Grab posts first full-year profit, shares fall on weak outlook
Southeast Asian super app swings to $200M profit but 2026 revenue guidance disappoints Wall Street
Grab Holdings delivered a milestone in its decade-long journey to profitability, reporting its first full-year net profit, yet investors sold off the stock after the Southeast Asian super app forecast revenue growth that fell short of Wall Street expectations.
The Singapore-based company posted net income of $200 million for 2025, a dramatic reversal from a $158 million loss in 2024. Fourth quarter revenue climbed 19% year-over-year to $906 million, with net profit reaching $153 million, up from $11 million in the same period a year earlier.
Despite the profitability breakthrough, Grab shares fell approximately 4% in extended trading and were hovering around $4.23 to $4.27 on Thursday. The decline followed the company's 2026 revenue guidance of $4.04 billion to $4.10 billion, which missed consensus estimates of $4.13 billion, according to LSEG data.
The lower-than-anticipated outlook signaled slowing momentum in Grab's core ride-hailing and delivery segments, with the company citing consumer economic uncertainty and persistent inflation across Southeast Asian markets. Those headwinds are pressuring discretionary spending in the six countries where Grab operates.
"We will focus on a multi-year strategy to expand our market through greater affordability and reliability," Grab chief executive Anthony Tan said in a statement, adding that the company plans to "use product innovations to deepen ecosystem engagement and enhance user lifetime values."
Grab's board authorized a $500 million share repurchase program, representing approximately 2.9% of the company's $17.4 billion market capitalization. The buyback, to be funded from excess cash, marks a significant shift toward shareholder returns after years of heavy capital expenditure to build Grab's ecosystem of ride-hailing, food delivery, and financial services.
The company's adjusted EBITDA for the full year surged 60% to $500 million, while fourth quarter adjusted EBITDA reached $148 million, up 52% year-over-year from $97 million. However, operating cash flow declined 72.7% to $69 million in the quarter, raising questions about the quality of earnings.
Grab forecast 2026 adjusted EBITDA of $700 million to $720 million and set ambitious long-term targets of $1.5 billion in adjusted EBITDA by 2028, with 80% free cash flow conversion. The company also announced the acquisition of Stash Financial, a U.S.-based AI-powered investing platform, for an enterprise value of $425 million, a move that accelerates its fintech expansion beyond Southeast Asia.
Analyst reactions were mixed. While the majority of analysts maintain buy ratings on the stock—with a mean target price of $6.80, implying roughly 60% upside from current levels—some firms tempered their enthusiasm. Bernstein SocGen Group lowered its price target to $5.80, citing concerns about growth deceleration.
TipRanks' AI Analyst issued a "Neutral" rating, noting "improving fundamentals and a positive earnings outlook" but pointing to weak technical momentum and a demanding valuation as offsetting factors. Grab currently trades at a forward price-to-earnings ratio of 47.6 times.
The company's path to profitability represents a significant achievement for a business that expanded aggressively across Southeast Asia following its 2012 founding, using billions in venture capital to subsidize rides and capture market share. The profitability milestone comes after Grab's merger with special purpose acquisition company Altimeter Growth Corp in 2021, which valued the company at nearly $40 billion at the time of listing.
Despite Thursday's share price decline, 27 of 28 analysts covering the stock rate it a buy or strong buy, with just one hold rating and no sell recommendations. The stock remains down 36% from its 52-week high of $6.62, but has climbed 26% from its 52-week low of $3.36.
Investors will be watching closely whether Grab can balance its new emphasis on shareholder returns through buybacks with the continued investment needed to maintain growth in competitive markets across Southeast Asia, where it faces rivals from GoTo in Indonesia to various local players in other markets.