By Zaheer Kachwala
(Reuters) -Singapore Grab shares (NASDAQ 🙂 raised its fiscal 2024 revenue forecast on Monday, as the Southeast Asian technology company anticipates strong growth in its food delivery and ride-hailing businesses during the busy holiday season.
The company’s U.S.-listed shares rose more than 10% in extended trading.
Grab’s core food delivery business has been recovering from a post-pandemic drop in demand as consumers increase their discretionary spending budgets in a sign of economic easing.
“We remain optimistic about Southeast Asia’s long-term growth prospects and are working flat out to capture strong user demand trends,” said Grab CEO Anthony Tan.
The company expects revenue in the range of $2.76 billion to $2.78 billion, compared to its previous guidance of between $2.7 billion and $2.75 billion.
Grab has been trying to introduce cheaper options for its ride-hailing services to attract price-wary customers. On the other hand, the company has been trying to promote its premium offerings and increase its profits.
Margins for the most premium trips are 1.2 times higher than the standard trips offered by the company, Chief Financial Officer Peter Oey told Reuters.
Grab reported third-quarter revenue of $716 million, beating Visible Alpha estimates of $700.8 million.
Oey said transactions made by customers increased 22% in the third quarter and that subscribers to the company’s services spend four times as much as non-subscribers.
The firm also raised its annual core profit forecast to between $308 million and $313 million, from $250 million and $270 million.
Revenue in the delivery segment rose 16% to $380 million, beating estimates of $374.2 million.
The company left its full-year adjusted free cash flow forecast unchanged and beat estimates in its financial segment.
On an adjusted basis, the company earned 1 cent per share, compared with estimates for a break-even quarter, according to data compiled by LSEG.