By Zaheer Kachwala
(Reuters) -Singapore’s Grab Holdings (NASDAQ:) raised its forecast for fiscal 2024 revenue on Monday, as the Southeast Asian tech firm anticipates robust growth in its food delivery and ride-hailing businesses during the busy holiday season.
U.S.-listed shares of the company jumped more than 10% in extended trading.
Grab’s mainstay food delivery business has been recovering from a post-pandemic slump in demand as consumers increase their discretionary spending budgets in a sign of economic easing.
“We remain bullish on the long-term growth outlook of Southeast Asia, and are firing on all cylinders to capture the strong user demand trends,” Grab CEO Anthony Tan said.
The company expects revenue in the range of $2.76 billion to $2.78 billion, compared with its prior projection of between $2.70 billion and $2.75 billion.
Grab has been attempting to introduce cheaper options for its ride-hailing services to woo price-wary customers. On the other hand, the firm has been trying to promote its premium offerings as well to boost its earnings.
The margins for the more premium rides are 1.2 times higher than the standard rides offered by the company, CFO Peter Oey told Reuters.
Grab reported third-quarter revenue of $716 million, exceeding Visible Alpha estimates of $700.8 million.
Oey said transactions made by customers were up 22% in the third quarter and subscribers of the company’s services spend four times that of non-subscribers.
The firm also raised its annual core profit forecast to between $308 million and $313 million, from $250 million and $270 million.
Revenue in the deliveries segment increased 16% to $380 million, surpassing estimates of $374.2 million.
The company left its annual adjusted free cash flow forecast unchanged and beat estimates in its financial segment.
On an adjusted basis, the company earned 1 cent per share, compared with estimates of a break-even quarter, as per data compiled by LSEG.
