GoTo’s Q4 net loss widens to 19.5 trillion rupiah despite lift in profitability metrics
Claudia Chong
INDONESIA’S GoTo on Monday (March 20) said net loss for the fourth quarter ended Dec 31, 2022 increased to 19.5 trillion rupiah (S$1.7 billion), from 10.2 trillion a year ago, even though profitability metrics improved.
The group said results were impacted by non-cash or one-off factors, including goodwill impairment, the increase in share-based compensation expenses – due to an adjustment of the assumed employee turnover rate – and one-off restructuring costs.
Net revenue jumped 199 per cent to 3.4 trillion rupiah, based on unaudited financials posted on Monday.
The group, which has been undergoing extensive cost cuts, marked its fourth straight quarter of improvement in adjusted loss, by 52 per cent to 3.1 trillion rupiah. For the full year, adjusted loss improved 3 per cent to 16 trillion rupiah.
GoTo last month said it expects to reach positive adjusted earnings before interest, taxes, depreciation and amortisation by Q4 of this year, sending its shares surging as much as 4.96 per cent.
“The scaling back of incentives and product marketing spend has not come at the expense of revenue growth, thanks to a sharpened focus on key monetisation drivers that target high-quality, profitable users,” said CEO Andre Soelistyo.
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Contribution margin, which shows revenue after variable costs, grew by 254 basis points in Q4 to reach -0.4 per cent of total gross transaction value (GTV).
The group’s on-demand services segment posted a positive contribution margin a quarter ahead of guidance. Gross revenue for the segment rose 13 per cent to 3.7 trillion rupiah as transport fully recovered to pre-pandemic levels. GoTo, however, expects the food delivery business to slow down due to the reopening of the economy.
Meanwhile, gross revenue for e-commerce grew 24 per cent to 2.4 trillion rupiah, with take rate improving to 3.4 per cent of GTV.
Fintech services improved 28 per cent to 0.5 trillion rupiah, with the loan book increasing 40 per cent quarter on quarter. GoTo said the average loan disbursed from the PayLater products was profitable by the end of Q4.
GoTo is among the region’s biggest tech companies forced to brutally slash costs after a pandemic boom turned into volatility amid rising interest rates and inflation.
The company on Mar 10 said it will embark on fresh layoffs that will affect about 600 roles, following 1,300 jobs that were cut late last year.
Cost-saving measures in Q4 2022 resulted in a 20 per cent reduction in average monthly fixed operating expenses during the first two months of 2023, compared with Q4, said GoTo. That translated to around 200 billion rupiah in monthly cost reduction.
Incentives and product marketing spend was cut by 34 per cent year on year in Q4, resulting in a 2.8 trillion rupiah cost reduction.
GoTo expects GTV to slow down over the coming quarters as it prioritises high-quality users.
It has restructured its fulfilment and first-party e-commerce delivery business, moving it under GoTo Logistics. The unit will focus on reducing the cost-to-serve by moving towards aggregated logistics mainly serving the e-commerce business.
Logistics will be reported as a separate segment in GoTo’s financial statements, starting from Q1 2023.
The company said it is not guiding for 2023 GTV and gross revenue, given its focus on profitability.
GoTo had 29 trillion rupiah of cash and equivalents as at the end of Q4, and a credit facility of 4.65 trillion rupiah, of which 1.5 trillion rupiah has been used. The company expects to reach positive operating cash flow without any additional external funding.
GoTo shares closed at 108 rupiah on Monday, down 6.9 per cent, before the results announcement.
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