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KINERJA KORPORASI - Jakarta, 21 November 2022. Today GOTO Group released its third quarter 2022 earnings results which exceed the company’s guidance.
Despite challenging macroeconomic conditions, third quarter 2022 GTV increased by 33% year on year and 7% quarter on quarter or 69 basis points, to Rp161 trillion, exceeding the company’s guidance. In addition, gross revenue grew by 30% year on year and 7% quarter on quarter to reach Rp5.9 trillion, above the midpoint of the company’s guidance range. The company’s achievement in GTV and revenue is so far the best quarterly performance since it first made the financial statement public in Q1 2021.
The higher growth of the revenue compared to the GTV growth shows that GoTo is getting better in monetization. Not only trying to improve the topline, GoTo also paved its track to profitability with efficiency in incentives and promotional spending, resulting in Group adjusted EBITDA improved by 44 basis points quarter on quarter to -2.3% from -2.8% in the second quarter of 2022.
Contribution margin for On Demand Services has also turned positive in September and Group contribution margin improved, both faster than anticipated and beating guidance by 46 basis points quarter on quarter to reach -0.7% of the company’s total GTV. This is the third consecutive quarter with sequential improvement in contribution margin.
The company also took further cost savings measures and saved up to Rp 269 billion year to date, including Rp 144 billion in operating expenses.
Andre Soelistyo, GoTo Group CEO, said “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. The financial and operational results we achieved in the third quarter provide reassurance that we can accelerate even faster towards profitability, and we will continue to play to our strengths as the largest digital ecosystem in Indonesia.”
The company attributed its business resilience to its strategy shift from incentive-led to product-led growth focusing on high-quality users. Some of the examples include GoPay Coins, a unified rewards currency that enables customers to earn, redeem and spend points for any transaction within the GoTo ecosystem, and subscription based program GoTo Plus.
Since GoPay Coins was rolled out across the whole ecosystem at the end of June, approximately 21% of GoTo’s annual transacting user base have been issued with GoPay Coins. To date, the increased utilization of GoPay Coins has demonstrated 2.3x higher conversion for cross-platform user acquisition compared to other incentives, and lowered customer acquisition costs by 20% compared with standalone platform incentives.
GoTo Plus, the company’s pilot subscription program announced last quarter, has achieved over 50k subscribers within a short period. Based on preliminary data, Plus subscribers transact and spend more than 5x compared to non-subscribers to date.
Moving forward, the company remains focused on its path to profitability as its top priority by improving topline, contribution margin, and adjusted EBITDA over the coming quarters.
For the full year 2022, the Company’s guidance expects:
- GTV to be between Rp613 trillion and Rp619 trillion.
- Gross revenue to be between Rp22.6 trillion and Rp23.0 trillion.
- Contribution margin as a percentage of GTV to be between -1.09% and -1.06%, reaching between -0.6% and -0.5% in the fourth quarter.
For the contribution margin break even timeline, the Company reiterates its guidance:
- Group contribution margin to turn positive starting in the first quarter of 2024
- On-demand segment to achieve positive contribution margin by the first quarter of 2023
- E-commerce segment to achieve positive contribution margin by the fourth quarter of 2023
