Q2 2025 Grab Holdings Ltd Earnings Call
Grab.
Fit. And our digital banks are reaching close to $3 billion on an annualized run rate basis in the second quarter.
At the same time, credit risks remain within our risk appetites.
Looking ahead to the second half, Grab remains well positioned with our investments solidifying, our resilience in the face of potential macroeconomic uncertainty.
As such, we expect to sustain this growth momentum to a salary-on-demand GMV growth rates, relative to 2024.
We will also maintain discipline on costs to drive profitable growth and free cash flow generation. So, I now open the call for questions. Operator?
Ladies and gentlemen, we'll now start the questions and answers portion of the call. Please press *1 to ask a question, and we'll call on you for your question. When asking questions, please limit it to 2 questions per person.
Thank you. We will now start your first question. The question comes from the line of Pain from Goldman Sachs. Your line is open.
Good morning, management. Congratulations on a good quarter and a strong growth acceleration. I have two questions. Number 1: with the uncertainty in the macro environment and what's happening in Thailand and Indonesia, as well as Trump tariffs being implemented and negotiated, how are you thinking about the outlook for Grab and for the countries you operate in? Are you seeing any weakness in consumption right now?
That's number one. Number two, immobility. The number of transactions was 23% with sign.
Outpacing.
Growth in MTUs. What strategies have you successfully implemented to drive this increase in frequency of users? How should we anticipate this trend evolving in the future? Thank you.
Thanks, Frank. Great question, and you're right; it is top of mind—the macro environment for all of us.
Good news, Pang, is we have been leaning into affordability since 2023 with our first initial product launches focused on affordability, like Savor delivery, Saver, and Transport Rights.
Anthony Tan: Dispose of the cost of Grab Finn and our digital banks, reaching close to $3 billion on an annualized run rate basis in the second quarter. At the same time, credit risks remain within our risk appetite. Looking ahead to the second half, Grab remains well-positioned, with our investments solidifying our resilience in a face of potential macroeconomic uncertainty. As such, we expect to sustain this growth momentum to accelerate on-demand GMV growth rates relative to 2024. We will also maintain discipline on costs to drive profitable growth and free cash flow generation. With that, I now open the call for questions. Operator.
Now has become even more critical with the ongoing uncertainty in the global macro landscape.
Nonetheless, we believe we are very well positioned on this front, Pang, because of our product LED Investments that continues to solidify our resilience. As you saw from the slide we shared, it drove the ecosystem flywheel faster.
And it really positions us as a counter-cyclical company.
Operator: Ladies and gentlemen, we'll now start the questions and answers portion of the call. Please press star one to ask a question, and we'll call on you for your question. When asking questions, please limit to two questions per person. Thank you. We will now start. Your first question comes from the line of Peng Bitayamunokun from Goldman Sachs. Your line is open.
You know, over the past, uh, two years, we have enhanced affordability with enhanced reliability of our services, and that further deepens user engagement and retention and brings new users to the Grab ecosystem. You saw this with the, uh, all-time high of MTUs. You saw this with another quarter of profitable growth, uh, and how our growth has reassured that to 21% year on year.
Now uh, moving forward.
We'll continue our track record of working very closely with governments and regulators to ensure that our partners and users can navigate this period of uncertainty. For example, in Indonesia, uh,
Pang Vitt: Good morning, management. Congratulations on a good quarter and strong growth accelerations. Two questions from me. Number one, with the uncertainty in the macro environment and what is happening in Thailand and Indonesia, as well as Trump tariffs being implemented and negotiated, how are you thinking about the outlook for Grab and for the countries you operate in? Are you seeing any weakness in consumption right now? That is number one. Number two, in mobility, the number of transactions was 23%, which significantly outpaces growth in MTUs. What strategies have you successfully implemented to drive this increase in frequency of usage? How should we anticipate this trend evolving in the future? Thank you.
We participated in the pilot phase of Makan Bizi Gratis, which is the free nutritious meal program. This program is very important for the Indonesian government.
As part of this initiative, we delivered nutritious meals to over 1,500 students across 7 elementary schools across many parts of Indonesia and we collaborated with 9 local msme Merchants uh, in these areas to provide healthier meals. But also Foster Greater brand loyalty, among our student customer segments. You talk about Thailand as well. Uh, Thailand, you know, we are actively working with the government to support the tourism sector. That's very important, especially during this time for Thailand,
Anthony Tan: Thanks, Pang. Great question. You are right, it is top of mind, the macro environment for all of us. Good news, Pang, is we have been leaning into affordability since 2023 with our first initial product launches of affordability, like saver deliveries, saver transport rides, which now has become even more critical with the ongoing uncertainty in the global macro landscape. Nonetheless, we believe we are very well positioned on this front, Pang, because of our product-led investments that continue to solidify our resilience. As you saw from the slides we shared, it drove the ecosystem flywheel faster, and it really positions us as a countercyclical company. Over the past two years, we have enhanced affordability. We have enhanced reliability of our services, and that further deepens user engagement and retention and brings new users to the Grab ecosystem. You saw this with the all-time high of MTUs.
Uh, we established a private-public tourism task force to contribute to the Grand Tourism Year 2025. This builds on the existing partnership we’ve had with the Tourism Authority and the Transport Authority, as well as the Airports Authority in Thailand.
So, looking ahead.
We are confident that our strategy of,
Focusing on using partners, uh, with a very user- and partner-centric lens for product development will continue to drive sustainable and profitable growth for the business. And this, you will continue to see. And that's why we are confident to say that our expectations for on-demand GMV growth in 2025 will accelerate from that of.
2024 levels, and I'll adjust it to be done, the second half being substantially stronger than that of the first half.
Okay, yeah, thanks. Anthony Long, let me take the second part of the question about mobilities.
Because we know there's untapped growth potential in Southeast Asia, we chose to reinvest the benefits of our scale economies to drive broader accessibility and increase platform usage this half.
Anthony Tan: You saw this with another quarter of profitable growth and how our growth has reaccelerated to 21% year on year. Moving forward, we will continue our track record of working very closely with governments and regulators to ensure that our partners and users can navigate this period of uncertainty well. For example, in Indonesia, we participated in the pilot phase of Makan Bergizi Gratis, which is a free nutritious meal program, very important for the Indonesian government. As part of this initiative, we delivered nutritious meals to over 1,500 students across seven elementary schools across many parts of Indonesia, and we collaborated with nine local MSME merchants in these areas to provide healthier meals, but also foster greater brand loyalty among our student customer segment. You talked about Thailand as well.
And as a result, as you said, we saw this growth of 23% year-on-year in Mobility transactions, which we think is a good return for our Mobility flywheel because it attracts new user cohorts and improves retention. And that, of course, creates more demand for partners, so they can improve their utilization and driver earnings. So that supports better reliability and lower prices, and that in turn attracts even more users. So, it's a great flywheel impact.
Overall, Mobility GMV grew 16%, while MTUs continued to grow strongly at 19% year-on-year.
Percentage.
And of course, in our case because we're a multi vertical as an ecosystem. The benefits of having new users, come in extends to the broader growth. Ecosystem is then we can cross sell into deliveries and financial services. Um, so it's a it's a broader benefit for us and it would be for a single vertical player.
Anthony Tan: In Thailand, we are actively working with the government to support the tourism sector. That is very important, especially during this time for Thailand. We established a private public tourism task force to contribute to the Grand Tourism Year 2025. This builds on the existing partnership we have had with the Tourism Authority and Transport Authority and Transport Airports Authority in Thailand. So looking ahead, we are confident that our strategy of focusing on user and partners with a very user and partner-centric lens for product development will continue to drive sustainable and profitable growth for the business. This you will continue to see, and that is why we are confident to say that our expectations for on-demand GMV growth in 2025 will accelerate from that of 2024 levels. Our adjusted EBITDA in the second half being substantially stronger than that of the first half.
There has not been much trade-off on profitability. If you look at the numbers, we still grew EBIT D profitability on an absolute dollar basis, year on year and quarter on quarter.
And we're still growing, our higher margin uh, high value rides, uh, which now have reached double digit as a percentage of Mobility. Gnv this quarter, so that helps us to balance off on our margin basis.
So the margin for this quarter was 8.7% for Mobility, very close already to our steady-state margin target of 9% plus.
So we think this is a very sustainable strategy going forward, and we'll continue to lean into growth.
Thank you.
Thank you.
Our next question comes from Alicia group. Your line is open.
Alex Hungate: OK, thanks, Anthony. Pang, let me take the second part of the question about mobilities. We know there's untapped growth potential in Southeast Asia. We did choose to reinvest the benefits of our scale economies to drive broader accessibility and increase platform usage this quarter. As a result, as you said, we saw this growth of 23% year on year in mobility transaction, which we think is a good return for our mobility flywheel because it attracts new user cohorts and improves retention. That, of course, creates more demand for partners so they can improve their utilization and drive earnings. That supports better reliability and lower prices, and that, in turn, attracts even more users. So it's a great flywheel impact. Overall, mobility MTUs grew 16%, and GMV still continued to grow strongly at 19% year on year, 16% concurrently.
Um, thank you. Um, good morning, management. Congrats on the subject quarter. Uh, two questions. Uh, first on, um, the delivery business. Just wondering, uh, given the growth of GrabFood, for one, to share saver, uh, will this result in potentially lower blended AOV? Uh, will this volume have lower margins? Um, so if excluding the contribution from the advertising revenue, can you walk us through how you balance, uh, between the faster volume driver of the GMV growth versus the lower ESG and the margin trend?
Second question questions, uh, with the launch of your autonomous vehicle shuttles in Singapore recently. How soon do you think, uh, a commercial roll out of the AV vehicles in your market across the southeast Asia, will take, uh, any updates. Also, uh, on the partnership front, uh, to booster your Innovations in this space. Thank you.
Hi, Alicia. This is Alex again. Let me take the question on delivery, growth, and margin.
Alex Hungate: Of course, in our case, because we're multi-vertical as an ecosystem, the benefits of having new users come in extend to the broader Grab ecosystem, because then we can cross-sell into deliveries and financial services. So it's a broader benefit for us than it would be for a single vertical player. There's not been much trade-off on profitability. If you look at the numbers, we still grew EBITDA profitability on an absolute dollar basis year on year and quarter on quarter. We're still growing our higher margin, high-value rides, which now have reached double digits as a percentage of mobility GMV this quarter. So that helps us to balance off on a margin basis. The margin this quarter was 8.7% for mobility, very close already to our steady-state margin target of 9% plus.
You know, we really believe that ASEAN has still so much upside in digital consumption. So, um, on the delivery side, we also decided to invest in product-led growth.
Delivered GMV accelerated to 19% year-on-year on a constant currency basis because of these product-led initiatives. So, there was user acquisition from those affordable products that you mentioned; it has been strong. But we've also seen strong growth from what we think of as viral products, such as Doubt.
Alex Hungate: So we think this is a very sustainable strategy going forward, and we'll continue to lean into growth.
Family accounts group orders, and those are proving very effective in attracting new users through network effects and shared experiences. So, um, we got a combination of those viral products and the affordable products bringing in new monthly paying users (MPUs). The GMV from all of these new product initiatives that we announced at Grab X earlier this year is growing three times faster than the existing products, and now accounts in total for a third of deliveries GMV.
Operator: Thank you. Thank you. Our next question comes from Alicia Yap of Citigroup. Your line is open.
In addition, as you well know, we've got GrabUnlimited, which is now the largest paid loyalty program in Southeast Asia, driving almost 5 times higher spend and 3 times higher order frequency for its members.
And we've reached new record highs and paid subscriber count there. So, that's also a big impact on the health of our ecosystem.
Alicia Yap: Hi. Thank you. Good morning, management. Congrats on the public quarter. Two questions. First, on delivery business, just wondering, given the growth of the Grab Food for One, the share saver, all will result in potentially lower blended AOV. Will this volume have a lower margin? So if excluding the contribution from the advertising revenue, can you walk us through how you balance between the faster volume driver of the GMV growth versus the lower ASP and the margin trend? Second question, with the launch of your autonomous vehicle shuttles in Singapore recently, how soon do you think a commercial rollout of the AV vehicles in your market across the Southeast Asia will take? Any updates also on the partnership front to boost your innovations in this space? Thank you.
And then finally, I would like to mention one of the other products that was launched at Grab, which is GrabMore. This feature enables users to bundle food and grocery orders into a single transaction.
So that's helped us drive higher growth rates for GrabMark this quarter than for our core business, which is another quarter where that's been the impact. So, there's lots of upside on GrabAr also.
The overall the you mentioned saver. Um it's contributed 34% of deliveries transactions, in Q2, that's versus uh a number of 28% for prior year for a comparison. So it has grown in terms of number of transactions.
However, if you look year on year, our segment margins have continued to expand by 34 basis points, in fact, from 1.5% last year to 1.8% this quarter. So, we are able to still improve margin despite the fact that the affordable products are accounting for a higher percentage of transactions.
Alex Hungate: Hi, Alicia. This is Alex again. Let me take the question on delivery growth and margin. You know, we really believe that ASEAN has still so much upside in digital consumption. So on the delivery side, we also decided to invest into product-led growth. Delivery GMV accelerated to 19% year on year on a concurrency basis because of these product-led initiatives. So there was user acquisition from those affordable products that you mentioned that have been strong. But we've also seen strong growth from what we think of as viral products, such as Dine Out, family accounts, group orders. And those are proving very effective in attracting new users through network effects and shared experiences. So we've got a combination of those viral products and the affordable products bringing in new MTUs.
So, what I would say is that margins will move from quarter to quarter, but overall...
We're still, we've still managed to grow absolute EBITDA in this segment by 50% year on year.
Medium term, I think we can expect the margins, as we scale the business, to reduce the delivery cost and improve monetization, particularly through the growth of advertising, which this quarter reached 1.7% GMV penetration. So, that will continue to show a deeper penetration there and that will improve with scale in terms of its attractiveness to our advertising clients.
So we still believe that we will reach margins of 4% plus in steady state. Um, so there's no change in our longer-term outlook. Thanks.
Alex Hungate: So the GMV from all of these new product initiatives that we announced at Grab X earlier this year is growing three times faster than the existing products and now accounts in total for a third of delivery's GMV. In addition, as you well know, we've got Grab Unlimited, which is now the largest paid loyalty program in Southeast Asia, driving almost five times higher spend and three times higher order frequency for its members. And we've reached new record highs in paid subscriber count there. So that's also a big impact on the health of our ecosystem. And then finally, I'd just like to mention one of the other products that was launched at Grab X, which is Grab More, which enables users of food to bundle food and grocery orders into a single transaction.
On the AV question, uh, Lisa, thank you so much, and you are absolutely right. Uh, very, very top of mind for us. In fact, we are leaning heavily into the AV option, Unity, or what we think of as.
The driverless Ave option, Unity, uh, across.
Time position to support the AV transition over the next few years. Uh, we have a very significant role to play uh, via a hybrid Fleet a hybrid, meaning both uh, driverless with and drivers are Fleet.
When you think about our right to win, we think about, number one, we have and continue to build strong relationships with AV players as well as OEMs across the world.
Alex Hungate: So that's helped us drive higher growth rates for Grab Mart this quarter than for our core business, which is another quarter where that's been the impact. So there's lots of upside on Grab Mart also. So overall, you mentioned saver. It's contributed 34% of delivery's transactions in Q2. That's versus a number of 28% for prior year for a comparison. So it has grown in terms of number of transactions. However, if you look year on year, our segment margins have continued to expand 34 basis points, in fact, from 1.5% last year to 1.8% this quarter. So we are able to still improve margin despite the fact that the affordable products are accounting for a higher percentage of transactions. So what I would say is our margins will move from quarter to quarter.
Second our scale, our Network across the region that allows us to provide the best-in-class utilization rates, uh, which is very important as you imagine these because these cars, uh, you have to make sure you utilization rates are high to make the unit aonics work.
Third, the brand trust and a long track record of safety, along with working constructively with regulators and governments, continue to ensure.
Alex Hungate: But overall, we still managed to grow absolute EBITDA in this segment by 50% year on year. Medium term, I think we can expect the margins, as we scale the business, to reduce the delivery costs and improve monetization, particularly through the growth of advertising, which this quarter reached 1.7% GMV penetration. So that's continued to show a deeper penetration there. And that will improve with scale in terms of its attractiveness to our advertising clients. So we still believe that we will reach margins of 4% plus in steady state. So there's no change in our longer-term outlook. Thanks.
Community safety passenger driver. Safety is 1 that people really care about. And lastly, we show. We also build up our own mapping, the tech with very rich, local data sets, uh that provides millions of real world, driving hours, uh, real world user pickup, drop off, uh, points patterns, traffic flows, heat Maps across High
Highly complex Southeast Asian-specific urban environments. So that really positions us well.
We also have several Pilots. Uh we planned at the moment earlier this month. We uh we announced the A2Z uh partnership with the Korean full stack Ave manufacturer. Uh now that uh culminated in the announcement of the first autonomous electric uh shuttle bus in Singapore.
Anthony Tan: On the AV question, Alicia, thank you so much. And you're absolutely right. Very, very top of mind for us. In fact, we are leaning heavily into the AV opportunity or what we think of as the driverless AV opportunity across Southeast Asia. We are in a prime position to support AV transition over the next few years. We have a very significant role to play via a hybrid fleet, a hybrid meaning both driverless with and drivers fleet. When you think about our right to win, we think about, number one, we have and continue to build strong relationships with AV players as well as OEMs across the world.
Now, uh, in the Philippines, we are working closely with regulators and, uh, property developer Megaworld, uh, to launch a pilot study on drone-powered commercial delivery. So, really, I just want to thank, uh, A to Z Megaworld, Kevin, and all the regulators across the region, uh, for working closely with us to roll out and think through, uh, the implications and how best to do it in a safe, affordable, uh, way.
As we think about the communities we serve, we are always focused on safety.
Affordable, convenient services for all our customers.
So looking ahead, what are we going to do uh 1 you can expect to hear new Partnerships with more Global Ai and driverless Ave partners.
Anthony Tan: Second, our scale, our network across the region, that allows us to provide the best-in-class utilization rates, which is very important, as you imagine, because these cars, you have to make sure utilization rates are high to make the unit products work. Third, the brand trust and a long track record of safety and of working constructively with regulators and governments to really continue to ensure community safety, passenger and driver safety is one that people really care about. And lastly, as you know, Alicia, we also built our own mapping tech with very rich local data sets. That provides millions of real-world driving hours, real-world user pickup, drop-off points, patterns, traffic flows, heat maps across highly complex Southeast Asian-specific urban environments. So that really positions us well. We also have several pilots we planned at the moment.
Uh, we'll continue to explore potential, high-value, new job opportunities that this sector could create for the communities we serve.
Uh, expect to hear more pilots to understand the operational conditions for different driverless vehicle services in the region. And, of course, we want to continuously work with regulators.
To improve transport connectivity using and leveraging the Innovative Technologies uh together. So all in all, we are leaning in in the AV path moving forward.
Thank you.
Thank you. Your next question comes from the line of Dja Gangar from Morgan Stanley. Your line is open.
Uh, thank you very much and good morning. Um, so my first question is just, uh, getting some more details on competition by market and segment. Specifically, if you can comment, maybe on, you know, the mobility GMB growth was a bit slower in the second quarter versus the first quarter. And the trip fares were down about 4%. Which market, specifically, have we seen some slowdown in? And if you can help us, uh,
Anthony Tan: Earlier this month, we announced the A to Z partnership with the Korean full stack AV manufacturer. Now, that culminated in the announcement of the first autonomous electric shuttle bus in Singapore. Now, in the Philippines, we are working with regulators closely and probably develop a mega world to launch a pilot study on drone-powered commercial delivery. So really, I just want to thank A to Z mega world, Kevin, and all the regulators across the region to work closely with us to roll out and think through the implications and how best to do it in a safe, affordable way. So now, as we think about the communities we serve, we are always focused on safe, affordable, convenient services for all our customers. So looking ahead, what are we going to do? One, you can expect to hear new partnerships with more global AI and driverless AV partners.
Contextualize the script as being down 4% and how to think of it going forward. And also, Vietnam specifically, if you have any comments on, you know, a new player entering food delivery if you're seeing any more competition there. So that's my first question. And my second question is just on capital allocation, especially after the raise of the $1.5 billion. CB, I mean beyond the obvious, you know, M&A that has been on and off for a long time. What are the other segments that this capital can be deployed into? Do you have any updated thoughts on buybacks? Thank you.
Hi Divya. Alex here, thanks for your questions. Let me take the first part. Um,
Uh, reinvesting the scale economies from our...
From our ecosystem back into volume. So the AOV drop of 4% in Mobility is something that we have decided upon ourselves rather than being driven by competitive activity.
Um, we think the returns have been good. So, you know, a transaction growth of 23%.
Anthony Tan: We'll continue to explore potential high-value new job opportunities that this sector could create for the communities we serve. Expect to hear more pilots to understand the operational conditions for different driverless vehicle services in the region. And of course, we want to continuously work with regulators to improve transport connectivity using and leveraging the innovative technologies together. So all in all, we are leaning in the AV path moving forward.
Um, means that we’re creating future growth pipeline, and the reason we've taken this stance is because of the potential in Southeast Asia.
A lot of the growth has come from new users and higher frequency in Tier 1 cities.
Um, we are also growing in some of the smaller cities, using the auto Adaptive Technologies that we've developed. This means that we can manage small theaters without having team members present in those cities, which gives us lots of cost efficiencies.
So our strategy is to continue to drive that growth, the topline growth. Um, the margin trade-offs, as I mentioned earlier, are not considerable. They think that it's a good trade-off to make and, therefore, it's sustainable.
Alicia Yap: Thank you.
Operator: Thank you. Your next question comes from the line of Deja Gong Gongar from Morgan Stanley. Your line is open.
Alicia Yap: Thank you very much, and good morning. So my first question is just getting some more details on competition by market and segment. Specifically, if you can comment maybe on the mobility GMV growth was a bit slower in the second quarter versus the first quarter, and the trip fares were down about 4%. Which market specifically are we seeing some slowdown in? And if you can help us contextualize the trip fares being down 4% and how to think of it going forward. And also, Vietnam specifically, if you have any comments on a new player entering food delivery, if you're seeing any more competition there. So that's my first question. And my second question is just on capital allocation, especially after the raise of the $1.5 billion CB.
Um, Market by market always, you know, there's always competitors in every market and the the Market's Dynamics for different. Uh, competitors. Go up and down. But I think overall, uh, we're about 3 times 3.5 times larger than our next largest competitor in the region and that means that our scale economies are quite considerable.
And that's why we've been reinvesting in AI and other capabilities, which means that our efficiencies and the savings we can pass on to consumers are much higher than those of smaller competitors. So, we think this is a sustainable competitive strategy, no matter whether from time to time, there might be surges in competitive activity in particular markets.
Ad on your capital allocation question. Um,
Alicia Yap: I mean, beyond the obvious M&A that has been on and off for a long time, what are the other segments that this capital can be deployed into? Do you have any updated thoughts on buyback? Thank you.
Alex Hungate: Hi, Divya. Alex here. Thanks for your questions. Let me take the first part. We have chosen to lean into reinvesting the scale economies from our ecosystem back into volume. So the AOV drop of 4% in mobility is something that we have decided upon ourselves rather than being driven by competitive activity. We think the returns have been good. So a transaction growth of 23% means that we're creating a future growth pipeline. And the reason we've taken this stance is because of the potential in Southeast Asia. A lot of the growth has come from new users and higher frequency in tier one cities. And we are also growing in some of the smaller cities using the auto-adaptive technologies that we've developed, which means that we can manage small cities without having team members present in those cities. So that gives us lots of cost efficiency.
Our spans has always been consistent. We take a very prudent approach when it comes to Capital allocation. So where do we look at? We always want to create generate, share all the value and a long-term basis. And if you look at where we've been deploying our Capital, it's really fueling the growth of our business through organic growth and that's going to be P0 for us. It's going to be high top of the list for us and you're seeing that playing out in this result, which is fueled by the previous deployment of capital was all the product Innovations and the tech innovations that we've been doing and that will continue, that will continue to fuel the growth that we're going to see in our business as we move forward. Now, with that being said, with m&a, we're always on the lookout with a strong balance sheet and with the recent Capital, raise, it does, give us that strategic flexibility and the flexibility is important uh, because m&a comes and goes so we'll be continuing to
Style of the market in terms of what's available. But at the same time, also the barriers are so much higher when you compare to the organic growth that we're continuing to prioritize over our business today.
Alex Hungate: So our strategy is to continue to drive that growth, the top line growth. The margin trade-offs, as I mentioned earlier, are not considerable. We think that it's a good trade-off to make, and therefore, it's sustainable. Market by market, there's always competitors in every market, and the market dynamics for different competitors go up and down. But I think overall, we're about 3.5 times larger than our next largest competitor in the region. And that means that our scale economies are quite considerable. And that's why we've been reinvesting in AI and other capabilities, which mean that our efficiencies and the savings we can pass on to consumers are much higher than those of smaller competitors. So we think this is a sustainable competitive strategy, no matter whether from time to time there might be surges in competitive activity in particular markets.
Now in terms of buyback, we did complete the 500 million buyback with we was done concurrently with the recent, uh, convertible note that we raised, there's no plans for new buyback programs. Uh, this that's something that will continue to explore, uh, with our board. But in in this quarterly earnings, there's nothing for us to announce again. It's all about for us prioritizing the right sort of Capital Management in our business. And we have a new buyback, we'll definitely share it with all of you.
Thank you very much.
Yeah, next question.
Thank you. Your next question comes from the line of Pure Chery from HSBC. Your line is open.
Yeah. Hi, good morning, management team, and congrats on a good set of results. I have two questions, please. Firstly, on the delivery segment.
Anthony Tan: Hey, Divya, on your capital allocation question, our stance has always been consistent. We take a very prudent approach when it comes to capital allocation. So what do we look at? We always want to create, generate, share all the value on a long-term basis. And if you look at where we've been deploying our capital, it's really fueling the growth of our business through organic growth. And that's going to be P0 for us. It's going to be high at the top of the list for us. And you're seeing that playing out in this result, which is fueled by the previous deployment of capital towards all the product innovations and the tech innovations that we've been doing. And that will continue. That will continue to fuel the growth that we're going to see in our business as we move forward.
Uh, what's the outlook of, uh, consumer incentive spending as it remains at around 7% of GMV in Q2? Um, Alex, you talked about the midterm margin outlook, but should we expect the pace of margin to be lower going forward due to these new product launches and focus on driving user engagement?
And second question on mobility, if you can share. What's the contribution mix between premium rides and affordable rides? How has that proportion changed over the last year? Because that dynamics, um, you know, uh, have an impact on the margins. Thank you.
Thanks, PJ.
The deliveries.
Product investment. Yeah, we'll continue to see opportunities there for further product investment. Um, I can tell you that in terms of the medium term...
Anthony Tan: Now, with that being said, with M&A, we're always on the lookout. With a strong balance sheet and with the recent capital raise, it does give us that strategic flexibility. And that flexibility is important because M&A comes and goes. So we'll be continuing to scour the market in terms of what's available. But at the same time, also, that barrage is so much higher when you compare it to the organic growth that we're continuing to prioritize over our business today. Now, in terms of buyback, we did complete the $500 million buyback. It was done concurrently with the recent convertible note that we raised. There's no plans for new buyback programs. That's something that we'll continue to explore with our board. But in this quarterly earnings, there's nothing for us to announce. Again, it's all about, for us, prioritizing the right sort of capital management in our business.
For the next two quarters of this year for deliveries, we do expect the margin to improve from the current quarter.
So, we see sequential improvement in margin for the rest of this year. So, hopefully that's helpful for you all with your models.
Um, as penetration will obviously contribute to that, you typically see the third and fourth quarters as big quarters for advertising. And as you can see from our results, both...
The self-serve ad Channel penetration and the uh sales uh sales force, uh sold directly to Enterprise, larger clients, both continue to grow. And so, we're very bullish about what grab has to offer as a retail media Network to have a to advertise as given our first party data and the closed loop, um,
Effectiveness that we can show to those advertisers.
Anthony Tan: And when we have a new buyback, we'll definitely share it with all of you.
We are committed to the 4% steady-state margins in the longer run as well, so just confirming all of that.
Moving to mobility, the mix between SA and premium.
Alicia Yap: Thank you very much.
Alex Hungate: Next question.
Operator: Thank you. Your next question comes from the line of Piyush Chaudhry from HSBC. Your line is open.
Pang Vitt: Yeah, hi. Good morning, management team, and congrats on a good set of results. Two questions, please. Firstly, on delivery segment, what's the outlook of consumer incentive spending as it remains at around 7% of GMV in Q2? Alex, you talked about the mid-term margin outlook, but should we expect the pace of margin expansion in the delivery segment to be slower going forward due to these new product launches and a focus on driving user engagement? Second question on mobility, if you can share, what's the contribution mix between premium rides and affordable rides? How has that proportion changed over the last one year because that dynamics have an impact on the margins? Thank you.
Um, saving now is about one-third of Mobility transactions. So we're continuing to scale that, particularly in the lower-tier cities. But we're still seeing growth in the number of users, attracting new users into Tier 1 cities and increasing frequency both in Tier 1 and in the smaller cities.
So, uh, we're consciously focusing on affordability, um, so that we can, uh, continue to...
Um, we can continue to drive that frequency and growth of new users into the ecosystem on the premium end. We're also continuing to grow at the same time, so it's not just the affordability summit, which is growing premium now, as in double digits as a percentage of transaction.
Um, and we expect that to continue to grow with the advanced booking and other features that we've been launching recently.
We've done a lot of work with airports around the region so that we can get better access into airports.
Alex Hungate: Thanks, Piyush. So first one on the delivery's product investment. Yeah, we will continue to see opportunities there for further product investment. I can tell you that in terms of the medium term, for the next two quarters of this year for deliverys, we do expect the margin to improve from the current quarter. So we see sequential improvement in margin for the rest of this year. So hopefully, that's helpful for you all with your model. Ads penetration will obviously contribute to that. Typically, third and fourth quarter are big quarters for advertising. And as you can see from our results, both the self-serve ad channel penetration and the Salesforce sold directly to enterprise larger clients both continue to grow.
And uh and therefore we can balance that margin between the affordable products and the high value products for the less price sensitive users. So uh I can reiterate that we are committed to the 9% steady state uh Mobility margins which as you're probably aware would remain.
Industry-leading, when you look across the world.
Thanks Posh next question.
You your next question.
Comes from Jong Sha of Barkley. Your line is open.
Thank you very much.
First, um, I have 4, um, around. Um,
Autonomous driving? Sorry, more like a robot! Actually, I don't know. Prepare to remarks, and we'll be open to earlier.
Alex Hungate: And so we're very bullish about what Grab has to offer as a retail media network to advertisers, given our first-party data and the closed-loop effectiveness that we can show to those advertisers. We are committed to the 4% steady-state margins in the longer run as well. So just confirming all of that. Moving to mobility, the mix between saver and premium. Saver now is about one-third of mobility transactions. So we're continuing to scale that, particularly in the lower-tier cities. But we're still seeing growth in numbers of users attracting new users into tier one cities and higher frequency both in tier one and in the smaller cities. So we're consciously focusing on affordability so that we can continue to drive that frequency and growth of new users into the ecosystem. On the premium end, we're also continuing to grow at the same time.
And you talked about that twice in Singapore. Given what Uber is doing, he wrote about taxi around the world, but it is doing in China. I was wondering if you could elaborate on that.
Uh, what's your plan or roadmap with taxis in a region? My questions are, um, the first is around the region, of course. I was hoping, um, perhaps you can comment about...
Um, your expectations for the original pause for the second half of this year; and I have another portion around the correct month.
Um, could you talk about sort of a longer term, how do you anticipate a camp for web traditional food delivery? Um, and can we expect the long-term modules for for the market to be close to the about 4% pocket as well? Thank you so much.
Alex Hungate: So it's not just the affordability segment which is growing. Premium now is in double digits as a percentage of transaction. And we expect that to continue to grow with the advanced booking and other features that we've been launching recently. We've done a lot of work with airports around the region so that we can get better access into airports. And therefore, we can balance that margin between the affordable products and the high-value products for the less price-sensitive users. So I can reiterate that we are committed to the 9% steady-state mobility margins, which, as you're probably aware, would remain industry-leading when you look across the world. Thanks, Piyush. Next question.
Thanks, John. So I'll take the AV1. Uh, and well, the good news is, uh, D. Uh, so you know with Uber, we have a good sense of what is happening, and, uh, you're right. Uh, we see also, uh, a lot of AV action taking place, uh, also in China, and, uh, we...
Uh, these actual robot taxis are on the streets now. Um,
Operator: Thank you. Your next question comes from Zhongxia of Barclays. Your line is open.
Zhongxia: Thank you very much for taking my questions. First, I have a follow-up around autonomous driving or sorry, more like a robotaxi. I know you have prepared remarks and also you know earlier. And you talked about the trial for the shuttle bus in Singapore. Given what Uber is doing in robotaxi around the world, what it is doing in China, I was wondering if you can comment about what's the plan for robotaxi in your region. My question to your first is around the regional cost. I was hoping that either perhaps you can comment about your expectations for the regional cost for the second half of this year. And now I have another question around the Grab Mart. Could you talk about sort of a longer term? How do you anticipate the TAM for Grab Mart vis-a-vis the more traditional food delivery?
As I talked about the Partnerships, uh, we I have nothing to announce today, um, but we can, uh, assure you. That, uh, we are, uh, really looking very seriously at how to expand, uh, Pilots, uh, across the region. We are talking to, uh, number partners, and we are, we will, uh, announce more, uh, when we are ready, um, and of course, all this is done, uh, very closely with the government. Uh, but, you know, you can, you can foresee in the next. Uh, the amount of months, you'll, you'll hear more announcements on this,
Hey, John on your question around Regional corporate costs. Um, so what you're what you saw in the second quarter uh in the increase which is roughly about a 9.5% Q on Q. Increase the original copper cost is pretty much on tandem with the strong on demand, gmv growth momentum. Uh, in the second quarter. Um, it if you look at the on demand gmv was growing at 21% um on on actual currency but our regional corporate cost was growing at 9.5%. So as you're growing much slower than on than our Topline business growth overall which is what we're actually driving. We're driving operating leverage in the business and a lot of the cost that's tied to the increase Q on Q. It's pretty much a variable cost. We're looking at more Cloud costs software.
Zhongxia: And should we expect the long-term margins for the Grab Mart business to be close to about 4% margin as well? Thank you so much.
Anthony Tan: Thanks, Zhong. So I'll take the AV one. And well, good news is Dara's on. So with Uber, we have a good sense of what's happening. And you're right. We see also a lot of AV action taking place also in China. And we've actually seen experience gone there multiple times to experience the actual robotaxis on the streets. Now, as I talked about the partnerships, I have nothing to announce today, but we can assure you that we are really looking very seriously at how to expand pilots across the region. We are talking to a number of partners, and we will announce more when we are ready. And of course, all this is done very closely with the government. But you can foresee in the next number of months, you'll hear more announcements on this.
Cost, if you would expect from just the, the volume of growth that we're driving the transactions in our business, our transaction was up 23% on a year-over-year basis. Now, as we think about moving forward, um, overall, uh, will your corporate costs will probably be somewhere around that 10% to 12% increase on a year-over-year basis. What's important though? Is driving operating leverage, um, and I would expect that somewhere around a hundred to about 150 basis points of margin Improvement. In terms of regional corporate costs is the percentage of Revenue, which is really critical as we drive that cost efficiency throughout the business both on variable as well as on fixed costs. So hopefully that gives you a bit of color on copper costs and I'll turn it over to Alex on Mark.
Thanks, Peter, and thanks, John, for the question. I'm glad you've asked us about GrabMark, because this is an area where the TAM is very large—potentially much larger than the food delivery market in the longer run.
Online groceries is still barely penetrated in Southeast Asia, probably less than 5% penetrated.
Um, and it's a context where many of our countries in Southeast Asia have a very low penetration of the modern retail offline business.
So, the user experience is not great. So, the chance to leapfrog that with a digital smart experience is strong.
M is only currently less than 10% of our deliveries business.
But already growing faster than food deliveries. So it's about 1.5 times in terms of growth rate.
And the NUS for Marta hitting all-time highs this quarter. So, it's a very active and growing user base now.
Alex Hungate: Hey, Zhong, on your question around regional corporate costs. So what you saw in the second quarter in the increase, which is roughly about a 9.5% Q1 Q increase in regional corporate costs, is pretty much on tandem with the strong on-demand GMV growth momentum in the second quarter. If you look at the on-demand GMV, it was growing at 21% on actual currency. But our regional corporate cost was growing at 9.5%. So it's actually growing much slower than our top line business growth overall, which is what we're actually driving. We're driving operating leverage in the business. And a lot of the cost that's tied to the increased Q1 Q is pretty much variable costs. We're looking at more cloud costs, software costs, as you would expect from just the volume of growth that we're driving.
Shows the potential of the digital experience.
We're taking our partnership first approach. Um, as you know we own Gia grosser and we just purchased everise in Malaysia. So we have a, we have an offline online experience there, which is probably the Leading Edge of the customer experience that we're developing with the o2o opportunity.
Um, that's working well. Uh, we can extend that to partnerships in other markets.
And, uh, the goal there is to make sure we can replicate the very beginning of customer.
Already in jaw. We're heading towards 15% online, penetration of gmv, which is, uh, which is great and shows what can be done. That would be an, that's an industry-leading number. So it's obviously attractive for partners and other markets to work with us to try to get to those types of levels of online penetration.
Alex Hungate: The transactions in our business, our transactions were up 23% on a year-over-year basis. Now, as we think about moving forward overall, regional corporate costs will probably be somewhere around that 10% to 12% increase on a year-over-year basis. What's important, though, is driving operating leverage. And I would expect that somewhere around 100 to about 150 basis points of margin improvement in terms of regional corporate costs as a percentage of revenue, which is really critical as we drive that cost efficiency throughout the business, both on variable as well as on fixed costs. So hopefully, that gives you a bit of color on corporate costs. And I'll turn it over to Alex on Mart.
Something about margins. Currently, the mark margin is embedded within our overall expectations for the deliveries margin, which, as we talked about earlier, is 4% plus in steady state.
There is a huge advertising opportunity for M. Many of the FMCGs in Southeast Asia find it hard to get strong data on their sales because of the multi-tier distribution in the rather traditional retail environment here.
So, we're able to give them first-party data, which they find very valuable.
Peter Oey: Thanks, Peter, and thanks, Zhong, for the question. I'm glad you've asked us about Grab Mart because this is an area where the TAM is very large, potentially much larger than the food delivery market in the longer run. Online groceries is still barely penetrated in Southeast Asia, probably less than 5% penetrated. And it's a context where many of our countries in Southeast Asia have a very low penetration also of the modern retail offline business. So the user experience is not great. So the chance to leapfrog that with a digital Mart experience is strong. Mart is only currently less than 10% of our deliveries business, but already growing faster than food deliveries. So it's about 1.5 times in terms of growth rate. And the MTUs for Mart are hitting all-time highs this quarter. So it's a very active and growing user base now.
So, as we work with the FMCGs, uh, with our digital-first, uh, approach for Mark, then, of course, that's something very attractive from an aspect as well.
Um, I put ads in something that we think we can improve upon, particularly for mud.
Thanks, John next question.
Thank you. Your next question is from Mark Mahaney from Evercore ISI. Your line is open.
Thank you. I just want to ask about the advertising Revenue. You got that 236 million run rate, I think, and that 45% growth just talk about the sustainability of that growth. Uh, and um, and then think about or talk about the, the long-term, um,
Stealing or marking for where advertising is a percentage of GMV could go. Thank you very much.
Peter Oey: It shows the potential of the digital experience. We're taking a partnership-first approach. As you know, we own Jaya Grocer, and we just purchased Everrise in Malaysia. So we have an offline online experience there, which is probably the leading edge of the customer experience that we're developing with the O2O opportunity. That's working well. We can extend that to partnerships in other markets. And the goal there is to make sure we can replicate the very best customer experience that we can. And already in Jaya, we're heading towards 15% online penetration of GMV, which is great and shows what can be done. That's an industry-leading number. So it's obviously attractive for partners in other markets to work with us to try to get to those types of levels of online penetration.
Thanks Mark. Yeah. Um, you can see that the that the advertising business has has doubled, um, a couple of times over the last couple of years, so you can see that we're, we're growing super fast.
Uh, there's an exponential impact in here that I should explain.
1 is the number of advertisers that are actually trying to grab as a retail media network. For the first time, it continues to grow. We're still at less than 50% penetration of our merchant base in terms of those that have tried us, so there's still upside there in terms of expanding the penetration of our merchandise.
And because they return on advertising sales is averaging 8 times. We know that it's a great product for them and it can help them grow.
So, as the retention of those, those that do try us,
Peter Oey: In terms of margins, currently, the Mart margin is embedded within our overall expectations for the deliveries margin, which, as we talked about earlier, is 4% plus in steady state. There's a huge ads opportunity for Mart. Many of the FMCGs in Southeast Asia find it hard to get strong data on their sales because of the multi-tier distribution of the rather traditional retail environment here. So we're able to give them first-party data, which they find very valuable. So as we work with the FMCGs with our digital-first approach for Mart, then, of course, that's something very attractive from an ads perspective as well. So the penetration of 1.7% for food deliveries or for ads is something that we think we can improve upon, particularly for Mart. Thanks, Zhong. Next question.
is very high, and therefore, we're experiencing that exponential impact of existing advertisers spending more.
While, uh, we grow, uh, the penetration at the same time,
Um, so the penetration year on year grew 40 percent. So that's the first part of the exponential.
Um, and then those existing advertisers...
On the self-serve platform, also, we increased by 31%, so uh, really good opportunity for us there.
Advertisers as, you know, or I want reach. So the bigger we get the, the more attractive we are on our cost per Point basis as well. So the the pricing on the network gets larger gets higher as we get larger, simply because there are all they care about is the the returns ultimately to their investment. So this is, this is why you're seeing those kinds of exponential growth rates on Advertising.
Operator: Thank you. Your next question is from Mark Mahaney from Evercore ISI. Your line is open.
If you look across the world, penetration of advertising to GMV in various markets can get much higher than where we are today.
Mark Mahaney: Thank you. I just wanted to ask about the advertising revenue. You got that 236 million run rate, I think, and that 45% growth. Just talk about the sustainability of that growth and then think about or talk about the long-term ceiling or marker for where advertising as a percentage of GMV could go. Thank you very much.
Uh, we're seeing examples of 2% penetration, 3%, penetration, even 4% penetration particularly when you get into the M type of um type of ecosystem.
So I think, uh, depending on our different verticals, including Mobility, by the way, where we've now introduced ads with the opportunity to increase habitat and penetration much higher than the current penetration that we have of 1.7%.
Peter Oey: Thanks, Mark. Yeah, you can see that the advertising business has doubled a couple of times over the last couple of years. So you can see that we're growing super fast. There's an exponential impact in here that I should explain. One is the number of advertisers that are actually trying Grab as a retail media network for the first time continues to grow. We're still at less than 50% penetration of our merchant base in terms of those that have tried us. So there's still upside there in terms of expanding the penetration of our merchant base. And because their return on advertising sales is averaging eight times, we know that it's a great product for them, and it can help them grow.
Thank you very much.
Thanks, Mark. Next question, please. Thank you. Next question.
Thank you. Your next question is from Ron Jon Sharma at JP Morgan. Your line is open.
Hi, good morning, and thank you for the presentation. Uh, my first question, I know a lot of people talked about deliveries, uh, in the margins.
But I can get a bit deeper into it. Uh, if I remove the ad revenue,
Uh, then the delivery if it.
Uh, uh, X adds, uh, seems to be a bit softer.
I appreciate that you're doing a lot of growth investments, and you're seeing tremendous experience in your...
Per monthly transacting users and new services.
Peter Oey: So as the retention of those that do try us is very high, and therefore, we're getting that exponential impact of existing advertisers spending more while we grow the penetration at the same time. So the penetration year on year grew 42%. So that's the first part of the exponential. And then those existing advertisers on the self-serve platform also increased 31%. So really good opportunity for us there. Advertisers, as you know, want reach. So the bigger we get, the more attractive we are on a cost-per-point basis as well. So the pricing on the network gets larger, gets higher as we get larger, simply because all they care about is the return, ultimately, to their investment. So this is why you're seeing those kinds of exponential growth rates on advertising.
But is there a point where we should think, uh, that the underlying delivery with the X ads?
Uh, could you start, uh, in selecting upwards, or do you see the focus on the new term or the midterm as well?
Uh, to uh, focus on growing the business rather than monetizing it, uh, to its potential. Uh, second, uh, on fintech, No. 1 has asked; let me ask, uh, about the tremendous growth in the loan portfolio. If you can help understand, uh, where you’re making these uh, uh, uh, where you’re making these loans. Thank you.
Thanks, Jen. Yes, let me take both of those. Um, on the deliveries, we do see considerable website penetration and volume in Southeast Asia in the medium term.
We think that the current strategy, leaning into growth and reinvesting, represents the economies we're gaining from our scale.
Peter Oey: If you look across the world, penetration of advertising to GMV in various markets can get much higher than where we are today. We're seeing examples of 2% penetrations, 3% penetration, even 4% penetration, particularly when you get into the Mart type of ecosystem. So I think depending on our different verticals, including mobility, by the way, where we've now introduced ads, is the opportunity to increase advertising penetration much higher than the current penetration that we have of 1.7%.
Uh, considerable trade-offs in margin. We, uh, we don't see the advertising upside as separate from the margin of the business. We see them as a combined opportunity. As I mentioned in response to Mark on the last question, the return to advertisers is what's key. So as we get more scale, the returns to them improve, and therefore the value of our advertising inventory increases. So, scale itself...
Or the delivery segments including Mark is an important driver of value for advertisers and therefore we don't we don't separate it from the deliveries margin but we'll continue with this strategy. Uh as you can see it's created a an acceleration of um of our of our deliveries growth.
Mark Mahaney: Thank you very much.
Peter Oey: Thanks, Mark. Next question, please.
Operator: Thank you. Next question. Thank you. Your next question is from Ranjan Sharma at JP Morgan. Your line is open.
And there's and, and Southeast. Asia is a region where there's still lots of untapped potential. So uh we want to we want to drive further into that.
Ranjan Sharma: Hi. Good morning, and thank you for the presentation. My first question, I know a lot has been said about deliveries and the margins. But I can get a bit deeper into it. If I remove the ad revenue, then the delivery EBITDA X ads seems to be a bit softer. I appreciate that you're doing a lot of growth investments, and you're seeing tremendous expansion in your monthly transacting users and new services. But is there a point where you would say where we should think that the underlying delivery EBITDA X ads could start inflecting upwards? Or do you see the focus on the near term or the midterm as well? We'll be on growing the business rather than monetizing it to its potential. Our second on context is no one has asked that we ask tremendous growth in the loan portfolio.
Moving to your second question on Financial Services. It's the first time that we've given an outlook for the loan book size. Um, so I hope that's helpful for you all.
So we've said that by the end of the year, we'll hit 1 billion. Um, um, we're at about 700 million at the end of Q2.
And the reason why we're very confident that we can exceed $1 billion is because of the very strong product lineup we have, both for Grab Fin, our fintech arm, and for the digital banks.
so,
Um, for the first time, we've got personal lending products available for all three banks.
We've got BMPL available through Grab. Finn in multiple markets.
And as of the middle of this year, so going forward for the full second half, we have.
Ranjan Sharma: If you can help understand where you're making these loans. Thank you.
Peter Oey: Thanks, Anjanya. Let me take both of those. On the deliveries, we do see considerable upside in penetration and volume in Southeast Asia in the medium term. We think that the current strategy leaning into growth and reinvesting the economies we're getting from our scale is sustainable. We haven't had to make considerable trade-offs in margin. We don't see the advertising upside as separate from the margin of the business. We see them as a combined opportunity. And as I mentioned in the response to Mark on the last question, the return to advertisers is what's key. So as we get more scale, the returns to them improve. And therefore, the value of our advertising inventory increases. So scale itself for the delivery segment, including Mart, is an important driver of value for advertisers. And therefore, we don't separate it from the delivery's margin. So we'll continue with this strategy.
The supply chain financing capability that we got by acquiring the Validus business in Singapore, which is now being rebranded as GXS Capital through GXS Bank. So we've been financing SMEs through the supply chain; in other words, with a well-managed risk profile because it's based on the risk of larger corporate off-takers.
And it's a very good fit with our ecosystem. So that's a capability that not only will we grow in Singapore, but we'll start to expand across the region as well.
If you look at the numbers carefully, the $1 billion represents an acceleration half on half.
So the half-and-half growth was 32% in the first half, and $1 billion would see us reaching 41% in the second half.
And that's because of this product lineup that I mentioned earlier, and also our increasing faith in the system data advantage that we have for underwriting and distribution. So our credit models are performing well. The performance of the Gini coefficients that we're managing to generate are significantly higher than they were when we first started this journey. Um, and we're getting more and more capabilities there as we ingest.
Peter Oey: As you can see, it's created an acceleration of our delivery's growth. And Southeast Asia is a region where there's still lots of untapped potential. So we want to drive further into that. Moving to your second question on financial services, it's the first time that we've given an outlook for the loan book side. So I hope that's helpful for you all. So we've said that by the end of the year, we'll hit 1 billion. We're at about 700 million at the end of quarter two. And the reason why we're very confident that we can exceed 1 billion is because of the very strong product lineup we have both for Grab Fin, our fintech arm, and for the digital banks. So for the first time, we've got personal lending products available for all three banks. We've got BNPL available through Grab Fin in multiple markets.
More data fields from across our ecosystem.
I can reiterate also the break-even target. So, for Financial Services overall, we expect to break even in the second half of 2026. And for the free banks, we expect to break even in the fourth quarter of 2026.
So our approach overall is high growth, this is still the fastest growing business that we have, but we remain focused on balancing risk management as well as scale as we as we um as we grow this business.
Around John also just to add on that. Deliveries margin. If you if you look at some of the countries that we operate in today, uh a majority of those countries are already in the ZIP code or 4 to 5% deliveries margin. Uh, and it's been very consistent uh, throughout many quarters now. Now, we so we have some work to do in terms of closing the gap on some of the
The other countries which were very focused on.
Peter Oey: And as of the middle of this year, so going forward for the full second half, we have the supply chain financing capability that we got by acquiring the Validus business in Singapore, which has now been rebranded GXS Capital through GXS Bank. So we've been financing SMEs through the supply chain, in other words, with a well-managed risk profile because it's based on the risk of larger corporate off-takers. And it's a very good fit with our ecosystem. So that's a capability that not only will we grow in Singapore, but we'll start to expand across the region as well. If you look at the numbers carefully, the 1 billion represents an acceleration half on half. So the half on half growth was 32% in the first half. And 1 billion would see us reaching 41% in the second half.
Also, at the same time, we are balancing the underpenetrated markets with also feeling that growth on the top line is coming as we bring new users into the platform.
And also with advertising scaling up that, um, Alex also spoke about, we feel that we're very confident we can get to a margin improvement in deliveries, but also we're not going to sacrifice the growth that we're seeing at the same time. Also, it's a balancing act, but we've got some countries already north of 4%. But we're also balancing us overall as an ecosystem, as a business, a deliveries business. We also want to make sure we're fueling that 20% growth rate that we're seeing across deliveries.
Um, Anthony, Alex, and I, uh, really want to express.
Peter Oey: And that's because of this product lineup that I mentioned earlier, and also our increasing faith in the system data advantage that we have for underwriting and distribution. So our credit models are performing well. The performance of the GENIE coefficients that we're managing to generate are significantly higher than they were when we first started this journey. And we're getting more and more capabilities there as we ingest more data fields from across our ecosystem. I can reiterate also the break-even target. So for financial services overall, we expect to break even in the second half of 2026. And for the three banks, we expect to break even in the fourth quarter of 2026. So our approach overall is high growth. This is still the fastest growing business that we have. But we remain focused on balancing risk management as well as scale as we grow this business.
Our appreciation to all our drivers and to all our Merchant partners, and all our customers, and users and shareholders for really just continuing the Trust In grab. Uh, thank you also to the grab team for a great quarter, uh, looking forward to delivering a strong second half, uh, together with our IR team, Doug Ken. And I will be on the road. In the next few weeks will be attending various a conferences, across us, Hong Kong and Singapore, in the coming weeks. So, we wish to meet up, please reach out to any of us here. We would love to see you in person and catch up then. Thank you for this morning, and for those dialing in at different time zone. Appreciate it. And we'll talk over the next few weeks. Thank you, everyone.
Thank you. This concludes the second quarter 2025 earnings conference call. Thank you for your participation. You may now disconnect.
Anthony Tan: And just to add on that delivery's margin, if you look at some of the countries that we operate in today, a majority of those countries are already in the zip code of 4% to 5% delivery's margin. And it's been very consistent throughout many quarters now. So we have some work to do in terms of closing the gap on some of the other countries, which we're very focused on. Also, at the same time, we're balancing the underpenetration of deliveries, which Alex spoke about, which we feel that we're balancing with also feeling that growth on the top line as we bring new users into the platform. And also with advertising scaling up that Alex also spoke about, we feel that we're very confident we can get to a margin improvement in deliveries.
Anthony Tan: But also, we're not going to sacrifice the growth that we're seeing at the same time also. It's a balancing act. Well, we've got some countries already north of 4%. We're also balancing us overall as an ecosystem, as a business, a deliveries business. We also want to make sure we're also fueling that 20% growth rate that we're seeing across deliveries. All right. So we're going to wrap up the call here. So thanks very much, everyone, for dialing in. Anthony, Alex, and I really want to express our appreciation to all our drivers and to all our merchant partners and all our customers and users and shareholders for really just continuing the trust in Grab. Thank you also to the Grab team for a great quarter. And looking forward to delivering a strong second half.
Anthony Tan: Together with our IR team, Doug, Ken, and I, we'll be on the road over the next few weeks. We'll be attending various IR conferences across the US, Hong Kong, and Singapore in the coming weeks. So if you wish to meet up, please reach out to any of us here. We'd love to see you in person and catch up then. Thank you for this morning and for those dialing in in a different time zone. Appreciate it. And we'll talk over the next few weeks. Thank you, everyone.
Operator: Thank you. This concludes Grab's second quarter 2025 earnings conference call. Thank you for your participation. You may now