GRAB Grab Finished Its Buyback With Borrowed Money - Is That Capital Discipline?

A Record Quarter, Financed Partly By Someone Else's Money

Grab's second quarter of 2025 was, by the numbers management chose to headline, its best yet: revenue grew 23% year-over-year (19% on a constant-currency basis) to a record $819 million, On-Demand GMV^» grew 21% YoY (18% constant-currency) to $5.4 billion, and Group Adjusted EBITDA^» hit $109 million - a fourteenth consecutive quarter of sequential improvement, up $45 million YoY. Every growth rate accelerated from Q1 2025's already-strong print, reversing the seasonal softness that quarter was explicitly flagged for.

The capital-allocation story underneath those numbers is the one worth reading closely, though. Last quarter, Grab repurchased zero shares for the first time since its $500 million buyback authorization began, leaving $274 million undeployed with no explanation offered. This quarter, Grab repurchased 58 million shares for exactly that same $274 million figure - taking the cumulative program to $499.6 million of its $500 million authorization, effectively complete - and CFO Peter Oey's prepared remarks explain why the two numbers line up: Grab used part of the proceeds from a newly-issued $1.5 billion zero-coupon convertible note, offered specifically to fund what the remarks call the "Concurrent Repurchase." The buyback wasn't paused for a quarter and then resumed from ordinary operating cash - it was paused until debt could be raised to fund it, then executed all at once (see Beyond the Usual).

The Prescription

Grab should keep leaning into the pattern that made this quarter's growth acceleration possible: both On-Demand segments grew GMV in the high teens and expanded Segment Adjusted EBITDA margin simultaneously - Deliveries to 1.8% of GMV from 1.5%, Mobility to 8.7% from 8.2% - while total incentives as a share of On-Demand GMV held flat YoY at 10.1%. That's a genuinely rare combination (accelerating growth without buying it with more incentive spend), and management's own framing - product-led initiatives like Saver Deliveries, GrabUnlimited, and Group Orders now driving a third of Deliveries GMV - is backed by numbers that actually support the story this quarter, unlike some of the softer macro-framing language from Q1.

What it should stop doing: treating major capital-allocation decisions as things to explain only after the fact, if at all. This is now a two-quarter pattern - a buyback halted without a word of explanation, then resumed using freshly-borrowed money without that connection being volunteered anywhere except a single sentence buried in the CFO's prepared remarks (it appears nowhere in the press release itself, which describes the repurchase as if it were funded normally). A company describing itself as having "a strong and robust balance sheet" and "disciplined capital allocation" in the same breath it announces $1.5 billion of new debt used partly to buy back stock owes shareholders a clearer, more prominent explanation of the sequencing - not a phrase a reader has to notice and connect themselves.

Key Financial Metrics

Q2 2025 vs. Q2 2024 - consolidated, reported in USD

Grab reports natively in US dollars, so no FX conversion is needed here. Constant-currency growth ran 3-5 percentage points behind headline growth across every line this quarter - a wider gap than Q1 2025 showed, meaning Southeast Asian currencies strengthened against the dollar again during the quarter after last quarter's relative calm.

Metric	Q2 2025	Q2 2024	YoY	Note
On-Demand GMV	$5,354M	$4,434M	✅ +21%	+18% constant-currency
Revenue	$819M	$664M	✅ +23%	+19% constant-currency; all-time high, growth accelerated from Q1 2025's 18%
Total Segment Adjusted EBITDA	$201M	$148M	✅ +36%	Deliveries and Mobility both improved YoY; Financial Services widened
Adjusted EBITDA	$109M	$64M	✅ +69%	All-time high; fourteenth straight quarter of sequential improvement
Operating profit/(loss) (IFRS)	$7M	$(56)M	✅ NM	First positive operating quarter since Q4 2024
Profit for the period	$20M	$(68)M	✅ NM	~$31M of the $89M YoY swing came from net finance income, not operations (see below)
Net cash from operating activities	$64M	$272M	⚠️ -77%	Prior year benefited from a much larger deposit inflow
Free Cash Flow (FCF)	n/a	n/a	—	See Adjusted Free Cash Flow below; Grab doesn't separately disclose an unadjusted FCF line this quarter
Adjusted Free Cash Flow (quarter)	$112M	$40M	✅ +177%	Best quarter on record
Adjusted Free Cash Flow (trailing 12 months)	$229M	n/a	—	Up from $157M last quarter, a $274M YoY improvement

Regional corporate costs rose to $92 million (from $84 million a year ago and $86 million last quarter), but fell as a share of revenue to 11.2% from 12.6% a year ago - genuine operating leverage, not just nominal cost growth. Profit for the period swung from a $68 million loss to a $20 million profit, an $89 million improvement, of which roughly $63 million came from the operating-profit turnaround and the rest from net finance income swinging to a $36 million gain from $5 million a year ago (partly offset by higher income tax). That's a smaller share of the improvement coming from below the operating line than Q1 2025's roughly $67 million out of $125 million - a fourth straight quarter this blog has had to isolate the split, but a genuinely better-quality one this time, since operations now account for the clear majority of the swing (see Beyond the Usual).

Balance sheet metric	Jun 2025	Dec 2024	Change
Total Assets	$11,145M	$9,295M	✅ +20%
Total Liabilities	$4,784M	$2,944M	⚠️ +62%
Total Equity	$6,361M	$6,351M	— Flat

The liabilities jump is almost entirely the new $1.5 billion convertible notes rather than the usual digital-banking deposit growth this blog has tracked in prior quarters (deposits still grew, to $1,543 million from $1,225 million, but that's a much smaller share of the increase this time). Cash liquidity rose sharply to $7.6 billion from $6.2 billion on the notes proceeds, but net cash liquidity - which nets out borrowings - actually fell slightly to $5.7 billion from $5.9 billion, since the new debt outpaced the cash raised against it once the buyback and other outflows are accounted for. Grab completed essentially its entire $500 million buyback authorization this quarter (see The Prescription above and Beyond the Usual below).

Trailing Eight Quarters

Period	Revenue	Adjusted EBITDA	Profit/(Loss) for the Period
Q3 2023	$615M	$29M	$(99)M
Q4 2023	$653M	$35M	$11M
Q1 2024	$653M	$62M	$(115)M
Q2 2024	$664M	$64M	$(68)M
Q3 2024	$716M	$90M	$15M
Q4 2024	$764M	$97M	$11M
Q1 2025	$773M	$106M	$10M
Q2 2025	$819M	$109M	$20M

Adjusted EBITDA has now improved sequentially in all eight of these quarters, extending management's cited streak to fourteen. Revenue growth accelerated for a fourth straight quarter on a sequential percentage-point basis (17%, 17%, 18%, now 23% - though part of that acceleration is a currency tailwind rather than pure constant-currency growth, which came in at 19%). Profit for the period broke out of the narrow $10-15 million band this blog flagged after three straight quarters stuck there, roughly doubling sequentially to $20 million - the first quarter since this pattern started that profit growth actually outpaced, rather than lagged, the Adjusted EBITDA line's steady climb.

Segment Results

Q2 2025, four reportable segments

Grab reports four segments - Deliveries, Mobility, Financial Services, and Others - unchanged since Q1 2024's restructuring.

Segment	GMV (Q2'25)	YoY	Revenue (Q2'25)	Segment Adj. EBITDA (Q2'25)	Margin	YoY Margin
Deliveries	$3,471M	✅ +22% (+19% CC)	$439M	$63M	✅ 1.8% (of GMV)	vs 1.5% in Q2'24
Mobility	$1,883M	✅ +19% (+16% CC)	$295M	$164M	✅ 8.7% (of GMV)	vs 8.2% in Q2'24
Financial Services	n/a (GMV discontinued)	—	$84M	$(26)M	⚠️ (31.0)% (of revenue)	vs (40.0)% in Q2'24
Others	n/a	—	$1M	~$0M	— NM	roughly flat YoY

Deliveries GMV growth accelerated again to 22% YoY (19% constant-currency) - the third straight quarter of constant-currency acceleration (14% in Q2 2024, 17% in Q1 2025, 19% here), per management's own sequential framing. Segment margin expanded to 1.8% of GMV from 1.5% a year ago, a smaller improvement than Q1 2025's jump to 2.0% but still a second straight quarter of YoY expansion, reversing Q4 2024's first-ever margin decline. Advertising revenue grew 45% YoY to a $236 million annualized run-rate, reaching 1.7% of Deliveries GMV (from 1.4% a year ago), with self-serve advertisers up 31% YoY to 220,000 and average per-advertiser spend up 42% YoY - genuinely broad-based growth in the ad business, not just a handful of large accounts spending more.

Mobility GMV grew 19% YoY (16% constant-currency), a deceleration from Q1 2025's 17% constant-currency rate on a smaller base but total Mobility transactions grew 23% YoY, outpacing GMV growth for the second straight quarter - meaning more, smaller-value trips rather than fewer, pricier ones, consistent with average user trip fares declining 4% YoY. Segment margin expanded to 8.7% of GMV from 8.2% a year ago, the first YoY margin expansion this blog has tracked for Mobility since Q1 2023 - a reversal of the "deliberate reinvestment" framing management used to explain margin dips through most of 2024. GrabCab, Grab's own taxi fleet in Singapore, officially launched during the quarter.

Financial Services revenue grew 41% YoY (38% constant-currency) to $84 million, again the fastest-growing segment, but the segment Adjusted EBITDA loss widened 8% YoY to $26 million on higher expected-credit-loss^» provisions as loan disbursals scaled - continuing the pattern first flagged widening in Q1 2025. The loss did narrow sequentially from Q1's $30 million, though, and loan portfolio^» grew 78% YoY to $708 million (a $2.9 billion annualized disbursal run-rate), with 90-day non-performing loans^» still described as "within our risk appetite." Customer deposits across GXS Bank (Singapore) and GX Bank (Malaysia) reached $1,543 million, more than doubling YoY from $730 million and up from $1,432 million last quarter. Indonesia's Superbank (30.84% Grab-owned) reached 4.0 million deposit customers, up from 3.3 million in March, with its OVO Nabung savings product doubling users over the same span. Management now guides to exiting 2025 with a loan book "over $1 billion" - a specific target not given in prior quarters - while reiterating the second-half-2026 breakeven timeline first disclosed in Q1 2023.

Others posted $1 million of revenue and roughly flat Adjusted EBITDA, immaterial to the group total.

Read across the segment table, this quarter reversed Q1 2025's split between strong On-Demand and a weakening Financial Services: both On-Demand segments again grew GMV in the high teens to low twenties while expanding margin - the cleanest quarter for that combination this blog has tracked - while Financial Services kept widening its loss YoY, but by a narrowing amount and against a loan book still compounding at an accelerating pace. If the segment holds its guided trajectory toward the 2026 breakeven target, this quarter's wider loss reads as the cost of pulling loan-book growth forward, not a structural deterioration.

Beyond the Usual

Grab's only Q2 2025 source documents are the earnings press release (also furnished to the SEC as a 6-K exhibit, identical in content to the press release itself), the supplemental investor presentation, and CEO/COO/CFO prepared remarks - no annual 20-F was filed this quarter, so none of the three legal/governance threads tracked through the FY2024 20-F (the securities class-action settlement, the Malaysia Competition Commission appeal, and the Toyota related-party agreement) have any new company-disclosed developments this quarter - the same limitation flagged for Q1 2025.

The Buyback's Silence Last Quarter Is Now Explained - By A Debt Raise, Not Organic Cash

The zero repurchase activity in Q1 2025, flagged here as unexplained at the time, now has a plausible explanation: CFO Peter Oey's prepared remarks state that part of the net proceeds from the newly-issued $1.5 billion zero-coupon convertible notes were used "for the Concurrent Repurchase," and in the same sentence discloses the 58 million shares repurchased for $274 million this quarter - the exact amount left undeployed at the end of Q1. That reads as a buyback that was paused specifically to be funded by a debt raise rather than by ongoing operating cash flow, which is a materially different capital-allocation story than "we chose not to buy back stock this quarter." Nothing in the press release itself makes this connection explicit; it appears only as a single sentence in the CFO's prepared remarks, meaning a reader following only the headline materials would still see an unexplained pause followed by an unexplained catch-up.

$1.5 Billion Of New Convertible Debt Sits Entirely In Current Liabilities

The balance sheet shows current loans and borrowings jumping to $1,630 million from $123 million at year-end - a $1,507 million increase that accounts for essentially all of the new convertible notes, even though the notes aren't due until 2030. Non-current loans and borrowings barely moved, up only $42 million. No footnoted quarterly filing exists this quarter to explain the classification (see the introduction above), so the reason can't be confirmed from what Grab has disclosed - a conversion or investor put right exercisable within twelve months would be a standard IFRS explanation, but that's inference, not something Grab has stated. A reader skimming only the balance sheet would see current liabilities nearly double, from $2.59 billion to $4.36 billion, and could reasonably read that as near-term repayment pressure when it's more likely just how a long-dated convertible instrument gets classified.

Grab's own disclosure states plainly that the convertible notes' conversion feature is a derivative liability re-measured at fair value each period, which "may lead to volatility in profit/loss for the period" without affecting cash flows or Adjusted EBITDA - a genuinely useful heads-up for future quarters, since a swing in that fair-value line could otherwise be mistaken for an operating result. This is the first quarter this instrument exists on Grab's balance sheet, so there's no comparative volatility to point to yet, but it's now a line worth watching independent of the operating metrics.

The share of this quarter's profit improvement coming from below the operating line - roughly $31 million of $89 million, or about 35% - is meaningfully smaller than Q1 2025's roughly 54% and continues a pattern this blog has now tracked for four straight quarters. It's worth noting as a quality improvement rather than another repeat of the same flag: for the first time since this pattern started, operating performance did the clear majority of the work.

Management's Case For Accelerating Through Macro Uncertainty, With A Convertible Note As The New Talking Point

Anthony Tan's framing pulled back from Q1 2025's heavier "counter-cyclical" language, instead crediting "product- and tech-led innovations" for the reacceleration and naming Autonomous Vehicles - a Singapore shuttle-bus pilot with Autonomous A2Z, plus a Philippines drone-delivery pilot with government partners - as the next growth vector, alongside a Generative-AI merchant assistant tool. CFO Peter Oey's remarks were the most direct of any quarter covered here about capital allocation, laying out a three-part framework (organic growth first, selective inorganic opportunities second, excess capital returned to shareholders third) - but as Beyond the Usual above notes, that same set of remarks is also the only place the buyback-to-convertible-note connection is actually stated, and it doesn't appear at all in the press release. None of the prepared remarks addressed the securities class-action settlement, the Malaysia Competition Commission appeal, or the Toyota agreement - the fourth straight quarter with prepared-remarks-only materials and no disclosed analyst Q&A on this blog's coverage.

Target Valuation Range

DCF-implied fair value of roughly $1.95-$3.20 per share (bear to bull), against a $5.03 close - still overvalued, and the gap to even the bull case widened again this quarter after narrowing in Q1. The stock rallied 11% while the DCF's underlying inputs (net cash liquidity, in particular) barely moved, so the reprice outran the model's output growth.

Grab's stock closed the second quarter at $5.03, up 11% from $4.53 at the end of Q1 2025 - a reversal of Q1's quarter-over-quarter decline and a new high for the roughly two-year window this blog has tracked, edging past the prior $5.00 peak from November 2024. Using the 4,116,419 thousand weighted-average basic shares Grab discloses for the quarter:

Market cap → enterprise value	Q2 2025
Share price (period-end)	$5.03
Shares outstanding	~4.116B
Market capitalization	~$20.7B
Total liabilities	n/a (net cash basis used)
Less: net cash liquidity	$5.7B
Enterprise value	~$15.0B

Market cap is up from ~$18.5B at Q1's close; EV is up sharply from ~$12.6B three months ago. Net cash liquidity is down slightly from $5.9 billion last quarter, since the new debt outpaced the cash raised against it (see Beyond the Usual).

Peer-multiple sanity check	Q1 2025	Q2 2025	Change
Enterprise value	~$12.6B	~$15.0B	⚠️ up sharply
EV/Revenue (annualized run-rate)	~4.1x	~4.6x	⚠️ up
EV/Revenue (FY guidance midpoint)	~3.7x	~4.5x	⚠️ up
EV/On-Demand GMV (annualized run-rate)	~0.64x	~0.70x	⚠️ up

Every multiple re-rated up meaningfully this quarter, reversing Q1 2025's modest compression. Updating the DCF built last quarter with the new $229 million trailing Adjusted Free Cash Flow base (versus $157 million three months ago), the same 13% discount rate and net-cash-plus-discounted-cash-flow approach, and five-year fade paths reflecting FY2025's unchanged guidance:

Scenario	Year 1-5 Adjusted FCF path	Terminal growth	Implied equity value per share
Current (Q2 2025 close)	— actual market price, for reference	—	$5.03
Bear	$170M → $300M	2%	~$1.95
Base	$250M → $680M	3%	~$2.65
Bull	$320M → $900M	4%	~$3.20

The bull case now lands roughly 36% below the $5.03 close, versus a 30% gap against Q1 2025's $4.53 close using the same methodology - the narrowing trend flagged as worth tracking last quarter reversed after just one data point. The underlying business didn't get cheaper on a cash-flow basis - trailing Adjusted Free Cash Flow grew 46% - but net cash liquidity, which anchors a large share of this model's equity value, barely moved (and fell slightly), because the same quarter that raised $1.5 billion in gross cash also added $1.5 billion in gross debt and spent $274 million on the buyback. A model built around net cash plus discounted operating cash flow doesn't reward a company for raising money and immediately redeploying it - which is precisely the point: the reported metrics look stronger, but the balance sheet that actually backs this year's valuation math isn't materially better funded than it was three months ago. This remains a directional model, not a definitive one, as noted every quarter it's been run here.

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