Grab Holdings Limited (NASDAQ:GRAB) saw its shares climb approximately 4% in premarket trading on Tuesday, reaching around $3.82, following the release of its second-quarter financial results. The stock had closed at $3.67 on Monday, and the positive market reaction underscores investor optimism about the company's improving profitability and capital return plans.
Q2 Performance Highlights
Revenue for the quarter increased by 22% year-over-year to $997 million, slightly surpassing the LSEG consensus estimate of $990.8 million. More notably, adjusted EBITDA surged 54% to $168 million, reflecting strong operational leverage. The incremental adjusted EBITDA margin came in at 33%, even as the company increased spending on incentives to drive growth.
On-demand gross merchandise value (GMV) expanded 21% to $6.46 billion, while monthly transacting users grew 17% to 53.9 million. The company's share of on-demand GMV improved by 72 basis points to 10.9%.
Segment Performance
Deliveries remained the primary growth engine, with revenue rising 21% to $531 million and segment adjusted EBITDA increasing to $96 million. The segment's GMV margin improved by 45 basis points to 2.3%, driven by advertising and operational efficiencies. Mobility revenue grew 12% to $331 million, with adjusted EBITDA of $191 million, though its GMV margin contracted by 9 basis points due to increased driver support. Financial services recorded the strongest growth, with revenue up 59% to $134 million, as the loan portfolio expanded to $2.3 billion.
Guidance and Capital Returns
Management raised its full-year 2026 revenue guidance to $4.10–$4.15 billion from $4.04–$4.10 billion, and adjusted EBITDA outlook to $720–$740 million from $700–$720 million. The company also announced an additional $750 million share buyback authorization, representing roughly 5% of its market capitalization. This follows $351 million already executed under the previous program.
The raised guidance includes contributions from recent acquisitions Superbank and Stash, which will be consolidated into the financial services segment starting in the third quarter.
Profitability and Cash Flow
Headline net profit of $235 million included a one-off $307 million gain from Superbank and a $66 million tax benefit, offset by a $183 million fair-value loss. Operating profit stood at $19 million. Adjusted free cash flow declined 35% to $73 million, reflecting higher working capital requirements.
Management attributed some margin improvement to artificial intelligence initiatives, noting that AI-related interaction costs have dropped by over half since June 2025. The company's sales assistant tool saves approximately 40,000 hours per quarter.
Market Context and Peer Comparisons
Grab's stock had already outperformed the Nasdaq in the prior week, and Monday's pre-earnings surge widened that gap. Looking ahead, investors will closely watch Uber Technologies (NYSE:UBER) and DoorDash (NASDAQ:DASH) earnings on Wednesday for industry-wide commentary on incentives and margins.
Risks include a 35% drop in adjusted free cash flow, narrowing mobility margins, and rising credit exposure. Additionally, higher fuel costs and Indonesia's updated commission regulations could pressure returns in the second half.
