GoTo posts first-ever net income after cost cuts bear fruit

[JAKARTA] GoTo Group reported its first-ever net income, a major milestone in the Indonesian ride-hailing and food delivery company’s turnaround effort as it seeks to gain fresh momentum in its longstanding rivalry with Grab.

Net income was 257 billion rupiah (S$21.4 million) for the three months ended March, after a loss of 283 billion rupiah a year earlier, the company said on Tuesday (Apr 28) in a statement.

GoTo’s revenue grew at a slower pace amid the tough competition, but the firm reiterated it expects as much as 3.4 trillion rupiah in adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) this year.

GoTo, Indonesia’s biggest Internet company, has recently endured some of its toughest quarters since its founding in 2010. The ride-hailing and food delivery provider, which grew at triple-digit percentage rates just three years ago, has seen its growth slow dramatically after its subscriber base expanded and competition intensified. Job cuts and unit disposals have helped the company reduce its costs.

Seeking relief from the tough competition, GoTo has been in years-long talks about a takeover by Singapore-based Grab. The on-and-off-again effort has been delayed by regulatory scrutiny and differences over perceived valuation. In a recent hurdle, negotiations were snagged over wireless carrier Telkomsel’s roughly 2 per cent stake in GoTo.

Shares of GoTo have lost about 35 per cent over the past 12 months, with drawn-out discussions for a potential takeover by Grab yet to yield concrete results. The stock is down more than 80 per cent since its 2022 initial public offering.

The fresh profitability milestone could bode well for GoTo’s new chief executive officer, Hans Patuwo, who was appointed to the top job at the end of last year after a campaign by prominent shareholders to remove his predecessor.

He is betting on initiatives such as fintech services to leverage the company’s user base. Meanwhile, merger talks have not “substantially shifted” since December, Patuwo said in an interview with Bloomberg TV last month.

Bloomberg Intelligence analysts Jason Low and Nathan Naidu noted that GoTo’s fintech business is growing faster than on-demand services as high oil prices dampen commuting and food delivery demand.

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“Fintech enters the quarter with momentum, supported by 8.8 trillion rupiah of consumer loans, 57 million annual transacting users and 497 billion rupiah of 2025 adjusted Ebitda,” they said.

“The company expects Fintech’s adjusted Ebitda to roughly (treble) in fiscal 2026. On-demand services growth should also recover as product mix, advertising and incentives support margins, while management works to lift demand through pooling and zone operations.”

Former CEO Patrick Walujo took GoTo closer to profitability by slashing jobs, exiting businesses and selling off peripheral assets. He was replaced in a move by the top investors that was seen as potentially speeding up a combination with Grab.

Meanwhile, GoTo has been working on stemming the ramifications of oil price increases, brought about by the war in the Middle East which could broadly affect its businesses.

So far, there has not been much impact on operations, in part due to subsidised oil prices by the Indonesian government, chief financial officer Simon Ho said in an interview.

“If the conflict continues to drag on and becomes more severe, then clearly we will feel more and more impact come through,” he said. If the situation stabilises in the Middle East, Ho said the company “would be confident in hitting our targets and possibly exceeding them”.

The “broad direction” in GoTo’s net profit is set to trend upwards, he noted, adding that there could be some fluctuations quarter to quarter because of external factors such as market volatility and the value of its investments.

Adjusted Ebitda more than doubled to 907 billion rupiah in the first quarter, GoTo said. Net revenue, which excludes incentives to driver and merchant partners and promotions to users, climbed 26 per cent. BLOOMBERG