Q4 2025 Grab Holdings Ltd Earnings Call

Anthony Tan: That's what drives the conversion to move from 58% in 2025 to a target of 80% by 2028. This is driven by capital expenditures and taxes growing at a much slower rate than EBITDA. While we remain disciplined in how we deploy capital into critical assets like our fleet, including autonomous vehicles, we're also aiming to decouple our revenue growth from our capital intensity. This ensures that even as we invest for the long term, we are seeing a much higher portion of our earnings converting directly into cash. By 2028, we expect this efficiency to generate over $1.2 billion in full year Adjusted Free Cash Flow. This level of cash generation allows us to self-fund our continued innovation while maintaining a strong balance sheet. Finally, I want to discuss our capital allocation principles. As we move into this next chapter, our framework continues to be anchored on four priorities.

Anthony Tan: First, we remain disciplined in investing for organic and profitable growth. We are ensuring that our core segments have the resources needed to capture the deep market opportunities that we see, and also we'll be prudent towards deploying capital where it generates the highest returns. Second, we are staying highly selective on inorganic opportunities. We'll maintain a high bar and only pursue acquisitions if they strategically accelerate our roadmap, bring in critical technology or talent, and meet our strict return thresholds. Third, we'll aim to maintain a strong balance sheet with ample liquidity. Our robust cash position is a competitive model. It ensures we can navigate macro volatility with ease while continuing to innovate. And finally, where we have excess capital, we will continue to return capital to our shareholders. We're pleased to announce a new $500 million share repurchase program this quarter.

Anthony Tan: This follows the completion of our previous $500 million share program last year and brings a total commitment to $1 billion in share repurchases. To wrap things up, 2025 has been a milestone year for us. If our first decade was about proving that the super app model could work, then this past year was a critical proof point that we can scale this engine with durable growth and profitability. While we are proud of our progress, we recognize we are still in the early chapters of our long-term journey. The Grab that you see today is a fundamentally different company than the one that went public four years ago. We have reached a stage where growth and profitability are no longer a trade-off. We are driving significant top-line expansion while maintaining strict discipline on our capital allocation.

Anthony Tan: What is most meaningful to me as well is that our financial progress is now the engine for our wider mission. By generating robust cash flow, we are in a stronger position to deliver our Triple Bottom Line. We are delivering sustainable value for our shareholders by building a profitable, compounding business, enabling us to create positive societal impacts by expanding earnings opportunities for our partners, but also at the same time protecting the environment. We are more energized than ever to continue this work and keep growing the business for our users, our partners, and shareholders. Thank you for watching and listening to Anthony, Alex, and me. I will now turn it over to Ken Lek as we begin the Q&A session.

Operator: Peter, we now open the call to questions. As a reminder to the audience, please submit your questions via investor.relations@grab.com. With that, our first question comes from the line of Pang Vitt from Goldman Sachs, as well as Hong Han from CLSA. The question is about our 2028 EBITDA guidance. Question for management: you provided a strong outlook of tripling EBITDA between 2025 and 2028. Could you outline the key assumptions by segment, and what are the biggest drivers to this step up?

Alex Hungate: Let me take this one here. Hong Han and Pang. There's really two key themes if you really step back. In the last 40 minutes, we've actually gone outline what they are. The first is sustainable growth. You're seeing that momentum of the revenue growth that you're seeing in the business. That translates to what you see in the guide, the 2026 guide in terms of revenue, the 20% to 22%. Then also that even gone beyond that to 2028, where you see that 20% revenue CAGR growth from 2025 to 2028. So that's the first theme. The second theme is operating leverage in the business and the cost structure. Now let's step back here. There's really, if you look at how, in terms of how we think about profitability, that $1.5 billion of EBITDA target that we're aiming for, there is four key things.

Alex Hungate: The first theme is on-demand revenue. The on-demand engine is working. You see that continuing momentum in driving user growth at the top end of the funnel that we're seeing right now. Now, that is going to translate into also absolute margin expansion and absolute margin dollar in the business. We are driving cost down so we can lower the cost to serve in the business. That affordability that we're working on, so focused on, is working. We're going to continue to extend that. But to do that and drive margin at the same time, you've got to drive also lowering our cost to serve. So we're going to go and continue to double down on driving that top line, but also lowering our cost to serve so that we can deliver margin improvement in both the deliveries and the mobility business.

Alex Hungate: So that's the first critical pillar that we're going to drive. The second one is around financial services. You're seeing that engine working now. You're seeing that loan book now continuing to scale. We clipped the $1 billion in terms of loan book. What you're going to see is that as the business turns break-even in the second half of 2026, it'll enter into a new inflection point. You're going to see that profitability continuing to grow. We're very bullish in the way financial services is going as we lower the credit costs also of that business. The risk-adjusted return that you're seeing is already tracking above our cost of capital. You've got the financial services segment and also the on-demand business working together to really lift that operating margin in the business at the same time.

Alex Hungate: Now, the third and the fourth is really a combination of operating leverage in the business, which is the corporate costs out of the house. You're seeing that corporate cost coming down. If you look at 2023, it was roughly about 17% as a percentage of revenue. In 2025, we've gone down to 11%. So you see a 600 basis point margin improvement for that business. So it's...