What happened
Shares of Grab Holdings (GRAB 0.57%) were tumbling today after the Southeast Asian ridesharing and food delivery company posted disappointing results in its fourth-quarter earnings report.
As a result, the stock closed down 37.3%.
Image source: Getty Images.
So what
Gross merchandise volume (GMV), or the total spent on services on the platform, increased 26% to $4.5 billion, with 52% growth in delivery but an 11% decline in mobility, which appears to be due to the pandemic.
Despite the increase in use, revenue actually fell 44% to $122 million as Grab added incentives to increase its supply of drivers ahead of an expected rebound in demand as the pandemic fades. The sharp decline in revenue seemed to be unexpected, but there were no analyst estimates available for comparison.
Monthly transacting users inched up by 3% to 26 million, its highest level since the pandemic began.
Bottom-line results were ugly as well: Its adjusted EBITDA loss widened from $102 million to $305 million, and it reported a loss under International Financial Reporting Standards of $1.1 billion due to significant noncash expenses related to its initial public offering and a redemption of convertible shares.
Now what
Grab's guidance for 2022 was also uninspiring. The company expects GMV of $3.15 billion to $3.3 billion in the first quarter, a seasonally slower period, but that was still a notable drop from its fourth-quarter performance of $4.5 billion. For the remainder of the year, it called for 30% to 35% growth in GMV. It also said it was targeting break-even EBITDA in its core food-delivery segment in the first half of 2023.
Like Uber and other mobility and delivery platforms, Grab has struggled during the pandemic and has found profitability elusive. Given the disappointing fourth quarter, it's not surprising to see the stock tumbling today.
