Shares of Grab Holdings Ltd. tumbled following its forecast of full-year revenue that was below expectations, pointing to a more cautious approach in the competitive Southeast Asian ride-hailing and food delivery sector where GoTo Group poses a significant challenge.
Its stocks dropped approximately 11% during after-hours trading in the United States.
The company anticipates a growth in sales of 19% to 22%, amounting to $3.33 billion to $3.4 billion in the current year, slightly lower than the $3.5 billion average projected by analysts surveyed by Bloomberg.
Despite a smaller-than-anticipated 23% decrease in quarterly net income, the company’s spending on incentives to drive usage of its ride-hailing, meal delivery, and financial services surged by nearly 30% during the period, reflecting intensifying competition across segments.
Chief Financial Officer Peter Oey mentioned in an interview that the company tends to adopt a conservative stance when providing initial-year guidance, with a track record of improving outlooks as the year progresses. Oey expressed optimism about achieving positive net income by 2025, and regarding the spike in incentives in the recent quarter, he highlighted during an earnings call that such costs fluctuate intentionally.
In a potentially landscape-altering move for the regional market, Grab is contemplating acquiring GoTo at a valuation exceeding $7 billion. Despite significant regulatory challenges, both companies have escalated discussions for a potential merger to halt years of losses, as reported by Bloomberg News.
