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GoTo aims to hit profitability milestones earlier than expected
The tech major expects its contribution margin to turn positive in the current quarter and adjusted EBITDA to move above zero by the end of this year.
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This handout photo taken and released by the GoTo Group shows president director of the GoTo group Andre Soelistyo speaking to the audience during the company's initial public offering (IPO) and public event in Jakarta. (AFP/Handout)
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T GoTo Gojek Tokopedia has improved its contribution margin projection, which may bring the Indonesian tech giant closer to profitability.
In a press conference on Thursday, GoTo Group CEO Andre Soelistyo revealed that the firm’s contribution margin, net revenue deducted by cost of revenues and sales and marketing expenses related to promotional activity, is expected to be positive in the first quarter (Q1) of this year.
That is earlier than the company had predicted in November last year, when it stated that the contribution margin would break even only in Q1 2024.
On top of that, GoTo targets adjusted EBITDA, operating income minus deductions for depreciation, amortization, interest expenses, share-based compensation costs and other nonrecurring items, would turn positive in Q4 2023.
Grab, the biggest competitor to GoTo in ride-hailing services, projected in September last year that it would hit a similar milestone in Q4 2024.
GoTo chief financial officer Jacky Lo explained that the contribution margin in Q4 last year beat the performance guidelines set in November.
The firm mentioned that its gross transaction value (GTV) for Q4 2022 hit Rp 162 trillion, up 18 percent from the same period of 2021. That lifted GoTo's contribution margin in Q4 last year to minus Rp 810 billion, a significant improvement from minus Rp 1.2 trillion in the previous quarter.
