Grab's 620% Growth Surge: Strong Metrics Do Not Equate to a Sound Business

(This article was written by Xiaohai Fallsea and is published by TMTPost with authorization.)

Article by Xia Hai (fallsea), Author: Hu Buzhi

On August 4, Southeast Asian super-app Grab announced its financial results for the second quarter of 2026: net profit surged 620% year-over-year to approximately $250 million. Profit for the first half of the year reached $355 million, compared to just $30 million in the same period last year. Revenue grew 22% year-over-year to $997 million, while adjusted EBITDA increased by 54% to $168 million, marking the 18th consecutive quarter of growth. Monthly transacting users hit a record high of 53.9 million.

These figures are certainly enough to excite the market. Grab subsequently raised its full-year revenue guidance to a range of $4.1 billion to $4.15 billion and lifted its adjusted EBITDA forecast to $720 million–$740 million. The company also announced a $750 million share buyback program, bringing its cumulative repurchase authorization since 2024 to $1.75 billion.

However, behind these impressive numbers lies an easily overlooked detail: $307 million of the $355 million in profit came from a one-time accounting revaluation associated with the consolidation of Superbank. Excluding this non-recurring gain, Grab’s actual operating profit for the first half was only $41 million. While this represents a qualitative turnaround from the $14 million loss recorded in the same period last year, there remains a significant gap between this reality and the narrative of 620% growth, largely due to accounting treatments.

From listing on Nasdaq in 2021 via the largest SPAC deal in history, with shares plunging over 20% on the first day of trading, to accumulating losses exceeding $10 billion, and finally achieving consecutive quarters of profitability, Grab has spent nearly five years transitioning from a "cash-burn for scale" model to a "scale-for-profit" strategy. However, having reached this stage, the challenges it faces have become more complex: Is the 620% growth indicative of sustainable profitability, or is it merely operational improvement amplified by accounting treatments?

To understand Grab's 620% growth, we first need to break down the composition of its $355 million profit.

In June this year, Grab's stake in Indonesia's digital bank, Superbank, rose to over 50%, triggering financial consolidation. This means that Superbank's assets, liabilities, and revenue have been directly included in Grab's financial statements since that point. During the consolidation process, Grab's previously held equity in Superbank was revalued, generating a one-time accounting gain of $307 million.

This is a 'paper profit.' It does not reflect changes in Grab's core business operations, nor will it recur in subsequent quarters. However, it certainly made the $355 million profit figure for the first half of the year look exceptionally impressive.

Excluding this one-time gain, Grab's operating profit for the first half of the year stood at $41 million. While modest, this represents a substantial improvement compared to the $14 million loss recorded in the same period last year. More importantly, this $41 million reflects actual earnings generated from Grab's core businesses: mobility, deliveries, and financial services.

Looking at segment performance, Q2 metrics are indeed trending positively.

Delivery revenue reached $531 million, up 21%; however, the more notable figure is profitability: adjusted EBITDA grew 53% to $96 million, with profit growth more than double the revenue growth rate. The mobility segment remains the largest contributor to profits. Financial services revenue hit $134 million, a 59% increase, while the loan portfolio reached approximately $2.3 billion, nearly tripling year-over-year.

Adjusted EBITDA of $168 million, up 54% year-over-year, better reflects the operational improvements in Grab's core business. Moreover, this marks the 18th consecutive quarter of growth—tracing a clear trajectory of improvement from deep losses in Q1 2022 to steady profitability today.

The improvement is even more pronounced when compared to its initial public offering status. On December 2, 2021, Grab listed on Nasdaq via a SPAC merger at a valuation of $39.6 billion, setting a global record for SPAC deal size. However, after opening 18% higher on its debut day, the stock quickly fell below its issue price, closing down 20.53% and shrinking its market cap to $34.5 billion. The decline continued thereafter: in Q4 2021, it reported a loss of approximately $1.1 billion, with the stock plunging 37% to a new low; full-year losses for 2021 totaled a staggering $3.56 billion.

From an annual loss of $3.56 billion to 18 consecutive quarters of EBITDA growth, Grab has indeed navigated a challenging path of recovery.

However, the disparity between the 620% net profit growth and the 54% EBITDA growth highlights a key issue: headline numbers in financial reports do not necessarily tell the whole story of the business.

If we are to identify the part of Grab's financial report that truly reflects operational improvement, the delivery business is the most noteworthy.

Food delivery was once one of Grab's most subsidy-intensive businesses. During the early "burn cash for market share" phase, Grab and its competitors used heavy subsidies to vie for restaurants and users, leaving the delivery segment perpetually on the brink of losses. However, this business is now becoming more profitable.

In Q2, Grab's delivery revenue reached $531 million, a 21% increase. Yet, profit growth was even more pronounced: adjusted EBITDA rose by 53% to $96 million. With profit growth more than double the revenue growth rate, this indicates improving profitability efficiency in the delivery business.

This improvement stems from a structural shift: Grab's delivery business is evolving from a pure "commission model" into a three-tier revenue structure comprising "delivery fees + advertising fees + membership fees."

Advertising is the first growth driver. On Grab's self-service advertising platform, the number of active advertisers grew by 21%, and average spending per advertiser increased by 24%. This means restaurants on Grab are no longer just fulfilling orders; they are also paying for traffic. When a platform has sufficient users and order volume, advertising becomes a high-margin incremental revenue source.

Membership is the second growth driver. GrabUnlimited subscribers increased by 20%. This group contributed 35% of the delivery business's GMV, with spending five times higher than non-members. The essence of the membership model is to lock high-frequency users into the ecosystem while using stable subscription revenue to offset delivery subsidy costs.

The third direction is grocery delivery. GrabMart's growth rate reached 1.7 times that of food delivery. Grocery delivery features higher average order values and more frequent usage. If user engagement frequency can continue to rise, the monetization potential for advertising and memberships will expand further.

This "three-tier monetization" logic bears similarities to Meituan's trajectory. Meituan Waimai initially relied heavily on delivery fees and subsidies, but gradually introduced advertising (traffic fees beyond merchant commissions) and memberships, ultimately achieving a turnaround from losses to profitability in its delivery business. Grab is following a similar path, albeit at a different pace.

However, behind the improvement in the delivery business lies a hidden concern. According to a report by Momentum Works, the GMV of the Southeast Asian food delivery market is projected to grow by 18% to $22.7 billion in 2025, with Grab holding a 55% share, slightly up from 53.8% in 2024. Although Grab holds over half of the Southeast Asian food delivery market, its growth is slowing. ShopeeFood, with a 14.54% share, has surpassed foodpanda to become the second-largest platform and is expanding rapidly in lower-tier markets.

As the market shifts from growth-driven competition to a zero-sum game for existing users, whether the monetization efficiency of advertising and memberships can continue to improve depends on whether user stickiness to the platform is strong enough. ShopeeFood's strategy includes price competition. If Grab's users are diverted by low-price strategies, the foundation of its three-tier monetization model will be undermined.

Returning to the core question: After a 620% growth, is Grab still a good business?

The answer is not that simple.

First, the rapid expansion of its financial services has introduced new risk exposures.

In Q2, revenue from financial services grew by 59%, with the loan portfolio surging from approximately $800 million to around $2.3 billion, nearly tripling in size. Part of this loan balance was contributed by the consolidation of Indonesia's Superbank, while loan balances from GrabFin and Grab’s own digital bank also saw significant growth. In February this year, Grab announced the acquisition of Stash, a U.S.-based digital investment platform with over 1 million paying users and more than $5 billion in assets under management (AUM), a deal expected to close in the third quarter.

Financial services are Grab’s fastest-growing and most dynamic segment. However, the rapid expansion of its loan book also means increasing risk exposure. The consumer credit market in Southeast Asia is still in its early stages, with insufficient data on credit cycles. If the economy slows down or non-performing loan ratios rise, the financial services segment could shift from being a 'growth engine' to a 'drag on profits.'

Second, the mobility segment’s low-price customer acquisition strategy has driven up incentive expenses.

Mobility transaction volume grew by 28% in Q2, but gross merchandise value (GMV) only increased by 18%. This indicates a decline in the average order value, as Grab is attracting new users with more cost-effective offerings. However, customer acquisition is not free: Grab incurred $706 million in incentive spending in the second quarter, partly allocated to user discounts and partly to subsidizing drivers amid rising fuel costs.

Mobility remains Grab’s largest profit contributor. However, if the low-price strategy continues to expand user coverage, it will be difficult to reduce incentive spending, thereby continuously compressing mobility margins. The key question is whether Grab can find a sustainable balance between scaling its user base and reducing incentives. The earnings report did not provide a clear answer to this issue.

Third, AI represents an investment in efficiency, but its returns have yet to be fully validated.

According to company disclosures, Grab has launched multiple AI features underpinned by a technology framework called the 'Intelligence Layer,' which is built on data accumulated from its mobility, delivery, advertising, and financial services businesses. The earnings report highlighted several efficiency metrics: AI interaction costs for drivers and merchants have decreased, goods delivery speeds have improved by over 30%, and internal data analysis tools have saved time for the sales team.

However, efficiency gains must be weighed against additional capital outlays. Whether the cost reductions driven by AI can sustainably cover the rising expenses for computing power and R&D remains to be verified in future financial reports. For a platform like Grab, which handles a high volume of frequent transactions, the long-term value of AI lies in reducing unit costs across every business segment. In the short term, AI is more akin to an efficiency investment rather than a direct source of profit.

These three questions point to a common conclusion: Grab's core business is improving, but it needs to find a more precise balance among scale, efficiency, and risk. The 620% growth figure was amplified by one-off accounting effects, whereas the 54% increase in EBITDA reflects genuine operational improvement. Ultimately, the $41 million in actual operating profit represents Grab's current true earnings power.

From breaking its issue price on the first day of its 2021 IPO and accumulating over $10 billion in losses, to achieving 18 consecutive quarters of EBITDA growth and turning a positive actual operating profit in the first half of the year, Grab has indeed navigated its most difficult phase. However, 'being able to generate profit' and 'being a good business' are two distinct issues.

Grab's 620% growth essentially reflects accounting treatments that amplified signals of operational improvement. After excluding one-time gains, the $41 million in operating profit, while signifying a qualitative shift, still does not represent a convincing level of profitability relative to its market capitalization of approximately $15.4 billion.

The super-app narrative has never been solely about growth. Uber spent over a decade on its path to profitability, and Didi continues to face GAAP-level earnings volatility even after achieving positive adjusted EBITA. The unique characteristics of the Southeast Asian market—underdeveloped payment infrastructure, high user price sensitivity, and a complex regulatory environment—mean that Grab's journey to profitability will be no easier than that of its peers.

There is often a gap between strong data and a strong business, bridged by accounting treatments. Grab has proven it can make money, but whether it can sustainably generate higher profits is the real test for the next chapter.

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