In the first quarter, Grab reported better-than-expected revenue rose of US$653 million, up 24% on an annual basis, ahead of analysts' estimates of US$642.4 million. The Singapore-based company reported adjusted core profit of US$62 million, a significant improvement over a US$67 million loss in the first quarter of 2023. However, Grab still lost US$115 million in the January-March period, though that performance was significantly better than the US$250 million loss a year earlier.

Auguring well for Grab is the performance of its digital financial services business, in which revenue grew 53% year-on-year to US$55 million in the first quarter. The growth was driven primarily by contributions from lending across both the GrabFin brand and the company’s digital banks, as well as better monetization of GrabFin’s payment services. Total loan disbursements rose 64% year-on-year, with the loan portfolio ending the quarter at US$363 million, compared to US$196 million a year earlier.  

With regards to deposits in the digibanking business, they rose briskly to US$479 million in the January-March period, compared to just US$36 million in the first quarter of 2023. Grab noted that its deposit customers at its Malaysian digital bank GXBank have been increasingly rapidly in recent months. The number of customers reached 262,000 in March, compared to 131,000 at the end of 2023.

For their part, investors have reacted modestly thus far to Grab’s first-quarter earnings. The company’s shares reached US$3.72 as of the end of trading hours on May 17, compared to US$3.57 when trading ended on May 14, the day before earnings were reported.

Grab’s performance as a public company has yet to live up to the expectations that led to a US$40 billion SPAC merger in December 2021, then the biggest such deal on record. SPACs have tapered off since then, given greater regulatory scrutiny and changing market dynamics.

Looking ahead, Grab will have to prove to investors that it can effectively differentiate itself in ultra-competitive Southeast Asian markets. An ongoing issue to watch is the commoditization of the services Grab and other super apps in the region offer. Greater innovation will likely be needed to stand out from the competition.