Singapore's Grab raised its annual revenue and profit forecasts on Tuesday, encouraged by strong demand for its ride-hailing and delivery services driven by promotional offers, driver incentives and its AI initiatives.
The upbeat projections and a new $750 million share buyback programme pushed shares of the Nasdaq-listed company up 4% in extended trading.
Grab, the biggest ride-hailing and delivery firm in Southeast Asia, has banked on features including order bundling and a budget-friendly tier called "Saver" to target cost-conscious customers grappling with higher fuel prices following the Iran war.
Grab CFO Peter Oey said the company's affordability strategy, combined with AI investments, has helped boost driver earnings and attract new customers.
"It was intentionally designed so prices would continue to be very, very low for customers, and drivers would be on the road despite high fuel prices... We know our ASEAN customers are watching their wallet and that's why we've leaned in so hard on affordability," Oey told Reuters.
The company invested $706 million in customer and partner incentives in the second quarter, including more than $7 million to support driver earnings during the fuel crisis, helping increase the number of active drivers and customer rides on the platform.
The incentives boosted driver earnings in the quarter, while Grab's "Saver" option, subscription plan and loyalty programme helped add new customers and improve better user engagement, Oey said.
Grab's AI efforts have also helped lift the company's margins.
"The cost structure is getting better and better. Part of that is some of the return on our AI investment. We're shipping products three times faster than last year, we've cut out nearly 40,000 hours of sales inefficiencies. All that translates to better margin."
Gross merchandise value (GMV), or the total dollar value of transactions, across Grab's mobility and deliveries businesses climbed 21% to $6.5 billion in the quarter.
Grab now expects revenue between $4.10 billion and $4.15 billion for 2026, compared with its prior projection of $4.04 billion to $4.10 billion, and marginally above market estimates.
Second-quarter revenue rose 22% to $997 million, beating analysts' estimate of $990.8 million, according to LSEG-compiled data.
