Grab's Q1 net loss narrows as demand for food delivery buoys revenue growth

Southeast Asian superapp Grab reported on Thursday that its net loss narrowed in the first quarter of this year on the back of a 6% year-on-year rise in revenue.

In its earnings call, the Southeast Asian ride-hailing and food delivery company said its losses in January-March narrowed by 35% to $435 million from $666 million a year earlier.

Grab noted that the smaller net loss in Q1 was “primarily due to the elimination of non-cash interest expense of Grab’s convertible redeemable preference shares that converted to ordinary shares in December 2021 and will no longer be incurred going forward”.

“The headline net loss is less relevant as most of the improvement is from the lack of interest expenses on the preference shares. Not really a reflection of the underlying business,” said Angus Mackintosh, consulting editor, DealStreetAsia.

Grab’s Q1 revenue stood at $228 million, compared with $216 million a year earlier, on the back of an increase in the demand for food delivery services.

The company said its cash liquidity stands at $8.2 billion as of March 31, 2022, down from $9 billion as of December 31, 2021 primarily due to net cash outflow from operating activities and the acquisition of Malaysian grocery chain Jaya Grocer for a reported $350-$430 million.

“Our first quarter results are a testament to the resilience of Southeast Asia’s economy as we move past the worst of the pandemic restrictions,” company’s co-founder and chief executive Anthony Tan said.

In a nutshell, here’s how the company performed in Q1 2022:

  • Revenue stood at $228 million, up 6% from $216 million a year earlier
  • Posted a net loss of $435 million in the Jan-March period, from $666 million a year ago.
  • Surpassed quarterly gross merchandise value (GMV) and total payments volume (TPV) Q1 guidance for deliveries, mobility and financial services, respectively.

In Q4 2021, Grab had posted a net loss of $1.1 billion, up 73% from Q4 2020. Revenues stood at $122 million, down 44% from a year ago. The hit was on account of merchant and driver incentives that rose 74% year-on-year to $218 million.

Here’s what the company expects the full year 2022 to look like:

  • Full-year revenue to be between $1.2 billion and $1.3 billion
  • Year-on-year growth in group GMV to be between 30% and 35%

“We are optimistic that our business will continue to strengthen as more countries pivot to living with COVID-19,” Tan added.

Deliveries vertical

Revenue from delivery activities in Q1 2022 came in at $91 million, up 70% from a year earlier. GMV in this segment also rose by 50% year-on-year to $2.56 billion from $1.70 billion in Q1 2021.

“Our deliveries segment registered strong GMV and revenue growth driven by continued growth in food and groceries deliveries and contributions following our acquisition of Jaya Grocer,” according to the company.

Grab, which continues to double down on on-demand grocery delivery, earlier said the acquisition allows it to bring more Jaya Grocer retail stores into its marketplace.

Food delivery has been a major growth driver for Grab. According to a report published by the consultancy Momentum Works in January, Grab accounted for half of Southeast Asia’s food delivery market share in 2021.

Grab said it will expand its deliveries segment into underpenetrated outer cities and towns in most of its markets to tap growth opportunities there.

The company saw stable demand for deliveries in Q1, despite an easing of COVID restrictions in some countries, and a moderating of consumer incentives compared to the prior quarter.

Grab saw stable demand for deliveries in Q1, despite easing of COVID restrictions.

“These early signs indicate that demand for deliveries may remain stable even as Southeast Asia moves to a post-pandemic footing,” Grab said.

Ride-hailing vertical

Grab said revenue from ride-hailing activities in the first three months of the year dropped by 22% year-on-year to $112 million. It had reported a 27% decline in the fourth quarter of 2021.

Revenue and segment adjusted EBITDA declined year-on-year as Grab spent to acquire drivers to capture demand coming back online. Segment Adjusted EBITDA margin for mobility declined to 9.8% of GMV in Q1 2022 compared with 14.3% of GMV in Q1 2021 and from 10.1% of GMV in the previous quarter.

Tan expects Grab’s mobility business to “gradually recover” as COVID-19 restrictions ease further and the company’s active driver base increases. The company expects ride-hailing activity to be close to pre-pandemic levels by the end of this year.

Financial services

Revenue from Grab’s financial services business in Q1 2022 came in at $11 million, up 52% from $8 million a year earlier. GMV also grew 23% year-on-year to $1.36 billion.

The company cited off-platform GMV growth and strong ecosystem lending growth as the drivers of the rise in revenue and GMV during the quarter.

In the quarter, e-wallet firm OVO continued to execute on its open ecosystem strategy, signing up key partners and launching its first recurring payment partnership with a global subscription-based streaming service.

OVO also expanded its partnerships with key merchants in the groceries, travel, and marketplace segments to capture growth opportunities in those segments. One such partner is Indomaret, a convenience store chain in Indonesia.

Grab also launched its first Islamic financing product in the quarter with a partner in Malaysia. The Shariah-compliant product lets eligible drivers tap convenient financing options to address their cash flow needs.

Grab launched its first Islamic financing product in Q1 in Malaysia.

The company said it will continue to embed different payment and lending options into its app to “enhance our marketplace” and better support its drivers, merchants and consumers. For example, Grab said it will expand the Buy Now Pay Later product into more markets in 2022 and 2023.

Enterprise and New Initiatives

In the quarter, Grab reported a 34% revenue increase for its enterprise and new initiatives segment to $14 million, from $10 million a year earlier. GMV in the segment also grew 98% to $52 milllion, on the back of strong gains in its advertising business.

GrabAds, which was launched in 2018 to provide search and display advertising, increased its advertiser base seven times in the quarter, compared to the same period a year ago, by onboarding more Grab merchants in its advertising platform.


Grab is focusing on sustainable growth to meet its core food deliveries and overall deliveries segment adjusted EBITDA breakeven timelines by the first half of 2023 and the end of 2023, respectively.

To achieve this, the company seed to focus on overall cost management, leverage technology, partnerships, and its superapp ecosystem, and continue to position its core segments for recovery and growth.

“Looking ahead, we are focused on growing sustainably by being disciplined with our capital, optimizing our fixed cost base and tapering our incentive spend as the market rationalizes,” said Grab’s chief financial officer Peter Oey.

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