The stock fell more than 8% in New York after Grab said it expects to reach positive adjusted earnings before interest, taxes, depreciation and amortization in the final quarter of 2023. It previously expected to hit that goal in the second half of 2024. But that quickened target suggests Grab may sacrifice top-line expansion, some analysts said.

Singapore-based Grab is among money-losing Southeast Asian internet giants that have shifted strategies to focus on achieving profitability instead of spending on growth.

Rival GoTo Group said last week it was bringing forward its profitability targets by a year, while Sea Ltd has cut jobs and closed down its e-commerce operations in India, Europe and some Latin American markets to trim costs.

Evercore ISI analyst Mark Mahaney wrote that Grab’s focus on profitability indicates a “meaningful” deceleration in segment gross merchandise value growth from 20%-plus to single digits. “This will be the metric to keep a close eye on in the coming quarters,” he said. “That said, we are encouraged by Grab’s consistent push towards profitability.”

The concerns overshadowed better-than-expected results from the company. Adjusted Ebitda loss for the fourth quarter narrowed to US$111 million, Grab said. That compares with the US$147 million loss analysts estimated. Revenue quadrupled to US$502 million, also beating predictions.

The company’s projections for 2023 revenue of as much as US$2.3 billion and adjusted loss of as little as US$275 million also came in better than analysts had estimated.

While its competitors cut thousands of jobs last year, Grab has so far refrained from mass layoffs even after its shares slumped following a US stock market debut more than a year ago. But Grab expects headcount under its regional corporate cost to be lower in 2023, CEO Peter Oey said on a conference call without providing details.

The company, like its peers, is trying to convince investors of its longer-term earnings prospects as stiff competition weighs on prices and margins in Southeast Asian markets where consumers have limited spending power.

Grab’s quarterly performance on an adjusted basis also beat its own projections. In November, it revised its second-half 2022 adjusted Ebitda guidance to a loss of US$315 million, indicating it was expecting a loss of about US$154 million for the fourth quarter.

The company is still far off from profitability on a net income basis. In the fourth quarter, its quarterly net loss narrowed to US$386 million from US$1.06 billion a year earlier, and its cash and cash equivalents shrank to US$1.8 billion from US$4.8 billion a year ago.