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GoTo set to wait another year for profit
PT GoTo Gojek Tokopedia (GoTo) says it is on track to reach profitability in 2024 as it issues its financial report for this year’s third quarter.
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T GoTo Gojek Tokopedia (GoTo) says it is on track to reach profitability, with a positive contribution margin in the first quarter of 2024.
The company announced that its on-demand service segment could achieve a positive contribution margin in the first quarter of 2023, but the e-commerce segment lags behind, as its contribution margin is projected to turn positive only by the end of next year, according to GoTo’s third-quarter financial report published on Monday.
“We had a strong third quarter, rapidly accelerating our path to profitability as revenues grew and adjusted [earnings before interest, taxes, depreciation and amortization (EBITDA)] losses narrowed. Group contribution margin significantly exceeded the guidance we shared last quarter, and we achieved positive contribution margin for our on-demand services in September – well ahead of schedule,” GoTo CEO and cofounder Andre Soelistyo said in a statement accompanying the quarterly data.
For this year’s third quarter, the company reported a 33 percent year-on-year (yoy) increase in its gross transaction value (GTV) at Rp 161 trillion (US$10.2 million), beating the company’s guidance.
Meanwhile, its gross revenue rose 30 percent yoy to Rp 5.9 trillion and its adjusted EBITDA shrunk 11 percent yoy to Rp 3.7 billion.
Read also: GoTo claims revenue hike, sustainable growth in Q2
GoTo noted that the adjusted EBITDA loss had been shrinking for three quarters in a row.
Demand for the company’s services increased as the number of orders grew 28 percent yoy to 693 million in the third quarter.
GoTo financial director Jacky Lo said the company had to tread carefully in an environment of increased inflation, rising interest rates and higher fuel prices.
“Throughout the third quarter, we reduced incentives, eliminated promotional spend on cohorts of unprofitable users, further reduced product marketing spend and continued to develop a program of structural cost savings as we equip our business for the road that lies ahead,” said Lo in the statement.
Read also: As RI tech giants face axing spree, small startups regain funding momentum
“The improved margins have not come at the expense of top line growth, demonstrating the resilience of our business and the relative strength of the Indonesian economy,” said Andre.
