remarks, we will open the call to questions. During this call, we will be making forward-looking statements about future events, including our future business and financial performance. These statements are based on our current beliefs and expectations. Actual results could differ materially due to a number of risks and uncertainties as described on this earnings call, in the earnings release, and in our Form 20-F and our filings with the SEC. We do not undertake any duty to update any forward-looking statements. We will also be discussing non-IFRS financial measures on this call. These measures supplement but do not replace IFRS financial measures.

My name is Lydia and there'll be a conference operator for this session.

Welcome to <unk> fourth quarter, and full year 2023 earnings results call.

After the Speakers' remarks, there will be a question and answer session.

I'll now turn it over to Douglas you just thought nickel.

Good day, everyone and welcome to <unk> fourth quarter and full year 2023 earnings call.

Douglas you head of Asia Investor Relations, they grab and joining me today are <unk>, Chief Executive Officer, Alex <unk>, Chief operating Officer, and Peter <unk>, Chief Financial Officer.

During the call today, Anthony will discuss our key strategic and business achievements, followed by Alex who will provide operational highlights and Pierre will share details of our fourth quarter and full year 2023 financial results.

Following prepared remarks, we will open the call to questions.

During this call we will be making forward looking statements about future events, including our future business and financial performance. These statements are based on our current beliefs and expectations.

Actual results could differ materially due to a number of risks and uncertainties. As described on this earnings call in the earnings release and in our form 20-F, and other filings with the SEC.

We do not undertake any duty to update any forward looking statements. We will also be discussing non <unk> financial measures on this call. These measures supplement, but do not replace I first financial measures. Please refer to the earnings materials for a reconciliation of non <unk> to <unk> financial measures.

Douglas Yu: Please refer to the earnings materials for reconciliation of non-IFRS to IFRS financial measures. For more information, please refer to our earnings press release and supplemental presentation available on our website. And with that, I will turn the call over to Anthony to deliver his remarks.

For more information please refer to our earnings press release and supplemental presentation available on our IR website and with that I will turn the call over to Anthony to deliver his remarks.

Anthony Tan: Thank you for joining us. 2023 was a pivotal year for Grab. We set out to achieve a number of big milestones, and we delivered on our key goal. Our mobility business, which was severely impacted by the pandemic, exceeded pre-COVID levels as we exited 2023. This was done through focused product investments into our key affordability initiatives and targeting traveller demand.

Thank you for joining us today drain drain tree was a pivotal year for <unk>.

Set out to achieve a number of big milestones and we delivered on our key goals.

Ability business, which was severely impacted by the pandemic exceeded pre COVID-19 levels as we exited <unk>.

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This was done through focused product investments into our key affordability initiatives and targeting traveler demand in.

Anthony Tan: In deliveries, we drove a re-acceleration of our Deliveries GMV, executing upon three consecutive quarters of sequential growth post-COVID normalization, in the fourth quarter of 2023. Deliveries GMV reaccelerated to grow 13% year on year, setting us up strongly for 2024. At the same time, delivery segment adjusted EBITDA margins expanded by over 160 basis points year-on-year as we continue to drive marketplace efficiencies and grow our category leadership position across all our core markets amid reductions in incentive spend. Finally, at a group level, we achieved our bottom-line goals.

And deliveries, we drove a reacceleration of our deliveries <unk> executing upon three consecutive quarters of sequential growth post COVID-19 normalization.

The fourth quarter of 2023 deliveries <unk> reaccelerate it to grow 13% year on year setting us up strongly for 2024.

At the same time delivery segment, adjusted EBITDA margins expanded by over 160 basis points year on year as we continued to drive marketplace efficiencies and grow our category leadership position across all our core markets amid reductions in incentive spend and.

Finally at a group level, we achieved our bottomline goals, we turn group adjusted EBITDA profitable since the third quarter of 2023, and also achieved adjusted free cash flow and positive net profit for the first time in the fourth quarter of 2023.

Anthony Tan: We turned group-adjusted EBITDA profitable since Q3 2023 and also achieved adjusted pre-cash flow and positive net profit for the first time in Q4 2023. These outcomes were achieved by driving intense scrutiny and discipline on cost while innovating relentlessly to deliver top-line growth. While net profit benefited from an accounting accrual reversal, more importantly, our adjusted EBITDA continued to grow quarter on quarter. This showcases our ability to deliver strongly on the bottom line, which we are committed to improving in the coming years. Importantly, we took strides towards profitable growth while staying true to our mission: Powering Everyday Entrepreneurs.

These outcomes would see by driving intense scrutiny and discipline on costs, while innovating relentlessly to deliver topline growth.

Net profit benefited from an accounting accrual reversal more importantly, our adjusted EBITDA continued to grow quarter on quarter.

This showcases our ability to deliver strongly on the bottom line, which we are committed to improving in the coming years.

Importantly, we took strides towards profitable growth, while staying true to our mission.

Empowering everyday entrepreneurs during the year, we generated over $11 billion of earnings fall drive very much in partners, which is an all time high.

Anthony Tan: During the year, we generated over $11 billion in earnings for our driver and merchant partners, which is an all-time high, and our average driver earnings per transit hour also grew by 14% year-on-year. We also onboarded over 700,000 new merchants in the year itself. We achieved this by driving win-win solutions such as hyper-batching and just-in-time allocation, all of which enabled us to improve the productivity of our driver partners, enhancing their earnings potential while reducing our cost to serve. For Grab, improving lives and livelihoods is not just the right thing to do but makes financial sense for us too. Only by helping our communities to thrive can we also thrive alongside them.

Average driver earnings, but transit our also grew by 14% year on year, while also on boarding over 700000, new merchants in the year itself. We achieved this by driving win win solutions, such as hyper batching and just in time at locations all of which.

<unk> enabled us to improve the productivity of our driver partners enhancing earnings potential while reducing all cost itself.

Grab improving lives and livelihoods is not just the right thing to do but makes financial sense for us too.

Only by helping our communities to thrive can we also.

Anthony Tan: Looking ahead to 2024, this is the year where we will build on our foundations and double down on the following key priorities. First, we will deepen our engagement with all our users by focusing on value creation through product innovation. One such initiative is Grab Unlimited, the largest on-demand paid loyalty program in Southeast Asia.

Thrive alongside them.

Looking ahead to 2024. This is a year, where we will build on our foundations and double down on the following key priorities.

First we will deepen our engagement with all our users by focusing on value creation through product innovation.

One such initiative is grabbing limited the largest on demand paid loyalty program in southeast Asia. We're confident that we will be able to drive further uplift to customer lifetime value by stepping up cross selling initiatives and service differentiation for all users, which will lead to improve.

Anthony Tan: We are confident that we will be able to drive further uplifts to customer lifetime value by stepping up cross-selling initiatives and service differentiation for our users, which will lead to improved usage frequency and retention rates. We've already demonstrated this in 2023 via the cross-sell of Grab Unlimited to our supermarket, Jai Grocer, in Malaysia, which resulted in net new MTUs onto the Grab platform. We've also seen strong traction with our Malaysian digital bank, GXBank, which was launched in the fourth quarter of 2023. This is the first digital bank out of the five licenses granted in Malaysia to launch.

Usage frequency and retention rates.

We've already demonstrated this in 2000 thirteen's free via the cross sell of grab unlimited to our supermarket Jai gross said, Malaysia, which resulted in net new <unk> onto the <unk> platform.

We've also seen strong traction with our Malaysia Digital Bank <unk> Bank, which was launched in the fourth quarter of 2023 is the first digital bank out of five licenses grant in Malaysia to launch <unk> Bank has seen more than 100000 customer sign ups in just the first two weeks of which 79%.

Anthony Tan: GxBank has seen more than 100,000 customers sign up in just the first two weeks, of which 79% of depositors were existing Grab users. Our loans dispersals for GXS Singapore also grew quarter and quarter and over 80% of GXS customers, don't have ecosystem linkages to grab. Second, we'll continue to expand the top of our funnel. We'll do this by increasing our appeal to travelers, harnessing strategic product partnerships, such as with WeChat or Alipay, or expanding our product portfolio to provide not just affordable solutions, but also high-value offerings. I'm particularly excited about one of our new launch products, Family Account. This feature allows users to add their loved ones to a group account, enabling users to share payment methods with potentially new-to-Grab users, e.g., family members or elderly parents, while allowing them to keep track of each other's rides for peace of mind, will further leverage generative AI, to drive productivity and, For example, we have now developed our own in-house LLM-powered marketing tool, which has enabled us to reduce content generation time from 99 hours to just 90 minutes while raising output quality.

Deposit as existing grabbed users are loans disposals for <unk>, Singapore also grew quarter on quarter and over 80% of GSS customers.

Bohn have ecosystem linkages to grab.

Second we will continue to expand the top of our funnel.

We'll do this by increasing our appeal to travelers harnessing strategic product partnerships, such as with Wechat Ali pay by expanding our product portfolio to provide not just affordable solutions, but also high value offerings.

I'm, particularly excited about one of our new launch products family accounts. This feature allows users to add their loved ones to a group account and enabling users to share payment methods with potentially new to grab users example family members or elderly parents, while allowing them.

To keep track of each as rides for peace of mind.

We will further leverage generative AI.

To drive productivity enhancements.

For example, we've now developed our own in house LLM powered marketing tool, which has enabled us to reduce content generation time from 99 hours to just 90 minutes, while raising output quality.

Anthony Tan: Furthermore, our pilots also show an improvement in click-through rates as compared to content generated manually. So this not only drives significantly greater throughput but also enables us to stay lean and disciplined from a cost management perspective; savings can then be reinvested into more technology to drive greater long-term growth for the platform. This is only one of the many GAI initiatives that we are currently working on that we are proud to share with you today. Now, from this tree, we won't stop here.

Furthermore, our pilots also show an improvement in click through rates as compared to content generated manually.

So it does not only drives significantly greater throughput, but also it enables us to stay lean and disciplined from a cost management perspective save.

Savings can then be reinvested into more technology to drive greater long term growth for the platform. This.

This is the only one of the many initiatives that we are currently working on that we are proud to share with you today.

Now from this treaty, we won't stop here.

Anthony Tan: As a leader of this company, I'm constantly looking at ways to deliver greater impact and bolder growth by investing in and incubating brand new tech lab initiatives. When successful, these initiatives will be transformative for Grab. Our leaders have all been empowered to drive this step change for us, to reap the fruits of this labor in the subsequent years, to be strategically patient but tactically impatient and always remain good stewards of capital. As part of this push, we expect these initiatives to accelerate revenue growth rates in the mid-term after 2024, building on the solid foundations we are establishing this year. Finally, on creating shareholder value, we see a clear path to steady group-adjusted EBITDA growth and to improve upon our adjusted free cash flow generation in the years to come. With the progress that we have made on profitability, and with a strong balance sheet in place, we are announcing two capital market-related activities today that have been approved by our Board of Directors. Firstly, we plan to repay our remaining Terminal B debt facility, which we expect will save us around $50 million in interest expenses annually.

As a leader of this company I am constantly looking at ways, where we deliver greater impact and Boulder growth by investing in incubating brand New Tech led initiatives. When successful these initiatives will be transmitted live for drop.

Our leaders have all been empowered to drive the step change for us to reap the fruits of this labor in the subsequent years and executing such initiatives will be strategically patients, but tactically impatient and always remain good stewards of capital.

As part of this push we expect these initiatives to accelerate revenue growth rates in the mid term. After 2020 full building on the solid foundations. We are establishing this year Peter our CFO will elaborate later.

Finally on creating shareholder value, we see a clear path to steady group adjusted EBITDA growth and to improve upon our adjusted free cash flow generation in the years to come with the progress that we've made on profitability with a strong balance sheet in place we are announcing two capital market related.

<unk> today.

<unk> been approved by our board of directors.

We plan to repay our remaining term loan b debt facility, which we expect will save us around $50 million in interest expenses annually.

Anthony Tan: Secondly, we are announcing our inaugural share repurchase program of up to $500 million, which Peter will share more on later. Closing, We are incredibly excited about what Grab will embark on in the years to come. Southeast Asia is a fertile ground for us.

Secondly, we are announcing our inaugural <unk> share repurchase program of up to $500 million, which Peter will share more on later.

In closing.

We are incredibly excited about what grab one back on in the years to come.

Obviously Asia is a fertile ground for us we're now the largest on demand platform in the region at a scale that is over three times larger than our next closest competitor and yet theres still a lot for us to achieve four partners in this region.

Alex Hungate: We're now the largest on-demand platform in the region at a scale that is over three times larger than our next closest competitor, and yet, there's still a lot for us to achieve for our partners in this region. Having operated in the region for over a decade, we are now best positioned to deploy our significant local knowledge, data insights, scale, and technology to solve the region's many complex problems, including accelerating financial inclusion for the underbank. We will also remain relentless in innovation to unlock new possibilities for our users and partners while ensuring we continue to focus on growing our bottom line and shareholder value over the long term. I'll now hand over to Alex, who will cover our fourth quarter operational highlights in more detail. Thank you, Anthony.

Having operated in the region for over a decade, we're now best positioned to deploy our significant local knowledge data insights scale and technology to solve the regions many complex problems, including salaries <unk> financial inclusion for the under banked we.

We will also remain relentless innovation to unlock new possibilities for our users and partners, while ensuring we continue to focus on growing our bottom line and shareholder value over the long term.

Now I'll hand over to Alex who will cover our fourth quarter operational highlights in more detail.

Thank you Anthony our fourth quarter results demonstrate our commitment to driving both topline growth and bottom line improvements, while deepening market penetration across the region.

Alex Hungate: Our fourth-quarter results demonstrate our commitment to driving both top-line growth and bottom-line improvements while deepening market penetration across the region. Over the next few minutes, I will share our operational highlights and the underlying drivers of these results, starting with deliveries. We saw robust amount growth for deliveries with both MTUs and GMV at record highs, driven by improving year-on-year spend per user across our 2000 to 2022 user cohorts. Our pre-COVID cohorts are spending well over two times more relative to their initial year, and even cohorts that started during or after the COVID lockdowns are showing higher spend relative to their initial year.

Over the next few minutes I will share our operational highlights and the underlying drivers of these results starting with deliveries.

We saw robust demand growth for deliveries with both <unk> and <unk> at record highs driven by improving year on year spend per user across our 2000 to 2022 user cohorts.

Our pre Covid cohorts are spending well over two times relative to their initial year.

And even cohorts that started during or after the COVID-19 lockdowns are showing higher spend relative to their initial year.

Alex Hungate: Everything that we do is about making ourselves the number one choice for our users and partners in Southeast Asia. In order to achieve this, we continued to improve the affordability and reliability of our delivery services, as we reduced our cost to serve so effectively that we were able to expand our profitability at the same time. Our teams have executed strongly on this front, and we have made meaningful improvements to several of our efficiency metrics, such as batching and trips per transit hour. Almost 40% of our delivery orders were batched in the fourth quarter, growing by around 10 percentage points year on year, and average delivery fees for batched orders were 8% lower than unbatched orders, supporting our push for greater affordability and adoption of saver deliveries. A key focus in 2023 also hit 23% of all delivery orders. And, as we expected, saver users recorded average frequency levels that were 1.6 times higher than non-saver users during the fourth quarter.

Everything that we do is about making ourselves the number one choice for our users and partners in Southeast Asia.

In order to achieve this we continue to improve the affordability and reliability of our delivery services as we reduced our cost to serve so effectively that we were able to expand our profitability at the same time.

Our teams have executed strongly on this front and we have made meaningful improvements to several of our efficiency metrics, such as batching and trips the trends at our <unk>.

Almost 40% of our deliveries orders with batched in the fourth quarter growing by around 10 percentage points year on year.

An average delivery fees for batched orders were 8% lower than unmatched orders supporting our push for greater affordability.

Adoption of save a deliver is a key focus in 2023 also hit 23% of all delivery orders and as we expected savers save a user's recorded average frequency levels that were one six times higher than non savour users during the fourth quarter.

Alex Hungate: In Singapore, where SAVY was launched much earlier than our other markets, 8 out of 10 SAVY orders are now back, and looking ahead. We see further opportunities to improve on our efficiency while expanding our product portfolio to maximize value and convenience for a wider range of users. We have begun to roll out several hyper-batching product initiatives that not only improve batching rates but also maximize basket size per trip while providing users with more affordable delivery fees. Well, for our users who want their food faster... We also offer priority deliveries. In contrast to SEWA, priority deliveries have higher delivery fees relative to standard deliveries, and they generate adjusted EBITDA margins that are much higher than standard deliveries on a per-order basis.

In Singapore, where <unk> was launched much earlier than our other markets eight out of 10 say the orders are now batched.

And looking ahead.

We see further opportunities to improve on our efficiency, while expanding our product portfolio to maximize value and convenience for a wide range of users.

We have begun to rollout several high per batching product initiatives that not only improve batching rates, but also maximize basket size per trip.

Providing users with more affordable delivery fees.

Well for our users who want that food faster.

We also offer priority deliveries in contrast to save a priority deliveries have higher delivery fees relative to standard and they generate adjusted EBITDA margins, which are much higher than standard deliveries on a per order basis.

Alex Hungate: Priority delivery is still in its early days as it comprises only 6% of orders, and we are confident we can continue to grow the adoption of this product. Grab Unlimited, the largest paid on-demand loyalty program in Southeast Asia now, is proving to be an important engagement and retention driver for our loyal users. Grab Unlimited continues to account for a third of Deliveroo's GMV, and subscribers exhibit healthier spend levels and retention rates relative to non-subscribers. We see opportunities to improve customer lifetime value on Grab Unlimited by driving up cross-sell rates, particularly for mobility and financial services, as well as to introduce more non-monetary, exclusive benefits for our most loyal subscribers. Looking ahead, I'm confident that our delivery's top and bottom lines will continue to grow healthily in 2024, while our delivery service providers' business performance is typically impacted by seasonal factors in the first quarter.

Priority deliveries is still in its early days as it comprises only 6% of orders and.

And we are confident we can continue to grow adoption of this product.

Grab unlimited the largest paid on demand loyalty program in southeast Asia.

Is proving to be an important engagement and retention driver for our loyal users.

The program continues to account for a third of deliveries DNV and subscribe as exhibited healthier spend levels and retention rates relative to non subscribers.

We see opportunities to improve customer lifetime value and grab on limited by driving up cross sell rates, particularly to mobility and financial services as well as to introduce more non monetary exclusive benefits for our most loyal subscribers.

Looking ahead.

Im confident.

That our deliveries top and bottom lines, we will continue to grow healthily in 2024.

While our delivery business performance is typically impacted by seasonal factors in the first quarter I do want to call out that delivers demand has held up resilient Lee so far this year and we expect G&A to be relatively stable now on a quarter on quarter basis.

Alex Hungate: I do want to call out that delivery demand has held up resiliently so far this year, and we expect GMV to be relatively stable now on a quarter-on-quarter basis. We also anticipate year-on-year growth rates in the first quarter to remain north of 12% and for demand to grow sequentially in the second quarter. So when we take a step back and examine the overall food competitive landscape, the competitive moats that we have built have enabled us to remain in pole position as the regional category leader across Southeast Asia with a scale advantage that's now more than two times larger than our next largest competitor.

We also anticipate year on year growth rates in the first quarter to remain north of 12%.

And for demand to grow sequentially in the second quarter.

So when we take a step back and examine the overall food competitive landscape. The competitive moats that we have built have enabled us to remain in pole position as the regional category leader across Southeast Asia with a scale advantage. That's now more than two times larger than our next largest competitor.

Alex Hungate: In 2023, we drove year-on-year category leadership expansion across every one of our core markets. And at the same time, we have improved our deliverer's segment-adjusted EBITDA margins by over 160 basis points to 3.6%, and are profitable in every one of our core markets on a segment-adjusted EBITDA basis. Looking forward, we also see headroom for segment-adjusted EBITDA margins for deliverers to expand by a further 100 to 200 basis points over the medium term. The success of this organic strategy means that we must hold a correspondingly high hurdle rate when assessing inorganic opportunities. While, as a matter of policy, we do not comment on rumors, we understand that Delivery Hero has issued a statement overnight indicating that they have terminated discussions with regard to a potential sale of their food panda business in certain Southeast Asian markets.

In 2023, we drove year on year category leadership expansion across every one of our core markets.

And at the same time, we have improved delivery segment adjusted EBITDA margins by over 160 basis points to three 6%.

And our profitability in every one of our core markets on a segment adjusted EBITDA basis.

Looking forward, we also see headroom at the segment adjusted EBITA margins for deliveries to expand by a further 100 to 200 basis points over the medium term.

The success of this organic strategy means that we must hold a correspondingly high hurdle rate when assessing inorganic opportunities.

While as a matter of policy, we do not comment on rumors we understand the delivery hero has issued a statement overnight, indicating that they have terminated discussions with regard to a potential sale of that food panda business in certain southeast Asian markets.

Alex Hungate: Consistent with that statement, Grab can also confirm that it is not pursuing any acquisition of that business. Now, moving on to mobility. Our mobility business recorded strong year-on-year GMV growth. We also exceeded our guidance, with GMB surpassing pre-COVID levels as we exited 2023. This growth came on the back of strong demand as we focused our efforts to further drive growth in domestic ride-hailing and on capturing the return of traveler demand as it started to ramp up throughout 2023. We previously shared that the traveler segment is a key focus for us. Compared to domestic users, travelers are generally less price sensitive and, on average, spend nearly twice as much as domestic users.

Consistent with that statement grab can also confirm that it is not pursuing any acquisition of that business.

Now moving on to mobility.

Our mobility business recorded strong year on year GMB growth, we also exceeded our guidance with dnb, surpassing pre COVID-19 levels as we exited 2023.

This growth came on the back of strong demand as we focused our efforts to further drive growth in domestic ride hailing.

And on capturing the return of traveler demand as it started to ramp up throughout 2023.

We previously shared that the travel segment is a key focus for us compared to domestic uses travelers are generally less price sensitive and on average spend nearly twice as much as domestic users.

Alex Hungate: We are pleased to see that our efforts to capture this set of users have yielded good results. Year-on-year mobility, traveler MTUs, and spending grew 67% and 68%, respectively, during the quarter. And in 2024, we still see headroom to continue targeting international traveller demand to provide further upsides to our mobility business. Notably, official stats estimate that inbound travelers across several of our core markets are still only around 70% of pre-COVID levels, with governments projecting further growth in inbound travel this year. In addition, we continue to aid drivers in improving their productivity and earnings potential on our platform, while also reducing our cost to serve to improve the affordability of our services. Our efforts to optimize driver supply and enhance driver efficiencies to meet demand continue to bear fruit. During the fourth quarter, monthly active driver supply grew 11% year-on-year, with total online hours growing 20% year-on-year. This resulted in the proportion of surged mobility rides further reducing by 589 basis points year-on-year.

We are pleased to see that our efforts to capture this set of users has yielded good results year on year mobility travel and to use and spending grew 67% and 68% respectively. During the quarter.

And in 2024, we still see headroom to continue targeting international traveler demand to provide further upsides to our mobility business, notably official stats estimate that inbound travelers across several of our core markets are still at only around 70% of pre COVID-19 levels.

With government is projecting further growth in inbound travel this year.

In addition, we continued to aid drivers in improving their productivity and earnings potential on our platform, while also reducing our cost to serve to improve the affordability of our services.

Our efforts to optimize driver supply and enhance driver efficiencies to meet demand continues to bear fruit.

During the fourth quarter monthly active driving supply grew 11% year on year with total online now is growing 20% year on year.

And this resulted in the proportion of surge to mobility rides further reducing by 589 basis points year on year.

Alex Hungate: Correspondingly, average frequency per mobility user grew 11% year-on-year, and in tandem with higher volumes, this led to improvements in ride hailing driver utilization rates and a 14% year-on-year increase in average driver earnings per transit hour. As we look ahead to 2024, we expect growth rates for mobility to remain strong. We usually see seasonal softness in the first quarter, but with our efforts in place to drive demand, we expect mobility demand to be stable sequentially. And structurally, similar to deliveries, we see plenty of headroom to increase total users and enhance frequency levels by expanding and deepening our product portfolio across our key affordability and high-value initiatives. One of these key affordability initiatives was the relaunch of Moveit, our two-wheel ride hailing app in the Philippines, which has seen daily rides grow phenomenally by over 30 times in less than eight months. It was such a proud moment when earlier this week we met many of the new drivers who have joined us in Manila and are so happy for the opportunity to earn a good living on the Grab platform. In fact, when I left the driver's center at around 10 p.m., there were still hundreds of new drivers arriving to sign up.

Correspondingly average frequency per mobility user grew 11% year on year and.

And in tandem with higher volumes led to improvements in ride hailing driver utilization rates and a 14% year on year increase in average driver earnings per trends at our.

As we look ahead to 2024, we expect <unk> growth rates for mobility to remains strong.

We usually see seasonal softness in the first quarter, but with our efforts in place to drive demand, we expect mobility demand to be stable sequentially and structurally similar to deliver as we see plenty of headroom to increase total users and enhance frequency levels by expanding and deepening our product portfolio across our key affordability.

And high value initiatives.

One of these key the key affordability initiatives was the re launch of move at our two wheel ride hailing app in the Philippines, which has seen daily rides grow phenomenally by over 30 times in less than eight months.

It was such a proud moment when earlier this week, we met many of the new drivers who have joined US in Manila and was so happy for the opportunity to earn a good living on the grant grabbed platform.

Private centered around 10 PM there was still hundreds of new drivers arriving to sign up.

Alex Hungate: Beyond our affordability initiatives, we see ample opportunities to roll out and expand newer products such as GrabCar Premium, which will enable us to tap into newer user segments such as corporate travel demand. Moving on to financial services. Revenues here more than doubled year-on-year and grew 12% quarter-on-quarter on the back of higher contributions from our ecosystem payments and lending businesses. Total loans dispersed in 2023 grew 57% year-on-year to reach $1.5 billion, and we ended the quarter with $326 million of loans outstanding, underpinned by the expansion of ecosystem lending in GrabFin and the new FlexiLoan volumes from GXS Bank in Singapore This is even while we maintained NPL ratios at low single-digit levels...

Beyond our affordability initiatives, we see ample opportunities to rollout and expand newer products, such as <unk> premium, which will enable us to tap into newer user segments, such as corporate travel demand.

Yeah.

Moving on to financial services.

Revenues here more than doubled year on year and grew 12% quarter on quarter on the back of higher contributions from our ecosystem payments and lending businesses.

Total loans disbursed in 2023 grew 57% year on year to reach one 5 billion.

And we ended the quarter with $326 million of loans outstanding underpinned by the expansion of ecosystem ending in graph thin and the new flexi loan volumes from <unk> Bank in Singapore.

This is even while we maintained NPL ratios at low single digit.

Alex Hungate: Customer deposits across our digibank stood at $374 million at the end of 2023, as we are still managing under our deposit balances underneath the regulated deposit cap in Singapore. Segment adjusted EBITDA losses narrowed year-on-year, driven by higher revenues from lending and from payments, where we further streamlined our cost base in GrabFin as we focused our strategy on on-platform payments. We also continue to see solid traction across our digibanks, as Anthony highlighted earlier. Finally, on our Enterprise and New Initiatives segment. Year-on-year revenues more than doubled, while segment-adjusted EBITDA grew by 378%. During the fourth quarter, our advertising business reached several all-time highs.

Customer deposits across how did your bank stood at $374 million at the end of 2023.

As we are still managing under our deposit balances underneath the regulated deposit cap in Singapore.

Segment, adjusted EBITDA losses narrowed year on year.

Driven by higher revenues from lending and from payments, while we further streamline streamlined our cost base and grab Finn as we focused our strategy on platform payments.

We also continue to see solid traction across RTG bank as Anthony highlighted earlier.

Finally on our enterprise or new initiatives segment.

Year on year revenues more than doubled while segment adjusted EBITDA grew by 378%.

During the fourth quarter advertising business reached several all time highs.

Alex Hungate: Advertising revenues scaled to 1.5% of total delivery GMV and reached an annualized run rate of nearly 160 million dollars, while segment adjusted EBITDA margin as a percentage of revenue is nearly 80% in this very profitable business. We deepened the penetration of our advertising self-service platform among our merchant partners while improving monetization rates. We saw monthly active advertisers joining our self-service platform grow by 54% year-on-year to 115,000, while active advertisers consistently demonstrated higher retention rates than non-advertisers. An average spend by active merchants who adopted self-serve advertising tools also increased 129% year-on-year, underscoring the value we deliver to our merchant partners who try out our advertising platform.

Advertising revenue scale to one 5% of total deliveries GMB and reached an annualized run rate of nearly $160 million while segment adjusted EBITA margin as a percentage of revenue is nearly 80% in this very profitable business.

We deepened penetration of advertising self service platform, among our merchant partners, while improving monetization rates, we saw monthly active advertisers joining our self service platform.

ROE by 54% year on year to 115000.

While active advertisers consistently demonstrated higher retention rates than non advertisers.

And average spend by active merchants, who adopted self serve advertising tools also increased 129% year on year underscoring the value, we deliver to our merchant partners to try out our advertising platform.

Alex Hungate: While advertising penetration is still relatively nascent today, we see plenty of upside to drive demand for our advertising services and value for our merchant partners and other top brands. So, in closing, we are happy with the progress that we've made in expanding our top line while driving operational efficiencies to improve our bottom line. There is still significant headroom for growth going forward, both in terms of driving frequency uplinks, user stickiness, and adding new users and partners to our platform. And with that, I will turn the call over to Peter. Thanks, Alec.

While advertising penetration is still relatively nascent today, we see plenty of upside to drive demand for advertising services.

And value for our merchant partners and other top brands.

So in closing we are happy with the progress that we've made in expanding our top line, while driving operational efficiencies to improve our bottom line.

There is still significant headroom for growth going forward, both in terms of driving frequency up line offsets user stickiness, and adding new users and partners to our platform.

And with that let me turn the call over to Peter.

Thanks, Alex.

Peter Oey: We close out 2023 on a strong footing. In the fourth quarter, revenue grew 30% year-on-year to reach $653 million, while full-year revenue grew to $2.36 billion. This is about the top end of the revenue guidance that we revised up in the last quarter. The strong revenue growth was driven by all segments of our business.

We closed out 2023 on a strong footing.

In the fourth quarter revenue grew 30% year on year to reach $653 million, while full year revenue grew to $2 $3 6 billion.

This is above the top end of the revenue guidance that we revised up in the last quarter.

The strong revenue growth was driven by all segments of our business.

Peter Oey: On a year-on-year basis, in the fourth quarter, mobility revenue was up 26% as we continue to see strong demand from domestic users and international travelers across the region. Deliveries revenues grew 20% as we continue to grow GMV while reducing incentive spend. Financial services revenue doubled in the fourth quarter, and we improved payments monetization and increased lending contributions, and enterprise revenues, primarily advertising, more than doubled year-on-year to hit an annualized revenue run rate of around $160 million.

On a year on year basis in the fourth quarter mobility revenue was up 26% as we continue to see strong demand from domestic users and international travelers across the region.

Deliveries revenues grew 20% as we continued to grow <unk>, while reducing incentive spend.

Financial services revenue doubled in the fourth quarter, and we improved payments monetization and increase lending contributions and enterprise revenues consistently primarily of advertising more than doubled year on year to hit an annualized revenue run rate of around $160 million.

Peter Oey: This was attributable to increased ad monetization and ad demand from our merchant partners. On GMV, our on-demand segments of mobility and delivery saw fourth quarter GMV growth of 18% year-on-year. Mobility GMV grew strongly by 28% year-on-year and exceeded pre-COVID levels as we exited 2023; NHFes GMB grew by each third consecutive quarter of growth with a re-acceleration of growth to 13% year-on-year. This was supported by strong underlying demand trends, with delivery MTUs hitting a record high, coupled with increasing levels of GMB per delivery MTU.

This was attributable to increased ads monetization and adds demand from our merchant partners.

On <unk>.

Our on demand segments of mobility in deliveries, so fourth quarter GMB growth of 18% year on year.

Mobility GMB grew strongly by 28% year on year exceeded pre COVID-19 levels as we exited 2023.

<unk>.

Its third consecutive quarter of growth.

A reacceleration in growth to 13% year on year.

This was supported by strong underlying demand trends with deliveries empty us hitting a record high coupled with increasing levels of GMB per deliveries MCU.

Yeah.

Peter Oey: Moving on to segment-adjusted EBITDA, total segment-adjusted EBITDA doubled year-on-year to $228 million in the fourth quarter. This growth can be attributed to all segments of the business. The delivery segment adjusted EBITDA grew to $96 million in the fourth quarter, with segment adjusted EBITDA margins expanding by over 160 basis points to 3.6%. The mobility segment adjusted EBITDA grew 20% year-on-year to $182 million, with margins at 12.3%. The Financial services segment adjusted EBITDA narrowed 13% year-on-year to negative 81 million dollars.

Moving on to segment adjusted EBITDA total segment adjusted EBITDA doubled year on year to $228 million in the fourth quarter.

This growth can be attributed to all segments of the business.

Delivery segment, adjusted EBITDA grew to $96 million in the fourth quarter with segment adjusted EBITDA margins expanding by over 160 basis points to three 6%.

<unk> segment, adjusted EBITDA grew 20% year on year to 182 million with margins at 12, 3%.

Financial services segment, adjusted EBITDA narrowed to 13% year on year to negative $81 million.

Peter Oey: The reduction in losses was driven primarily by lower overhead expenses and higher revenues from lending and payments in our GrabFin business that more than offset higher costs of funds and also higher Digibank-related costs. Notably, payment costs of funds represented 26% of our financial services segment cost structure in the fourth quarter. Finally, for Enterprise, segment adjusted EBITDA grew by 378% year-on-year for the fourth quarter. As a percentage of revenues, margins expanded to 79%, consistent with our efforts to improve the monetization of our ad services and increase self-serve ads penetration across our merchant base. Regional corporate costs for the fourth quarter improved by 13% year-on-year to $193 million.

The reduction in losses was driven primarily by lower overhead expenses and higher revenues from lending and payments in that graph in business that more than offset higher cost of funds and also higher DG bank related costs.

Notably <unk>.

Cost of funds represented 20% of our financial services segment cost structure in the fourth quarter.

Finally for enterprise segment, adjusted EBITDA grew by 378% year on year for the fourth quarter as a percentage of revenues margins expanded to 79% consistent with our efforts to improve the monetization of our AD services and increased self serve ads penetration occur.

Ross our merchant base.

Regional corporate costs, the fourth quarter improved 13% year on year to $193 million.

Peter Oey: The year-on-year improvements are attributed to reductions across both our variable and our fixed cost base. Total headcount reduced 18% year-on-year as we continue to recognize greater efficiencies across the organization, while cloud costs and direct marketing expenses declined 32% and 16%, respectively, year-on-year in the fourth quarter. As a result of the strong top-line growth and the greater focus on profitability, we continued to grow Group Adjusted EBITDA to $35 million in the fourth quarter, a year-on-year improvement of $146 million. Additionally, for the first time, we reported a quarterly positive adjusted free cash flow of $1 million in the fourth quarter. We also reported for the first time a net profit of $11 million in the fourth quarter.

The year on year improvement attributed to reductions across both variable and fixed cost base.

Total head count reduced 18% year on year as we continue to recognize greater efficiencies across the organization.

While cloud cost and direct marketing expenses declined, 32% and 16% respectively year on year in the fourth quarter.

As a result of the strong top line growth and the greater focus on profitability. We continued to grow group adjusted EBITDA to $35 million in the fourth quarter, a year on year improvement of $146 million.

Separately for the first time, we reported a quarterly positive adjusted free cash flow of $1 million in the fourth quarter.

We also reported for the first time, a net profit of $11 million in the fourth quarter.

Peter Oey: I do want to call out that while we reported a net profit in the fourth quarter, we benefited from a reversal of an accounting accrual that was no longer required. As we look ahead to 2024, we remain committed to growing our business sustainably, anchored on generating profitable growth and free cash flow. As Alex mentioned, our business performance is subject to seasonal factors. In the first quarter, we expect on-demand GMV to be stable on a quarter-on-quarter basis, with demand and supply being impacted by the Lunar New Year festivities and Ramadan.

Do you want to call out that while we reported a net profit in the fourth quarter. We benefited from a reversal of an accounting accrual that was no longer required.

As we look ahead to 2024, we remain committed to growing our business sustainably anchored on generating profitable growth and free cash flow.

As Alex mentioned.

Our business performance is subject to seasonal factors.

And in the first quarter, we expect on demand <unk> to be stable on a quarter on quarter basis with demand and supply being impacted by the lunar new year festivities and Ramadan.

Peter Oey: Nonetheless, we expect year-on-year growth rates for on-demand GMV to be healthy and to see a sequential rebound of GMB in the second quarter and continued growth during the year. From a margin perspective, we expect mobility margins to be in at around 12% plus and delivery margins to be 3% plus through 2024. As we look beyond 2024, however, we see headroom for margins to expand by a further 100 to 200 basis points for deliveries in the midterm, as we continue to build out new product features that enhance our operational efficiencies, as well as drive greater marketplace optimization. We will aim to provide an update on our longer-term margins during our first quarter results. Separately, in financial services, we expect losses to sequentially narrow heading into 2024, coming down We estimate revenues to come within the range of $2.7 to $2.75 billion, representing a year-on-year growth of 14 to 17 percent, and for adjusted EBITDA to be at $180 to $200 million.

Nonetheless, we expect year on year growth rates for on demand <unk> to be healthy.

And to see a sequential rebound of <unk> in the second quarter and continued growth during the year.

From a margin perspective, we expect mobility margins to be in at around 12% plus and deliveries margins to be 3% plus through 2024.

As we look beyond 2024 however.

We see headroom for margins to expand by a further 100 to 200 basis points for deliveries in the midterm as.

As we continue to build out new product features that enhance our operational efficiencies as well as drive greater marketplace optimization.

We will aim to provide an update on our longer term margins during our first quarter results call.

Separately in financial services, we expect the losses to sequentially narrow hitting into 2024 coming down from peak losses in the fourth quarter of 2023.

On a formal guidance for 2024.

We estimate revenues to come within the range of two seven to $2 75 billion.

Representing a year on year growth of 14% to 17%.

And for adjusted EBITDA to be at $180 million to $200 million.

Peter Oey: In the medium term, we anticipate revenue growth beyond 2024 to accelerate, as we are incubating and scaling up the series of tech-led products and initiatives that Alex and Anthony spoke about. We expect these initiatives to drive strong growth across our core products and services and also see meaningful upsides in contributions from our digital banks, advertising, and our high-value offerings, as key examples. And as far as just free cash flow for 2024 is concerned, we expect this to improve substantially year on year as we grow profitability and drive cash flow generation. However, I do want to point out that the trajectory of our quarterly Adjusted Free Cash Flow levels could fluctuate due to seasonal factors and the timing of payments for certain expenses, such as bonus payments and capital expenditures.

In the medium term, we anticipate our revenue growth beyond 2024 to accelerate.

And so we are incubating and scaling up a series of a tech led products and initiatives that Alex and Anthony spoke about.

We expect these initiatives to drive strong growth across our core products and services and also see meaningful upsides in contributions from our digital banks advertising and our high value offerings as key examples.

And as far as just the free cash flow for 2024, we expect this to improve substantially year on year, as we grow profitability and drive cash flow generation.

However, I do want to point out that the trajectory of our quarterly adjusted free cash flow levels could fluctuate due to seasonal factors and the timing of payments for certain expenses, such as bonus payments and capital expenditures.

Peter Oey: Finally, we expect to be highly disciplined on costs and to continue driving operating leverage in the business. Centralized regional expenses, which account for approximately half of our regional corporate costs, are expected to grow broadly in line with inflation, much lower than our revenue growth. Turning now to our Balance Sheet and Liquidity Position. We continue to maintain a strong liquidity position, ending the year with $6 billion of gross cash liquidity, up slightly from $5.9 billion in the prior quarter, and our net cash liquidity was $5.2 billion at the end of the year, flat from the prior quarter.

Finally, we expect to be highly disciplined on costs and to continue driving operating leverage in the business.

Centralized regional expenses, which accounts for approximately half of our regional corporate cost is expected to grow broadly in line with inflation much slower than our revenue growth.

Turning now to our balance sheet and liquidity position.

We continue to maintain a strong liquidity position ending the year with $6 billion.

Of gross cash liquidity up slightly from $5 $9 billion in the prior quarter.

And our net cash liquidity was $5 2 billion at the end of the year flat from the prior quarter.

Peter Oey: We'd also like to take some time to share our updated capital allocation framework, with the objective of driving long-term sustainable value creation for our shareholders first. We will have a high hurdle rate when it comes to deploying our capital, and we'll have a balanced approach to investing for organic, profitable growth and be very highly selective on inorganic opportunities. Secondly, we will continue to be efficient in our working capital needs and continue to maintain a strong balance sheet with ample liquidity. Third, where there is excess capital on our balance sheet, we will look to return it to our shareholders. In line with this capital allocation framework, our board of directors has approved an inaugural share repurchase program of $500 million and the full repayment of the outstanding balance of our term loan B with a principal and accrued interest amount of $497 million as of the end of 2023.

I would like to also take some time to share our app, our updated capital allocation framework with the objective of driving long term sustainable value creation for our shareholders.

First.

We will have a high hurdle rate when it comes to deploying our capital and we will have a balanced approach to investing for organic profitable growth.

B very highly selective on inorganic opportunities.

Secondly, we will continue to be efficient in our working capital needs and continue to maintain a strong balance sheet with ample liquidity.

Third where there is excess capital on our balance sheet, we will look to return it to our shareholders.

In line with this capital allocation framework, our board of directors have approved an inaugural share repurchase program of $500 million.

And the full repayment of the outstanding balance of our Tim loan B with a principal and accrued interest amount of $497 million as of the end of 2023.

Peter Oey: We are announcing our first share repurchase program now as we are in the fortunate position of having a very strong balance while retaining sufficient cash to fund the growth of our business. This also underscores our commitment to driving shareholder value creation and only the highest return on investment opportunities when deploying our cash. This also has the benefit of offsetting dilution resulting from the issuing of shares as part of our employee stock compensation plan.

We are announcing our first share repurchase program now.

We're in the fortunate position of having a very strong balance sheet, while retaining sufficient cash to fund the growth of our business.

This also underscores our commitment in driving shareholder value creation, and only the highest return on investment opportunities when deploying our cash.

This also has benefited of offsetting dilution, resulting from issuance of shares as part of our employee stock compensation plans.

Peter Oey: As for the repayment of Term Line B, we expect this to create significant interest expense savings for Grab of approximately $50 million per year. Finally, as we look ahead to 2024 and beyond, I would like to provide an update on our financial reporting that we will move towards beginning with our first quarter of 2024 results. We will be reviewing the composition of our operating segment, which reflects a change in how we plan to evaluate and manage the performance of our business, and also enhance our operating segment's financial disclosures to be more comparable with peers. As such, from the first quarter of 2024, we will be allocating the relevant portions of advertising revenues and costs currently in our enterprise segment.

As for the repayment of a term loan B. We expect these to create significant interest expense savings grab of approximately $50 million per year.

Finally, as we look ahead to 2024 and beyond.

I'd like to provide an update on our financial reporting that we will move towards beginning from a first quarter of 2024 results.

We will be seeing.

The composition of our operating segments.

Which reflects a change in how we plan to evaluate and manage the poll for the performance of our businesses.

And to also enhance our segment's financial disclosures to be more comparable with peers.

As such from the first quarter of 2024.

We will be allocating the relevant portions of advertising revenues and cost currently in our enterprise segment.

Peter Oey: Cost of funds currently in our financial services segment and regional corporate costs to the respective segments of our business. Secondly, consistent with our strategic focus on ecosystem transactions and lending for GrabFin and our digital banks, we will be enhancing disclosures around our lending and banking business, which you have seen since our third quarter results, while discontinuing the reporting of GMV for our financial services segment as we deprioritize off-platform transactions.

Cost of funds currently in our financial services segment, and regional corporate costs to their respective segments of our business.

Secondly, consistent with our strategic focus on ecosystem transactions and lending for graphene and our digital banks.

We will be enhancing disclosures around our lending and banking business, which you have seen since our third quarter results.

While discontinuing the reporting of <unk> for.

For our financial services segment, as we de prioritize up off platform transactions.

Peter Oey: We'll share additional color on these reporting changes during our next earnings call. In closing, Grab delivered a strong set of results in 2023, where we continued to grow across our top and bottom lines. As we look into 2024, we will continue to manage the business with three key financial guidelines. First, by continuing to generate sustainable adjusted epidermal growth.

We'll share additional color on these reporting changes during our next earnings call.

In closing.

Grabbed delivered a strong set of results in 2023, we continue to grow across our top and bottom lines.

As we look into 2024.

We will continue to manage the business with three key financial Guardrails.

First by continuing to generate sustainable adjusted EBITDA growth.

Peter Oey: Second, driving towards sustained, positive, adjusted free cash flow. And third, continue to drive operating leverage in the business. Before ending the call, Anthony, Alex, and I would like to thank fellow Grabbers, our users, and partners for their contributions and support.

Second driving towards sustained positive adjusted free cash flow and third continue to drive operating leverage in the business.

Before ending the call Anthony Alex and I would like to thank fellow grabbers, our users and partners for their contributions and support.

Operator: Without it, these results and strong performance in 2023 would not have been possible. Thank you very much for your time, and we will now open up the call to questions. Thank you. Please press star followed by the number one if you'd like to ask a question and ensure your device is unmuted locally when it's your turn to speak.

Without these results and strong performance in 2023 would not have been possible.

Thank you very much for your time, and we will now open up the call to questions.

Thank you. Please press star followed by the number one if you'd like to ask a question and then showing a devices Amit likely miniature attentive.

Pang Zik: When asking questions, please limit yourself to two questions per person. Our first question comes from Pang Zik of Goldman Sachs. Your line is open, please go ahead.

When asking questions. Please limit yourself to two questions per platform.

Our first question comes from.

Your line is open. Please go ahead.

Pang Zik: Hi, good afternoon management, and thank you very much for the opportunities. First of all, congratulations on your first profitable quarter and on announcing a positive surprise in the $500 million share buyback. On that point, can you share with us more on this repurchase program you now have? What will be the pace of this, and how do you plan to utilize this program for the rest of the year? That's question number one.

Hi, good afternoon. Thank you very much for the opportunities first of all congratulation on your five profitable Claire and housing are positive surprise in the 500 million in potash.

Back on this point surely ask more on this repurchase program do you know what will be the pace and how do you plan to use the lightest program for the rest of the year. That's question number one question number two we understand back for Pandora as you mentioned have terminated discussion.

Pang Zik: Question number two, we understand that Foodpanda, as you mentioned, has terminated its discussions with regards to a potential sale in Southeast Asia. On this point, could you share potential color with us on why this asset was not of your interest and how does this potentially impact the competitive landscape in Southeast Asia going forward? Hey Peng, this is Peter.

With my cost per ton Michelle Sal in Southeast Asia on this point could you have a ton of color with us on why this asset whatsapp after your interests and how that could potentially impact the competitive landscape in southeast Asia clean products.

Hey, Patrick This is Peter let me take the first one around the 500 million buyback and I'll ask Alex to address your second question around <unk>.

Peter Oey, Alex Hungate: Let me take the first one around the 500 million buyback, and I'll ask Alex to address your second question about Foodpanda. We did make the announcement of the First Purchase Repurchase Program. We view this as an ideal opportunity to look at investing in the long-term upside in our business, and we also couple that with the $5.2 billion net cash liquidity position. Now as to the pace or how we deploy the capital, we will be efficient in how we're using that, and a lot of that pain will be influenced by the dynamic market itself. We will be very cautious in how we're deploying this cash in the market, but we are committed to fulfilling the board mandate for this share buyback program, and we'll continue to update the market as we continue to enter into the program. Hi, Pang. It's Alex here.

We did the announcement of the first purchase repurchase program, we view this as an ideal opportunity.

To look at investing in the long term <unk> upside in our business.

And also coupled with the $5 2 billion net cash liquidity position.

Now as to the pace or how we deploy the capital we will be efficient in how we're using that in a lot of that patent will be influenced by the dynamic market itself.

We will be very cautious in how we deploy these cash in the market.

But we are committed to dip to play the board mandate for the share buyback program and we'll continue to update the market as we continue to enter into the program.

Hi, It's Alex here, let me just talk about the food <unk> situation.

Alex Hungate: Let me talk about the Food Panda situation. You know, as we were indicating in our comments, in food deliveries, we're more than double the size now of the next largest competitor in Southeast Asia, and we've been able to translate that scale into significant efficiency advantages. You know, the cost to serve that Anthony was talking about, and hyper-batching, the just-in-time allocation, all of these things work better at higher volume with higher density. And that means we've been able to then drive affordability, which drives growth and improves our competitive position even better. So increasing CP in all markets, increasing margins in all markets. And we've even shared today that we expect our long-term margins in deliveries to go up by another 1 to 2 percent, higher than the 3 percent plus that we've mentioned in the past as our long-term target.

As we were indicating in our comments and food deliveries will more than double the size now of the next largest competitor in southeast Asia.

And we've been able to translate that scale into significant efficiency advantages cost to serve that Anthony was talking about in hyper batching. The just in time allocation all of these things work better at higher volume with higher density and that means we've been able to then drive afford.

Stability, which drives growth and improve our competitive position even better.

So increasing CP in all markets, increasing margin in all markets and we've even share today that.

We expect our long term margins and deliveries to go up by another 1% to 2% higher than the 3% plus that we've mentioned in the past is our long term target.

Alex Hungate: And that reflects the confidence that we have that we can continue with this organic strategy, driving growth, driving improved margins, and driving better services for our consumers. And therefore, the bar for any inorganic use of shareholder funds has to be very high in comparison with that. And so, in the end, you know, any asset that we would acquire would have to be available at a very attractive price to cross that cross that bar. And I think probably that's all I should say. Thank you. The next question comes from Pranugopal Gauri of Bernstein. Please go ahead; your line is open.

And that reflects the confidence that we have that we can continue with this organic strategy driving growth and driving improved margin and driving better services for our for.

For consumers and therefore, the bar for any inorganic use of shareholder funds has to be very high in comparison with that.

And so in the end any asset that we that we would acquire would have to be available at a very attractive price to cross that crossed up.

And I think probably that's all I should say.

Thank you our next.

Our next question comes from.

Gary of Bernstein.

Please go ahead your line is open.

Pranugopal Gauri: Hi, thanks a lot for the opportunity. So, two questions from me. Firstly, You know, I remember last year, you started with an EBITDA loss guidance of about $275 to $325 million, and eventually, you ended up reporting a loss of only $24 million. So I want to understand that while you've given a guidance of about 180 to 200 million dollars of profit this year on the EBITDA level, but if I analyze your fourth quarter EBITDA, that itself is 140 million. So you're not really looking for guidance that is materially different from what you delivered in the fourth quarter in terms of run by. I just wanted to understand that given you've given a broadly positive outlook in the medium term as well on almost all your segments, why are we being a bit conservative on guidance? What is it that we should watch out for, if at all? And if surprises emerge, which are the areas you think surprises could emerge? That's my first question.

Hi management, Thanks, a lot for the opportunity so two questions from me firstly.

I remember last year, you had started with an EBITDA loss guidance of <unk> 70.

70, <unk> hundred $25 million and eventually you ended up reporting a loss of only $20 million.

So I wanted to understand that.

Given the guidance of about $180 million to $200 million.

If you had an EBITDA level.

If I annualize your fourth quarter EBITDA that it takes is $140 million. So you're not really looking for a guidance, which is literally different from what you've delivered in the fourth quarter in terms of the run rate.

Just wanted to understand that given you've given them broadly positive outlook in the medium term as well.

Or do you think need why are we being a bit conservative.

<unk> guidance what is it that's.

In that we should watch out for.

And it surprises and large which are the areas where things have gotten much. That's my first question second one.

Pranugopal Gauri: The second one is a smaller one largely on financial services, while we were anticipating some increase in losses sequentially given that you know we had noticed the Malaysia launch. Could you just quantify the impact, if at all? More importantly, for us to understand how the losses would shape up, especially through the year, is it going to be elevated for a while before it comes down, or is it going to be a shift? Hey Vinu, let me address the first one around Ipida, and Alex, I'll ask you to address the second part of the question.

The smaller ones largely on the financial services sector, while we were anticipating some increase in losses sequentially given that there's.

It's the militia launch.

You just quantify the impact if it goes.

More importantly for us to understand how the losses will shape up.

Especially.

It couldnt be elevated for a while before it comes down what is it going to be a shift of marketing.

Thank you so much.

Okay.

Avenue, Let me address the first one around the EBITDA and.

And Alex I'll ask you to address the second part of the question.

Peter Oey: A few things here, Bhanu. One is, as Anthony and Alex mentioned, we are focusing and deepening our product model in 2024, and we're incubating a number of product and tech investments, particularly around operational efficiency improvements that we will expect to see growth, acceleration, and revenue beyond 2024. For this year, as we also alluded in the remarks, we are keeping our margins on deliveries and mobility fairly stable at 3% and 12% plus, respectively. However, now we do see opportunities for our delivery margin to expand in the midterm. We quoted somewhere around 100 to 200 basis points, and this will be part of the EBITDA expansion in 2025 and beyond. But given where we are today and the line of sight that we have from a guidance perspective, this is where we are committed, and it's a point in time, and as we continue to roll out these products, new product features, which we're very excited about, we will continue to update our EBITDA guidance.

A few things here.

One is as Anthony and Alex mentioned, we are in 2024, focusing deepening our product modes, and we're incubating a number of product and tech investments, particularly around operational efficiency improvements that we will expect to see <unk>.

The acceleration in revenue beyond 2024.

For this year as we also alluded in the in the remarks, we are keeping our margins on deliveries and mobility fairly stable at 3% and 12% plus respectively.

Now, we do see opportunities for our deliveries margin to expand in the midterm, we quoted somewhere around 100 to 200 basis points and this will you will see part of the EBITDA expansion.

2025, and beyond but given where we are today and a line of sight that we that we that we have from a guidance perspective. This is where we are committed and as a point in time and as we continue to rollout. These product new product features which we're very excited about we will continue to update.

EBITDA guidance.

Yeah.

Peter Oey: Thanks for the question, Vinu, on financial services. Yes, you're right, the increase in EBITDA losses in the fourth quarter, as we had indicated, was because of the Malaysian launch, the launch of GXB in Malaysia, which has been very successful, as Anthony said. In the first two weeks alone, we gathered 100,000 new accounts, but there were launch-related expenses in the fourth quarter.

Thanks for the questions and new on financial services, Yes, Youre right.

Losses, the increase in the EBITDA losses in the fourth quarter as we had indicated it was because of the Malaysia launch the.

The launch of DXP, and Malaysia, which which has been very successful and he said in the first two weeks alone. We gathered 105 100000, new accounts, but they will launch related expenses in the fourth quarter.

Alex Hungate: We took in deposits, of course, which is great, but we are not able to redeploy those deposits into income-generating lending products until we launch the loan products, which is coming up in this coming quarter. So that is the first part of the question. I think the GrabFin costs remain relatively stable. You asked for some of the underlying factors elsewhere.

We took in deposits of course, which is great, but we are not able to redeploy those deposits into the income generating lending products until we launch the loan products, which is upcoming.

And this coming quarter.

So that is the first part of the question.

I think the grab fin costs remained relatively stable you asked for some of the underlying factors elsewhere. So grab fin costs remained relatively stable quarter on quarter.

Alex Hungate: So GrabFin costs remained relatively stable quarter on quarter, despite their improvements in revenues, actually. So they're heading on the right track there. And within that, you've got the cost of funds for our payments business, which supports the on-demand platform payment. That was approximately $30 million in the quarter, representing about 26% of the total financial services segment cost structure. So hopefully that's helpful for you to understand that.

Despite their improvements in revenues actually so.

They are hitting on the right track there and within that you've got the cost of funds for our payments business, which supports the on demand platform payments.

That is approximately $13 million in the quarter.

<unk> zero, representing about 26% of the total financial services segment cost structure.

So hopefully that's helpful for you to understand that that's so.

Alex Hungate: That's an underlying piece of the cost structure in GrabFin. I want to call out that we see payments, though, as one of our core moats, because having our own payments infrastructure will significantly lower the payment costs for Grab. And we expect that payment cost now, because it's under our own control, so to speak, to remain roughly stable as a percentage of our on-demand GMV in 2024. So there are two indicators for you which might help you to model going forward. So, going forward, the last part of your question... Q4 does represent the peak of the quarterly losses for the financial services segment for Grab. Now, you know, going forward, we'll see revenues kick in from the loan book. So we're already lending in Singapore.

That's.

And underlying piece of the cost structure and grab Finn.

I Wonder if I wanted to call out that we see payments I was one of our call notes.

Having our own payments infrastructure will significantly lower the payment cost per gram and.

And we expect that payment cost to now because its on the hour.

Own control so to speak we expect it to remain roughly stable as a percentage of our on demand <unk> in 2024.

So there are two indicators for you which might help you.

To model going forward.

So going forward the last part of your question.

Q4 does represent the peak of the quarterly losses for for the financial services segment for grab.

Now going forward, we will see the revenues kicking in from the loan book.

So were already lending in Singapore, We've got chief and also doing well with its high velocity low ticket.

Alex Hungate: We've got Gfin also doing well with its high-velocity, low-ticket ecosystem lending. And then, from this quarter, we'll start to have Malaysian loan revenue on top of that again. And in Singapore, as the regulatory caps are lifted, the Singaporean business can start to scale more aggressively also. So that's why we're calling Q4 the peak of the losses for Grab Financial Services. Our next question comes from Sachin Salgunkar of Bank of America. Please go ahead; your line is open.

Ecosystem lending and then from this quarter will start to have Malaysia and loan revenue.

On top of that again.

And Singapore is the regulatory regulatory capsule lifted the Singapore business can start to scale more aggressively also so that's why we we calling Q4 is the peak of the losses.

Financial services.

Our next question comes from Sachin <unk>.

Bank of America. Please go ahead your line is open.

Sachin Salgunkar: Thank you for the opportunity. I have two questions. First question, you know, perhaps a follow-up to Venu's question, but I want to ask that in a slightly different way. So if you look at what you guided for adjusted EBITDA and revenue, it does imply an adjusted EBITDA margin anywhere between 7.3 to 7.5 at the high end. Your last reported adjusted EBITDA margin was close to around 5%. So, in a way, we are looking for a 200-bit... and Marjan.

Alright. Thank you for the question actually I have two questions first question, perhaps a follow up to <unk> question, but wanted to ask that in a slightly different format.

So if you look at what <unk> guided for adjusted EBITDA and revenue. It does imply an adjusted EBITDA margin anywhere between 7.3 to $7 five at the high end you last reported adjusted EBITDA margin was close to around 5%. So in that way. We are looking for it to 100 bps improvement in margin.

Peter Oey: And if the mobility margin is around 12%, delivery margin around 3% plus, is a large part of the improvement predominantly driven by the financial services losses going down, or it's also the delivery margin 3% plus also implies you know maybe 100 bps improvement from that, so that's question number 2. Question number 2: wanted to understand a bit more color on the centralized regional expense you guys are talking about. I understand in the next quarter you're going to give details, but anything this quarter you guys want to provide in terms of that will help us quantify going into the next quarter? And a related question is, you know, this is my understanding, roughly 30% of your costs are largely linked to GMB. So as in how GMB increases, we should see an increase in these expenses in a pretty hefty manner, right? Wanted to understand how one should look at the regional cost. Let me take all those questions.

And then the mobility margin is around 12% delivery margin around 3% plus is a large part of the improvement predominantly driven by the financial services losses going down.

Also the delivery margin, 30% plus.

<unk>, maybe 100 bps improvement from that so that's question number one.

Question number two wanted to understand a bit more color on the.

Our centralized recently expense what you guys are talking about.

I understand in the next quarter Youre going to give details pertaining to this quarter you guys wanted to provide in terms of where that will help us quantification going into next quarter.

And a related question as you know.

This is my understanding roughly 30% of your costs are largely linked to <unk>.

So as in how GMB increases we should see an increase in these expense.

In a pretty hefty manner right I just wanted to understand.

One should look at there is unit cost expense going all right. Thank you.

Okay, Let me take all of those questions.

Peter Oey: Let me take the first part around the EBITDA margin. There are a couple of things here that I want to call out. One is the operating leverage in the business. A lot of the products and initiatives that we're pushing are also generating operational efficiency in our business. Some of that may be translated in the segment margins. Some of that can be translated outside of our segments, in our corporate cost structure also. So there is improvement.

Let me take the first part around the EBITDA margin.

There's a couple of things here that I want to call out one is the operating leverage in the business a lot of the product initiatives that we're pushing is also generating operationally efficient business.

Some of that may be translated.

Segment margins some of those can be translated in our outside about segments and our corporate cost structure also.

So there is improvement there's operating leverage in the business.

Peter Oey: There's operating leverage in the business. What we said was the margin for our mobility and deliveries would be around about the 12th and 3% plus. Now, GFIN, though, you're right.

What we said was that the margin for our mobility and deliveries will be around about the 12% and 3% plus now <unk>, though youre right. The <unk> part or the financial services segments as Alex just alluded earlier, we will see improvements in the cost structure.

Peter Oey: The GFIN part or the financial services segments, as Alex just alluded earlier, will see improvements in the cost structure of our business as they start to generate revenue, especially from our banking and as we start to scale loans even further in that business. So you'll see a dynamic of operating leverage in the business in terms of efficiencies and also the GFIN or the financial services segment also coming down. The third part is around our regional corporate costs. That's going up roughly inflation at around 4% on a year-over-year basis, which is at a significantly lower clip versus what our GMV growth is. Your second question concerns centralized regional corporate costs.

Our business as well as as they start to generate revenue, especially from our banking and as we start to scale alone. Even further of that business. So youll see a dynamic of operating leverage in the business in terms of efficiencies and also the <unk>.

Financial services segment also coming down the third parties around our regional corporate cost that's going up roughly inflation with around uptake of 4% on a year over year basis, which is at a significantly lower clip versus what our GMB growth is.

Your second question around centralized regional corporate costs.

Peter Oey: So the cost structure there is growing in line with inflation, like I said earlier. Now, there are always a couple of pieces in regional corporate cost. There's the variable cost piece, and there is the fixed cost piece. Now, the cloud and direct marketing will obviously commensurate with the growth of the pace of the business itself. Those are variable costs.

So the cost structure there is growing in line with inflation like I said earlier that there's always a couple of pieces in radio copper cause it is variable piece and there is the fixed cost piece now.

Cloud and direct marketing.

We'll obviously commensurate with the growth of the pace of the business itself those are variable costs.

Peter Oey: And while we continue to see efficiency both in the cloud and marketing, and you saw the reduction in those cost structures in 2023, we'll continue to make sure that those are being efficiently optimized. We will see, as a percentage of GMV, those revenue, those cost structures being stable. But from an absolute dollar perspective, we'll continue to grow with the growth of our on demand business. On the fixed cost structure, though, it's going to be pretty much in line with the growth of inflation. That's how we're thinking about it.

And while we continue to see efficiency, both in cloud and marketing and you saw the reduction in those cost structure. In 2023, we'll continue to make sure that those are being efficiently optimize we do we'll see as a percentage of GMB those revenue does cost structure being stable, but.

Absolute dollar perspective, we will continue to grow with the growth of our on demand business on the fixed cost.

Structure, though.

It's going to be pretty much in line with the growth of the inflation. That's how we're thinking about it we're being very disciplined in terms of how we're managing our fixed cost structure, we're going to be very prudent in terms of how we are looking at head count across the business and we are going to continue to find productivity.

Piyush Chowdhury: We've been very disciplined in terms of how I'm managing a fixed cost structure. We're going to be very prudent in terms of how we are looking at headcount across the business. And we are going to continue to improve productivity across our workforce base as it becomes. I hope that answers the question. Our next question is from Piyush Chowdhury of HSBC. Please go ahead, your line is open.

Across our workforce base as it is to come.

Hope that answers the question.

Our next question is from Piyush Choudhary of HSBC.

Please go ahead your line is open.

Piyush Chowdhury: Yeah, hi. Thanks a lot for taking my questions and congrats to Anthony and the entire team on a good set of results. Two questions, firstly, how do you expect M2U growth going forward across segments? In the fourth quarter, we saw good growth in MTU; is it driven by gaining market share, or are you able to expand the time? new solutions and if you can call out how much is seasonalally driven due to travel and tourism in the region.

Yeah, Hi, Thanks, a lot.

For taking my questions and congrats to Anthony entire team on good set of results and announcing a share buyback.

Two questions Firstly.

How do you expect.

<unk> growth going forward across segments in.

In fourth quarter, we saw good growth in MCU.

Is it driven by gaining market share or you are able to expand the time.

With new solutions, and if you can call out like how much is seasonally driven due to travel and tourism in the region.

Piyush Chowdhury: Secondly, on the delivery segment... Can you talk a little bit about your margin range across various countries? I would imagine that there is a big difference between delivery margin and there could be room for improvement over there, in some of the countries where you have more intense competition. So why are we saying delivery margin will remain more constant year-on-year? Wouldn't that make sense?

Secondly on the delivery segment.

Can you talk a little bit about your margin range across various countries.

I would imagine that there is a big difference between delivery margin there could be room for improvement over there.

And some of the countries, where you have more.

Competition.

So why why we are seeing delivery margin will remain constant year on year wouldn't that mix.

Alex Hungate: Jiong Shao, Grab Hldg Jiong Shao, Grab Hldg, Piyush, thanks for your questions. I'll take the first one on MTU growth and then hand it to Peter for the second one. Yeah, we see opportunity on the MTU side from the mobility recovery. Clearly, the traveler segment has not fully recovered since pre-COVID.

Our improvement in those countries helped to lift margin even in 2024. Thank you.

Thanks for your questions I'll take the first one on the MCU growth and then hand to Peter for the second one.

Yes.

We see opportunity on the MCU side from the mobility recovery.

Clearly the <unk>.

Traveler segment is not fully recovered since pre COVID-19 as I mentioned in my remarks earlier, most external estimates.

Alex Hungate: As I mentioned in my remarks earlier, most external estimates suggest that it's only around 70% so far. Then we've got on delivery... We're starting to see the effect of the affordability initiatives that we flagged to you earlier last quarter. We can see that it does drive new users using the platform and also frequency, so that will give us an MTU boost as well. And then the family accounts that Anthony mentioned earlier, we're optimistic about that. We think that that will improve, the kind of self-generated growth of MTUs, the network itself generating new MTUs, so we're very keen on that as a kind of a hyper growth driver as well. And then we think that we're barely tapped into the premium segment, we, you know, the corporate premium segment.

Suggest that's only around 70% so far.

Then we've got on the deliveries.

We're starting to see the effect of the affordability initiatives that we flagged to you earlier last quarter.

We can see that it does drive.

New users using the platform and also frequency so that will give us an MCU boost as well.

And then the family accounts that Anthony mentioned earlier.

We are optimistic about that we think that that will improve the.

<unk> kind of self generated growth of MTS network itself generating new and to use that we're very keen on.

And that as a kind of a hyper growth drive as well.

And then we think that we're barely tapped into the premium segment.

Corporate premium segment.

Alex Hungate: And as we mentioned in our remarks, there'll be some really fantastic new offerings coming up for that segment. So we hope that that will be a high margin and high growth opportunity for our MTUs going forward. Peter.

As we mentioned in our remarks there'll be some some really fantastic new offerings coming coming up for that segment. So we hope that that will be a high margin and high growth opportunity for our end to use going forward.

Peter.

Peter Oey: Yeah, Piyush, also, I just would add from an MTU perspective, we're also driving engagement in our business. It's really important that, yes, we can add MTUs, but we also have got to make sure these users are constantly engaging with our platform. And we have more and more users now using the Grab platform. We finished a quarter with 38 million, and we see opportunities to grow that even further in 2024. But it's also equally as important that they're constantly coming back to the platform and using it.

Yeah Piyush also I just would add also from an empty. Your perspective, we're also driving engagement in our business. It's really important that yes, we can add them to use but also we've got to make sure. These users are constantly engaging in our platform and we have more and more users now using the graph platform. We finished the quarter of $38 million and we see opportunities to grow that.

Even further in 2024, but it is also equally as important that they're constantly coming back to the plants and using that and that's part of our growth factors also in 2024, but that's kind of also come from product features that we're investing in the business and tied to that actually is your question around margins now you asked about <unk>.

Peter Oey: That's part of our growth factor also in 2024, but that's going to also come from product features that we're investing in the business. And tied to that, actually, is your question around margins. Now, you asked about country-specific margins. The way we see our business is a portfolio. We don't look at, well, countries are important, but it's really important that we see it across the board, across all the countries

Country specific margins the way, we see our business as a portfolio. We don't look at while countries are important but it's really important that we see it across the across the board across all the countries itself.

And what if you step back in terms of what we've done in deliveries margin, we've seen margin improvement of over 500 bps over the last two use itself. Now. This is a year that we are going to continue to consolidate and make investments into these new product initiatives that will drive engagement as well as <unk>.

Peter Oey: And if you step back in terms of what we've done in terms of delivery margin, we've seen margin improvement of over 500 bps over the last two years itself. Now, this is a year that we are going to continue to consolidate and make investments in these new product initiatives that will drive engagement, as well as also broaden the TAM base. We worked hard last year on affordability.

<unk> broaden the Tam base, we've worked hard last year and affordability with growth of 10 base. There we are.

Peter Oey: We've grown the TAM base there to use with record GMV. And we're gonna push this year also, make sure that we bring in new user base, but also that these user base are sticky. These user base are constantly using our product base.

Ended.

To use with record GMB and we're going to push this year also make sure that we bring in new user base, but also that these user base are sticky. This user base are constantly using our product base and that will lead to further acceleration in growth of revenue and margins for our deliveries business.

Peter Oey: And that will lead to further acceleration in growth of revenue and margins for our delivery business in 2025 and 2026. So this is how we're thinking about it. Where there is upside in margins, we'll obviously capture those margins. But for us, it is making sure that we are going to see revenue growth acceleration in the business, especially in 2025 and 2026. The next question comes from Ranjan Sharma of J.P. Morgan. Your line is open. Good evening, and thank you for the presentation.

In 2025 and 2026. So this is how we're thinking about it where there is upside in margins will obviously capture those margins, but for US is making sure that we are going to see a revenue growth acceleration in the business, especially.

Especially in 2025 and 2026.

The next question comes from Ranjan Sharma of Jpmorgan your.

Your line is open.

Hi, good evening and thank you for the presentation.

Ranjan Sharma: Questions from my side first. In the buybacks, there's a reference to privately negotiated transactions. Thank you very much.

Two questions from my side Firstly.

And the buybacks is a reference to privately negotiated transactions.

If you can help.

And what could be how would you do to mine the different share price for such transactions.

Ranjan Sharma: The second question is about your overall cost base. Can you share some color, like what percentage of your costs are coming from? coming in like U.S. dollars and Singapore dollars. Ranjan, on the buyback... Look, it's hard for us to quantify buybacks because, as you know, it is influenced and led by market dynamics at the end of the day. And the mandate that the board has given us has given us full flexibility in terms of how we deploy this capital.

The second question is on your overall cost base.

Can you share some share some color on like what percentage of your costs are coming from they're.

Coming in U S dollars in Singapore dollars. Thank you.

John on the buyback.

Look it's hard for us to quantify buybacks as you know is influenced and led by the market dynamics at the end of the day.

And the mandate that the board has given us has given full flexibility in how we deploy this capital.

Peter Oey: We'll see how the market from a dynamic perspective and will enter into the markets, whether it's whether it's block trades, whether it's it's a trade that we do in the market, in the open market. That's all influenced by the price of the market itself. So it's hard for us to say because we can't control the market. But what I can say is that we'll be efficient in how we use that cash for those buybacks to get the highest return for our shareholders. On your second question around cost in USD and SGD, we're a USD denominator business. What we do with our cash, predominantly, will be fairly concentrated in USD. We naturally hedge our business itself.

We'll see how the market.

From a dynamic perspective and will enter into the markets, whether it's whether it's block trades, whether it's so it's.

Seeing a trade that we do in the <unk> in the open market.

Influenced by the price of the.

<unk> itself. So it's hard for us to say because we just can't control the market. What I can say is that will be efficient in how we use that cash for those buybacks for the highest return for our shareholders.

On your second question around.

Costs in USD, and SGD, where a USD denominated business.

What we do with our cash.

Prime predominantly will be fairly concentrated in USD, we naturally hedge our business itself.

Peter Oey: We're a diversified portfolio when it comes to countries, as you know. But we make sure that, from an FX perspective, we're not exposed, and where we are, we will heavily concentrate our balance sheet on the U.S. Our next question comes from Alicia Yap of Citigroup. Please go ahead. Hi, thank you.

Diversified portfolio when it comes to countries as you know, but we make sure that from an FX perspective, we're not exposed.

And where we will we will heavily concentrate our balance sheet on USD.

Our next question comes from Alicia Yap of Citigroup.

Please go ahead.

Hi, Thank you.

Alicia Yap: Good evening, management. Thanks for taking my question. Hi, I have two very quick questions.

Hey management, Thanks for taking my question.

Hi.

Two questions.

Alicia Yap: Firstly, I'm just wondering how much of the FX fluctuations that you have fit into your 2024 revenues and EDIDA guidance. And then second, on follow up on your comments about inorganic versus organic growth, just wondering in what type of situations or what kind of synergy that you are looking for that will trigger you to think about the inorganic opportunity, potentially, if it's a right. Thank you. Hey Alicia, let me take those two questions. In the FX part of your question, look, we've obviously built in a buffer to prevent movement in FX.

Just wondering how much of that.

The FX fluctuation that you have baked into our 2024.

And then second follow up on <unk>.

Non stop.

Organic license to organic growth.

Just wondering what type of situations or what I have seen that.

You are looking for that will change.

Think about that.

Hum.

Okay.

Potentially.

Thank you.

Hi, Alicia let me take those two questions.

In the FX part of your question look we've also built in buffer.

In the movements in FX, we have to be prudent we can read in terms of what the forward FX rates will be.

Peter Oey: We have to be prudent. We can't read in terms of what the forward FX rates will be. We have built in some conservatism in our foreign exchange, in our model, and that's been appropriate. We don't know where the rates will be in terms of the next 12 months.

Build in some conservatism.

In our foreign exchange in our model.

And thats being appropriate we don't know where the rates will be in terms over the next 12 months in terms of inorganic versus organic growth.

Peter Oey: In terms of inorganic versus organic growth, Alex mentioned this a couple of times that we have a very high hurdle rate when it comes to inorganic opportunities. We are very, very focused on making sure that organic growth takes the highest priority for us, and we are investing in those products, Alicia, to make sure that drives those engagements, drives the user base, and drives growth especially because that's really what's going to deepen our competitive mode in the business. The next question is from Jiong Shao of Barclays High School. Please go ahe- in answer my questions.

Alex mentioned this couple of times that we have a very high hurdle rate when it comes to inorganic opportunities.

We are very very focused and making sure that organic growth takes the most highest priority for us and we are investing in those products Felicia to make sure that to drive that engagement to drive the user base to drive growth, especially beef.

Because that's really what's going to deepen our competitive moat in the business today.

The next question is from Jim Shao Lee.

Please go ahead.

And my questions.

Jiong Shao: I think, Peter, you mentioned a couple of times about the re-acceleration of growth in 2025 and beyond. So usually, you know, the law of large numbers is growth rates tend to decelerate, and moderate as you get bigger. But I was hoping you could elaborate a bit more on why the growth rate in 2025 and beyond will be higher than 2024, other than advertising and FinTech will contribute more. My second question is about travelers.

I think Peter you mentioned, a couple of times about the Reacceleration.

<unk> growth in 2025.

And beyond.

So usually the law of large numbers as growth rate tend to decelerate moderate as you get bigger.

But I was hoping you can elaborate a bit more on why the growth rate in 2025 and beyond will be higher than 2024 other than the advertising as a tag will contribute more.

My second question is about.

Jiong Shao: I think Alex mentioned a couple of times as well that the travelers are now only back to 70% of pre-COVID. And some of the stats we have seen from Chinese New Year for travelers seem pretty good. So I was wondering if you could talk about sort of how big Chinese travelers are, is that revenue contribution to your mobility business? Any color or numbers you can share, the trends you saw during this holiday period a couple weeks ago would be helpful.

Travelers I think <unk> mentioned, a couple of times as well that to the travelers now owning back to 70%.

Pre COVID-19.

And some of the stats, we have seen from Chinese new year for travelers seem pretty good. So I was wondering if you can talk about sort of how big is that Chinese travelers is that revenue contribution to our morbidity business.

Any any color at all.

On numbers you can share the.

Trends you have seen.

During this holiday period couple of weeks ago will be helpful. Thank you.

Anthony Tan: Thank you. Jiong, thanks so much for the question. I'll talk about growth and reacceleration of growth and why 2025 and how we are thinking about the confidence of it. We are actually very confident as a team about our ability to execute, to drive revenue growth, especially in the midterm. Hence, we set out these stretches, goals across not just 24 but beyond. If you just look at our past history, In 2022 and 2023, you know, we set some internal targets. For example, our cost to serve.

Hey, Joe.

Thanks, So much for the question I'll talk about growth and Reacceleration of growth and why in 2025 an hour.

While we are thinking about the confidence of it.

We are actually very confident as a team our ability to execute to drive revenue growth, especially in the midterm.

Hence we set out these stretch goals.

Across across not just.

For 'twenty four but beyond.

You just look at our past history.

In train train two and train train three we.

Showed some internal targets for example, our cost to serve so we had very bold numbers.

Anthony Tan: We had very bold numbers that many people thought we couldn't achieve, but we've shown now that we're actually the most efficient cost-to-serve platform in the region by orders of magnitude. And that's what we are going to keep demonstrating. We said what we were going to do, and then we did it.

Many people thought we couldn't achieve but we've shown now we are actually the most efficient.

Cost of sub platform in the region.

Bye bye bye orders of magnitude and Thats, what we are going to keep demonstrating we said, what we're going to do and we did it.

Anthony Tan: We said that Mobility GMV will exit 2023 above pre-COVID, and we did that as we drove focus, and we targeted the affordability segment, and that grew very well. We said, "Hey, deliveries will come back into growth into GMV growth, and we saw that with Q4 growing at 13% year-on-year and sequential growth for three quarters because we focused on Grab Unlimited, we focused on saver and differentiation of pricing, and then we said we're going to deliver on EBITDA, and we did, actually, way ahead of time. What we are saying now is that we are incubating growth with a lot of initiatives. One you talked about it advertising, we still see tremendous headroom there. We've seen an increase in penetration across, whether it's the big BD clients, whether it's the small long tail, we've seen, and yet, penetration compared to other markets is still very low, so we see a lot of headroom there, and we've seen how the ROAS, or the return on advertised sales, for them continues to provide even greater earning opportunities for all our merchant partners. The second thing Alex talked about was banking, for example. We are very excited because we see revenue growth as our loan book scales. We saw that with GrabFin.

We said that the <unk> exit drains main three above pre COVID-19 and we did that as we drove focus and we targeted.

And affordability segment that grew very well.

Said, a deliveries will come back into growth in the GMB growth.

And we saw that with Q4 growing at 13% year on year and.

The sequential growth for three quarters, because we focused on grabbing limited be focus on safe and differentiation of pricing.

And then we said we're going to deliver on EBITDA and we did.

Actually way ahead of time now what we are saying now is we are incubating growth.

With a lot of initiatives.

One you talked about at advertising, we still see tremendous headroom there we've seen the increase in penetration across whereas the big BD clients with a small long tail are we've seen and yet penetration compared to other markets is still very low so we see a lot.

A lot of headroom, there and we've seen how the roll offs or the return on on on advertised sales for them continues to provide even greater earning opportunities for all our merchant partners.

What Alex talked about was banking for example, we are very excited because we see.

Revenue growth as our loan book scales, we saw that with <unk>.

Anthony Tan: We're very happy with our GFin team as they drove costs and continue to grow with loan growth. Now with banks, as we are very conscious of costs, at the same time, we believe deposits and loans will continue to grow strongly. With all that said, we also have shared, or Peter has actually shared, that a delivery margin upside of somewhere between 100 to 200 bps will continue to take place over the longer term as we invest more in tech and product. All those are just examples that will continue to reinforce the re-acceleration of revenue growth even beyond 2024. Thanks for your question, Jiong.

We're very happy with our <unk> team as they drove cost.

Continue to grow our loan growth now with banks as we are very conscious on cost at the same time, we believe deposits and loans, our continuing to be growing strongly with all of that said. We are also have shared or Peter is actually shed.

Deliveries margin upside of somewhere between 100 to 200 bps will continue to take place over a longer term as we invest more into tech and product all that I've. Just examples that we'll continue to reinforce reacceleration of revenue growth.

Beyond 2024.

Yeah.

Thanks for your question John Yes, let me pick up the question about Chinese travelers in fact Chinese travelers for US are more significant now than they were before COVID-19, but I think thats.

Alex Hungate: Yeah, let me pick up the question about Chinese travelers. In fact, Chinese travelers are more significant now than they were before COVID. But I think that could be largely driven by the efforts that we've put into targeting them, because we've done the integration with WeChat, Ali, Trip.com, and we've got Chinese translation as well, in-app translation. So I think our top-of-mind awareness with Chinese travelers has increased, and therefore, we're seeing that impact in our numbers. Having said that, I just happened to meet with the Asia head of a very large global hotel chain, and he was saying that they're seeing much more domestic Chinese travel at this point than they saw pre-COVID as a proportion, and less international. So I think there's still upside, um, as the Chinese economy starts to regrow again, and Chinese consumers start to travel internationally. But right now, based on some of the feedback we have from our partners, I think they're disproportionately traveling domestically.

Could be largely driven by the efforts that we've put into targeting them because we've done the integration with Wechat Ali Ctrip Dot com.

The Chinese translation as well in that translation.

I think our top of mind awareness with Chinese travelers has increased and therefore, we're seeing seeing that impact in our numbers.

Having said that.

I just happened to.

Meet with the Asia ahead of a very large global hotel chain and he was saying that.

We're seeing much more domestic Chinese travel at this point.

And then they saw pre.

Pre COVID-19 as a proportion and less international so I think there's still upside.

As that as the China economy starts to re grow again in the Chinese consumers start to travel internationally, but right now I think it does.

Proportionately travelling domestically based on some of the feedback we have from our partners.

Operator: This concludes Grab's 4th Quarter 2023 Earnings Conference Call. Thank you for your participation. You may now disconnect. 4th Quarter 2023 Earnings Conference Call Thank you for your participation.

Uh huh.

Thank you.

This concludes <unk> fourth quarter 2023 earnings conference call. Thank you for your participation you may now disconnect.

Fourth quarter 2023 earnings conference call. Thank you for your partners.

Q4 2023 Grab Holdings Ltd Earnings Call

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