Grab's 74% number is EBITDA, not net profit

A careful read of the quarter. Adjusted EBITDA rose 74% to US$237m. Revenue rose 27% to about US$1.1bn, broadly in line with where the street was. Full year revenue guidance moved to US$4.15bn to US$4.2bn, above the top of the range given in August, and the upper end of the net profit forecast went from US$740m to US$800m. Net profit came in above the analyst average of US$194.2m. Monthly transacting users reached 57m after adding roughly 3m in the quarter.

One thing worth flagging for anyone reading the local coverage. Several headlines described the 74% as net profit growth. The company reported it as adjusted EBITDA. Those two are far apart, and the distinction matters a lot if you are building a multiple off that number.

What I am watching from here is regulation rather than demand. Indonesia has already capped the commission Grab can take on motorbike rides and is considering rules for food delivery before year end. That is the single largest threat to the margin story, bigger in my view than GoTo or anything Uber does if it brings Uber Eats back to the region.

The stock is still down more than 40% this year with a market value near US$11bn. So the honest question is not whether this was a good quarter. It was. The question is whether it marks a turn, or whether it is one good print inside a bad year.