Grab Holdings Aktie

Good day, everyone, and welcome to Grab's First Quarter 2026 Earnings Call. I'm Douglas Eu, Director of Investor Relations and Strategic Finance at Grab. And joining me today are Anthony Tan, Chief Executive Officer; Alex Hungate, President and Chief Operating Officer; and Peter Oey, Chief Financial Officer.

During this call, we will be making forward-looking statements regarding future events including our business and financial performance. These statements are based on our current beliefs and expectations. Actual results could differ materially due to a number of risks and uncertainties as described on this earnings call in the earnings release and in our Form 20-F and our filings with the SEC.

We do not undertake any duty to update any forward-looking statements. We will also be discussing non-IFRS financial measures on this call. These measures supplement but do not replace IFRS financial measures. Please refer to the earnings material for a reconciliation of non-IFRS to IFRS financial measures for more information to refer to our earnings press release, remarks and supplemental presentation available on our IR website.

For today's call, Anthony will deliver opening remarks, after which we will open the floor to questions. As a reminder, we are accepting questions via e-mail at [email protected]. Do submit your questions ahead of time, and we will add them to the Q&A queue. And with that, I'll hand it over to Anthony.

Great. Thanks, Doug. Good day, everyone, and thank you for joining us. We set out to start 2026 strongly, and we delivered against the backdrop of our seasonally softest quarter due to Ramadan and Chinese New Year, on-demand GMV growth accelerated to 24% year-on-year, while group NGUs increased to 52 million.

In Financial Services, loan disposals grew 67% to exceed $1 billion for the first time, and we remain on track for our Financial Services segment to achieve adjusted EBITDA breakeven in the second half of this year. We also delivered our 17th consecutive quarter of adjusted EBITDA growth, expanding our trailing 12-month adjusted free cash flow to $489 million.

These results demonstrate the compound nature of our strategy, which is increasingly being accelerated by our investments in AI. What truly sets our AI capabilities apart however, is the proprietary data foundation we spent the last 14 years building to PowerDem. They grab operates as a system of record for local across Southeast Asia. We capture highly localized real-time data on how over 50 million users and partners interact across 8 markets.

Over the years, this has generated a proprietary data set of over 20 billion transactions. We feed these multimodal signals from hyper local mapping to in-store payment terminals into our AI Grab intelligence layer to optimize our own complex efficiency from dynamic pricing to last mile routing. Crucially, we paired this data advantage with our massive through physical fulfillment network. That closed loop system or ecosystem is our biggest competitive mode, which is why our AI investments translate directly into measurable financial outcomes.

We are already seeing significant tangible returns on these initiatives. For instance, I'm pleased to share partners who adopted Turbo, our AI-powered driving mode in our Grab driver app to optimize driver earnings and efficiency, saw a 23% uplift in earnings per online hour competitive driver partners who have not adopted a feature. This has contributed to Mobility transactions growth outpacing Mobility GMV growth with transactions up 28% year-on-year.

Within a year of launch, our merchant AIS system, Mai has been adopted by approximately half of our active single installment base, driving a 15% uplift in GMV for engaged users. This deeper engagement directly supports our ability to improve monetization with average advertiser spend growing 44% year-on-year as merchants see increasing measurable returns.

Following the launch of 13 new AI-powered experiences at Grab this year, we are turning external AI interfaces into our newest growth engines by acting as the essential fulfillment layer for Southeast Asia, we ensured whenever customers use AI agents to navigate the day, those interactions, act as proper funnel leads, drive transaction directly back to Grab.

We're also making steady progress on autonomous ecos. In April, we successfully transitioned our private trials to full paying public operations. Our AIR service deployment partnership with Verite is the first autonomous passenger service we deployed within a Southeast Asian residential estate. The fleet has clocked over 40,000 kilometers and have safely served several thousand public rights.

That said, the adoption of AVs in Southeast Asia remains nascent. We see governments and regulators taking a measured approach in implementing AVs, which we believe is the right approach to our region. We worked the new to incorporate AVs in our platform at a pace that reflects the trust communities place in us and our emphasis on customer safety.

To be clear, we do not expect anyone to be able to deploy impactful disruption to our human driver network in the near future. Yet we remain firm believers in the technology. This has shaped how we have made small investments ahead of the curve to forge international partnerships while doubling down on ensuring our Singapore pilot succeed.

We intend to be the most experienced local hybrid AV and human operator in Southeast Asia, one able to amplify the efforts of any AV software player in bringing the smoothest, safest and most cost-efficient service when we eventually scale up in partnership with governments in this region.

Now beyond AI and AVs, the structural health of our driver partner supply base remains our top priority. When fuel price volatility emerged in early March, we acted decisively to protect partner livelihoods by deploying targeted fuel rebates and proactively engage with regulators across our markets.

In April, we also launched the dual earnings tracker to provide our driver partners with greater transparency over the earnings. In 2025, partners earned over $15 billion on our platform, up 19% year-on-year.

Looking ahead, our record start to the year is a testament to the resilience of our ecosystem. Whether we are enriching AI to drive greater marketplace efficiencies today or piloting the autonomous networks of tomorrow, our focus remains on compounding sustainable growth and out serving our communities.

Despite macroeconomic uncertainties particularly regarding inflation and fuel prices, our platform is structurally stronger than ever. Against that backdrop, we reiterate our 2026 full year guidance. Group revenue of $4.04 billion to $4.10 billion and adjusted EBITDA of $700 million to $720 million.

Our first quarter provides us with a strong foundation. In March, we announced that we are advancing our buyback mandate with a $400 million salarated share repurchase program. This is a reflection of our conviction in grabs long-term value at these dislocated prices. Thank you so much. Let's open it up for questions.

Thank you, Anthony. We will now transition to the Q&A session. [Operator Instructions] Our first and most apps question comes from the line of several analysts DG at Morgan Stanley, Venu at Bernstein and Piyush of HSBC. And with regard to the fuel crisis. So the question is, what's the impact of the ongoing Middle East conflict and higher fuel prices across your various operating countries. Has it started to impact business performance in the second quarter? And can you quantify the impact? And what's our strategy to manage long-term fuel risk? So this is a question for Alex.

Thanks, Divya, Venu and Piyush. This is a critical topic. And as I said in my prepared remarks, Q1 results actually give us a good solid foundation entering the year. And as you saw from the slide pack, the demand trends in April have remained resilient. Our Mobility business in weekly average transaction volumes sustained at plus 32% year-on-year, and our deliveries business continues to see record high daily transacting users in April.

So it's a good start to the year. The business, in fact, is in a structurally more resilient position today than it has been through our history. Product innovations we have made have really targeted affordability and reliability. Group orders, for example, has GMV up 74% year-on-year, and we launched group rides at GrabX last month, which is a similar concept for sharing rides to reduce pricing for individual consumers.

And that's now available across all 6 of our core markets. GrabUnlimited, of course, is very good value for high-frequency customers, and it continues to account for 1/3 of our deliveries GMV. So all of these are highly affordable products, which keep the demand strong even when consumers are stretched. We're monitoring the fuel situation extremely closely. And of course, we will not hesitate to act for if needed.

In the medium term, we are committed to accelerate the EV transition to reduce our driver partners exposure to fuel price volatility. So for example, in Thailand and Philippines, we have a drive to own program that connects our drivers with OEMs like BYD and GIC, where we have deals of up to 70,000 vehicles available across 6 markets. with accessing to financing so they can own those more easily.

In Vietnam, we have secured preferential charging rates also through our charging network partners, eBoost and ChargePlus, which helps our drivers in the transition also. And finally, in Thailand, I am pleased to say that our total fleet supply has crossed EVs on the platform and demand for those consumers is also strong, where they can select that EV option, and that demand has grown by over 35% year-on-year. So this fuel crisis has become an opportunity in the sense that it helps us to accelerate that EV transition.

Thank you, Alex. So move on to the next question. The next question is on financial services and comes from Zhiwe, Macquarie and Venu, Bernstein. So for the Financial Services segment, the loan portfolio showed a modest quarter growth, but there was a step improvement to your segment adjusted EBITDA. Could you describe the factors that led to these improvements? And what can we expect in coming quarters and how do you intend to drive that? So this is a question for Alex again.

Thanks, Zhiwe, Venu. Yes, you're right. Strong EBITDA Financial Services, both quarter-on-quarter and year-on-year. So that is the operating leverage that we've been talking about starting to come through very strongly now as we scale up our loan portfolio. Revenue growth accelerated 43% year-on-year and 38% on a constant currency basis. And more than 1/3 of that incremental revenue dropped straight to the bottom line for financial services, demonstrating that operating leverage that we've been speaking about. .

The loan book growth is strong year-on-year. And importantly, the credit quality is improving alongside that. So loan disbursals grew 67% year-on-year to over $1 billion but the growth was modest. You're right, this quarter because of seasonal factors, and that's a normal factor for first quarter.

The ECL as a percentage of our gross loan portfolio has improved year-on-year to on that show, I think the improving quality of our credit models. We've been proactive on risk management, though. So we've been tightening for some sectors. And in other sectors where conventional lenders have stepped away, we've seen more opportunity.

In Q1, we applied those additional ECL overlays to account for that macroeconomic uncertainty with that selective tightening also part of our change in the risk appetite. Looking ahead, we do have some experience, of course, of managing these kinds of shocks to the macroeconomic situation. So our underwriting models have already been through the similar fuel price shock that we saw at the start of the Ukraine conflict not to mention COVID as well. And in both instances, our credit quality remained within our risk appetite throughout. So we continue to monitor the portfolio performance super carefully. We aim to generate healthy returns on risk-adjusted returns for our loan portfolio and we are reiterating our second half 2026 breakeven target for financial services. .

Thank you, Alex. So the next question is also another highly asked question, and it comes from several analysts. So from Alicia from Citi, Divya from Morgan Stanley, Zhiwei from Macquarie, Jones for Barclays and Piyush from HSBC. So regarding recent news in Indonesia. So an Indonesia's cap on rider commissions to 8%, can you clarify if that is applicable to what are the levers available to cushion the key negative impact from lower rider commission? What's the likely impact of profitability due to the proposed change? And what's the impact in the delivery segment, if any, from the proposed change and you can help to quantify it. So this is a very long questions. Well question for Alex.

Okay. Thank you to all of you, all of you or 5 of you question. Let me see if I can cover section by section. Okay. So it does appear that the immediate regulatory exposure is highly specific. So the recent announcements are explicitly focused on drivers, check online drivers, who are our 2-wheel ride hailing partners, so 2-wheeler ride-hailing partners . The 4-wheel drivers earn well above the minimum wage. And so we believe that they're less of a concern for government and regulators in Indonesia. .

That said, of course, we're engaging very proactively with the relevant ministries, and we try to seek absolute clarity and the technical aspects of how the decree will be implemented. It's essential we believe that, together with regulators, we shape a balanced implementation of these -- this decrease. So that our Indonesia and mobility marketplace remains healthy and that driver partners earnings remain well supported. It's worth noting, as I mentioned in my prepared remarks, that 2-wheel mobility, so the old drivers that the degree referred to in Indonesia is less than 6% of our total mobility GMV.

So drivers in Singapore represent less than 6% of our total mobility GMV. So we are, therefore, reiterating our expectations for Mobility margins to stabilize within the historical range and not to go outside of that range.

Thank you, Alex. So we'll move on to a related topic as well. This comes from the line of Venu from Bernstein, Sachin, DBS and Alicia from City. In relation to the 8% commission cap in Indonesia is the likelihood of consolidation now looking higher in Indonesia as well. Does the shift in policy in Indonesia change your near- to medium-term investment or resource and capital allocation priorities. So just a question for Peter.

Sure, yes. Look, I want to comment on specific M&A speculation. And -- but I'll speak to how we view our position in this evolving landscape. Within M&A, we always take into account the regulatory environment, it's really critical. And we want to work with the relevant agencies there also, because there's always synergies and dissynergies that we could accrue from any transactions. And as we've always spoken in many, many quarters, quarterly earnings, we always have a very high bar when it comes to M&A transaction itself.

We specifically to Indonesia, and also just our M&A portfolio, we've always been taking a very diversified approach. And you see that in the lungs of our businesses, and you see that our product continues to expand also broadly. We're entering a neither market, which also shows our diversification also in terms of geographies. So the way we always position the lens that we take is diversification and that's really important.

So specifically for Indonesia, as Alex just mentioned, it's really important that we have a very constructive and very healthy ecosystem both for our driver partners, consumers is also for our restructure specifically to Indonesia, our strategy for Indonesia remains fundamentally unchanged despite what we're seeing in the weekend and also the way we approach the strategies in Indonesia. Our Indonesian Mobility business continues to grow double digits year-over-year. remains very, very -- remained stable quarter-on-quarter in spite of the seasonal headwinds. And as I'm always reiterating that we're very highly disciplined in our capital allocation. So when we evaluate any strategic opportunity strictly through the lens of long-term shareholder value and also how can we diversify our grab business.

Thank you, Peter. So the next question comes from Alicia, Citi and Wei of Mizuho. So the question topic now moves back to the fuel crisis as well. Given the step-up in partner incentives to offset elevated fuel costs, how does this impact the demand elasticity and translated into revisions to your near-term financial outlook for mobility? Should we expect levels to remain elevated? Or do you see offsetting it levers such as EV adoption and cross-border rights that could bring incentives back down in the second half and support the sequential EBITDA ramp-up implied by your full year $700 million to $720 million guidance?

Thanks, Alicia. Wei. Great question. So yes, Q1, you can see that driver incentives was elevated. Two specific drivers there. One is and most importantly was the confluence of New Year and Ramadan within the first quarter, both in the first quarter this year, creating acute supply pressures as usual during those 2 festive periods. So it's -- the second factor was, of course, the fuel crisis. So towards the end of the quarter during March, we started a deliberate decision to support our driver partners with the abated fuel prices across some countries in the region.

So as we move into the second quarter, of course, festive-driven incentive pressure normalizes, but fuel does remain an important variable that we're watching very, very closely. The targeted earnings report was will continue through into the second quarter, but it no longer with the seasonal impact. We expect this first quarter to be a peak in the driver incentives.

We are reiterating the full year guidance, therefore, of $700 million to $720 million for adjusted EBITDA, assuming that peak and not that it's a run rate, but it's more like a peak. But I would say we've got multiple levers available to us, including, if necessary, more emphasis on advertising and financial services monetization to defend the overall margin trajectory for the full year of those fuel pressures persist through the full year.

In the medium term, if those elevated fuel prices continue, we would have to pass some more of the costs on to consumers. But of course, we'll grow that very judiciously because we want to maintain demand for our driver partners through this difficult time. Finally, I think it's worth emphasizing, we saw that the impact of AI marketplace optimization this quarter was very powerful. And we did use it to manage, for example, incentive spend for consumers. You can see that the incentive spend for consumers became more efficient during this quarter. And so going into the full year, we will also have that powerful capability at our disposal to try and manage some of the volatility and incentive spend.

Thank you, Alex. So the next question, the topic will now move into AI. This comes from Morris Stanley and Wei at Mizuho. On AI monetization, are you building toward a merchant and driver SaaS revenue stream that sits outside the current commission rate structure or is going to be remaining bundled into the existing take rate? What AI tools are you investing in mainly into this quarter? So this is a question for Anthony.

Thanks so much, Divya and Wei. Appreciate the question. Look, our approach to tools like merchant AI and driver AI assistant coach has been to solve everyday promise that our drivers and merchant partners face. There's no reason why our partners should not have access to these tools that will enable them to grow their customers and earnings.

If we get that right, the tools and the partnership right, we build something competitors can't easily replicate and it creates high loyalty, high engagement, which results in them choosing us as the our primary platform, not just because of the tech, but because of the trust and, of course, growing earnings for them.

This has translated into concrete results within our ecosystem. On a year-on-year basis, not only do we see the growth in a number of active merchant partners, but their earnings also grew 12% during the quarter. For our Mobility business, total active driver partners increased 4% quarter-on-quarter and 16% year-on-year to reach another all-time high in spite of macroeconomic uncertainty. So when we build these AI tools well and we may generally partner and outserve them, the economics tends to follow naturally.

Thank you, Anthony. So another highly asked question is on regional corporate costs and also related to AI. So this comes from several analysts, Jiong at Barclays, Wei at Mizuho, Divya, Morgan Stanley, Ranjan, JPMorgan. So regional corporate costs increased year-on-year to $114 million for the first quarter. Can you help us understand how much of the step-up is AI infrastructure costs, whether it's tokenization of cloud versus general inflation as well as FX? And how should we expect the AI spend to start translating into measurable cost savings elsewhere in the P&L that can offset this higher regional corporate cost run rate. So this is a question for Peter.

Sure. . I will Start by saying that the step-up that you saw in the first quarter of regional corporate costs was a conscious decision. We did that decision as a management team to invest in the AI infrastructure that we've been talking about for many quarters. And Anthony just answered the question regarding AI and what we will be deploying to our partners as well as now we're starting to deploy to our consumers also at the same time.

And that really underpins to the Grab intelligence line that we spoke a lot about actually a few weeks ago, at the GrabX event regarding the new 13 new product experience features that we're rolling out. So we are investing in our -- in the AI specifically towards tokenization stack that we saw in the first quarter and the cloud capacity that needs to run that powers those tokenization at the same time.

Now the early returns on those investments is critical also we can't discount because that's also showing up in the numbers. And Anthony just also shared some of those on the driver side and the merchant assist by where they're seeing the impact on earnings, which is really a critical part of that healthy ecosystem. If you look at the adoption of these driver system, which is now over 50%, and we generated over 1.25 million interaction in just 2 months since we rolled it out.

We've seen also for merchants that are using the AI assistant, their GMV is also up double digits on a year-over-year basis. So they're thriving as a merchant, and we're benefiting also as a platform from that. And this is the type of things that we want to see more and more coming out from these AI rollout, which is really critical. Now if you strip it all these AI investments, and we saw some tax headwind also from the weaker USD, the U.S. dollar and our underlying cost base, which is really important remains lean, disciplined. And that's been a mandate that how we run Grab. So I'm not expecting any further step-ups from regional cooper costs. We expect the regional copper cost to stabilize around the levels that you saw in the first quarter for the rest of 2026. .

Thank you, Peter. So the next question now moves to the share repurchase, and this comes from Ranjan of JPMorgan and Divya, Morgan Stanley. So Grab has announced that acceleration to repurchase $400 million of shares at the end of March itself. Nonetheless, the basic and diluted shares have increased quarter-on-quarter. So what is the impact of dilution from stock-based compensation? And with regard to the share repurchase program, would you consider upsizing this given the current stock price?

Okay. So I'll take this one. If you step back, when we announced a $500 million buyback program earlier this year. And I announced also a $250 million accelerated share repurchase and an additional $150 million in contingent forward purchase on the 24th of March. So a total of $400 million has been accelerated, which means only in the market for 5 to 5 trading days in Q1 itself. So you can't look at it in isolation.

Now both these programs are expected to be executed over the next 4 months. So I'll share a lot more in the next quarterly earnings when we look at the Q2 results. Now in terms of share count, it would have amount to roughly around 2% of our total share count, which will more than offset for the dilution from stock-based compensation. So that's how we're viewing it. As a reminder, there's still another $100 million left to go in the share buyback program, and we'll continue to have discussions around capital allocations with our Board.

Thanks, Peter. So the next question now moves to groceries. This question comes from Wei of Mizuho. So regarding to grocery contribution, you've mentioned that GrabMart is only 10% of deliveries GMV, but growing 1.7x faster than food. When you look at the grocery TAM in Southeast Asia and the economics of the Grab model itself, where does Grab model to be to basically to contribute to GV by 2028 to underpin the $1.5 billion EBITDA target? And at what point does become margin accretive the segment rather than the drag to the blended deliveries economics. So this is a question for Alex.

So GrabMart is an exciting segment. I mean, the TAM is very large, arguably larger than food delivery altogether. So we are doing a lot to accelerate the product innovation particularly the front end, the AI-powered shopping agent, which we think will transform the ease with which consumers can, for example, create a weekly shopping basket and then improve the targeting for grab more cross-sell as well. .

And by the way, Grab more grew more than double-digit quarter-on-quarter. So I think very, very good signs for both of those things. Overall, as a result, the MTUs going into grocery at 2.6x the rate of food MTU growth on a year-on-year basis. So that shows you that it's really expanding the top of our funnel, which is extra important in the age of AI in terms of generating data and deepening the long-term value relationships that we have with our consumers.

And then the order frequency that we saw were -- 1.8x higher than the food only users, which illustrates that long-term value enhancement that I was speaking about. So over the long term, the North Star is very clear. We've got global peers, who have achieved like 20% to 40% mark penetration as a percentage of their deliveries business overall. So it's definitely the right model that we're pursuing. And with regards to the 3-year guidance that you asked about, we expect that GrabMart will maintain its current growth momentum and outpace delivers growth throughout and for the higher basket sizes, the engagement and the lifetime value we can achieve reinforce our conviction to achieve a long-term sustainable economic alongside it as part of a comprehensive super app LTV relationship customers powered by AI.

So that's how we think about it rather than a stand-alone vertical by vertical. That's our -- the power of our approach and that power becomes enhanced in the AI world where our optimization across all those verticals to get to the right LTV customers is particularly powerful.

Thanks, Alex. So the next question we'll move to Financial Services. This comes from Ranjan of JPMorgan. So a 2-part question. So the first question is regarding the deposits. Deposits have remained flat quarter-on-quarter. The question is, what are the challenges that Grab is facing and growing deposit base. The second part of the question is on the loan book and securitization. So what Grab considers securitizing its loan book to free capital to grow the business forward as well. So perhaps the first question will be for Alex and deposits and Peter, a question on securitization.

Okay. Well, first of all, we actually don't have any issue at all in raise deposits. We've been really gratified at the trust that consumers have in the Grab brand, the grab ecosystem, our capabilities to protect their money. And if you look at the pricing of our deposits, we are never the most aggressive in the market. We're able to actually gather sufficient deposits to create the right shape of balance sheet.

So there's no point having excess deposits, particularly in this yield curve environment. So what you're seeing is that's carefully managing the level of deposits to make sure that we optimize for P&L purposes. If we needed to raise more deposits, we're very confident that we can do that. .

On the topic of securitization, it's a potential tool for us to be able to recapital recycle on a long-term basis, particularly as a loan will grow. Just to remind everyone, we have 2 parts of our lending book we have, the bank's piece also, which are backed by the customer deposits and then you've got also our Grab financial services, nonbanks, which is on balance sheet equity-wise. .

If you look at our current priority through scaling the lending through our digital banks, we have deposits of roughly $1.6 billion. They sell a lot of headroom in terms of the loan-to-deposit ratio that we could deploy towards those loans. And we are still done target to get to the $2 billion loan book by the end of the year. So our priority now is to use -- make sure that our digital banks capital structure is efficient, and those deposits are an important component of that. But long term, there could be options for us to recycle. That's not an immediate priority right now.

Thank you. So now we'll move on to the final question for today. This comes Piyush from HSBC. So regarding to Foodpanda Taiwan recently announced acquisition, can you share the progress and what are the key milestones to watch and likely timings of the milestones? So final question for Alex.

Well, maybe a very brief final answer then, Piyush, Thanks. So we're in the middle of the approval process for regulators. So no real updates today, but we'll make sure we provide updates as soon as we get any further feedback. Thank you. .

Okay. So thanks, everyone, for the questions. So that concludes today's earnings call. Let me hand over the time to Peter to deliver the closing remarks.

Thanks, everybody. Great, there's a lot going on, typically in Southeast Asia and in Grab. Hope you got a flavor in terms of how our performance are. Q1 to a fantastic start -- for us across all the financial fundamentals of our business. A lot of questions around fuel prices, obviously, which we hope we've addressed that. We are leaning in. We want to make sure our driver community are also benefiting and also I will be helping them along the way. And people are continuing to make sure that EV acceleration also happens within Southeast Asia. It's a great cast for that as far as in adoption. A lot of questions around Indonesia also around the 8% commission. Just to reiterate, our demand or 2-wheels business for Indonesia is less than 6% of our GMV. We continue to reiterate our full year guidance for the rest of the year. What makes us confident is the traction that we're seeing across the portfolios of our businesses today. So all the hard work.

Thank you very much for all the Grabbers. Thank you for all the support egos in the first quarter to all our driver partners, our merchants of all the things that we want to serve and help you also thrive. Thank you very much for the first quarter and also to our shareholders for our support. As usual, the IR team, Ken, Doug and I will be on the road over the next few weeks. We'll be in the U.S., Google across Asia, Singapore, Hong Kong and also in Australia. Don't please reach out to us if you want to meet with us or have a chat, have a coffee. We're more than happy to sit down with you. See you all next quarter.

Welcome to the Delivery Hero Taiwan divestment conference call.

[Operator Instructions]

I will now hand the call over to Andrea Ferraz Estrada to begin the presentation.

Hello, and welcome, everyone. Thank you for joining us on short notice for this update regarding the significant milestone in Delivery Hero's ongoing strategic review. Joining me today are Niklas Oestberg, CEO and Marie-Anne Popp, CFO of Delivery Hero. Following a brief presentation, we will open the floor for Q&A. Please note that we will be publishing our full year results on Thursday, and we will be hosting an analyst call on the day. We will, therefore, not be commenting on business performance or provide 2026 guidance for the Delivery Hero Group today. I will now turn the call over to Niklas. Please go ahead.

Thank you, Andrea, and thank you all for joining us today. We are pleased to announce the divestment of our food delivery operations in Taiwan to Grab for USD 600 million in cash. This marks a decisive first step in the strategic review we announced back in mid-December 2025. While our operational performance remains strong, we recognize that public markets have not fully reflected the intrinsic value of our global operations. This is our fifth asset monetization to date, and it allows us to crystallize fundamental value for a market-leading asset. Executing a successful carve-out like this is no easy feat, and I'd like to thank the team for many long nights over the past 9 months.

The negotiations had many ups and downs, but outcome is good for both Grab and Delivery Hero. Let me now hand over to Marie-Anne to brief us on the transaction details.

Thanks, Niklas. Let's look at what it means for our financials, balance sheet and capital structure. In full year 2025, the Taiwan business generated a GMV of EUR 1.5 billion, representing around 3% of the group's total GMV. This move significantly strengthened our capital structure, reducing our net leverage from approximately 2.7x to 2.2x. We anticipate the transaction will close in the second half of 2026, subject to the usual regulatory approvals. To ensure a seamless decoupling from our global infrastructure, Delivery Hero will provide support services for a migration period of up to 12 months following the close.

While Taiwan is a decisive first step, it is just one of several ongoing reviews. To protect the integrity of these processes, we will not provide interim updates. We will inform the market only when definitive agreements are signed. And with that, we can move on to questions. Operator, please go ahead.

[Operator Instructions]

Our first question comes from Joe Barnet-Lamb from UBS.

I'll open with one and get back into the queue. But yes, I just wanted to start with regard to your balance sheet. You obviously announced the issuance of a term loan a week or so back. There's been substantial debate in the market as to why you felt the need to issue $1.4 billion, $600 million or so more than the converts you explicitly stated you would buy back. The company line seem to be sort of prudent balance sheet management. But I think many investors struggled to get their heads around that. And obviously, that debate is only going to be exacerbated with an additional $600 million eventually coming from this sale. So can you give us a bit of an explanation for sort of the size of the term loan issuance? And maybe more broadly, why you feel the need to sit on such a substantial cash balance?

Sure. So yes, we have obviously raise the term loan a week ago. We're now expecting $600 million from this transaction. And I think the explanation for that would be similar and in line with what we said previously to focus on repaying existing debt and overall strengthening our capital structure. And with that, those amounts in our balance sheet, we deem that we can remain flexible. We can remain well prepared to respond to future opportunities or challenges, and this supports the long-term interest of the company and the stakeholders.

So I would say this is very much in line with what we communicated previously to overall optimize our debt structure, reduce it and strengthen the capital structure.

Our next question comes from Monique Pollard from Citi.

I just had one question, if I can. It was just around the profitability of that Taiwanese business and how we should think about the business going forward without it in? So I understand it's positive EBITDA before central costs. So should we think that the sort of net EBITDA impact is immaterial for losing that business? And are there any fees that you will get for the 12 months in which you help with the kind of service agreement of the asset?

Yes. So if we think about 2026, we indeed expect the impact to be marginal. So as mentioned on the country level, Taiwan contributes to adjusted EBITDA. And when you include the platform cost allocation, the impact is marginal. So that's the way to think about 2026. And then as mentioned, we expect to continue to provide Taiwan with technology for 2026 and the most part of 2027, and that would follow a normal approach to transitional services. And again, that would mean that the impact on the EBITDA and cash flow would be marginal for those years that for the period where we provide those transitional services.

And I think if you think beyond that, that's obviously been in quite a while. We would expect to have managed to adjust the cost level to the size of the business at that point in time. So again, I think about it as a marginal effect.

Our next question is from Luke Holbrook from Morgan Stanley.

Good afternoon. Congrats on getting the deal announced. Mine is just really, just on how you're thinking about the multiple and the value that Grab has paid compared to what Uber was effectively announced to be paying 18 months or so ago. Just trying to get your thinking on how that's changed and the multiple for this deal size?

Do you want to take this, Niklas or shall I go ahead?

Sorry, I was on mute. I'm happy to take it. So I repeat my answer. So every deal has certain uniqueness in it. And of course, the market is also different now versus back then. But I think the biggest difference we have here is that Uber was and still is operating in the market. So for them, this would have been incremental, gross profit contribution and so on. So therefore, of course, more value in that in market consolidation than someone now entering the market. If you look at someone entering market, you have to look at the value of that business as a stand-alone versus integrate into an existing business.

Yes, we think given the market environment and both multiple contractions and war, and other things going on. I think we managed to agree on a good deal that is a good boost for Grab, and leaves a lot of upside going forward, but also a good deal for us that is significantly incremental to at least the way delivery is valued today. So I think we can both be very happy with the outcome of the deal.

[Operator Instructions]

Our next question comes from Joe Barnet-Lamb from UBS.

Excellent. You referenced that the Taiwan small adjusted EBITDA positive precentral cost allocation. And you gave some color on total adjusted EBITDA in answer to Monique's question. But my understanding is there's a major tech hub in Singapore. And obviously, the businesses of that service sort of somewhat dwindling. So I guess the premise of my question is, is there a degree to which the sale of Taiwan potentially unlocks sort of a larger evolution in central costs and tech costs over time? If you can give a little bit more color on the evolution of central costs would be great.

Yes. I think, as I mentioned, right, for the transition period, that technology and product support will still be existing and be provided to the Taiwan hub, right? So I think that very much continuously the ongoing support to the hub that we have right now. I think over time, there will definitely be a process of adjusting the operations of that hub, right? But I think, again, for now, we have to reach the closing point of the transaction, and then we have to move into the post-closing migration period, which is designed to last up to 12 months.

So I think it is definitely a topic to obviously size the activities and operations of our tech hubs to the businesses they serve, but it's also an ongoing process as we still will have to continue to support that business for quite a while.

Our next question is from Silvia Cuneo from Deutsche Bank.

Just wanted to ask a question if you could tell us a little bit more about your market position in Taiwan versus competitors right now? Just other way to get a little bit of extra background as that will be helpful to understand the context for valuation of assets in the current market and the potential for the remaining portfolio. So yes, like what can you tell us about your Taiwan's position?

I think we have a very strong position in the Taiwan market. The business has been operating very well. And over the last couple of years, we have also significantly improved our profitability in the market. So we believe to have a very strong position in the market. There are some geographical differences with our main competitor, Uber. There will be some areas where they will be slightly larger, and there will be some areas where we will be larger. But I -- yes, I think overall, I think we have a very strong position.

This concludes the Q&A session. I will now hand back to Niklas Oestberg for closing remarks.

Yes. Well, thank you, everyone, for listening in. And yes, thank you also for everyone who's been working hard on this. It's a first good step then also big thanks to the Taiwan team for having built a tremendous business. And I believe there is a very exciting future ahead of you. I think Grab is an excellent owner. And yes, thank you very much, everyone.

[Audio Gap] like Trip.com and AliPay to enhance brand visibility even before users land in the region. And as a result of these initiatives, travelers MTUs have grown over 10x over the last 3 years, with airport rides driving over 10% of our Mobility GMV today.

GrabMart is growing 1.7x faster than GrabFood, thanks to three important improvements to the customer proposition. First, deepening integration with major supermarkets to ensure that handling of fresh produce Deliveries is reliable and consistent. Next, curating our merchant selection to shift user behavior from daily essentials to weekly stock-ups.

And lastly, [ GrabMore ] has been launched, where users can add groceries to their food order at no additional cost. And as a result, we've seen a 30% year-on-year increase in GrabMart users in 2025, while usage frequency continues to improve. There is still plenty of upside with GrabMart, only accounting for 10% of our Deliveries GMV today.

The success of our merchants has always been at the heart of our mission. The powerful integrated suite of offerings that we built for them is intended to take them and the Grab platform to the next level.

First, Grab offers merchants enterprise-level digital tools that help them maximize their return on advertising spend. Next, we provide integrated point-of-sale and payment systems to widen payments acceptance for them. And then we embed lending to improve cash flows and finally, transform their transaction data into actionable insights to help them scale their businesses.

With these capabilities, Grab will be able to deliver the one outcome that matters most to our merchant partners, which is, of course, sustained earnings growth. In 2025, total active Deliveries merchants increased 9% year-on-year, while their earnings have seen a corresponding increase of 11%.

Our Financial Services strategy is centered on embedded distribution that lowers customer acquisition costs with personalized offerings. For the majority of our users, drivers and merchants, GrabPay is their initial entry point into a range of Financial Services. And as they build a transactional history with us, we can also offer lending and insurance and even digital banking services in Singapore, Malaysia and Indonesia.

In just 3 years, we have grown to 7.4 million deposit customers across our 3 banks. We have not had to invest heavily in acquiring new users or offering high deposit rates as we are converting the users who are already on our platform.

This also drives our lending business because we see high-frequency daily transaction data on our platform. We can predict risk more accurately. And this allows us to scale our loan portfolio rapidly while risk-adjusted returns continue to track above our cost of capital and credit costs remain well within our risk appetite.

In 2025, our gross loan portfolio surpassed $1 billion for the first time, ending the year at $1.3 billion. Our goal is to exit 2026 with a gross loan book of over $2 billion.

I also want to touch on this morning's announcement on our acquisition of Stash, a U.S.-based digital investing platform. While we remain firmly committed to Southeast Asia and the growth of our regional lending business, this acquisition achieves two specific objectives. First, it accelerates our wealth management roadmap with the addition of new capabilities and talent. And second, it has an attractive financial profile. Stash has the potential to grow into a high-margin subscription revenue stream, contributing over $60 million in adjusted EBITDA by 2028.

The last part of our strategy is potentially the most important for the long term. That is how we harness technology, including AI, for efficiency gains. We leverage AI to improve conversion at every stage of the funnel. For example, we automate menu translations to enhance conversion of high-value segments such as travelers.

Over 97% of our merchant listings regionally are now available in English and Chinese. Our credit scoring models are also increasingly robust as we were able to white list a greater proportion of ecosystem partners.

We have also improved real-time personalization by collating a database of over 1,000 attributes and segmenting our users and ecosystem partners into 200,000 distinct segments. And finally, we have improved our search and basket conversion with AI semantic search and real-time personalization.

Our tech investments are helping us to gain operating leverage. We continue to lower our cloud costs per transaction by proactively retiring idle resources and transitioning to more cost-efficient solutions. And at the same time, payment processing costs as a proportion of total payment volumes is declining as we increase volumes through our wallets.

And finally, we are maximizing head count efficiency by deploying in-house AI models. For example, you may be asking yourselves, how are we able to double the amount of cities in which we offer services with a reduction in operations headcount at the same time? The answer is that we have been deploying auto adaptive technology to optimize our core marketplace in each city, enabling us to scale in a lean and agile fashion. In fact, today, more than 90% of our Mobility rides are dispatched by using AI.

Looking ahead to the future, we are investing in the next structural shift in On-Demand services. autonomous vehicles and robotics. In partnership with WeRide, we launched our first AV shuttle service for the public in Singapore. Our position as Southeast Asia's leading on-demand marketplace makes us the preferred commercialization partner for global autonomous technology leaders.

We are committed to serving two critical functions: first, acting as a key thought partner for regulators to help define safety standards and operational frameworks for driverless transport. And next, supporting our driver partners through the transition to our hybrid fleet by uplifting them to take on specialized roles in safety and fleet management within the autonomous ecosystem.

So in closing, I have updated on the strong progress we are making as we execute towards our strategy and share with you our priorities for the future. We will work closer than ever with a merchant and driver partners, government agencies, corporate partners and Grab-ers to execute this strategy. Thank you for your continued support.

And with that, I will now turn the call over to Peter, who will discuss how these developments support our financial road map over the next 3 years.

Thanks, Alex. Anthony and Alex just laid a powerful strategic roadmap, focused on affordability, ecosystem-led lifetime values and Gen AI efficiency. I will now show you how that strategy is translating into our financial road map, which is driving durable, profitable growth at scale. Now what makes it particularly energized is how our execution over the past few years is already setting foundations to drive the financial outlook that we are setting today.

Let me first deep dive into our fourth quarter and 2025 results, which sets us up for the next chapter of our financial road map.

We delivered a strong finish for the year in the fourth quarter, characterized by product-led demand-driven growth. Our On-Demand GMV increased 21% year-over-year or 20% on a constant currency basis. with transactions outpacing GMV growth at 24% year-over-year. The strong volume growth is underpinned by our affordability and ecosystem expansion strategies that drive both user acquisition and also drive higher transaction frequency.

Our group revenue grew 19% or 17% year-over-year on a constant currency basis to $906 million. This is fueled by this GMV momentum and also driven by increasing contributions from our Financial Services. Now Financial Services also achieved our goals with our gross loan portfolio hitting $1.3 billion. and our net loan portfolio reaching $1.2 billion, well above our guidance of $1 billion, while maintaining healthy risk-adjusted returns.

Adjusted EBITDA reached $148 million for the fourth quarter marking our 16th consecutive quarter of EBITDA expansion. On a full year basis, adjusted EBITDA grew by 60% year-on-year to $500 million. These profitability is being powered by our robust top of the funnel growth and also our relentless focus on driving operating leverage as we scale. Finally, we generated $76 million in adjusted free cash flow for the quarter and $290 million for the full year, underscoring the efficiency of our platform.

The scalability of our ecosystem is delivering clear trend of accelerating top line growth, coupled with expanding profitability. And when we take a step back to review 2025, we hit several key milestones. Let me show you what they are.

First one, we have driven a strong acceleration in growth with On-Demand GMV growing by 21% year-over-year. We are able to do this as a result of years of effort to widen the top of the funnel and execute on the product-led strategies Alex just described. Our confidence in this momentum remains high because we are seeing a product-led and ecosystem-focused initiatives drive higher transaction frequency and also attract a broader user base than ever before.

Now as we continue to scale the ecosystem, it translates into operating leverage as we benefit from greater network scale efficiencies. From our first quarter of adjusted EBITDA profitability achieved in the third quarter of 2023, we subsequently recorded positive adjusted free cash flow for the full year 2024. And I'm also proud to announce that in 2025, we achieved our first full year of net profit.

As we look ahead, there are four core principles of our financial road map that will guide our execution in the medium term and serves as a framework for how we create long-term shareholder value.

Firstly, we remain focused on growing in a sustainable and durable manner. We're not chasing growth at any cost. Instead, we are driving relentless improvements to the affordability and reliability of our core offerings to capture a larger share of our addressable market and also employing the product-led and ecosystem-focused approach to cross-sell high-margin services like Financial Services.

Secondly, we will continue to drive improvements to operating leverage. Our priority is now to build on this foundation and compound the earnings growth of our ecosystem as we continue to benefit from the network efficiencies we've spent the last decade building.

Third, we are laser-focused on free cash flow conversion. We expect our adjusted free cash flow conversion rates to improve as our profitability grows and achieving operating leverage.

Finally, we will maintain a strong disciplined balance sheet. Our capital allocation framework is one which prioritizes organic growth with high returns and remaining disciplined on M&A while returning excess capital to shareholders.

Now let's look at how this all comes together in our guidance for 2026.

First, on the top line, we expect group revenues to grow between 20% to 22% year-over-year to $4.04 billion and $4.1 billion, accelerating from the 20% growth in 2025. This is not just a byproduct but larger base. It's a direct result of our sustained growth in our On-Demand GMV and Financial Services continuing to be our fastest-growing segment as we scale our loan portfolio.

Now on adjusted EBITDA, we expect to grow by 40% to 44% year-on-year, reaching $700 million to $720 million in 2026. This step-up in profitability reflects that network scale efficiencies and cost leverage we've been building into the platform.

This is supported by the continued growth in our On-Demand EBITDA, but also Financial Services segment moving towards EBITDA breakeven in the second half of the year. As we continue to lean into technology and Gen AI also to drive the corporate efficiency and the operating leverage in the business.

Now I would also like to outline how we are thinking about the next 3 years and the goals we are focused to achieve. For the next 3 years, we expect robust momentum in revenue growing at a 20% CAGR from 2025 to 2028, with adjusted EBITDA tripling from 2025 to reach $1.5 billion in 2028, and for adjusted free cash flow conversion to expand to 80%. Now let me discuss each of these in the next three slides.

Looking ahead through 2028, our revenue outlook is defined by a demand-led strategy across several high-velocity levers.

First, for our On-Demand segments, we are very focused on new user growth by expanding our footprint into noncapital cities while broadening at the same time our product suite to capture the untapped segments of the market. This expanding base gives us our larger foundations to drive retention and frequency. And furthermore, we expect a gradual increase in basket sizes.

Secondly, our Financial Services engine. We expect Financial Services to become an increasingly larger contributor to our total revenue base. By leveraging our proprietary ecosystem data, we can scale lending dispersal with high confidence in our credit costs, creating a high-margin revenue stream.

Finally, on MSME and merchant solutions. We see significant upside from merchant-focused initiatives specifically in advertising and omni-commerce solutions like dining. These are services that allow us to enhance our value proposition to merchants. Collectively, these strategic pillars provide a clear trajectory towards our 2028 revenue targets.

Now let's move on from revenue outlook to our EBITDA trajectory. Our focus is on driving operating leverage required to reach our target of $1.5 billion in adjusted EBITDA by 2028. Now to point it to context, this represents 3x growth from our 2025 performance and a more than doubling of the EBITDA we've guided for 2026.

This is anchored by three key pillars. First, On-Demand. Our primary driver for absolute EBITDA growth is expansional our top of the funnel. As we continue to expand this ecosystem, we are benefiting from compounding network scale efficiencies, particularly within fulfillment and fixed cost leverage. This enables us to track towards our long-term steady-state margins of 9% plus of Mobility and 4% plus for Deliveries.

Secondly, for our Financial Services, we are firmly on track to achieve EBITDA breakeven in the second half of 2026. And from that point onward, we will progressively expand margins. This transition will be fueled by the scaling of our loan book and the continuous maturation of our credit models, which allows us to grow interest income while keeping a tight lid on credit costs.

Finally, on corporate costs. While corporate costs will naturally increase as we scale, our focus is on driving operating leverage and ensuring that these costs grow at a significantly slower pace than group revenue. By executing across these three fronts, we will aim to become more efficient as our business scales.

As we scale both our top and bottom lines, we are entering a phase of accelerated free cash flow growth. The key takeaway here is our conversion efficiency. We expect that adjusted free cash flow 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 are 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. 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 will maintain a high bar and only pursue acquisitions if they strategically accelerate our roadmap, bringing 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. 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 Superapp 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 graph that you see today is a fundamentally different company than the one that went public 4 years ago. We have reached a stage where growth and profitability are no longer a trade-off. We are driving significant top line expansion by maintaining strict discipline in our capital allocation.

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 strong 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 and also at the same time, protecting the environment. We are more energized and 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 I. I will now turn it over to Ken Lek as we begin the Q&A session.

Sure. We now open the call to questions. And as a reminder, to audience, please submit your questions via [email protected].

With that, our first question comes from the line of Pang Vitt from Goldman Sachs as well as Horng Han from CLSA. The question is about our EBITDA -- 2028 EBITDA guidance. Just a 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?

Let me take this one here, Horng Han and Pang. There's really two key themes. If you really step back and in the last 40 minutes, we've actually gone outlined what they are.

The first is sustainable growth. You're seeing the momentum of the revenue growth that you're seeing in the business, and that translates to what you see in the guide, the 2026 guide in terms of revenue, the 20% to 22%, and then also to 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. It'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. The first thing On-Demand revenue. The On-Demand engine is working. And you see that continued momentum in driving user growth at the top of the 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 of serving the business. That affordability that we're working on so focused on is working, and 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 a lowering of cost to set up. 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. So that's the first critical pillar that we're going to drive.

The second one is around Financial Services. You're seeing the engine working now. You're seeing that loan book now continuing to scale. We clipped the $1 billion in terms of loan book. And what you're going to see is that as the business turns breakeven in the second half 2026, you'll enter into a new inflection point, and you're going to see that profitability continuing to grow.

We're very bullish in where Financial Services is going as that low -- as we lower the credit cost also of that business. And the risk-adjusted return that you're seeing is already tracking above our cost of capital. So you have 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.

Now the third and the fourth is really a combination of operating leverage in the business, which is the corporate cost side of the house. And you're seeing that copper cost coming down. If you look at 2023, it was roughly about 17% as a percentage of revenue. In 2025, we just -- we've gone down to 11%. So you see a 600 basis points of margin improvement of that business.

So as we continue to drive cost in the business, whether we -- it's our cloud cost, whether it's the cost of funds or just using more AI to drive productivity in the business, you are going to see that absolute margin improve overall as a business.

So that's how you think about it. Two pillars, continuing to drive that growth across all our core segments of our business, drive operating leverage, and that generates the margin continued absolute dollar improvement to that $1.5 billion.

Okay. Our second question and then related one comes from Venugopal from Bernstein. And this is a question for Peter as well. What prompted us to provide a 2025 -- 2028 guidance, as such long-term guidance is typically not common? How predictable is the business model? And is this all going to be driven by organic growth?

So Venu, yes, it's all organic growth. That's what we've given out here today. If you look at the strategy, actually hasn't changed in terms of how we're going to continue that momentum. Just to earlier point of the previous question, we're continuing that momentum in the revenue side of the business.

And we feel that the timing is right. The last time that we provided a 3-year guidance was back in September 2022. And now the business has changed. The business has continued to scale, we're seeing a momentum, it's an inflection point. And we are seeing all the ingredients that we've been building over the last 2 years now are coming into action, and 2025 was the year demonstration of that. then we want to continue to expand that.

But we also we want to provide our investors our longer-term long-term financial roadmap, what are we heading for over the next 3 years? And really, the acceleration of growth that we're seeing, we're going to continue to maintain that. We clipped over 50 million of MTU today, and we think there is still a lot more MTUs that we can reach in South Asia.

If you look at the number of cities added in the last 4 years, we had over 400 cities. Imagine that in Southeast Asia, there are more than 400 cities. These are noncapital cities, and there are more cities that we want to go and enter and serve the Southeast Asians. So we want to continue to maintain that growth.

But at the same time also, we know that we have to grow the profitability and the free cash flow conversion. So we've given up all ourselves as a management team as well as Grab as a target to go for. And that is that $1.5 billion EBITDA that we want to reach in 2028 and the free cash flow conversion of our business.

We're on the right. All the cylinders are firing and the engine is going, which is great to see. And 2025 was a testament. We're able to demonstrate we can do that. And now we're in 2026, we're confident in the next 3 years.

All right. We'll move on to a few questions on Indonesia. The next question comes from Navin Killa from UBS as well as Pang Vitt from Goldman Sachs. A question for Alex. Is there any update on Indonesia's proposal to lower ride-hailing commissions? And if implemented, how would this impact take rates and segment margins? And what levers do you have to offset that potential pressure?

Okay. Thanks for this question, Navin and Pang. This is actually a great opportunity to clarify because there's been a lot of speculation in the media about what might happen in Indonesia.

So we can confirm that the government have not proposed any changes in commission caps. We're in close consultation with them. And we're aligned and committed to their ultimate goal, which is improving the welfare of drivers in Indonesia. So those of you that have been following closely will know that we have unveiled so social security initiatives for our hardworking drivers, plus Hari Raya bonus coming up as well.

And we're able to use the technology that we've developed, particularly AI and a product called Ride Guide, to help them get more productive so that they can get more orders and earnings for every hour that they choose to work.

We'll continue to do this because both ourselves and the government have aligned interest to develop a sustainable platform that operates reliably for our customers and affordably for our customers to enable us to continue to create and enhance livelihoods for driver partners and micro SMEs across Indonesia.

And then a follow-up question on the margins, I think, from Divya is coming up. So Ken, do you want to read the question?

So Divya asked a follow-up question in Indonesia. Also for Alex, could you provide updates on Grab's GMV growth and market share trends in Indonesia in the fourth quarter? Do you expect margins for Indonesia to be impacted by higher driver welfare costs in 2026?

Yes, Divya, thanks. So despite the macroeconomic headwinds, we have driven affordability as a key part of our strategy. and the product-led strategy in Indonesia. So we've been able to improve our category leadership across all verticals in Indonesia. It's growing about in line with the overall group and faster than the market in Indonesia. So we've been able to demonstrate a sustainable double-digit GMV growth for our On-Demand segment, and we've expanded the profitability year-on-year.

So in answer to your question, we do not expect margins to be impacted by the social programs that I just described because we're getting more operating leverage as we scale up in the country because of our scale.

So probably the most important aspect of the results in the fourth quarter for Indonesia were the increased velocity in Financial Services for us in the country. The highlight was, of course, the IPO of Superbank in December, which came out now, I think, with a $1.8 billion market cap and was incredibly successful, 300x oversubscribed with over 1 million shareholders.

And I believe at this point, we've got more shareholders in Superbank than any other stock on the IDX. So that's just an indication of the potential of the market for Financial Services, and we're just getting going now with an increase in velocity to be expected in 2026.

Okay. With that, we now have a two-pronged question from Piyush Choudhary from HSBC. We'll take the first question first before we pause for the second. So first question is for Anthony on our AV initiatives. So Grab has done various partnerships in cutting-edge AV companies. Can you provide an update on the progress of your various pilots? And apart from Singapore, do you see commercial rollout in other ASEAN countries in the next few years?

Great question, Piyush. Piyush, our long-term strategy is centered on a single goal of building supply resilience. We view AVs not as a replacement for our driver partners, but as a critical buffer to ensure 100% reliability. That is the key driver for customer retention, especially during peak hours or in underserved areas.

You may actually have seen us make, as you talked about just now, small minority investments. Now these position us in Southeast Asia in a way where we can have a geopolitical and technological [ hedge ] because we can partner global leaders across both U.S. and China ecosystems, whether it's a WeRide or [ May Mobility ] from the States or Momenta and even hardware leaders like [indiscernible] in LiDAR.

Now this agnostic approach allows us to leverage this unique position we are in with the ability to take the best technology from the world to adapt it to specific nuances of Southeast Asian infra.

Over the next 3 years, you asked, we see actually Singapore as our blueprint. You look at Ai.R. Ai.R is our first public AV shuttle service in Singapore's Punggol district. That's a great example. Ai.R has covered over 25,000 kilometers with zero safety critical incidents or near misses. This is the highest mileage recorded and the most data collected by any AV operator in Southeast Asia.

Our in-house fleet operations tooling will also enable real-time alerting for AV issues, which allows our operations center to respond quickly to potential incidents. And most importantly, we strongly reiterate our commitment to transitioning our driver partners into new and emerging roles as we move towards a hybrid human and autonomous fleet.

We are already retraining our strong Grab driver partners to form a pool of qualified safety operators during this pilot. They are part of our growing AV fleet operations ground team, which also comprises customer support and depot operations. And we do all this to ensure as we move to a hybrid fleet, we maintain our operational heart, while, as Peter just now shared, lowering our long-term cost per kilometer.

We will, of course, continue to work hand-in-hand with regulators like Singapore's Ministry of Transport to collectively define the safety standards and operational frameworks that allow driverless transport to coexist safely with traditional traffic.

Ultimately, we see this transition as a way to future-proof our platform and network, and we ensure that we can remain the most efficient marketplace as we lead Southeast Asia into its next chapter of mobility.

Thank you, Anthony. So second part of Piyush's question is a two-part question for Alex. How is the performance of the various new product initiatives you launched in 2025? And what are the key learnings from these rollouts? As for 2026, what new products could we potentially anticipate? So first part of the second question.

The second part of the question is, I note that Grab's MTUs has grown 15% year-over-year to now cross over 50 million users as of the fourth quarter of 2025. Could you share with us your outlook for MTU as a percentage of ATU penetration over the coming years?

Thanks, Piyush. Yes, you're right. At the start of 2025, we did say that we would be focusing on user growth and frequency. And it was indeed a key driver of our growth acceleration in 2025. I remember 2 years ago, we were talking about Grab being used by 1 in 20 of the folks here in Southeast Asia. Now we're at 1 in 15.

And I would make the same point, although we're growing very fast and penetrating very fast, we're still just scratching the surface. There's lots of upside left in this young, dynamic region for Grab to continue to penetrate.

So our GMV growth accelerated by 21% year-on-year, but the transaction growth, which is key, grew even faster at 24% year-on-year in this last fourth quarter. That MTU to annual transacting user penetration is at 37%, as Anthony said at the start of the presentation today, and that's an increase from last year. And ATUs, the overall base has grown even further to 129 million users now.

So the product strategy is working. We will continue. We updated the new product initiatives in Deliveries when we last updated at the half year, contributed to about 1/3 of our GMV. On a full-year basis, I can tell you that now is represented by almost half, so 46% year-on-year GMV growth from our new products, so a massive contribution.

Just to summarize what the product strategy has been and what we will continue to focus on, so the ladder pricing strategy is working. Affordability drives a lot better frequency. So Saver gives us 1.5 higher frequency than the average. And the high-value customers are here in Southeast Asia as well, less price sensitive, looking for limo rides to airports, et cetera. So we'll continue to grow at the top end of the ladder also, allowing us to manage the margin mix very nicely, as you saw in the overall results.

We like viral products for users. So we've been building viral products where usage brings in new users through the platform. So Group Order is a great example of that. We get to double the retention and frequency from Group Order that we get from the average. Family Account is another example of that. And then GrabMore, the cross-sell from food into GrabMart, is also operating extremely well for us to help build long-term value.

And then the last and probably the most important aspect is the focus on the merchants and their success. So now we've got a whole suite of integrated solutions, as I was describing earlier, that go from demand generation on delivery, dining in, loyalty as a service, all the way through to payments, fintech lending, et cetera.

We are the only provider in Southeast Asia that can bring all of those together for the merchants. And the more successful those merchants are with Grab, the more successful Grab will be in the long run as well.

In the future, we're not only talking about penetration of MTUs into ATUs, but we're now increasingly inside Grab talking about daily usage. We want Grab to be embedded in the daily lives of people in Southeast Asia every single day. So the frequency of once per day is how we think about the challenge in 2026, and we're making good progress towards that. Thank you.

Next question comes from Alicia Yap from Citi. This is a three-part question on our 3-year revenue guidance. So first part of the question could be, could you provide us with the breakdown by segment of how this will contribute to your revenue growth?

Second part to the question, could you also provide color on Deliveries EBITDA margin by 2028? And third part to the question, will you still achieve Financial Services breakeven by the second half of 2026? So all pointed questions, and this is a question for you, Peter.

Okay. Alicia, if you look at the top line, what you're going to see over the next 3 years is with the Financial Services of our business is going to be growing much faster than our On-Demand. And that's the product is just scaling. You've got the banks now on fire going really all out in building the loan book. We've clipped the $1 billion loan book. We expect to double that loan book by exiting 2022 -- 2026 and continue to increase from that.

So with the banks continuing to increase their penetration in the marketplace and also with some of the other products that they're coming up with, we expect that growth to continue to accelerate, outpacing the growth of our On-Demand business.

That's not to say that our On-Demand business will also continue to grow, which there will be. If you look at what Alex has been sharing across the product portfolio of our Deliveries business, we're seeing strong growth on our grocery business. which is growing 1.7x faster than our food business, and that will continue to also -- to be maintained and sustained as we get into 2026 and beyond in the Deliveries segment. We still have work to do also in affordability.

We're not stopping on affordability. There's still a lot of things that we want to do on the ride side of the house as well as on the Deliveries side that will continue to also fuel the momentum on the growth business of our On-Demand.

Margin, you'll see margin expansion, as I said earlier, when Pang asked about the margin side, the On-Demand business will continue to grow for that -- for both On-Demand. But also, you'll see the Financial Services margin continuing to grow faster than our On-Demand business also and also when it comes to the absolute margin versus our On-Demand portfolios of our business.

And then also, we're continuing to double down on our advertising business at the same time to supplement and complement our On-Demand business, which is really critical also as we continue to grow.

I think there was one more question from Alicia, which I haven't answered. I've lost track to that.

Fintech breakeven.

Fintech breakeven. That's right. Alicia, I can tell you right now, second half 2026 will happen.

All right. Thanks, Peter. So we're getting a couple of questions on AI from both Alicia from Citi as well as Navin from UBS. So Anthony, a question for you.

Given the rapid evolution of AI models and the increasing penetration of AI chatbots, what is management's view on the positioning of Grab's Superapp strategy in light of this? How does Grab anticipate potential shifts in user behavior and the use of AI chatbots as discovery funnels and ordering gateways, which could disrupt its services?

Great question, Navin and Alicia. Look, we view the evolution of AI not as a threat to the Superapp model, but as a high-velocity engine that will scale our model. Now to address your point on disruption, we see three strategic pillars that strengthen our position rather than pose a threat.

Let's talk about LLMs. LLMs are exceptional at discovery and digital commerce. We have now become embedded -- we, as Grab have now become embedded in the everyday lives of Southeast Asians. And this is the beauty of how we use and leverage this embedding.

The hyperlocal physical infrastructure that we've built by being embedded across Southeast Asia, it allows mobility, food delivery services to become our strong moat, and Grab has become the indispensable fulfillment partner. So LLMs can be a great channel, but we are the indispensable fulfillment partner.

We own real-time mapping, the merchant relationships and the fleet logistics across Southeast Asia. And these assets, these -- a lot of them are physical on-the-ground assets are incredibly difficult to disintermediate.

Number two, you mentioned earlier about search engines directing traffic. Now our partnerships with OpenAI now as our first lighthouse partner some time ago and Tropic aren't just for internal efficiency. They allow us to ensure that when a user asks a third-party AI, for example, how do I get home or what should I eat? Grab is the integrated fulfillment engine behind that answer.

I would say the third part, now for users, they want deep personalization, they want efficiency. So we are deploying semantic search and generative AI to turn our Superapp into a personalized concierge, if you may. We aren't just waiting for search, we are leveraging the data, we have leveraging generative AI and the best foundational models to predict intent.

For our ecosystem, with over 1,000 proprietary AI models, as Alex shared before, we're already powering merchants with our AI agent. We talked about Mai before. We're powering drivers with an AI Ride Guide that Alex talked about as a coach. We've dispatched over 90% of our rides are fully dispatched with AI, and we continue to improve our credit underwriting with AI. This has directly translated into higher retention and improved unit economics.

If you remember, from 2022 to 2024, headcount basically stayed flat, but revenues doubled. That's what we see. We've seen the power of AI.

Ultimately, we continue to build the AI-led operating system for Southeast Asia. We're excited to showcase the next generation of these tools at our upcoming GrabX Product Day. So we hope to see all of you there.

Okay. So the next question is actually on our new acquisition, Stash. As a reminder to the audience, we announced this morning that we are acquiring a digital investing platform Stash based in the U.S., which Alex shared more details on earlier. So two questions, one from Ranjan Sharma from JPMorgan and another from Venu Gopal from Bernstein.

So firstly, could you share with us management some of the financial metrics of this business, including its burn as well as near-term earnings? What did you pay for these assets on a valuation basis?

And second question, what does this signal? Is it a platform that's meant to be rolled out in Asia? Or is it a formal entry into the U.S. market? Does our 2028 guidance include contributions from Stash?

Lots of questions there. Let me just start, our long-term strategy remains very rooted in Southeast Asia. We still have a lot of work to do in Southeast Asia. It's our core markets, and there's still a lot of products and users that we want to touch with, whether it's across all our different segments of our business today.

Now why did we do Stash? It's really a unique asset. If you look at the trend of when we do acquisitions, if we looked at the last unique asset that we acquired was around Supermarkets, the Jaya and Everrise, we see Stash as a very unique asset with a few things. One is it's got a very strong IP. It's got a strong talent pool and a platform that we don't have today.

If you look at Financial Services as a business, what do we have? We have a very strong payments, we have a strong lending business, which is continuing to scale, we have a big deposit base over 7 million customers on the deposit side on the banking side of the house. What's missing? We don't have an investing platform today. And that's really critical for us as we continue to complete the full picture of Financial Services in Southeast Asia or also in other parts of the market where Stash operates today.

Now it is a positive EBITDA business today. It is generating free cash flow positive, and we see this business generating $60 million in EBITDA in 2028. So it's an accretive business that we see. But really, it's important that we also serve our user base today, not only in extending loans, but also teaching them how to save. It's critical in terms of our mission for the underserved, especially on Financial Services.

So we're very excited to have the Stash family joining us. We expect to close this transaction sometime in Q3 or Q4. It's a great team. We already have over 1 million customers that we are continuing to serve that they have continued to prove that, that product works. And as they continue to build that product set out, they're going to continue to penetrate the U.S. market, but also over time, we'll introduce the product here in Southeast Asia.

We're getting several questions now from various analysts on our grocery strategy. So notably questions from Jiong from Barclays, Divya from MS, Wei from Mizuho and Sachin from Bank of America. This is likely a question for you. Alex, can you provide us with an update on our grocery strategy and recent growth trends? What changes are you seeing in the competitive landscape across Southeast Asia? And how do you plan to invest capital into this vertical?

Okay. Thanks. So our most upvoted question. Well, first of all, let me start with the market opportunity. In ASEAN, the modern retail penetration is less than 40% of the overall grocery market. And then online grocery penetration is even lower at less than 3% in the majority of our markets. That compares with much higher numbers in U.S., China, U.K. of 15%, 20%, even 30% in some of those markets.

So for Grab, currently, [ Mart ] is only 10% of our Deliveries GMV, although it is growing a lot faster at 1.7x faster than food year-on-year. So we're starting to get a lot of traction.

The way that we are growing is that we are adding selection that is adjacent to the food consumption that we see. So beverages and groceries make a lot of sense when you're ordering food. And we're getting the input from the searches and the behaviors of customers on the food side to understand how to expand the SKU selection and using Grab more to do the cross-sell from food users into [ Mart ]. And when we do that, we see that the higher frequency is 1.5x and the spend is 1.5x when they're just a food-only user.

We're also improving the integration with our partners using tech, and that's helped us to improve the reliability. So the fulfillment rate and the customer experience is getting better and better. So those of you out there that haven't used GrabMart, please give it a go, and you'll see this tremendous improvement in selection and the availability of those items.

When we do that, we get higher engagement, we get higher long-term value, and that reinforces our conviction to invest in this space, but we're investing with discipline. So we can get sustainable returns because we're leveraging our on-demand capabilities. We're growing supply chain by integrating more deeply using our tech with the partners in each market, so we can leverage their supply chain assets, and that improves the financial performance.

And then finally, we can enhance monetization through the Financial Services capabilities that we talked about earlier, so the pay later capabilities, moving into installment loans. So you can see that we've got multiple levers to monetize, and that means that we can invest with discipline and continue to grow rapidly in the grocery space at the same time.

Okay. With that, we now have time for one last question. The final question comes from Divya from Morgan Stanley on our capital allocation strategy. So Peter, this is one for you. The cash on our balance sheet is notable, and it will build up further with our improving free cash flow outlook. While we welcome the share repurchase, it does contribute a very small amount of your total capital you have today.

Where do you expect to allocate capital if there are no opportunities for inorganic growth in the region? Are there new geographies to consider?

If you look at the -- there's one slide I had in my remarks earlier about capital allocation. And it hasn't actually changed. If you look at the previous comments that I made around capital allocation to what I just presented also, it hasn't changed a lot because we've been consistent in terms of how we think in capital allocation.

When it comes to inorganic opportunities, we're going to be continuing to be very disciplined. And that high bar is so important. So for every opportunity that we look at in using every dollar that we deploy, and you've seen a couple of examples that we deployed those assets, whether it's the Stash or whether it's the supermarkets.

We've also deployed certain capital around our autonomous vehicles product roadmap, robotics also; those come with a very high threshold in terms of valuing those companies, but also the synergies we can extract as well as the tech and the talent that we can bring into the ecosystem. So that lens, Divya is going to continue to maintain. It's not going to change.

The priority for us continues to be in organic growth, our existing businesses. And the banks is one that we're continuing to make sure that the scalability and the expansion continues. And it's where we do see opportunities in organic growth, we are going to double down.

We talked about -- Alex just talked about supermarket or grocery, the opportunity there that we see in modern retail in terms of where we can penetrate more. And we will have a high bar also when it comes to those organic opportunities, so we'll continue to deploy those.

Now the share repurchase program is important to us as we return capital back to our shareholders. So $1 billion, our wall is not small that we've continued to make sure that we bring the commitment back to shareholders. We'll continue to evaluate that over time.

But the -- what I want to finish up is that it's important that we always continue to have a strong balance sheet. That ample liquidity is important because it gives us flexibility, Divya. It gives us the leverage also in terms of how we can invest in the right areas. So we're going to continue to maintain the very strong capital allocation framework.

All right. With that, it brings us to the end of our Q&A session. I'll now turn the time over to Peter for his closing remarks.

Great. Well, I know it's been a lot longer than our traditional calls and also this format is a little bit different. But I thought it was important for Anthony, Alex and I here to really just go to a little bit more details in terms of how we think about the business over the next 3 years.

We are entering an inflection point as a business overall. The business that you look at today is very different to what we were 14 years ago, 10 years ago and when we went public. And that's important because we are going to continue to execute and out serve.

If you look at the number of the results that we just posted, what did we do? We exited 2025, much more stronger top line growth, profitability and our first year net profit. And our 3-year guidance is that reflection of our confidence. We want to go to continue to drive sustainable and profitable growth.

Now I just want to also just thank you to all the partners, the drivers and the merchants that we serve today. I had the opportunity of visiting a few cities in the last 3 weeks, and it's just been another just sobering moment for me just to talk to those drivers and the merchants and the sweat that they put through and the effort and the sacrifice that they put in into the Grab ecosystem. So thank you to all the drivers and the merchants out there who are our beloved partners.

To all our customers, we have over 50 million monthly transacting users today. Thank you for continuing to support Grab, and I hope we are fulfilling the products and the services that you're continuing to use to the Grab-ers for the mighty effort in 2025 and to also for our shareholders for their continued support.

The IR team and myself will be on the road over the next few weeks. Look us up, visit us, knock on our doors, give us a call. We'll be in the U.S. and across Asia in different parts. We'd love to meet up and sit down with you also as we go through our journey of 2026 and also go through our 3-year guidance.

So thank you again for listening and for watching us all today. See you at the next quarter.

Ladies and gentlemen, thank you for joining us today. My name is Tyler, I will be your conference operator for this session. Welcome to Grab's Third Quarter 2025 Earnings Results Call. [Operator Instructions]. I will now turn it over to Douglas Eu to start the call.

Good day, everyone, and welcome to Grab's Third Quarter Earnings Call. I'm Douglas Eu, Director, Investor Relations and Strategic Finance at Grab. And joining me today are Anthony Tan, Chief Executive Officer; Alex Hungate, President and Chief Operating Officer; and Peter Oey, Chief Financial Officer.

During this call, we will be making forward-looking statements about future events including our future business and financial performance. These statements are based on our current beliefs and expectations. Actual results could differ materially due to a number of risks and uncertainties as described on this earnings call in the earnings release and in our Form 20-F and other filings with the SEC. We do not undertake any duty to update any forward-looking statements.

We will also be discussing non-IFRS financial measures on this call. These measures supplement, but do not replace IFRS financial measures. Please refer to the earnings materials for a reconciliation of non-IFRS to IFRS financial measures. For more information, please refer to our earnings press release, remarks and supplemental presentation available on our website.

And with that, I will turn the call over to Anthony to deliver his opening remarks before we open it up for questions.

Thank you so much, Doug. Really appreciate everyone being here with us. This quarter marks another vital step forward in our journey, not just in our financial performance, but in how we are building a more resilient tech-driven platform for the long term. Our growth was a key standout this quarter, accelerating to new records as product-led innovations drove nearly a $6 million year-over-year increase in monthly transacting users to $48 million. This fueled a 24% year-on-year increase in on-demand GMV or 20% on a constant currency basis. At the same time, we continue to maintain cost discipline and leverage our ecosystem scale to drive profitable growth.

Group adjusted EBITDA rose 51% year-on-year to a new record of $136 million, marking our 15th consecutive quarter of sequential profitability improvement. Our adjusted free cash flow also improved by $185 million year-on-year to EUR 283 million on a trailing 12-month basis. Now these achievements are the direct result of our consistent focus on improving accessibility, affordability and reliability. This has enabled us to continue growing earnings for our driver and merchant partners, while expanding our marketplace, bringing new users on the platform and deepening engagement and loyalty among our user base.

As we head into the final stretch of 2025, we expect to exit the year on a high note. We remain on track for our financial services loan portfolio to exceed $1 billion and for full year on-demand GMV growth to accelerate from 2024 levels. As a result, both our Mobility and Delivery segments are well on track to exit the year at record GMV levels.

With our teams executing with focus and AI unlocking new growth and efficiency frontiers at unprecedented speed. We are confident in our ability to drive sustainable long-term value for our users, partners and shareholders.

With that, I'll now open the call for questions. Operator?

[Operator Instructions]. And your first question comes from the line of Pang Vitt with Golden Sachs.

Two questions from me. Number one, on the competitive landscape. Can you help us discuss some of the lasers that you've seen on the competitive landscape, especially in Indonesia, you delivered a strong 24% year-on-year in your on-demand service overall wondering whether there's any color you can share for what is the growth you have achieved in Indonesia? And what have led to your strong outperformance versus peers? That's question number one.

Question number two, can you discuss further on your latest update in guidance? What have led you to increase the guidance? And can you help us break down estimate by segment?

Alex here. Let me take your first question, and Peter will take the second question. On Indonesia, it's a key market for us. Our business continues to perform strongly there. It remains a very competitive market. But what we're seeing is that the product-led growth strategy that we've been talking about for the last few quarters is driving an increase in MTUs for both deliveries and mobility, particularly the affordability, strategy is bringing in a lot of Grab bike and Grab car saver users at the lower end of the pricing ladder. And at the top end, Indonesia still has a lot of wealthy customers, and we've launched Grab executive there for mobility, and there's a lot of domestic tourism and business travel, which is helping drive our high-value rides and our priority food delivery services.

We're also growing GrabMart, which is helping to drive those elevated levels of the delivery GMV growth that we're seeing. So overall, it's a reflection of microcosm of what we're doing across the group. I would say you can't see these in the numbers, but I can tell you that there's strong growth in Indonesia, and a strong sequential margin improvement as well. So we're very comfortable with what we're doing in terms of the market position and our penetration of the overall opportunity in Indonesia, which remains huge and something we continue to be excited about as we invest in that country.

Pang, on your guidance question, look, you've seen our numbers from Q1 to Q3, how we've been performing, we're continuing to have that consecutive quarter-on-quarter growth in our EBITDA guidance, and part of that is the top line growth that you're seeing in the business that Alex just talked about. You've got that nice momentum in our deliveries business, growing at 26% clip. You've got our mobility business also growing at 20%. So -- and let's not forget also our financial service is growing at 40% revenue and our loan book continues to hit all-time high. So you've got nice momentum just overall from the top line side. But also at the same time, we continue to be very disciplined on our cost structure. You see our regional corporate costs increasing only 8% on a year-over-year basis. But what's more important now that we're seeing about 150 basis points improvement in operating leverage as a percentage of revenue of our regional corporate costs. And that gets critical as we continue to make sure that we're spending in the right areas.

So we expect the strong top line growth to continue into the quarter where fourth quarter is usually our strongest quarter, we're on track to make sure that we deliver all the things that Alex mentioned about affordability, reliability, accessibility. And so with that, we are more confident in raising our EBITDA guidance to the $490 million and $500 million for the full year 2025, I do want to caveat that as we enter into Q1, which is around the corner for us. It's 1 of our more softer season, which is really very traditional for us. So -- but we do expect to maintain that profitable growth going into 2026.

Your next question comes from the line of Alicia Yap with Citigroup.

Congratulations on the solid set of results. Two questions. First, could you elaborate a little bit on your MTU growth? Have you seen any major differentiations in terms of the user profile you added this quarter compared to last few quarters. For example, is that more female this quarter, any more of the younger generations or any like the second or the lower-tier cities that contributed to the bigger additions of the new user this quarter? So any metrics that you could share would be helpful.

And then second question is, given the successful conversions of the product-led innovations to drive the order growth and also the higher frequency per user as well as your explorations into the GrabMart and also the grocery business, so following few quarters of the accelerated GMV growth for your delivery business, how should we be thinking about the growth rate for the fourth quarter this year and also into 2026? Should the growth rate be normalizing around maybe mid- to high teens or would that be possible to stay above the 20% growth for 2026?

And then if you are able to grow faster than the high teens or even 20% mark, would that mean your margins expansion will be more gradual or even potentially see margin flattish or declining for next year?

Thanks, Alicia, for those questions. Let me take those 2. So MTU growth, as you saw on demand MTUs grew 14% year-on-year. In fact, DTUs grew even faster. So our daily transaction are growing faster than our monthly transactions. So we are succeeding in our goal of being part of the daily lives of Southeast Asian. On demand transactions, the actual transactions grew 27%. So you can clearly see that increase in frequency effect as well. And this is very much part of our strategy for driving the flywheel of increased demand, increased supply, improved quality of services and driving further demand after that.

In terms of the demographics, saver deliveries obviously have been instrumental in acquiring new users, growing frequency as well over the past few quarters. So almost 1/3 of our deliveries MTUs, joining the platform, the new MTUs are coming through Saver deliveries. So that's an important driver of the flywheel again this quarter. It's similar for transport, where we see Grab bike saver and Grab car saver also bringing in a lot of MTUs. At the same time, as I mentioned earlier, when I was answering Bang's question, the high-value services are also growing fast. So high-value rides grew 66% year-on-year. And then priority delivery is also growing fast. So we're seeing growth at both ends of the pricing ladder, which is healthy. But the critical thing is that we're also being successful in cross-selling and retaining these new users to build long-term value, long-term customer value.

So what you can see overall, if you look at the GMV per MTU, so despite the strong growth in MTUs, the GMV spend per MTU grew 7% year-on-year. So I think that shows that your affordability strategy is both bringing in new customers, but also with our cross-sell is allowing us to deepen the value for each of those customers. So this growth effect is distributed both across big and small cities, you asked about that. But I would say that it skews to younger customers for the Saver products. But it does show that our product-led flywheel for deliveries and mobility is spinning faster and faster.

And then your next question about growth rates going forward. We still feel that the -- our MTU penetration of Southeast Asia is low, when you consider the size of the population and the growing spending power. So when you look at what's driving these elevated growth levels in the last three quarters where we've managed to accelerate quarter after quarter, you can see that there are three elements, which I feel are all sustainable going forward. One is the product-led viral growth. Without increasing consumer incentives, we're able with group orders and family accounts to bring in new users, so the ecosystem is self-generating and bringing in new users on its own. We've also got this very strong GU base, Grab Unlimited is the biggest subscription program, paid subscription program in Southeast Asia. The users grew again 14% year-on-year to another all-time high. So they now represent over 20% of our delivery MTU base. This is also a sustainable driver of future growth. And then we have this adjacent Grab Mart opportunity where now we have this functionality called Grab more where a food user can just add on a grocery order to the food delivery that they're about to receive, proving to be very popular, and that will allow us to penetrate more and more of our large food base so that we can keep GrabMart growing. It's already growing at 1.5x the size of food, but we think there's potential to increase that penetration.

In terms of the margin impact, we will be disciplined in driving sustainable growth, but also focusing on the absolute EBITDA growth. If you look at the margins this quarter, in fact, they've improved both for mobilities and for deliveries. As we've said in prior quarters, sometimes we'll launch new products and we'll promote those new products, and that will mean margins dip down. But overall, you can see that the margins this quarter have recovered to the average levels for the year. So there's no change in our margin outlook that we stated for the longer term. We still expect to get deliverers to 4% plus and mobility to 9% plus.

So we believe we can do this while not sacrificing growth. As you heard earlier, we expect fourth quarter on-demand GMV to grow sequentially from the third quarter. So we will exit 2025 at record GMV levels and make a healthy entry into 2026. And we do expect margins for deliveries to continue to grow from these levels into next year even while we invest into new product initiatives and the grocery growth where we're seeing stronger and stronger traction.

Your next question comes from the line of Navin Killa with UBS.

I had a couple of questions. One is with regards to your balance sheet. Obviously, strong cash balance, you raised the CBs earlier this year, and the business continues to be free cash flow positive. So how should we think about the use of this cash going into the next 12 to 18 months? And then secondly, in the context of some of the growth conversations that we have had, just wanted to understand how you are seeing the macro environment. And I mean, if you were to split this growth for this year between, let's say, macro market share gains and the impact of some of these initiatives that we have launched around new products, how would you qualitatively think of these three factors driving the growth?

Navin, it's Peter here. Let me kick it off with your first question around capital allocation, and I'll ask Anthony to chime in around the macro -- your question about macro. On the capital allocation framework, no change in terms of how we're thinking about it. And we've always been our focus as always on three pillars. The first 1 is around investing for organic growth. And you're seeing that in the business, the profitability of our business and the growth that you're seeing and some of that came from also some product adjacencies and tuck-ins that we've done as part of that profitable growth that you're seeing. But the organic growth has been really critical. One way that we've been deploying the balance sheet is on our loan book. If you look at the loan dispersal for Q3, for an example, we hit roughly $3.5 billion on an annualized basis on that dispersal. So Q3 alone was up roughly about 56% on a year-over-year. And that's a majority of that is on our balance sheet itself. So it's a great use of capital for us. It heals a higher rate of return. Actually, it returns above our average cost of capital for us, and we'll continue to use that balance sheet as we recycle those loans. That's just 1 example in terms of organic. We're also obviously deploying some of those capital in terms of investing in terms of new products that were earmarking for 2026.

On the second pillar is around what we call very highly selective M&A, which are more opportunistic and those are a lot more where it's more speculative also. But those have a very high bar, as you know, and we've always talked about this. But where we have been investing in some of the longer-term bet that we're looking at for things such as autonomous vehicles. And we've deployed some of those capital in making in those critical investments that we're leaning into. You've seen the announcement that we made with ride for an example, may mobility as part of our strategic pillar in terms of making sure that we are the pioneer and we're leaning in, in terms of autonomous vehicles deployment here in Southeast Asia. But overall, as a framework that M&A is a very high bar for us, and we want to make sure that the synergies that we can extract is of a greater value.

And then third, where there's excess capital, Navin, we'll obviously look at returning it to our shareholders. So those remain critical. Those 3 things that we believe in the recent capital raise that it will give us strategic flexibility in the interest of our investors. We'll continue to look at and explore those longer-term growth that Alex mentioned and how do we create the best value for our shareholders. But we are always, always prudent in terms of how we are managing our capital and our balance sheet. So hopefully, that answers the question. Anthony, on the macro.

Thanks, Peter. And thanks, Navin, for a really good question, especially on the macro environment. So look, in Southeast Asia, there's been a lot of positive focus recently. As many of you are aware, Malaysia hosted the ASEAN Summit earlier this week, and President Trump visited a region to finalize trade negotiations with several of the Southeast Asian countries. I wanted to call out was the peace agreement between Thailand and Cambodia. These have been 2 very significant and positive events for the region, and we are seeing signs of tourism recovery in Thailand as the country heads into its seasonally strongest quarter of the year.

Now to Navin, your second part of your question, are we seeing weakness in consumption? The short answer is no. Our platform is proving to be highly resilient. We're not seeing a broad-based slowdown. In fact, our model is built for this exact environment point to 2 key reasons. One, our strategy is countercyclical. The uncertainty in many ways actually accelerates our flywheel. We are seeing a healthy increase in partners coming into our gig platform to find income. And that, of course, improves supply. This also enables us to reduce wait times and hunt reliability and most importantly, it lowers prices values as our users, which our users really appreciate. This increases our affordability and grows the overall user base, as you saw in our numbers, which is our key strength.

Also, our focus on affordability is paying off. So this is a new. Our focus on affordability, which we began in 2023, with products like Saver delivery, Saver transport, that was explicitly designed for this purpose. These services are now essential for users, enabling them to manage their wallets effectively. So this makes us a must-have service not a nice to have, which protects us from a pullback in discretionary spending. Look, but the reality is we may not be immune to macro trends, but our strategy is designed to be resilient and even opportunistic in this landscape.

So we continue to reinforce this by partnering with governments as well. For instance, in Indonesia, we've been running what we call the Gota Masa Dean, which is a future cities program in partnership with the Ministry of medium small and micro enterprises, where we have worked to support small businesses and digital upscaling across nearly 20 cities. And in Vietnam, our EV launch is really to design to drive better NPS and also lower partners costs. These on-site projects, they strengthen our ecosystem and create a more sustainable, profitable business for the long term. So we are confident in our strategy and our outlook.

Your next question comes from the line of Venugopal Garre with Bernstein.

Two questions from me. First question, is more something that you discussed earlier in the call about the Grab mart business, the grocery business, which is outpacing the growth of full delivery. I wanted to really understand in terms of regions that are driving that growth for you, especially geographic regions and more importantly, I want to understand what are those big initiatives that you would need to incrementally take to make this a much, much larger segment? The reason I'm asking this is because grossery on an absolute basis is perhaps still relatively smaller in terms of penetration compared to the overall TAM that is there in the region. So newer models like with Commerce, any thoughts around any change in landscape around the models that you might use to really scale up this business? That's the first question.

The second 1 is more of a follow-up on the investment side of question that was discussed. I wanted to understand the investments that you have done in the autonomous tech company. This is largely to secure tech? Or is it more in the nature of financial investment? And more importantly, could you also outline the current progress with respect to the rollout on autonomous.

Thanks, Venu. This is Alex. Let me take the first question. I think Anthony will take the question about AVs. So you're right. Our deliveries -- our Groceries business, GrabMart, is relatively small compared to the rest of deliveries. It's only about 10% of deliveries GMV today. So it's very small compared to the TAM that you correctly identified is out there. We are seeing GrabMart grow across all markets. And 1 of the drivers for that is the rollout of GrabMore, this capability that allows customers to add groceries to their food orders for the same delivery cost, proving to be very, very powerful for cross-sell into groceries. So GrabMark continues to outperform, growing 1.5x faster than food delivery segment. And we've also seen that the users of both food and mart demonstrate order frequencies that are 1.8x higher than food-only users. So we know that it's a great driver of stickiness and loyalty and long-term value.

In terms of the various business models, we are experimenting about -- with some of the newer business models that would open up more TAM for us. So in Malaysia, where we have Jira we are experimenting with quick commerce around certain Jie stores where we can really sweat the inventory and store assets. So without increasing our fixed cost we're able to drive up the volume of orders quite significantly. Even though the experiments there are primarily grocery focused, but we have seen a nice step-up in demand when quick delivery is an option for customers. So I think there's something to build on there, and we've started to experiment in 1 or 2 other countries as well like Indonesia, where we work very closely with certain partners. So yes, I think watch this space, very early days for us. Grocery focus, but we are definitely exploring new models which can help us unlock future large TAM.

Now Anthony, on AVs.

Yes. Thank you, Venugopal. Let me talk about the plans and our strategy regards to AVs. Now our recent AV investments are all very deliberate. It's part of our long-term strategy to lead the adoption of AV and remote driving across Avis Asia and to secure the technology supply chain through strategic partnerships. While AVs are already a reality in parts of the world, we expect a longer ramp-up to mainstream adoption in Southeast Asia for a few reasons. One, Southeast Asia is still behind in the cost curve. Labor costs in Southeast Asia are significantly lower compared to the U.S. with Singapore being an exception. Now we believe, therefore, it will require considerable time for the unit economics to reach parity with human drivers.

Second, the crossover point will occur when AVs become safer and even cheaper than alternative options before we see a huge transformation in the way current transportation is served. Now as the largest mobility platform in Southeast Asia, AVs and remote driving are something we must lean into. We'll continuously learn about the technical optimization of AV performance on our platform. We'll also maintain a hybrid fleet approach for the foreseeable future and intend to collaborate very closely with regulators across Southeast Asia. Now 1 of our top priorities as part of this I would say, essential part of this strategy is to work alongside regulators to upscale our driver partners as part of this shift.

Our focus is to find the new jobs that will be required as we shift towards a hybrid transport world. We see new kinds of jobs emerging. For example, drivers could be remote safety drivers, data labelers, they could change lidars, cameras and so forth. So as we lean into AVs and remote driving with several partnerships already under our belt and more underway, we remain very excited about the longer-term opportunity to build capabilities to operate a word-class hybrid human and autonomous fleet to deliver the best experiences for our customers.

Your next question comes from the line of Wei Fong with Mizuno Securities.

I have 1 quick 1 on the Financial Services segment. We've seen very strong growth there, right, but with sizable bad loan provisions, of course. I was just wondering if management can talk about what you have learned about the newly acquired customers in recent quarters? And how you are fine tuning your risk provisions going forward? That's it.

Thanks, Wei. Let me take that one. You're right. We are accelerating our financial services growth, and we are reaffirming our goal to exceed a $1 billion loan book after excluding credit loss provisions by the end of 2025. And -- you can see in these -- in this quarter, there's been an acceleration of loan dispersals. So we're now at a $3.5 billion run rate on an annualized basis, growing 56% year-on-year, so very strong underlying growth.

We do see, as you mentioned in your question, an increase in the expected credit losses coming out of the models that we run to make sure that we're providing well for the future growth. It's a natural consequence of that growth. it's an upfront provisioning that occurs in the lending -- accounting of lending. And it's obviously offset against the revenue generation from those loans over their lifetime. So you should expect with this kind of accelerated growth that the ECLs will run through the P&L and sit on the balance sheet as you're seeing in the current quarter.

What I would say though is if you look at the underlying performance of the Financial Services business without taking those provisions into account, then our Financial Services segment adjusted EBITDA improved actually quarter-on-quarter and year-on-year by about $4 million quarter-on-quarter and EUR 17 million year-on-year -- that's an important measure for you to see because it underlies that if we -- if we don't need to pull down all of those provisions, it underlies how we're getting operating leverage out of the growth of the business.

You asked what we were learning from the customers. We are, in many ways, a data science company. So we are learning every single second of every single day from how our models ingest all of the different data points that we can generate through our ecosystem. Unlike banks, we can access a lot of unconventional markers of likelihood to repay that allow us to underwrite segments of the population in Southeast Asia that currently cannot access credit. These are often known as underbanked, unbanked. So a lot of what we do is about financial inclusion, bringing people into the market, allowing them to actually establish a credit record. About 1/3 of our customers could not access data because they weren't on a credit bureau -- could not access credit because they weren't on a credit bureau prior to borrowing from Grab and our financial subsidiaries. This is very important to us and very much aligned with our mission.

The repayment record actually from those customers is very pleasing. They know that when they repay us, they start to establish a credit record and they start to, therefore, become included in the financial and economic prosperity of Southeast Asia. So we're very pleased to learn more about those customers and to bring them into the financial services domain for the first time.

So the credit models every time we launch a new product, the credit models obviously take time to be established. But what you're seeing this quarter is that across the banks and GFI where you're starting to see that we've got credit models maturing. We've got new models being launched all the time. We're increasing the cycle speed with which our data science improves these models. So that's why going into this fourth quarter, if you run the numbers, we're predicting an acceleration of the loan book size. And we also are indicating that, that acceleration will continue into 2026.

Your next question comes from the line of Mark Mahaney with Evercore ISI.

Two questions, please. One, on the consumer incentives. Just talk about how we should think about where those will hold going forward. There's been a little bit of volatility, some leverage on quarter, deleverage another quarter. Is it -- are you running them at a level that you think sustainable going forward? Or do you think we should expect to see leverage against those in the future?

And then second, just talk about advertising intensity or what I mean by that is advertising revenue, the ramp that you're seeing? Just a little more color on where that is now? How much -- any new pockets of strength in there and how to think about growth for that particular segment over the next year or 2?

Mark, Alex here. Let me take that. On consumer incentives, you can see it's come down a little bit this quarter. We think that we can keep it at around this level going forward because we're getting a lot of boost from the viral product rollouts that we've been doing. And so we find that the incentive level doesn't have to be as high despite the fact we're accelerating growth for both deliveries and the mobility also staying relatively high and transaction volumes in mobility going up to 30%. That's all been achieved with a reduction in incentives quarter-on-quarter. But I would say for -- in terms of modeling, you can assume that the incentives stay at around this level on the consumer side.

In fact, this quarter, we've had to actually boost the driver incentives slightly because the growth in demand was so high. We needed to make sure that we can maintain the fulfillment quality and reliability of our services. So you can see that in contrast, there's a slight increase in driver incentives.

So going to the core question, these incentives can go up and down a little bit quarter-to-quarter. But in terms of modeling steady state, I'd say we're about the right levels where we are today.

The ads piece. The bigger we get, the more interesting we get for advertisers, whether those be the merchants on the platform or FMCG customers who want to advertise across the platform as well. I think for the food side, we see continued penetration of advertising. So we expect that to continue to move up gradually into next year. We've got total -- the total number of quarterly active advertisers joining our self-serve platform actually increased 15% year-on-year. So we're continuing to see new advertisers coming on to the platform, which is great. Many of them coming in through our self-serve capabilities. And then the average spend of the active advertisers on that self-serve platform grew 41%. So once people try the platform, they see it, it works very well for them in terms of ROS and they start to increase their spend. So these are both lead indicators of what we expect, which is a continued increase in the penetration of our deliveries GMV with ads.

As we grow the Grab Mart business, which we've talked about a lot on this call, we expect to be able to attract more and more FMCG advertisers. And there, if you look at some of the models in other parts of the world, you can see the penetration of advertising for grocery -- online grocery businesses is actually even higher than online food businesses. So that's something that as the scale increases, we should be able to improve as well. So we're very bullish about the advertising part of our business. In fact, I would say it's a key driver of margin growth in the longer run.

Your next question comes from the line of Divya Gangar with Morgan Stanley.

I had 2 questions. One is actually a continuation of what you just said, Alex, on the advertising being a driver for deliveries. So my question is on deliveries margins path to 4%. Could you talk about how different are the margins across countries just qualitatively and the role of some of these countries lifting up the overall portfolio margins. In the past, we've thought that Indonesia has been a drag, but looking at the competitive dynamics there, the margins for delivery seem to be relatively healthy in Indonesia at least for our competitor. So trying to understand how we look at that path to 4% from an advertising country-wise perspective as well as Grab Mart and how dilutive that is to margins? So that's my first question.

And my second question is on financial services. Now that we're closer to the breakeven year for fintech, could you maybe just share the framework and the milestones we need to hit over the next 6 months to be able to meet the target? And what do you see as the key risks? Also, if you can talk about some typical use cases that you're seeing for this loan book expansion, especially on the digital bank side, that would be helpful.

Thanks, Divya. Yes. In general, the Mart business has a lower margin than the food deliveries at this point. But of course, that's a lot because of the speed of growth. And also because the dynamic with the FMCG advertisers is such that we get more valuable to them, the larger we are. So although we have a lot of interest from efficacy advertisers, I think we're relatively small compared to some other venues still in terms of commerce in general. And therefore, it's important that we continue this growth. And I think that's where you start to see improved margin on the Grab Mart side.

In terms of Indonesia, I can confirm Indonesia continues to grow strongly again for us. Our deliveries business in Indonesia grew in the high teens in this year-on-year for this past quarter. So although the margin is stable, we're actually able to generate a lot of growth from that situation. And like I was just saying, we feel that it's important to get larger in order to really realize the full opportunity from the Mart business.

In other markets, for example, Malaysia, we've already -- of around 4%, and that's where we're starting to experiment with some of these other models around Instant Commerce, as I mentioned earlier because there, we can generate a lot more growth from entering into these adjacent markets based on the asset configuration that we have with Gyros doing very, very well in Malaysia, for example. So there are some differences across markets. You're absolutely right. But we're adopting a portfolio approach. So we're making sure we achieve our margin targets not just across different countries, but also across the verticals so that we can produce this kind of high growth but also maintain our margin progression towards those long-term targets that we've shared with you over the past quarters and years.

Moving to Financial Services. Yes, we're coming now towards our breakeven year. I can confirm that we are reiterating that we will break even overall as a segment in the second half. So it's a combination of banks and GFN and that the banks will break even in the fourth quarter. The milestones really relate to loan disposal growth, which, as you can see, is accelerating now through this annualized run rate of $3.5 billion in this current quarter. We started to see that the credit models are maturing nicely. We now have flexi loan products available for consumers in all 3 of the bank markets. We've just launched also a flexi loan product through our non-bank financial company in the Philippines, just in this last quarter. So we are able also to serve personal loan needs in other parts of the region beyond where we have those 3 banks using GFN as the vehicle.

We can share expertise about the credit modeling across those countries, which has proven to be very, very successful. As I said, we are really a data science company. So the way in which those models advance is super important to us.

You can see that EBITDA can fluctuate as the ECLs flow through the P&L and into the balance sheet. So I think the key thing to watch there is that the segment adjusted EBITDA excluding the credit loss provisions is continuing to improve. So that gives us line of sight and confidence that we're going to hit those breakeven targets. So the key thing for you to watch is the loan dispersal growth. We are seeing operating leverage on the cost base, too. So we're confident that we can continue to manage the cost very tightly going into 2026.

In terms of U.S., I think the last part of your question was asking about the different use cases. We are serving on the SME side, we're serving merchants that are on the Grab ecosystem. So we have tremendous line of sight of cash flows. And therefore, the credit models have a unique advantage relative to a conventional bank that wouldn't have line of sight of those cash flows. So small businesses will be a big focus for us. The unbanked and underbanked as I mentioned, particularly gig workers were able to finance them very, very accurately. And you can see that -- well, I think we've said that the risk-adjusted returns from our lending activities are actually comfortably above our cost of capital, and they remain above that. And even as we grow at these rates, in fact, the returns improved slightly quarter-on-quarter. So we are continuing to grow very rapidly, but at the same time within the risk appetite that we've set for ourselves because of the performance of these credit models.

I hope that helps in terms of some scenarios where we can provide unique capabilities to help the progress of Southeast Asia by bringing the -- bringing more and more people into the financial inclusion sphere.

And your final question comes from the line of Jiong Shao Jan Shao with Barclays.

Great. And congrats on a very strong set of results. So first question is really the follow-up on the previous 1 on the food margins. I think in the last quarter, you talked about Q4 delivery margins should be up sequentially from Q3. I want to confirm that's still the case, but more importantly, looking into 2026, just want to get a better understanding on the sort of the pace of the margin expansion for the food business? And what are some of the factors may kind of make it faster or slower in terms of expanding the margins for the delivery business for '26.

And my second question is around another way to monetize the delivery business. I think a couple of quarters ago, you may have talked about some of your thoughts around in-store kind of newer monetization, I recall you might have mentioned something to stop at these trials in '26. I was just wondering if there's any update around that? What may be the sort of the modality around that type of in-store monetization.

Jon, let me take the food margin question that you asked about. The way we approached deliveries is a portfolio play. And Alex kind of alluded also earlier when he answered the question to Divya. So as you know, the portfolio of delivery product is quite broad and quite wide competitive to say to our mobility business. So if you look at it, we have the food business, and we have the MAT which is a composite of the grocery business, but also there are some other parts of the non-grocery that we also serve there. We also have other forms of food products that we have, things like group orders. We have also dine out those omni commerce product features that we've also deployed in the marketplace. So it's a real broad portfolio.

So the way we think about it is the margins that you'll see in our overall deliveries is better to look at it as an overall deliveries business. It continues to be optimized. Now there will be times from quarter-to-quarter where we will invest and lean in into -- in adopting a product or when there's a product launch, and you've seen that in the previous quarters. But overall, food margin as our core business today continues to see improvement overall, which is exactly what we want to see because it's the most mature is about all deliveries, portfolio of products today.

Where we are starting to invest also and also scale is in the area of grocery delivery or mart liberties that we've spoken a lot about is still underpenetrated. It's 10% from our overall deliveries business. We also have other products that we're pushing. If you look at our -- the cross-selling that we're doing also across our different footprint and mark products also, it continues to increase. And we want to see more adoption of those other products that we've introduced from the beginning of this year. So as a strategy overall, it's a portfolio play. You'll see that we'll -- as a mixture of portfolio, those margins will be pretty much on an upward trajectory, but the mix between those margins will change quite a fair bit because again, the way that we're just on strategy in terms of scaling our deliveries business, that growth that you're seeing is a combination of those factors that you see on our portfolio play.

At the same time, also as the countries in each of our countries also continue to execute, you'll see also the margin profile of those countries also looks somewhat a little bit also from our portfolio, different from country to country as we put on the gas on certain things, and we pull back on certain things also at the same time. So -- but overall, the trajectory is moving up in the right direction. It's a portfolio that you'll see and the monetization that comes with that also becomes really critical. And that's where Mark asked the question on Divya on advertising also is really important because the advertising piece is a wrapper that goes around our deliveries play, which is really critical. And we're bringing in more and more advertisers on the platform itself.

So I hope that gives you a bit of a clarity. We don't do any in store. We don't have any in-store in terms of off-line retail or anything upside except for the Jia portfolio that we have in the supermarket business. We do have certain gray stores that we use today, which is really important. But in terms of how we work with the off-line retailers, especially is in the area of making sure we're bringing in more traffic to our food merchants. So the dine out that we do today brings today the -- all the ingredients for a user to transact from an online grab app to an off-line experience, whether it's through the in-store dining that we serve today, where they're also the reservation system that we're using now on the graph app also that omnicommerce play becomes really important in terms of monetization, but also our merchants are also continuing to increase their earnings and traffic at the same time.

That concludes today's question-and-answer session. I will now turn the call back to Peter for closing remarks.

Well, thanks very much, everyone, for dialing into the call. We always appreciate your time. Anthony, Alex and I would like to express all our appreciation to -- especially through our driver community all our merchant partners and also to our users and shareholders for their continued trust on all of our herein grab. I also want to thank you to all app team were a great quarter. Thank you all, and we're looking forward to closing the year stronger than ever. We'll be on the road together with the IR team, Ken, Doug and I -- we'll do our usual hitting the road, bringing the pavements. So we'll be attending various IR conferences across Europe, the U.S. and Hong Kong and Singapore over the next coming weeks. So if you wish to meet up, please just reach out to the IR team. We would love to see you in person. Until then, we'll speak at the next quarter earnings. Thanks, everyone.

This concludes Grab's Third Quarter 2025 Earnings Conference Call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, thank you for joining us today. My name is Faith, and I will be your conference operator for this session. Welcome to Grab's Second Quarter 2025 Earnings Results Call. [Operator Instructions]

I will turn it over to Douglas Eu to start the call.

Good day, everyone, and welcome to Grab's second quarter earnings call. I'm Douglas Eu, Director, Investor Relations and Strategic Finance at Grab. And joining me today are Anthony Tan, Chief Executive Officer; Alex Hungate, President and Chief Operating Officer; and Peter Oey, Chief Financial Officer.

During this call, we will be making forward-looking statements about future events, including our future business and financial performance. These statements are based on our current beliefs and expectations. Actual results could differ materially due to a number of risks and uncertainties as described on this earnings call, in the earnings release and in our Form 20-F and other filings with the SEC. We do not undertake any duty to update any forward-looking statements.

We will also be discussing non-IFRS financial measures on this call. These measures are supplement but do not replace IFRS financial measures. Please refer to the earnings materials for reconciliation of non-IFRS to IFRS financial measures. For more information, please refer to our earnings press release, remarks and supplemental presentation available on our IR website.

And with that, I will turn the call over to Anthony to deliver his opening remarks before we open it up for questions.

Thanks, Doug. Grab delivered yet another strong set of results in the second quarter with group MTUs scaling to another all-time high. Meanwhile, on-demand GMV accelerated to 21% year-on-year in U.S. dollars growth or 18% year-on-year growth on a constant currency basis. These top line trends, combined with our continued cost discipline, delivered our 14th consecutive quarter of adjusted EBITDA growth, while trailing 12 months adjusted free cash flow expanded to $229 million. This performance was powered by product and tech-led innovations, which drive our ecosystem flywheel faster and enable us to outserve everyday entrepreneurs across Southeast Asia.

Growth continues to be demand-led with on-demand transactions outpacing GMV as we increase our focus on rolling out more affordable services and expanding the addressable market with more price-sensitive users. We also continued to scale up our financial services business prudently with total loan disbursals across GrabFin and our digital banks reaching close to $3 billion on an annualized run rate basis in the second quarter. At the same time, credit risks remain within our risk appetites.

Looking ahead to the second half, Grab remains well positioned with our investment solidifying our resilience in the face of potential macroeconomic uncertainties. As such, we expect to sustain this growth momentum to accelerate on-demand GMV growth rates relative to 2024. We will also maintain discipline on costs to drive profitable growth and free cash flow generation.

With that, I now open the call for questions. Operator?

[Operator Instructions] Your first question comes from the line of Pang Vittayaamnuaykoon from Goldman Sachs.

Congratulations on a good quarter and strong growth accelerations. Two questions from me. Number one, with the uncertainty in the macro environment and what's happening in Thailand and Indonesia as well as Trump tariffs being implemented and negotiated, how are you thinking about the outlook for Grab and for the countries you operate in? Are you seeing any weakness in consumption right now? That's number one.

Number two, in Mobility, number of transaction was 23% with significantly outpacing growth in MTUs. What strategies have you successfully implemented to drive this increase in frequency of usage? How should we anticipate this trend evolving in the future?

Thanks, Pang. Great question. And you're right, it is top of mind, the macro environment, for all of us. Good news, Pang, is we have been leaning into affordability since 2023 with our first initial product launches of affordability like Saver delivery, Saver transport rides, which now has become even more critical with the ongoing uncertainty in a global macro landscape. Nonetheless, we believe we are very well positioned on this front, Pang, because of our product-led investments that continues to solidify our resilience. As you saw from the slides we shared, it drove the ecosystem flywheel faster, and it really positions us as a countercyclical company.

Over the past 2 years, we have enhanced affordability. We've enhanced reliability of our services, and that further deepens user engagement and retention and brings new users to the Grab ecosystem. You saw this with the all-time high of MTUs. You saw this with another quarter of profitable growth and how our growth has reaccelerated to 21% year-on-year.

Now moving forward, we'll continue our track record of working very closely with government and regulators to ensure that our partners and users can navigate this period of uncertainty well. For example, in Indonesia, we participated in the pilot phase of Makan Bergizi Gratis, which is the free nutritious meal program, very important for the Indonesian government. As part of this initiative, we delivered nutritious meals to over 1,500 students across 7 elementary schools across many parts in Indonesia, and we collaborated with 9 local MSME merchants in these areas to provide healthier meals, but also fostered greater brand loyalty among our student customer segment.

You talked about Thailand as well. Thailand, we are actively working with the government to support the tourism sector. That's very important, especially during this time for Thailand. We established actually a private-public tourism task force to contribute to the grand tourism year 2025. And this builds on the existing partnership we've had with tourism authority and transport authority of -- and transport airports authority in Thailand.

So looking ahead, we are confident that our strategy of focusing on using partners with a very user- and partner-centric lens for product development will continue to drive sustainable and profitable growth for the business. And this you will continue to see, and that's why we are confident to say that our expectations for on-demand GMV growth in 2025 will accelerate from that of 2024 levels and our adjusted EBITDA in the second half being substantially stronger than that of the first half.

Okay. Thanks, Anthony. Pang, let me take the second part of the question about Mobility. Because we know there's untapped growth potential in Southeast Asia, we did choose to reinvest the benefits of our scale economies to drive broader accessibility and increase platform usage this half. As a result, as you said, we saw this growth of 23% year-on-year in Mobility transactions, which we think is a good return for our Mobility flywheel because it attracts new user cohorts and improves retention. And that, of course, creates more demand for partners so they can improve their utilization and driver earnings. So that supports better reliability and lower prices, and that, in turn, attracts even more users. So it's a great flywheel impact.

Overall Mobility MTUs grew 16%, and GMV still continued to grow strongly at 19% year-on-year, 16% constant currency. And of course, in our case, because we are multi-vertical as an ecosystem, the benefits of having new users come in extends to the broader Grab ecosystem as then we can cross-sell into Deliveries and Financial Services. So it's a broader benefit for us than it would be for a single vertical player.

There's not been much trade-off on profitability. If you look at the numbers, we still grew EBITDA profitability on an absolute dollar basis year-on-year and quarter-on-quarter. And we're still growing our higher-margin high-value rides, which now have reached double-digit as a percentage of Mobility GMV this quarter. So that helps us to balance off on a margin basis. So the margin this quarter was 8.7% for Mobility, very close already to our steady-state margin target of 9% plus. So we think this is a very sustainable strategy going forward, and we'll continue to lean into growth.

Our next question comes from Alicia Yap of Citigroup.

Congrats on the solid quarter. Two questions. First, on delivery business. Just wondering, given the growth of the GrabFood for One, the Shared Saver, all will result in potentially lower blended AOV. Will this volume have lower margins? So if excluding the contribution from the advertising revenue, can you walk us through how you balance between the faster volume driver of the GMV growth versus the lower ASP and the margin trend?

Second questions, with the launch of your autonomous vehicle shuttles in Singapore recently, how soon do you think a commercial rollout of the AV vehicles in your market across the Southeast Asia will take? Any updates also on the partnership front to boost your innovations in this space?

Alicia, this is Alex again. Let me take the question on Deliveries growth and margin. We really believe that ASEAN has still so much upside in digital consumption. So on the Deliveries side, we also decided to invest into product-led growth. Deliveries GMV accelerated to 19% year-on-year on a constant currency basis because of these product-led initiatives. So there was user acquisition from those affordable products that you mentioned. It's been strong. But we've also seen strong growth from what we think of as viral products such as Dine Out, Family Accounts, Group Orders. And those are proving very effective and attracting new users through network effects and shared experiences.

So we've got a combination of those viral products and the affordable products bringing in new MTUs. So the GMV from all of these new product initiatives that we announced at GrabX earlier this year is growing 3x faster than the existing products and now accounts in total for 1/3 of Deliveries GMV.

In addition, as you well know, we've got GrabUnlimited, which is now the largest paid loyalty program in Southeast Asia, driving almost 5x higher spend and 3x higher order frequency for its members. And we've reached new record highs in paid subscriber count there. So that's also a big impact on our -- the health of our ecosystem.

And then finally, I'd just like to mention one of the other products that was launched at GrabX, which is [ GrabMore ], which enables users of food to bundle food and grocery orders into a single transaction. So that's helped us with -- drive higher growth rates for GrabMart this quarter than for our core business, which is another quarter where that's been the impact. So there's lots of upside on GrabMart also.

So overall, you mentioned Saver. It's contributed 34% of Deliveries transactions in Q2. That's versus a number of 28% for prior year for comparison. So it has grown in terms of number of transactions. However, if you look year-on-year, our segment margins have continued to expand 34 basis points, in fact, from 1.5 last year to 1.8 this quarter. So we are able to still improve margin despite the fact that the affordable products are accounting for a higher percentage of transactions. So what I would say is that margins will move from quarter-to-quarter. But overall, we still managed to grow absolute EBITDA in this segment by 50% year-on-year.

Medium term, I think we can expect the margins as we scale the business to reduce the delivery cost and improve monetization, particularly through the growth of advertising, which this quarter reached 1.7% GMV penetration. So that's continued to show a deeper penetration there. And that will improve with scale in terms of its attractiveness to our advertising clients. So we still believe that we will reach margins of 4% plus in steady state. So there's no change in our longer-term outlook. Thanks.

On the AV question, Alicia, thank you so much, and you're absolutely right, very, very top of mind for us. In fact, we are leaning heavily into the AV opportunity or what we think of as the driverless AV opportunity across Southeast Asia. We are in a prime position to support the AV transition over the next few years. We have a very significant role to play via a hybrid fleet, hybrid meaning both driverless and drivers of fleet.

When you think about our right to win, we think about, number one, we have, and continue to build, strong relationships with AV players as well as OEMs across the world. Second, our scale, our network across the region, that allows us to provide the best-in-class utilization rates, which is very important, as you imagine, because these cars, you have to make sure utilization rates are high to make the unit economics work. Third, the brand trust and a long track record of safety and of working constructively with regulators and governments to really continue to ensure community safety. Passenger and driver safety is one that people really care about. And lastly, as you know, Alicia, we also built our own mapping tech with very rich local data sets that provides millions of real-world driving hours, real-world user pickup, drop-off points, patterns, traffic flows, heat maps across highly complex Southeast Asian-specific urban environments. So that really positions us well.

We also have several pilots we planned. At the moment -- earlier this month, we announced A2Z, partnership with a Korean full-stack AV manufacturer. Now that culminated in the announcement of the first autonomous electric shuttle bus in Singapore. Now in Philippines, we are working with regulators closely and property developer Megaworld to launch a pilot study on drone-powered commercial delivery. So really, I just want to thank A2Z, Megaworld, Kevin and all the regulators across the region to work closely with us to roll out and think through the implications and how best to do it in a safe, affordable way.

So now as we think about the communities we serve, we are always focused on safe, affordable, convenient services for all our customers. So looking ahead, what are we going to do? One, you can expect to hear new partnerships with more global AI and driverless AV partners. We'll continue to explore potential high-value, new job opportunities that this sector could create for the communities we serve. Expect to hear more pilots to understand the operational conditions for different driverless vehicle services in the region. And of course, we want to continuously work with regulators to improve transport connectivity using and leveraging the innovative technologies together. So all in all, we are leaning in, in the AV path moving forward.

Your next question comes from the line of Divya Gangahar from Morgan Stanley.

So my first question is just getting some more details on competition by market and segment. Specifically, if you can comment maybe on the Mobility GMV growth was a bit slower in second quarter versus first quarter, and the trip fares were down about 4%. Which market specifically are we seeing some slowdown in? And if you can help us contextualize the trip fares being down 4% and how to think of it going forward? And also Vietnam, specifically, if you have any comments on a new player entering food delivery, if you're seeing any more competition there. So that's my first question.

And my second question is just on capital allocation, especially after the raise of the $1.5 billion CD. I mean beyond the obvious M&A that has been on and off for a long time, what are the other segments that this capital can be deployed into? Do you have any updated thoughts on buybacks?

Divya, Alex here. Thanks for your questions. Let me take the first part. We have chosen to lean into reinvesting the scale economies from our ecosystem back into volume. So the AOV drop of 4% in Mobility is something that we have decided upon ourselves rather than being driven by competitive activity. We think the returns have been good. So a transaction growth of 23% means that we're creating future growth pipeline. And the reason we've taken this stance is because of the potential in Southeast Asia.

A lot of the growth has come from new users and higher frequency in Tier 1 cities. And we are also growing in some of the smaller cities using the auto adaptive technologies that we've developed, which means that we can manage small cities without having team members present in those cities. So that gives us lots of cost efficiencies. So our strategy is to continue to drive that growth, the top line growth. The margin trade-offs, as I mentioned earlier, are not considerable. We think that it's a good trade-off to make, and therefore, it's sustainable.

Market by market, always -- there's always competitors in every market and the market dynamics for different competitors go up and down. But I think, overall, we are about 3x -- 3.5x larger than our next largest competitor in the region. And that means that our scale economies are quite considerable. And that's why we've been reinvesting in AI and other capabilities, which mean that our efficiencies and the savings we can pass on to consumers are much higher than those of smaller competitors. So we think this is a sustainable competitive strategy, no matter whether from, time to time, there might be surges in competitive activity in particular markets.

Divya, on your capital allocation question, our stance has always been consistent. We take a very prudent approach when it comes to capital allocation. So what do we look at? We always want to create, generate shareholder value on a long-term basis. And if you look at where we've been deploying our capital, it's really fueling the growth of our business through organic growth. And that's going to be P0 for us. It's going to be high top of the list for us, and you're seeing that playing out in this result, which is fueled by the previous deployment of capital towards all the product innovations and the tech innovation that we've been doing. And that will continue. That will continue to fuel the growth that we're going to see in our business as we move forward.

Now with that being said, with M&A, we're always on the lookout. With a strong balance sheet and with the recent capital raise, it does give us that strategic flexibility. And that flexibility is important because M&A comes and goes. So we'll be continuing to scout the market in terms of what's available. But at the same time also, the bar is just so much higher when you compare it to the organic growth that we continue to prioritize over our business today.

Now in terms of buyback, we did complete the $500 million buyback. It was done concurrently with the recent convertible note that we raised. There's no plans for new buyback programs. That's something that we'll continue to explore with our Board. But in this quarterly earnings, there's nothing for us to announce. Again, it's all about, for us, prioritizing the right sort of capital management in our business. And when we have a new buyback, we'll definitely share it with all of you.

Your next question comes from the line of Piyush Choudhary from HSBC.

Congrats on good set of results. Two questions, please. Firstly, on Deliveries segment, what's the outlook of consumer incentive spending as it remains at around 7% of GMV in 2Q? Alex, you talked about the midterm margin outlook, but should we expect the pace of margin expansion in Deliveries segment to be slower going forward due to these new product launches and a focus on driving user engagement?

Second question on Mobility. If you can share what's the contribution mix between premium rides and affordable rides. How has that proportion changed over the last 1 year because that dynamics have an impact on the margins?

Thanks, Piyush. So first one on the Deliveries product investment, yes, we'll continue to see opportunities there for further product investment. I can tell you that in terms of the medium term, for the next 2 quarters of this year for Deliveries, we do expect the margin to improve from the current quarter. So we see sequential improvement in margin for the rest of this year. So hopefully, that's helpful for you all with your models.

Ads penetration will obviously contribute to that. Typically, third and fourth quarter are big quarters for advertising. And as you can see from our results, both the self-serve ad channel penetration and the sales force-sold directly to enterprise larger clients, both continue to grow. And so we're very bullish about what Grab has to offer as a retail media network to advertisers given our first-party data and the closed-loop effectiveness that we can show to those advertisers. We are committed to the 4% steady-state margins in the longer run as well. So just confirming all of that.

Moving to Mobility, the mix between Saver and Premium. Saver now is about 1/3 of Mobility transaction. So we're continuing to scale that, particularly in the lower-tier cities, but we're still seeing growth in numbers of users, attracting new users into Tier 1 cities and higher frequency, both in Tier 1 and in the smaller cities. So we're consciously focusing on affordability so that we can continue to drive that frequency and growth of new users into the ecosystem.

On the Premium end, we're also continuing to grow at the same time. So it's not just the affordability segment which is growing. Premium now is in double digits as a percentage of transactions. And we expect that to continue to grow with the Advance Booking and other features that we've been launching recently. We've done a lot of work with airports around the region so that we can get better access into airports. And therefore, we can balance that margin between the affordable products and the high-value products for the less price-sensitive users.

So I can reiterate that we are committed to the 9% steady-state Mobility margins, which, as you're probably aware, would remain industry-leading when you look across the world. Thanks, Piyush.

Your next question comes from Jiong Shao of Barclays.

First, I have a follow-up around autonomous driving or more like robotaxi. I know in your prepared remarks and also in your comments earlier, you talked about the trial for the shuttle bus in Singapore. Given what Uber is doing in robotaxi around the world, what DiDi is doing in China, I was wondering if you can comment about what's your plan for robotaxi in the region. My question -- the first is around the regional cost. I was hoping Peter perhaps can comment about your expectations for the regional cost for the second half of this year.

And I have another question around GrabMart. Could you talk about sort of longer term, how do you anticipate the TAM for GrabMart vis-à-vis sort of more traditional food delivery? And can we expect the long-term margins for the Mart business to be close to the above 4% target as well?

Thanks, Jiong. So I'll take the AV one. And well, good news is [indiscernible]. So with Uber, we have a good sense of what's happening. And you're right, we see also a lot of AV action taking place also in China. And we've actually seen, experienced -- gone there multiple times to experience the actual robotaxis on the streets.

Now as I talked about the partnerships, we -- I have nothing to announce today, but we can assure you that we are really looking very seriously at how to expand pilots across the region. We are talking to a number of partners, and we will announce more when we are ready. And of course, all this is done very closely with the government. But you can foresee in the next -- in a matter of months, you'll hear more announcements on this.

Jiong, on your question around regional corporate costs. So what you saw in the second quarter in the increase, which is roughly about a 9.5% Q-on-Q increase in regional corporate cost, is pretty much on tandem with the strong on-demand GMV growth momentum in the second quarter. If you look at the on-demand GMV, it was growing at 21% on actual currency, but our regional corporate cost was growing at 9.5%. So it's actually growing much slower than our top line business growth overall, which is what we're actually driving. We're driving operating leverage in the business. And a lot of the cost that's tied to the increase Q-on-Q is pretty much variable costs. We're looking at more cloud costs, software costs, as you would expect from just the volume of growth that we're driving the transactions in our business. Our transaction was up 23% on a year-over-year basis.

Now as we think about moving forward, overall, regional corporate costs will probably be somewhere around that 10% to 12% increase on a year-over-year basis. What's important though is driving operating leverage. And I would expect that somewhere around 100 to about 150 basis points of margin improvement in terms of regional corporate costs as a percentage of revenue, which is really critical as we drive that cost efficiency throughout the business, both on variable as well as on fixed costs. So hopefully, that gives you a bit of color on corporate costs. And I'll turn it over to Alex on Mart.

Thanks, Peter, and thanks, Jiong, for the question. I'm glad you've asked us about GrabMart because this is an area where the TAM is very large potentially, much larger than the food delivery market in the longer run. Online groceries is still barely penetrated in Southeast Asia, probably less than 5% penetrated. And it's a context where many of our countries in Southeast Asia have a very low penetration also of the modern retail offline business. So the user experience is not great. So the chance to leapfrog that with the digital Mart experience is strong.

Mart is only currently less than 10% of our Deliveries business but already growing faster than food deliveries. So it's about 1.5x in terms of growth rate. And the MTUs for Mart are hitting all-time highs this quarter. So it's a very active and growing user base now, shows the potential of the digital experience.

We're taking a partnership-first approach. Yes, as you know, we own Jaya Grocer and we just purchased Everrise in Malaysia. So we have an offline/online experience there, which is probably the leading edge of the customer experience that we're developing with the O2O opportunity. That's working well. We can extend that to partnerships in other markets. And the goal there is to make sure we can replicate the very best customer experience that we can.

And already in Jaya, we are heading towards 15% online penetration of GMV, which is great and shows what can be done. That would be -- that's an industry-leading number. So it's obviously attractive for partners in other markets to work with us to try to get to those types of levels of online penetration.

In terms of margins, currently, the Mart margin is embedded within our overall expectations for the Deliveries margin, which, as we talked about earlier, is 4% plus in steady state. There's a huge ads opportunity for Mart. Many of the FMCGs in Southeast Asia find it hard to get strong data on their sales because of multi-tier distribution of the rather traditional retail environment here. So we are able to give them first-party data, which they find very valuable. So as we work with the FMCGs with our digital-first approach for Mart, then, of course, that's something very attractive from an ads perspective as well. So the penetration of 1.7% for food deliveries or for ads is something that we think we can improve upon, particularly for Mart. Thanks, Jiong.

Your next question is from Mark Mahaney from Evercore ISI.

I just wanted to ask about the advertising revenue. You got that $236 million run rate, I think, in that 45% growth. Just talk about the sustainability of that growth, and then think about or talk about the long-term ceiling or marker for where advertising as a percentage of GMV could go.

Thanks, Mark. Yes. You can see that the advertising business has doubled a couple of times over the last couple of years. So you can see that we're growing super fast. There's an exponential impact in here that I should explain. One is the number of advertisers that are actually trying Grab as a retail media network for the first time continues to grow. We're still at less than 50% penetration of our merchant base in terms of those that have tried us. So there's still upside there in terms of expanding the penetration of our merchant base.

And because their return on advertising sales is averaging 8x, we know that it's a great product for them, and it can help them grow. So as the retention of those that do try us is very high, and therefore, we're getting that exponential impact of existing advertisers spending more while we grow the penetration at the same time. So the penetration year-on-year grew 42%. So that's the first part of the exponential. And then those existing advertisers on the self-serve platform also increased 31%. So really good opportunity for us there.

Advertisers, as you know, want reach. So the bigger we get, the more attractive we are on a cost per point basis as well. So the pricing on the network gets larger, gets higher as we get larger simply because they -- all they care about is the returns ultimately to their investment. So this is why you're seeing those kinds of exponential growth rates on advertising.

If you look across the world, penetration of advertising to GMV in various markets can get much higher than where we are today. We're seeing examples of 2% penetration, 3% penetration, even 4% penetration, particularly when you get into the Mart type of ecosystems. So I think depending on our different verticals, including mobility, by the way, where we've now introduced ads, we see opportunity to increase advertising penetration much higher than the current penetration that we have of 1.7%.

Your next question is from Ranjan Sharma at JPMorgan.

My first question -- I know a lot has been said about Deliveries and the margins, but if I can get a bit deeper into it. If I remove the ad revenues, then the delivery EBITDA ex ads seems to be a bit softer. Now I appreciate that you're doing a lot of growth investments and you're seeing tremendous expansion in your monthly transacting users and new services. But is there a point where we should think that the underlying Deliveries EBITDA ex ads could start inflecting upwards? Or do you see the focus on the near term or the midterm as well will be on growing the business rather than monetizing it to its potential?

Second, on fintech, since no one has asked, let me ask. Tremendous growth in the loan portfolio. If you can help understand where you're making these loans?

Thanks, Ranjan. Yes. Let me take both of those. On the Deliveries, we do see considerable upside in penetration and volume in Southeast Asia in the medium term. We think that the current strategy leaning into growth and reinvesting the economies we're getting from our scale is sustainable. We haven't had to make considerable trade-offs in margin. We don't see the advertising upside as separate from the margin of the business. We see them as a combined opportunity. And as I mentioned in the response to Mark on the last question, the return to advertisers is what's key. So as we get more scale, the returns to them improve, and therefore, the value of our advertising inventory increases.

So scale itself for the Deliveries segment, including Mart, is an important driver of value for advertisers. And therefore, we don't separate it from the Deliveries margin. So we'll continue with this strategy. As you can see, it's created an acceleration of our Deliveries growth. And there's -- and Southeast Asia is a region where there's still lots of untapped potential. So we want to drive further into that.

Moving to your second question on Financial Services. It's the first time that we've given an outlook for the loan book size. So I hope that's helpful for you all. So we've said that by the end of the year, we'll hit $1 billion. We're at about $700 million in the end of quarter 2. And the reason why we're very confident that we can exceed $1 billion is because of the very strong product lineup we have, both for GrabFin, our fintech arm, and for the digital banks. So for the first time, we've got personal lending products available for all 3 banks. We've got BNPL available through GrabFin in multiple markets.

And as of the middle of this year, so going forward for the full second half, we have the supply chain financing capability that we got by acquiring the Validus business in Singapore, which has now been rebranded GXS Capital through GXS Bank. So we've been financing SMEs through the supply chain, in other words, with a well-managed risk profile because based on the risk of larger corporate offtakers. And it's a very good fit with our ecosystem. So that's a capability that not only will we grow in Singapore, but we'll start to expand across the region as well.

If you look at the numbers carefully, the $1 billion represents an acceleration half-on-half. So the half-on-half growth was 32% in the first half and $1 billion would see us reaching 41% in the second half. And that's because of this product lineup that I mentioned earlier and also our increasing faith in the system data advantage that we have for underwriting and distribution. So our credit models are performing well. The performance -- the Gini coefficients that we're managing to generate are significantly higher than they were when we first started this journey. And we're getting more and more capabilities there as we ingest more data fields from across our ecosystem.

I can reiterate also the breakeven target. So for Financial Services overall, we expect to break even in the second half of 2026. And for the 3 banks, we expect to break even in the fourth quarter of 2026. So our approach overall is high growth. This is still the fastest-growing business that we have. We remain focused on balancing risk management as well as scale as we grow this business.

Ranjan, also just to add on the Deliveries margin. If you look at some of the countries that we operate in today, a majority of those countries are already in the zip code of 4% to 5% Deliveries margin, and it's been very consistent throughout many quarters now. So we have some work to do in terms of closing the gap on some of the other countries, which we're very focused on. Also at the same time, we're balancing the underpenetration of Deliveries, which Alex spoke about, which we feel that we're balancing with also fueling that growth on the top line as we bring new users into the platform.

And also with advertising scaling up that Alex also spoke about, we feel that we're very confident we can get to a margin improvement in Deliveries, but also we're not going to sacrifice the growth that we're seeing at the same time also. It's a balancing act. We've got some countries already north of 4%, but we're also balancing us overall as an ecosystem, as a business, a deliveries business. We also want to make sure we're also fueling that 20% growth rate that we're seeing across Deliveries.

All right. So we're going to wrap up the call here. So thank you very much, everyone, for dialing in. Anthony, Alex and I really want to express our appreciation to all our drivers and to all our merchant partners and all our customers and users and shareholders for really just continuing to trust in Grab. Thank you also to the Grab team for a great quarter and looking forward to delivering a strong second half.

Together with our IR team, Doug, Ken and I will be on the road over the next few weeks. We'll be attending various IR conferences across U.S., Hong Kong and Singapore in the coming weeks. So if you wish to meet up, please reach out to any of us here. We would love to see you in person and catch up then.

Thank you for this morning. And for those dialing in, in a different time zone, we appreciate it, and we'll talk over the next few weeks. Thank you, everyone.

Thank you. This concludes Grab's Second Quarter 2025 Earnings Conference Call. Thank you for your participation. You may now disconnect.