(Bloomberg) — Grab Holdings Ltd. shares dropped after it predicted full-year revenue that trailed estimates, suggesting caution around a Southeast Asian ride-hailing and food delivery market where GoTo Group remains a formidable rival.
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The company expects a 19% to 22% rise in sales to $3.33 billion to $3.4 billion this year, just shy of the $3.5 billion average analyst projection. That was despite a far smaller-than-expected 23% decline in quarterly net income to $27 million, helped by a boost from holiday tourist demand.
Its shares were down around 11% during US postmarket trading.
“We always take a more of a conservative view when we give guidance at the beginning of the year,” Chief Financial Officer Peter Oey said, adding that the company’s outlook has often improved as the year progresses.
After years of spending to gain market share and fend off competition, Grab is taking steps to become a more financially mature company. Like its backer, Uber Technologies Inc., it’s slashed jobs and reined in spending to pivot toward profitability. The region’s largest ride-hailing and food delivery player has also pushed into new areas through acquisitions.
“We should be positive net income in 2025,” Oey said. The company is orienting itself to aim for more than 20% growth, he said.
In a move that would upend the regional market, Grab is now weighing a takeover of GoTo at a valuation of more than $7 billion. While the regulatory hurdles are considerable, both companies have accelerated talks for a combination to end years of losses, Bloomberg News reported.
What Bloomberg Intelligence Says
The chances of regulators clearing a merger between Grab and GoTo, or a takeover of GoTo by Grab, are slim given the combined entity would effectively have a 60-70% share of the Southeast Asian on-demand services market, we calculate using Momentum Works’ data. This may be viewed by the regulator as potential monopolistic behavior. The integration of both operations may not only attract tough regulatory scrutiny, but could also result in workforce retrenchment.
-Nathan Naidu, analyst
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Grab is also betting on new initiatives in areas from digital finance to its core delivery services, saying last year that such efforts should help its revenue accelerate from 2025. Growth has cooled dramatically from triple-digit rates in years past as customers in the region curb spending to cope with elevated inflation and interest rates.
