Recording Strengthening Performance in the Third Quarter of 2022, GoTo is Optimistic towards Profitability

GoTo Group, the result of the merger of two entities (Gojek and Tokopedia) which form the largest digital ecosystem in Indonesia today (22/11) announced their financial and operational performance for the third quarter of 2022 (3Q22). This report shows revenue growth and loss-adjusted EBITDA.

In the third quarter, GoTo has consistently accelerated its steps towards profitability by continuing to encourage monetization, making efficiency in incentive spending, and optimizing operating expenses.

The company just announced PHK at 12% or around 1300 employees.

Total transaction value (GTV) in the third quarter grew 33% (year on year) compared to the same period the previous year of 161 trillion Rupiah. This is said to have exceeded the company's achievement target in the quarter.

In addition, the company also posted net income of 4,5 trillion Rupiah, growing 206% from the same quarter in the previous year of 1,4 trillion Rupiah. This figure includes the contribution of the company's three main services, viz on-demand, e-commerce, and fintech.

Segment on-demand services grew to 15,7 trillion in 3Q22, driven by increased mobility services, including activities in the conventional sector that are gradually returning to normal, such as returning to school and working from the office.

Monetization efforts continue to evolve as premium services grow. This coincides with increased platform fees for mobility services and take rate commission scheme merchant as well as platform fees on food delivery businesses.

In the e-commerce segment, the increase in people's mobility towards physical social activities did not have a significant impact on the growth of GTV. This segment's gross revenue growth was recorded in 3Q22 surpassing GTV growth, increasing 27% YoY to IDR 2,2 trillion.

It is supported take rate consumer-to-consumer (C2C) business through implementation of a new commission scheme for C2C merchant partners, launch of a new platform fee scheme, and leveraging value added service such as advertising and logistics.

In the fintech (financial technology) segment, GoTo consistently recorded growth in GTV and gross income of 78% and 48% YoY, respectively. The company's initiative to expand the penetration of the GoPay digital wallet throughout the ecosystem has driven increased usage.

GoTo said that going forward, GoTo will continue to increase contribution margins through optimizing promotional expenses, along with shifting sources of income to products with higher margins, especially loans, where the Company is actively testing new products, such as cash loans which have already begun to be tested. try in October 2022.

Still losing money

It cannot be denied that the company has not made a profit so far. With increasing company expenses, GoTo's net loss continues to grow. As of the third quarter of 2022, the company's net loss was IDR 20,9 trillion, a 32% jump from the same period in the previous year of IDR 15,8 trillion.

The breakdown of expenses includes selling and marketing expenses which reached IDR 11,27 trillion, a more than double increase from last year. The cost of revenue also increased by 52,43% (yoy) to IDR 3,85 trillion.

Then GoTo's general and administrative expenses increased 67,45% (yoy) to IDR 8,62 trillion, product development expenses increased to IDR 3,33 trillion, depreciation and amortization expenses IDR 2,27 trillion, and operational and support expenses increased to IDR 1,36 trillion .

Even so, the company remains optimistic about targeting a positive contribution margin in the first quarter of 2024, supported by positive margins from on-demand service (first quarter 2023) and e-commerce (fourth quarter 2023).

Main Director of the GoTo Group Andre Soelistyo said, "The improvement in operating margins is in line with the Company's revenue growth, which shows the resilience of our business and the strength of the Indonesian economy. The results of financial and operational performance in this quarter confirm that the Company is on the right growth path as the largest digital ecosystem in Indonesia. Indonesia."