Morgan Stanley: Grab’s third-quarter profit beats expectations; full-year guidance raised

Where did the third-quarter beat come from?

Grab’s third-quarter 2026 revenue was 1.1 billion US dollars, up 27% year over year, or 30% at constant currency, and 3% above the market consensus.
Adjusted EBITDA reached 237 million US dollars, up 74% year over year and 16% and 23% above Morgan Stanley’s forecast and the market consensus, respectively. The beat came mainly from a significant improvement in delivery margins and a greater contribution from financial services.
On-demand services (ODS) gross merchandise value rose 18% year over year, or 22% at constant currency; monthly transacting users grew 16%, the main driver of transaction value growth.

Third-quarter delivery gross merchandise value grew 24% year over year at constant currency, with grocery gross merchandise value growing at approximately 1.8 times the rate of food delivery.
Delivery adjusted EBITDA as a share of gross merchandise value rose to 2.7%, up 65 basis points year over year. Morgan Stanley attributed the improvement to operating leverage from scale and higher-margin advertising revenue.
The bank believes delivery margin expansion can provide additional profit growth beyond the relatively mature mobility business.

Financial services adjusted EBITDA turned positive in the third quarter, reaching 12 million US dollars. The loan book grew 200% year over year to 2.7 billion US dollars; excluding Superbank, it still grew 115% year over year, and the non-performing loan ratio was 2.6%.
The lending business’s risk-adjusted margin was 7%, below the steady-state level of 10%–12%. Morgan Stanley believes this gap provides room for further profit improvement as lending scales up.

The company raised its full-year 2026 adjusted EBITDA guidance from 720 million–740 million US dollars to 790 million–800 million US dollars, 7%–9% above the market consensus of 737 million US dollars and 5%–6% above Morgan Stanley’s previous forecast of 755 million US dollars.
All three core businesses have achieved positive adjusted EBITDA, and adjusted free cash flow nearly doubled over the past 12 months to 533 million US dollars; management reiterated its guidance for adjusted EBITDA of 1.7 billion US dollars in 2028.
Grab’s proposed acquisition of foodpanda in Taiwan was rejected, and the company will incur a termination fee of 60 million US dollars in the fourth quarter of 2026.