On Thursday, Grab Holdings (NASDAQ:GRAB) celebrated its inaugural quarterly profit and introduced its maiden share repurchase strategy. However, the ride-share and food delivery giant’s cautious annual revenue forecast stirred concerns about its growth trajectory, casting a shadow over its shares.
Although the Singapore-based company witnessed a resurgence in ride-share growth to pre-pandemic levels in 2023, its food delivery arm is still recovering from a post-lockdown slowdown, having experienced a surge during the pandemic-induced restrictions.
Speaking to Reuters, CFO Peter Oey expressed optimism about revenue acceleration beyond 2024, citing investments in innovative products poised to yield substantial transactions. Grab is diligently crafting premium offerings within its mobility and delivery services to capture high-value markets.
In early trading, U.S.-listed Grab shares dipped by 2% to $3.38 following the announcement. The company projected its fiscal 2024 revenue to range between $2.70 billion and $2.75 billion, slightly below analysts’ average estimate of $2.80 billion, as per LSEG data.
Furthermore, Grab disclosed its intention to repurchase $500 million worth of class A ordinary shares, along with an early repayment of a term loan. This move echoes Uber’s (NYSE:UBER) recent debut share buyback initiative.
Additionally, Grab forecasted a full-year adjusted core profit of $180 million to $200 million, surpassing estimates of $135.2 million. Notably, the company’s fourth-quarter revenue of $653 million exceeded analyst expectations of $629 million, with a 26% rise in its mobility business attributed to heightened holiday quarter travel demand, coupled with a 20% uptick in its delivery unit.
Grab reported a net income of $11 million in the fourth quarter, aided by the “reversal of an accounting accrual.” The company achieved its first adjusted core profit in the fiscal third quarter, driven by workforce optimizations and strategic cuts to incentives and technology expenses over the past two years.
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Author Faith Yakubu 
