Indonesian tech giant PT GoTo Gojek Tokopedia (GoTo) posted a bigger loss in the first three months of 2022 despite a 53% year-on-year growth in gross revenue, prompting the company to focus more on measures to increase margins and reduce costs.
Its losses in the January-March period amounted to 6.47 trillion rupees, compared to 1.81 trillion rupees in the corresponding period a year earlier, according to the first earnings announcement after its listing in April. on the IDX following a $1.1 billion IPO.
GoTo Group CEO Andre Soelistyo attributed the increased losses to the fact that Q1 2021 figures do not include Tokopedia. The Gojek-Tokopedia merger was finalized in May 2021.
GoTo, which also released its earnings report for the year 2021, recorded 21.39 trillion rupees ($1.47 billion) in losses last year, up 50.55% from the previous year. Its gross revenue stood at 17 trillion rupees in 2021, up 43.51% from 11.850 billion rupees in 2020 and 10.410 billion rupees in 2019.
Most of the gross revenue was contributed by its on-demand service at Rs 10.27 trillion, followed by e-commerce at Rs 6.26 trillion and fintech service at Rs 1.16 trillion throughout. throughout 2021. GoTo’s GTV grew by 39.81% to reach Rs 461.6 trillion in 2021 from Rs 330.18 trillion a year earlier.
The tech major says it had a strong start to the year with gross revenue up 53% to Rs 5.2 trillion and GTV up 46% to Rs 140 trillion in the first quarter of 2022 vs. to 2021.
“We have seen positive momentum for GoTo,” Soelistyo said Monday, noting that the publicly traded company should focus on “building a sustainable business” with a “clear path to profitability” going forward.
GoTo’s path to profitability involves further investments in fintech, expanding hyperlocal delivery and accelerating monetization, Soelistyo said.
GoTo said it cut costs by reducing customer incentives and marketing costs by 90 basis points (bps) and 40 bps respectively. “We are focused on monetization and business synergies (between Gojek and Tokopedia) which led to contribution margin and Ebitda margin of 100 bps and 70 bps,” he said.
Regarding hyperlocal delivery, GoTo said it will optimize operations using the most suitable and least expensive fleet. In new fintech initiatives, GoTo plans to launch GoPay Coin in the second quarter to allow customers to earn rewards from Tokopedia which they can then spend on Tokopedia or other platforms within the GoTo ecosystem.
fintech game
GoTo recently obtained an e-wallet license from Bank Indonesia as part of its efforts to improve user convenience on its platform, a move that appears to be boosting transactions.
“We believe the ability to provide direct payments to a bank account will increase our users’ willingness to spend,” Andre Soelistyo said on GoTo’s first-ever earnings call.
“This is a trend that we also see in China and India, when you make a direct payment to a bank account, we see a big increase in GTV and so on. With the e-wallet license, we will be able to TO DO.
GoTo reported that 93% of its GTV electronic payments in the first quarter of 2022 came from GoPay. Soelistyo had mentioned during GoTo’s IPO presentation earlier this year that the company was looking to release a separate GoPay app. He didn’t give further details but mentioned in the call that the app will have features beyond payment.
“Saving, spending, growing and also being able to reconcile it all through our personal financial management dashboard,” he said, noting that many features will be supported by Bank Jago .
Amid the focus on profitability, GoTo will keep an eye out for merger and acquisition opportunities, but the company is not focusing on that at this time, Soelistyo said.
“You’ve also seen us being very disciplined on the other side, to give in where we don’t see a high return on investment,” GoTo chairman Patrick Cao said, noting that the company sold its units in Thailand. and in the Philippines to strengthen its capital. position.
Outlook
GoTo projected its GTV for the second quarter of 2022 to be between Rs 142 trillion and Rs 150 trillion, while gross revenue would be around Rs 5.3 trillion to Rs 5.6 trillion.
Its full-year 2022 outlook will be announced during the second quarter earnings call.
“We expect to reap significant additional benefits as we integrate Gojek, Tokopedia and GoTo Financial and have been investing in cross-platform integration accordingly since May 2021,” GoTo Group Chief Financial Officer Jacky Lo said in a statement. .
Through incentive spend and operating expense optimization, GoTo managed to improve contribution margin and adjusted EBITDA margin by 24 and 14 percentage points, respectively, in the first quarter of 2022 compared to the sequential quarter. previous (fourth quarter 2021), added Lo.
Commenting on the performance, MNC Securities Head of Research Edwin Sebayang said, “Investors want to see GoTo’s strategies to improve bottom line and revenue by cutting costs or reducing the rate of exhaustion.” He pointed out that GoTo’s plan to increase profitability should be reflected in its financial reports to attract investors.
