GoTo narrows Q1 loss to 3.9 trillion rupiah, but expects slower growth
Sharanya Pillai
INDONESIAN tech giant GoTo Group posted a net loss of 3.9 trillion rupiah (S$354.1 million) for Q1 ended March, 41 per cent narrower from a year ago as the company focused on trimming its incentives and marketing spend.
GoTo – which comprises ride-hailing service Gojek and e-commerce platform Tokopedia – grew its Q1 gross revenue 14 per cent to six trillion rupiah. Net revenue – which is adjusted for incentives and promotions – more than doubled to 3.3 trillion rupiah, from 1.5 trillion rupiah a year earlier.
GoTo’s gross transaction value (GTV) meanwhile grew 6 per cent to 149 trillion rupiah, but the outlook for growth remains hazy with the focus on cost cuts. The company expects slower GTV and transaction growth throughout the first half of the year.
“Slower growth is driven by the conscious decision we have made to weed out low-quality, subsidy-driven transactions as we calibrate our business for a future in which every user can be profitable,” said GoTo chief executive Andre Soelistyo in an earnings call on Thursday (Apr 27).
On an adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) basis, GoTo’s loss for the quarter narrowed 67 per cent to 1.6 trillion rupiah.
GoTo maintained its guidance of achieving positive group adjusted Ebitda within Q4 this year. It also still expects the FY2023 group adjusted Ebitda loss to be between 4.6 and 5.3 trillion rupiah.
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Gojek cost cuts
The on-demand services segment, which includes Gojek’s ride-hailing and food delivery services, saw a slowdown in Q1 with GTV dipping 5 per cent to 13.7 trillion rupiah.
That said, gross revenue was still up 12 per cent to three trillion rupiah. Take rate was up 324 basis points, with monetisation improvements such as Gojek raising its commission rate in Singapore from 10 per cent to 15 per cent.
On an adjusted Ebitda basis, GoTo narrowed the Q1 loss in on-demand services 85 per cent to 246 billion rupiah.
The segment saw its incentives and product marketing expenses fall by 30 per cent on a blended basis between food delivery and transport, “in line with the company’s focus on increasing its high-quality consumer base, which is more resilient and less motivated by incentives”, GoTo said.
Tokopedia GTV hit
Over on the e-commerce front with Tokopedia, GTV similarly dipped 4 per cent to 62.8 trillion rupiah, with GoTo noting this year’s absence of the pandemic tailwinds that fuelled e-commerce growth a year ago.
GTV was also impacted by GoTo’s decision to deprioritise its Mitra Tokopedia B2B marketplace offering. Excluding the impact from this business, Tokopedia said its GTV would have remained “largely flat”.
Tokopedia’s Q1 gross revenue was nevertheless up 21 per cent to 2.3 trillion rupiah. The segment’s adjusted Ebitda loss narrowed 75 per cent to 523 billion rupiah. This came as e-commerce take-rate improved by 72 basis points to reach 3.6 per cent of GTV in Q1.
The improvement was “driven by sales of dynamic advertising offerings that increased ad relevance and by improved monetisation” from the merchant app, GoTo said.
Over the coming quarters, GoTo plans to focus on increasing the penetration of its buy now, pay later offering, GoPayLater, on Tokopedia via more targeted communications and promotions.
Fintech and logistics growth
GoTo’s fintech segment was a bright spot, with GTV rising 18 per cent to 91.5 trillion rupiah, as the average spend per user of its e-wallet GoPay rose by over 30 per cent.
Gross revenue was up 25 per cent to 424 billion rupiah. The segment’s adjusted Ebitda loss narrowed 31 per cent to 516 billion rupiah.
GoTo is eyeing consumer loans as a “primary growth driver” for its fintech business. Outstanding loans generated from the company’s consumer lending business grew by 40 per cent quarter on quarter to 831 billion rupiah as at Q1.
“Given the multiplier effects it brings to our ecosystem, we will accelerate consumer lending this year while being very prudent in managing risks,” said Soelistyo, adding that the company will continue to strengthen its partnership with Bank Jago on this front.
The recently-formed GoTo Logistics business, which combined Tokopedia’s fulfillment unit and Gojek’s e-commerce same-day delivery unit, grew gross revenue 12 per cent to 580 billion rupiah. The adjusted Ebitda loss narrowed 37 per cent to 156 billion rupiah.
“We will continue to scale up this in-house delivery capability, making delivery affordability a key part of our e-commerce value proposition,” said Soelistyo.
GoTo shares closed at 99 rupiah on Thursday, up 4.2 per cent.
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