GoTo inches closer to profitability following mass layoffs

GoTo, one of the largest tech firms in Indonesia, has announced that it has moved closer to profitability with its adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) improving 67% year-on-year (YoY) and 49% quarter-on-quarter (QoQ) to Rp$1.6 trillion.

In terms of revenue, its gross revenue grew 14% year-on-year to 6 trillion rupiah due to the company’s continuous efforts in optimising monetisation and reducing cost across the organisation, it reported in its first quarter 2023 financial results.

Commenting on the growth, Jacky Lo, group CFO of GoTo, said, “Improved revenue growth and incentive rationalisations have made the group contribution margin positive in the first quarter - a key milestone for our company as we seek to drive profitability within the business units. The strict management of our fixed cost structure is also driving profitable outcomes, significantly reducing our OpEx base and reducing our cash burn.

"As we look ahead, maintaining cost discipline is central to our longer-term strategy, as a lower cost base will provide us with additional flexibility to allocate capital for the acceleration of growth in the future,” he said. 

Andre Soelistyo, GoTo's group CEO, added that the group was "halfway towards becoming Adjusted EBITDA1 positive within Q4."

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The improvement in EBITDA was mainly contributed by its performance from on-demand services and e-commerce segments. In the first quarter, on-demand services had a strong 12% increase in gross income, driven by streamlined commissions and fees in the transport sector as well as targeted platform and delivery fees in the food sector.  

As for the e-commerce segment, the addition of innovative features helped the segment's ongoing monetisation development during the quarter while maintaining Tokopedia's sizeable market share. These included enhanced merchant app features that allowed for useful competition data and sales-boosting marketing tools.  

GoTo’s gross transaction value (GTV) for the quarter recorded a 6% YOY increase to 149 trillion rupiah. Looking forward, the brand will focus on high-quality, profitable consumers along with a disciplined approach to costs, which in turn drives sustainable growth for the company in the long run. However, a slower growth in gross transaction value is expected in the second quarter. Building foundational product infrastructure and reducing low quality transactions are also plans in their roadmap, according to the release.

The news comes shortly after GoTo announced layoffs in March 2023 affecting about 600 roles. This came shortly after the company cut about 1,300 jobs in 2022. GoTo now aims to strengthen its operations and consolidate businesses and teams. The announcement was released shortly after GoTo Gojek Tokopedia revealed that its timetables for profitability had been substantially expedited.

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