Executive Summary / Key Takeaways

• Grab Holdings Limited (NASDAQ:GRABW) is solidifying its position as Southeast Asia's leading superapp, leveraging a multi-vertical ecosystem and product-led innovation to drive accelerated growth and profitability. The company achieved its 14th consecutive quarter of adjusted EBITDA growth in Q2 2025, with on-demand GMV accelerating to 21% year-on-year.
• A core investment thesis revolves around Grab's technological differentiation, particularly its extensive use of AI and proprietary mapping, which enhances operational efficiency, drives user engagement, and underpins its expansion into new frontiers like autonomous vehicles and digital banking.
• Grab's strategic focus on affordability and viral products is expanding its Monthly Transacting Users (MTUs) and increasing usage frequency, positioning it as a countercyclical company resilient to macroeconomic uncertainties.
• The Financial Services segment is Grab's fastest-growing business, with total loan disbursals approaching an annualized run rate of $3 billion in Q2 2025, and a clear path to overall segment profitability by the second half of 2026.
• Despite a competitive landscape, Grab maintains a dominant market position, being approximately 3x to 3.5x larger than its next closest regional competitor, and is committed to long-term steady-state margins of 4%+ for Deliveries and 9%+ for Mobility.

The Superapp's Strategic Foundation in Southeast Asia

Grab Holdings Limited, founded in Singapore in 2012, has evolved into Southeast Asia's premier superapp, offering an integrated platform for mobility, delivery, and digital financial services across eight countries. This expansive ecosystem, serving driver-partners, merchant-partners, and consumers, is built on a foundational commitment to technology and localized innovation. Grab's overarching strategy centers on leveraging its scale and multi-vertical approach to drive profitable growth, enhance user engagement, and expand its addressable market in a region characterized by rapid digital adoption and a large unbanked population.

The company's historical journey underscores its adaptability, particularly its shift towards affordability-focused products since 2023. Initiatives like Saver delivery and Saver transport rides have been instrumental in attracting new, price-sensitive users and expanding its Monthly Transacting Users (MTUs) to an all-time high. This strategic pivot, combined with viral products such as Dine Out, Family Accounts, and Group Orders, has not only driven user acquisition but also significantly increased platform usage frequency and retention. Grab's ability to cross-sell services across its ecosystem, from mobility to deliveries and financial services, creates a powerful flywheel effect, enhancing the lifetime value of its customers.

Technological Edge: AI as the Core Differentiator

Grab's competitive moat is significantly fortified by its deep integration of artificial intelligence and machine learning. The company boasts over 1,000 AI/ML models in production, touching every aspect of its product offerings and operational efficiency. This extensive AI infrastructure provides tangible and quantifiable benefits across its segments. For instance, in its Deliveries segment, AI-powered direct marketing campaigns have demonstrably improved accuracy and performance, contributing to margin expansion. The Merchant AI Assistant, leveraging Generative AI (GenAI), addresses a critical pain point for long-tail merchants by providing precise recommendations on how to boost sales and optimize ad spend, resulting in a 24% uplift in ad spend among engaged merchants and a corresponding sales uplift.

In Mobility, AI-driven Ride Guide, utilized by a quarter-million drivers weekly, has led to higher driver income and productivity. Furthermore, Grab's proprietary mapping technology, built on millions of real-world driving hours and local data sets, provides critical advantages in navigating Southeast Asia's complex urban environments, enabling best-in-class utilization rates for its fleet. This technological foundation extends to its Financial Services, where sophisticated, large language model-based lending models ingest over 120 different variables from the ecosystem, leading to significantly higher Gini coefficients and a stable non-performing loan (NPL) ratio of around 2%.

Grab is actively pursuing new technological frontiers, particularly in autonomous vehicles (AVs). The company views 2025 as the "year of agentic AI" and is leaning heavily into the AV opportunity, aiming to support the transition via a hybrid fleet of driverless and human-driven vehicles. Partnerships, such as with A2Z for an autonomous electric shuttle bus in Singapore, and a pilot study on drone-powered commercial delivery in the Philippines with Megaworld (MEG), highlight its commitment to exploring high-value job opportunities and improving transport connectivity through innovative technologies. While mainstream AV adoption in Southeast Asia is anticipated to be a longer road due to diverse infrastructure and regulations, Grab's early investments and partnerships position it as a key player in shaping this future.

Robust Performance and Strategic Growth Across Segments

Grab's financial performance in recent quarters reflects the effectiveness of its product-led strategy and cost discipline. In the second quarter of 2025, the company reported its 14th consecutive quarter of adjusted EBITDA growth, with trailing 12 months adjusted free cash flow expanding to $229 million. This momentum is expected to continue, with management raising its adjusted EBITDA outlook for the full year 2025 to $460 million to $480 million.

Deliveries Segment: Expanding Reach and Monetization

The Deliveries segment, encompassing GrabFood and GrabMart, has shown significant acceleration. In Q2 2025, Deliveries GMV grew 19% year-on-year on a constant currency basis. New product initiatives, including GrabFood for One and Shared Saver, are growing three times faster than existing products and now account for one-third of the segment's GMV. Saver options contributed 34% of Deliveries transactions in Q2 2025, up from 28% in the prior year. Despite the focus on affordability, segment margins expanded 34 basis points year-on-year to 1.8% in Q2 2025, with absolute EBITDA growing 50% year-on-year. GrabUnlimited, the largest paid loyalty program in Southeast Asia, is a key driver, with members exhibiting nearly five times higher spend and three times higher order frequency.

GrabMart, while currently less than 10% of the Deliveries business, is a significant growth engine, expanding 1.5 times faster than food deliveries and reaching all-time highs in MTUs. The Total Addressable Market (TAM) for online groceries in Southeast Asia is largely untapped, with less than 5% penetration, presenting substantial upside. The company's partnership-first approach, exemplified by Jaya Grocer and Everrise acquisitions in Malaysia, demonstrates successful online-to-offline (O2O) integration, with Jaya Grocer achieving an industry-leading 15% online penetration of GMV. Advertising revenue is also a crucial monetization lever, reaching 1.7% GMV penetration in Q2 2025 and showing exponential growth, with an average return on advertising sales of eight times. Management anticipates sequential improvement in Deliveries margins for the remainder of 2025 and remains committed to a long-term steady-state margin of 4% plus.

Mobility Segment: Balancing Growth and Profitability

Mobility continues to be a strong pillar of Grab's ecosystem. In Q2 2025, Mobility transactions surged 23% year-on-year, outpacing MTU growth, while GMV grew 19% year-on-year (16% constant currency). This growth is fueled by a strategy of reinvesting scale economies to drive broader accessibility and platform usage. Saver rides now constitute approximately one-third of Mobility transactions, particularly scaling in lower-tier cities, while higher-margin, high-value rides (including premium and advanced booking services) have reached double-digit percentages of Mobility GMV. The Mobility segment achieved an 8.7% margin in Q2 2025, nearing its steady-state target of 9% plus, which would be industry-leading.

Financial Services: The Fastest-Growing Frontier

Financial Services stands out as Grab's fastest-growing business. In Q2 2025, total loan disbursals across GrabFin and its digital banks approached an annualized run rate of $3 billion. The company projects its loan book to reach $1 billion by the end of 2025, accelerating from a 32% half-on-half growth in the first half to an anticipated 41% in the second half. This growth is driven by a robust product lineup, including personal lending products from all three digital banks (GXS Bank in Singapore, GXBank in Malaysia, Superbank in Indonesia), Buy Now Pay Later (BNPL) through GrabFin, and supply chain financing via GXS Capital (following the Validus acquisition).

Grab's digital banks are strategically focused on the unbanked and underbanked population, estimated to be two-thirds of Southeast Asia's demographic. The FlexiLoan product, now live in all markets, boasts an exceptionally high Net Promoter Score (NPS) of 65, indicating strong customer satisfaction. The ability to attract low-cost deposits has been a significant advantage, with customer deposits for GXS Bank and GXBank growing 50% quarter-on-quarter to over $1 billion in Q3 2024. Superbank in Indonesia, launched in July 2024, rapidly acquired 2 million accounts by October 2024. Grab expects its Financial Services segment overall to break even in the second half of 2026, with the three digital banks collectively achieving profitability by the fourth quarter of 2026.

Competitive Landscape and Strategic Positioning

Grab operates in a dynamic and competitive Southeast Asian market, facing both global and regional players. The company's multi-vertical superapp model provides a distinct advantage over single-vertical competitors, enabling robust cross-selling benefits and scale economies. Grab is approximately 3x to 3.5x larger than its next largest competitor in the region, a scale that allows it to reinvest in AI and other capabilities, leading to higher efficiencies and savings for consumers. This competitive strategy is sustainable, even amidst occasional surges in competitive activity in specific markets.

In Indonesia, a key market, Grab has consistently outgrown its closest competitor in both Q4 2024 and Q1 2025, despite increased spending from rivals. Grab's focus on product-led growth, reliability, and new services has resonated with customers, leading to increased order frequency and stable retention rates, thereby improving the lifetime value of its Indonesian customer base. The recent departure of a global competitor from the Thai market, marking the fourth such exit in 18 months, signals continued consolidation in the region, where natural returns to scale favor larger, more integrated platforms like Grab. Grab's variable commission model for drivers further strengthens its position by fostering driver loyalty, making it challenging for new entrants to gain traction.

Outlook, Guidance, and Risks

Grab's outlook for 2025 is optimistic, with management reiterating expectations for accelerated on-demand GMV growth relative to 2024 levels and a projected revenue growth between 19% and 22%. The company anticipates its adjusted EBITDA in the second half of 2025 to be substantially stronger than the first half, with a full-year 2025 adjusted EBITDA guidance of $460 million to $480 million, representing a 40% to 50% growth over 2024.

While regional corporate costs are expected to increase by 10% to 12% year-on-year in dollar terms due to variable costs and strategic investments in AI, IoT, and mapping infrastructure, Grab anticipates driving 100 to 150 basis points of margin improvement as a percentage of revenue through operating leverage. Group EBITDA to revenue margins are projected to improve by 200 to 300 basis points in 2025.

Despite this positive outlook, Grab acknowledges potential macroeconomic uncertainties. The company has proactively positioned itself as a "countercyclical" entity by emphasizing affordability and reliability, which tends to attract more users and drivers during economic downturns. Credit risks in the rapidly expanding Financial Services segment are closely monitored and remain within risk appetites, with robust credit models leveraging extensive ecosystem data. Foreign exchange headwinds are also a factor, with management adopting a conservative approach to FX assumptions in its guidance.

Conclusion

Grab Holdings Limited is demonstrating a compelling investment thesis, driven by its robust superapp ecosystem, relentless technological innovation, and a clear path to sustained profitable growth. The company's strategic focus on affordability, coupled with its advanced AI capabilities and proprietary data, is expanding its user base and deepening engagement across its Deliveries, Mobility, and Financial Services segments. With a strong competitive position in Southeast Asia, evidenced by its significant market lead and ability to outgrow rivals, Grab is well-positioned to capitalize on the region's underpenetrated digital economy. The clear guidance for accelerated GMV growth, expanding EBITDA, and a defined timeline for Financial Services profitability underscores management's confidence. While macroeconomic uncertainties and competitive dynamics persist, Grab's countercyclical positioning and continuous investment in technology and product innovation are critical factors that should enable it to continue its upward trajectory, delivering long-term value for investors.