GoTo Records Net Loss and Adjusted EBITDA Shrinkage in Q3 2023

PT GoTo Gojek Tokopedia Tbk (IDX: GOTO) released its financial performance in the third quarter of 2023 by recording revenue growth and improvement in adjusted EBITDA.

In its summary report, GoTo pocketed total net income of IDR 10,5 trillion or an increase of 7% (YoY) throughout the nine months of 2023. This income consists of a Service Fee line of IDR 6,2 trillion or an increase of 42% (YoY), Advertising Fees of IDR 1,7, 6 trillion or down 1,5% (YoY), and Delivery Services IDR 52 trillion or up XNUMX% ​​(YoY).

GoTo experienced a net loss of IDR 9,5 trillion, but it shrank 54% from a loss of IDR 20 trillion in the same period last year. Meanwhile, adjusted EBITDA also improved 71% to minus IDR 3,7 trillion from minus IDR 12,8 trillion in the same period last year.

In the On-Demand business unit, Adjusted EBITDA shrank 89% to minus IDR 458 billion from minus IDR 4 trillion. Then, adjusted EBITDA for E-commerce shrank 81% to minus IDR 974 billion. In Financial Technology, adjusted EBITDA also improved 44% to minus IDR 1,4 trillion.

GoTo President Director Patrick Walujo said the GTV Group's achievement was IDR 151,3 trillion or grew 5% compared to the previous quarter. The Group's GTV realization, which fell for two consecutive quarters, was driven by growth in the E-Commerce and On-Demand business units.

Other factors are also driven by GoTo's strategy to expand potential markets (total addressable market/TAM) through product and service development for price-sensitive segments. GoTo is also boosting core consumer groups to drive long-term growth, while reducing shipping costs by utilizing logistics in-house.

"This increasingly strong ecosystem synergy is our advantage amidst increasingly fierce competition. The GoTo Group will continue to adapt tactically to maintain our market leadership, while at the same time continuing to invest to support the Company's long-term business strategy," he said.

Furthermore, GoTo also recorded a decrease in fixed operational expenses of 19% and IT infrastructure costs of more than 25%, which constituted the largest part of the cost of revenue. With this cost reduction, GoTo's total savings reached IDR 2,5 trillion in the form of annualized savings in fixed operational expenses and cloud and IT expenses.

Strategic steps and efficiency

Throughout this year, GoTo has taken a number of strategic steps to encourage business efficiency and pursue profitability, including divesting from the entertainment business GoTix and GoPlay last August.

Apart from that, GoTo also released GoPay into a separate application. The claim is that GoPay has been downloaded more than 5 million times, of which 50% of users who transact on the GoPay application are new or returning users. Then, a quarter of them also transact at Gojek or Tokopedia.

Recently, GoTo also expanded its collaboration with Bank Jago through the launch of a joint savings product. GoPay Savings by Jago is said to have attracted 200 thousand users and recorded more than one million users after launching to the public.

In addition, almost 60% of the total loan book GoTo is funded by Bank Jago. He said he would continue to increase the scale of loan distribution with Bank Jago this year.

As of September 30, 2023, GoTo had cash, cash equivalents and short-term deposits worth IDR 25,2 trillion. The company mentions the level of net use of cash (net cash burn) decreased 76% compared to the previous year. In other words, GoTo has enough capital to run the business and execute its next plans.