Yesterday, hours before the print, we published our first article on Grab and said the number to watch was not the top line, which had been dependable, but the free-cash-flow line, which had not. The results landed after the US close: revenue $997M, up 21.7%, and free cash flow of +$39M on our definition, against −$69M in the prior quarter.
So the line we flagged moved the right way. The rest of this piece is about how far that gets Grab, and about a $235M profit that is a much stranger number than the headline suggests.
The four questions we asked, answered
| What we said to watch | What the print says |
|---|---|
| Two consecutive positive FCF quarters | Not yet. +$39M follows −$69M. One positive quarter, again. |
| Gross margin holding ~43% | Held. 43.63%, up from 43.35%, a sixth quarter in the low 40s. |
| Revenue growth staying in the low-20s | Held. +21.7%, inside the +18–24% band. |
| A diluted EPS figure to close our gap | Closed. 2026 Q1 −$0.01, 2026 Q2 +$0.06. |
Three of four came back the way the record suggested they would, which is the point of publishing the record first. The one that did not is the one the site is named after.
The Rule of 40, recomputed
Grab's Rule of 40 score for the quarter is 25.65 — 21.73 of revenue growth plus 3.91 of free-cash-flow margin. Last quarter it was 16.32. That is a nine-point improvement in a single quarter, entirely from the cash half, and it still leaves Grab fourteen points under the line.
Widen the window and the improvement mostly disappears. Over the trailing twelve months Grab grew revenue 21.45% and generated −$161M of free cash flow, a −4.32% margin, for a trailing score of 17.1. One positive quarter does not repair a year in which three of four quarters leaked cash. What it does is make the next one decisive: a second consecutive positive quarter would be the first time in this series that Grab's cash generation looked like a level rather than a coin flip.
Grab's free cash flow is $73M. Ours is $39M.
Both are correct, and the difference is worth spelling out because it is not a rounding matter. Grab reports Adjusted Free Cash Flow of $73M for the quarter. It starts from the same $56M of operating cash flow we do, then subtracts a broader capital-expenditure figure and adds back $177M of growth in the financial-services loan book, along with deposit and treasury-position movements.
The add-back is the substantive one. Grab's argument is that money lent out to build a loan portfolio is an investment, not an operating cost, and treating it as cash burned understates the business. Our house definition — operating cash flow minus capital expenditure — makes no exception for it, because it makes no exceptions at all: the same formula runs on every company on this site, which is the only reason the scores compare. This is the same class of disagreement we worked through when Meta reported $784M of free cash flow against our $1,746M, and it resolves the same way. We report our number, name theirs, and let the gap be visible rather than averaged away.
The gross loan portfolio, for the record, is $2,318M, up 197% year over year. Grab is lending at a rate that makes this definitional argument bigger every quarter, not smaller.
The $235M profit is almost entirely below the operating line
This is the part of the release the headline does not prepare you for. Grab reported profit for the period of $235M, against $20M a year ago. Its operating profit was $19M — a 1.9% operating margin on $997M of revenue.
The gap is made up of things that sit under operating profit:
- Net finance income of $171M, itself the net of $375M of finance income, $(27)M of finance costs and a $(177)M negative swing in the fair value of financial assets and liabilities.
- An income tax credit of $43M, where the year-ago quarter carried a $23M tax expense.
Add those to $19M of operating profit and you have essentially the whole $235M. The operating business did improve — $19M against $7M, and adjusted EBITDA of $168M was up 54% with margin at 16.9% — but the record profit is a financing and tax result more than a trading one. That distinction matters here more than usual, because the fair-value line that helped this quarter is the kind that can reverse next quarter without anything changing in Deliveries or Mobility.
Diluted EPS of $0.06 carries the same caveat, and one more: the diluted share count includes the convertible notes, which is why the six-month diluted figure is also $0.06 while the six-month basic figure is $0.10, and why our newly filled 2026 Q1 point is −$0.01 against a basic $0.03.
Where the growth actually is
| Segment | Revenue | YoY | Segment adj. EBITDA |
|---|---|---|---|
| Deliveries | $531M | +21% | $96M |
| Mobility | $331M | +12% | $191M |
| Financial services | $134M | +59% | −$15M |
Mobility is the profit engine and the slowest grower. Financial services is the fastest grower, still loss-making, and the segment whose loan book drives the cash-flow definition argument above. Deliveries sits in between and did the most for the quarter, adding $33M of segment EBITDA year over year.
Grab also raised full-year guidance — revenue to $4.10–4.15B and adjusted EBITDA to $720–740M — and authorized another $750M of buybacks, taking cumulative authorization to $1.75B since 2024. A company repurchasing shares while its trailing free cash flow is −$161M is making a statement about which cash-flow definition it believes; it has the balance sheet to do it, with $2,859M of cash at quarter end.
The bottom line
Grab did the thing we asked it to do: it put free cash flow back above zero, and it did so without giving up the gross margin or the growth rate. That is a better quarter than the one before it by every measure this site keeps, and the Rule of 40 score moved nine points to prove it.
It is still a 25.65 against a 40, and a −$161M trailing cash-flow line, and a record profit whose operating share is $19M. The turnaround in the accounts is real and it is not finished. The next print, not this one, tells us whether the positive quarter was a level or a swing.
Figures are from Grab's Q2 2026 release for the quarter ended June 30, 2026, furnished as Exhibit 99.1 to a 6-K. Free cash flow is operating cash flow minus the acquisition of property, plant and equipment — this site's definition, applied to every company on it — and differs from Grab's Adjusted Free Cash Flow as described above. Gross margin, growth rates and both Rule of 40 figures are our own arithmetic on those statements. Grab reports under IFRS and, as a foreign private issuer, furnishes results on Form 6-K rather than filing 10-Qs, so no quarterly XBRL underlies these values.