GoTo’s Q1 loss soars to 6.5 trillion rupiah as marketing expenses rise

INDONESIAN tech giant GoTo Group posted a 6.5 trillion rupiah (S$609.8 million) net loss for Q1 ended March, more than triple the 1.8 trillion rupiah loss from a year ago. 

This is despite Q1 net revenue rising 65.5 per cent year on year to 1.5 trillion rupiah. Gross revenue for the quarter, which includes customer promotions, was up 53 per cent to 5.2 trillion rupiah, the ride hailing and e-commerce company noted in its first earnings release since its April listing. 

The company’s bottomline was however weighed down by heavier expenses, especially sales and marketing costs, which rose over 7 times from the previous year to 3.3 trillion rupiah in Q1. 

In an earnings call on Monday evening, chief financial officer Jacky Lo emphasised that GoTo – formed in May 2021 from the merger of e-commerce platform Tokopedia and ride-hailing startup Gojek – is optimising costs on its “path to profitability”. 

“We want every dollar to be stretched to promote multiple GoTo services in a single transaction – for instance, incentivising a Tokopedia user, so they order food on Gojek and pay using GoPay,” he said.

The company’s management also highlighted gross revenue growth across its core businesses. Its on-demand services vertical – which includes Gojek’s ride-hailing, food delivery and parcel delivery offerings – posted a Q1 gross revenue of 3.1 trillion rupiah, growing 58 per cent year on year as Covid-19 restrictions eased. 

Over at Tokopedia, e-commerce gross revenue went up 53 per cent on-year to 1.9 trillion rupiah from 1.3 trillion rupiah, driven by logistics and digital goods and improved advertising targeting. 

Meanwhile, its Q1 fintech services revenue went up 47 per cent to 358 billion rupiah, from 254 billion rupiah the previous year. The company’s fintech offerings include e-wallet GoPay and its buy now pay later service. 

GoTo chief executive Andre Soelistyo believes the firm will be able to leverage competitive advantages from its “unique ecosystem” and growth opportunities in Indonesia and South-east Asia. 

“As markets open up further, it will be especially important to continually improve and integrate our core products to ensure we are meeting the needs of our growing customer base across on-demand, e-commerce and financial technology services,” he said. 

GoTo’s management also added that it has sufficient resources to fuel growth. The company had 27.1 trillion rupiah in cash as of end-March and 12.9 trillion rupiah in current liabilities. 

Shares of GoTo closed at 314 rupiah on Monday, up 0.64 per cent, before the earnings release.