Key Highlights

• Group Adjusted EBITDA¹ improved by 74% year-on-year (YoY) to -Rp 0.94 trillion — the seventh consecutive quarter of improvement
• Group contribution margin² reached 0.75% of GTV³, increasing 149 basis points (bps) YoY to Rp 1.1 trillion
• Gross revenue⁴ improved by 1% YoY to Rp 6.0 trillion
• Group GTV³ increased by 5% QoQ reaching Rp 151.3 trillion, following two consecutive quarters of decline
• Incentives and product marketing decreased by 36% YoY, reflecting savings of Rp 2.1 trillion for the quarter

Jakarta, Indonesia, October 30, 2023 – PT GoTo Gojek Tokopedia Tbk (IDX: GOTO, “GoTo Group” or the “Company”), the largest digital ecosystem in Indonesia, today announced its third quarter 2023 financial results, reporting Adjusted EBITDA1 improvement of 74% YoY to -Rp 0.94 trillion, driven by improved monetisation and disciplined management of operating expenses. At the same time, Group GTV3 increased by 5% QoQ as the Company’s product innovations began to take effect despite increasing competition.

Patrick Walujo, GoTo Group CEO, said: “Group GTV3 has returned to positive quarter-on-quarter growth following two quarters of sequential decline, driven by improvements in our E-commerce and On-Demand Services businesses. This is the result of our broader strategy to expand our total addressable market through the development of mainstream products and services that are particularly relevant for price-conscious consumers. Synergies across our ecosystem give us a real advantage within a competitive environment that remains intense. We will maintain tactical flexibility as we defend our market leading position, while continuing to prioritize the long term investment that our strategy is built upon.”

Jacky Lo, GoTo Group CFO, said: “As GTV³ returned to sequential growth in the third quarter, we also recorded continuous improvements in contribution margin² and Adjusted EBITDA¹. This was underpinned by a reduction in operating expenses as we eliminated redundancies and leveraged our technology to reduce costs. We continue to progress on our path to profitability, with our On-Demand Services unit reaching Adjusted EBITDA¹ positive before the allocation of corporate costs in the third quarter. Having said that, there is now increasing competition risk in the market, which we expect to continue. We will respond to this prudently, as we aim to find the right balance between growth and profitability.”

Gross revenue⁴ increased 1% YoY to Rp 6.0 trillion amid continued incentive and product marketing cost reductions of 36% YoY, resulting in savings of Rp 2.1 trillion for the quarter. Group contribution margin2 remained positive for the third consecutive quarter at 0.75% of GTV³, increasing 149 bps YoY and 2 bps QoQ to reach Rp 1.1 trillion.

GoTo maintains a solid cash position and balance sheet with Rp 25.2 trillion in cash, cash equivalents and short-term time deposits as of September 30, 2023. Net cash burn has declined significantly by 76% YoY and the Company therefore has more than enough capital to sustain its business and execute its current plan. This is why GoTo today announced that it no longer intends to execute on the international IPO that was disclosed in the Company’s IPO prospectus and approved by shareholders at the 2023 AGMS. Should the Company decide to carry out an International IPO in the future, it will seek a new approval from shareholders in accordance with the relevant laws and regulations.

3Q23 Group Adjusted EBITDA

 improved to -Rp 0.94 trillion, or -0.62% of GTV3, an improvement of 74% YoY and 22% QoQ.

The Group maintained positive YoY gross revenue4 growth of 1% as a result of improved monetisation across its ecosystem, as the overall take rate for the Group increased by 29 bps YoY to 4.0%.

Group GTV3 was Rp 151.3 trillion, an increase of 5% QoQ, primarily due to renewed traction among budget consumer groups. Group GTV3 declined by 6% YoY, attributable to reduced incentives and product marketing over the past year. At the same time, the number of profitable users and their contribution to GTV³ remained stable QoQ.

Net revenue for 3Q23 was Rp 3.6 trillion, a decline of 21% due to a catch up adjustment for the first half of 2022 of Rp 1.5 trillion, which was recorded in 3Q22, to reflect the impact of changes in the estimation process used to allocate incentives to corresponding revenue from customers, as reported last year. If this adjustment was allocated to each relevant quarter in 2022, net revenue for 3Q22 would be Rp 3.1 trillion, and the net revenue for 3Q23 would represent a 19% increase YoY.

Net loss narrowed by 28% QoQ and 65% YoY to -Rp 2.4 trillion, driven by consistent improvements in monetization and a reduction in incentives and product marketing spend of 36% YoY, reflecting quarterly savings of Rp 2.1 trillion. On a YoY basis, the Company also delivered a 19% reduction in fixed opex and a reduction of more than 25% in cloud and IT infrastructure costs, which is the largest part of its Cost of Revenue. This amounts to a combined Rp 2.5 trillion in annualized fixed opex and Cloud and IT cost savings. Further annual savings of around Rp 450 billion across these two cost groups has been identified and will be recognized over time.

Incentives and product marketing spend was increased prudently by 2% QoQ amid increasing competition throughout the period.

A key milestone in 3Q23 was the launch of GoTo Passport, a unifying technology that underpins all of GoTo’s platforms, giving the Company a much deeper understanding of its consumers and how they interact across the GoTo ecosystem. The Company has also begun experimenting with a universal subscription program, which will combine the benefits of free delivery across Tokopedia and GoFood, further encouraging cross-platform usage.

GoTo continued to scale its economy-focused on-demand products, while also launching its pioneering GoRide Transit service. These offerings are drawing in new customers and reengaging inactive users, in line with the Company’s core strategy to broaden its addressable market by catering to cost-conscious consumers.

• Adjusted EBITDA¹ for On-demand Services improved by 95% YoY, to -0.36% of On-demand Services GTV³.
• Gross revenue4 increased 4.6% QoQ in the third quarter to Rp 3.0 trillion, as a result of the Company’s focus on regaining growth momentum through user adoption of economy-focused products. On a YoY basis, gross revenue4 remained stable as a result of improved monetization.
• Lower costs and increased monetisation drove a positive contribution margin2 for the fourth consecutive quarter, reaching 5.0% of GTV³, up by 527 bps YoY.
• Tactical spending decisions were made to solidify the Company’s leadership in both Food and Mobility in Indonesia. This led to a 5% QoQ increase in incentive and promotion spend for On-demand Services. At the same time, IT costs were made more efficient through in-house mapping technology, which resulted in an approximately 40% QoQ saving on mapping costs.
• In October, the Company announced that it will lower the commission rate for the four-wheel business in Singapore from 15% to 10% to drive supply growth. This will have minimal impact on group take rate and the international business is expected to remain contribution margin2 positive.
• On a YoY basis, spending on incentives and marketing was reduced by 25% YoY, equivalent to Rp 663 billion in savings for the quarter.
• On-demand Services GTV³ improved by 1% QoQ to Rp 13.4 trillion as the Company regained its growth momentum while showing a YoY decline of 12% due to reduced incentives over the past year.
• GoTo launched GoRide Transit, the first and only platform in the world to seamlessly integrate public transport and ride hailing orders in one booking.
• GoCar Hemat, the Company’s low cost transport option, which is already profitable, is being rolled out in more cities. GoCar Hemat drivers have seen an increase in hourly orders of over 35%.
• The low cost selection on offer within GoFood Hemat is being expanded while its operations are being streamlined. This will lead to increased order density, better batching, and reduced cost to serve. In Q3, drivers who took GoFood Hemat orders on top of regular orders, saw their orders per hour more than double.
• To further expand its two-wheel offerings to budget consumers, the Company is piloting GoRide Nego, which allows consumers and drivers to communicate directly and agree a trip fare with each other. This is the latest example of the Company’s continuing innovation designed to unlock new customers.

In the E-commerce segment, GoTo invested in its core consumer group to drive long-term growth and momentum for 2024 by leveraging merchant co-funding programs and reactivating select marketing and promotions. Simultaneously, the Company is working to increase its appeal among budget consumers by providing more products that resonate with this demographic, as well as reducing delivery costs by leveraging GTL’s in-house logistics capabilities.

• Adjusted EBITDA¹ for E-commerce improved by 84% YoY, to -0.36% of E-commerce GTV3.
• E-commerce contribution margin2 remained positive for the third consecutive quarter in 3Q23, reaching 0.67% of GTV3 and increasing by 156 bps YoY.
• E-commerce GTV³ improved by 6% QoQ, reaching Rp 62 trillion, but declined 11% YoY due to the attrition of non-profitable users as a result of significant incentive reductions over the past year.
• GoTo tactically invested in E-commerce’s growth to maintain market share, including a carefully targeted 2% QoQ increase in spending on incentives and promotions. At the same time, Tokopedia has reduced platform fees and pursued a merchant co-funding program, which drove growth in the average GTV3 of participating merchants of over 40%, compared to before they joined the program. Initiatives such as these have enabled the Company to increase overall GTV3 while maintaining profitability and enhancing customer experience.
• On a YoY basis, incentives and marketing spend were reduced by 40%, equivalent to Rp 880 billion in savings for the quarter.
• Overall monetisation in E-commerce improved, with E-commerce gross revenue4 reaching Rp 2.2 trillion, an increase of 6% YoY and 1% QoQ. The Group has identified and is acting on large, untapped market opportunities in the advertising space, which can fuel merchant growth and monetization over the long term.
• To expand the Company’s addressable market, Tokopedia provided a greater assortment of products geared toward budget consumers, in addition to investing in a better platform experience that makes it easier for consumers to discover products relevant for them. This included investment in predictive AI to make content more personalized.
• GoTo also expanded its payment products on Tokopedia, such as GoPayLater and GoTo’s new cash loan product, providing additional payment flexibility for budget consumers.
• GoTo Logistics expects to reduce total logistics costs further, which will enable Tokopedia to provide more efficient shipping subsidies over the coming quarters.

GoTo launched four new products and features during 3Q23: the GoPay App, Cash loans on Tokopedia, Cash loans on the GoPay App, and GoPay Tabungan (Savings) by Bank Jago. This accelerated product pipeline supports GoTo’s ability to amass a broader and more inclusive user base beyond the Gojek and Tokopedia platforms, including those who are unbanked and underbanked. It also supports the Company's focus on its lending business, which has seen significant growth throughout 2023, with the scaling up of high-margin cash loans a key priority.

• Adjusted EBITDA¹ for Financial Technology improved by 55% YoY to -0.41% of Financial Technology GTV³. The improvement was mainly the result of GoTo’s continuous efforts to encourage users to transact both in and outside of its ecosystem by providing diverse payment use cases rather than relying on incentives.
• Gross revenue⁴ for Financial Technology increased 5% YoY to Rp 450 billion in 3Q23 mainly driven by growth in consumer lending. This increase would be 25% YoY if the impact of intercompany transactions is excluded.
• Financial Technology contribution margin² improved 38 bps YoY to reach a record Rp 77 billion. The payments business also became contribution margin2 positive, due to continuous efforts to improve efficiency in promotions as well as the optimization of IT costs, which reduced spending on cloud services by 12% QoQ.
• Financial Technology GTV³ was Rp 94.5 trillion in the third quarter, increasing by 4% QoQ, while decreasing by 3% YoY.
• Incentives and marketing spending were reduced by 61% YoY, equivalent to Rp 344 billion in savings for the quarter.
• GoTo continues to increase the frequency of new product releases, particularly in consumer lending, to boost monetization and prompt additional consumer spending across the GoTo ecosystem. A continued focus on open-loop expansion is expected to increase the cash loan book, with the GoPay App expected to drive penetration in its financial services offerings with budget consumers.
• The GoPay App has reached more than five million downloads to date. Approximately 50% of the app's transacting users are either new or reactivated, and around one quarter of them have subsequently transacted on either Gojek or Tokopedia.
• Outstanding loans generated from GoTo’s consumer lending business grew by 44% QoQ to Rp 1.4 trillion as of 3Q23, equivalent to a three fold increase over the past year, while maintaining profitability, with NPL levels well below comparable products in the market. Close to 60% of GoTo’s loan book is currently funded by Bank Jago and the companies will continue to collaborate to scale GoTo’s loan origination throughout 2023.
• The Company also introduced GoPay Tabungan (Savings) by Jago, a first-of-its-kind collaboration in Indonesia combining the simplicity of e-money, with the benefits of a bank account. GoPay Tabungan by Jago has attracted 200,000 users and more than 1 million transactions since launch. This will increase Bank Jago's current and savings accounts, directly translating to lower cost of funds within the companies’ loan channeling partnership.

The integration of Tokopedia's fulfillment division and Gojek's e-commerce delivery division within GoTo Logistics continues to result in increased in-house delivery in high-density areas, coupled with aggregate third-party deliveries elsewhere at the lowest possible cost per order. As a result, GoTo Logistics has successfully lowered delivery expenses for both customers and sellers and further reduced shipping subsidy costs.

• Adjusted EBITDA¹ was -Rp 113 billion, an improvement of 63% YoY.
• Gross revenue⁴ was Rp 530 billion, a 9% decrease YoY mainly driven by lower volume from E-commerce due to rationalization of incentives which impacted low-quality transactions.
• Incentives and marketing spending were reduced by 70% YoY, equivalent to Rp 164 billion in savings for the quarter.
• Increased efficiency has driven down shipping subsidy cost per order by around 22% QoQ. When combined with the 15% savings achieved in the first half of 2023, the Company has booked an aggregated 33% savings year-to-date, exceeding its 30% target for the year.
• Looking ahead, GoTo Logistics will continue to reduce shipping subsidies driven by expansion of its in-house deliveries to include merchant-fulfilled orders.
• GoTo Logistics will also invest in fulfillment to drive supply chain efficiency by creating more high-density delivery corridors, further lowering cost per order.

Environmental, Social and Governance (ESG)

GoTo continues to make operational shifts across its business, ensuring it aligns with global and industry best practices regarding ESG performance. Outcomes from the Company’s efforts in 3Q23 include:

• A new partnership with the International Finance Corporation (IFC) to build upon GoTo’s positive performance on digital economy inclusion and climate action. The partnership includes an investment from the IFC and its co-investor of USD 150 million to support financial inclusion across Indonesia, and non-financial support for GoTo’s ESG-related efforts such as the 100% transition to EVs.
• Growth in EV adoption amongst Gojek driver partners of 260% this year, with 13.7 million kilometers covered by two-wheel EVs in 2023.
• The GoGreener Tree Collective reached one million subscribers without any marketing spend.
• Positive 2023 ESG ratings from S&P and MSCI, ranking top quartile globally for climate action.

Company Outlook

GoTo expects to capture additional growth in broad user demographics more cost-effectively across the expansive Indonesian market by leveraging its unique ecosystem that spans the full range of consumer spending.

The Company currently expects:

• Positive Group Adjusted EBITDA¹ within the fourth quarter of 2023.
• Full-year 2023 Group Adjusted EBITDA¹ to be between -Rp 4.5 and -Rp 3.8 trillion.

The above outlook is based on current market conditions and reflects the Company’s preliminary estimates, which are all subject to various uncertainties and risks. These include increasing market competition, which is expected to continue over future quarters, as well as cost inflation and other variables.

About GoTo Group

PT GoTo Gojek Tokopedia Tbk (GoTo Group) is the largest digital ecosystem in Indonesia. GoTo’s mission is to “empower progress” by offering technology infrastructure and solutions that help everyone to access and thrive in the digital economy. The GoTo ecosystem consists of On-demand Services (mobility, food delivery, and logistics), E-commerce (third party marketplaces and official stores, instant commerce, interactive commerce, and rural commerce), and Financial Technology (payments, financial services, and technology solutions for merchants) through the Gojek, Tokopedia, and GoTo Financial platforms.

Forward-Looking Statements

This document may contain forward-looking information or forward-looking statements (collectively, “forward-looking information”). All information contained in this document that is not clearly historical in nature or that necessarily depends on future or subsequent events is forward-looking information prepared as of the date of this document is based upon the opinions and estimates of management as well as the information available to management as of the date of this document. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, expressions and phrases, including negative and grammatical variations thereof, or statements that certain events or conditions "may,” or "will" happen, or by discussion of strategy.

Forward-looking information is based upon a number of current internal expectations, estimates, projections, assumptions and beliefs that, while considered reasonable by management, are inherently subject to significant business, economic, competitive and other uncertainties and contingencies. Forward-looking information is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors (including the risks and uncertainties in the Company’s consolidated financial statements and Management’s Discussion and Analysis available on the Company’s website), that may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking information. Any estimates, investment strategies or views expressed in this document are based upon current market conditions, and/or data and information provided by unaffiliated third parties, and are subject to change without notice. To the extent any information in this document was obtained from third party sources, the Company has not independently verified that information, and there is a risk that the assumptions made and conclusions drawn by the Company based on such information are not accurate. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise. Readers are cautioned not to put undue reliance on this forward-looking information. It should not be viewed, in and of itself, as any basis for making any investment decision.

Non-IFAS Financial Measures

GoTo Group uses the following non-Indonesian Financial Accounting Standards (IFAS) financial measures including gross revenue4, contribution margin2 and Adjusted EBITDA1, to understand and evaluate GoTo Group’s core operating performance. However, the definitions of GoTo Group’s non-IFAS financial measures may be different from those used by other companies, and therefore, may not be comparable. Furthermore, these non-IFAS financial measures have certain limitations in that they do not include the impact of certain expenses that are reflected in GoTo Group’s consolidated financial statements that are necessary to run GoTo Group’s business. Thus, these non-IFAS financial measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with IFAS.

Non-IFAS measurements are not intended to replace the presentation of GoTo Group’s financial results in accordance with IFAS. Rather, GoTo Group believes that the presentation of Adjusted EBITDA1 provides additional information to investors to facilitate the comparison of past and present results, excluding those items that GoTo Group does not believe are indicative of GoTo Group’s ongoing operations due to their size and/or nature. In addition, GoTo Group also presents Contribution margin2, which may provide additional information to investors in relation to the results excluding non-variable expenses and other income/expenses. Contribution margin2 and Adjusted EBITDA1 presented herein may not be comparable to similarly entitled measures presented by other companies, who may use and define these measures differently. Accordingly, you should not compare these non-IFAS measures to those presented by other companies.

Unaudited and Unreviewed Consolidated Financial Information

GoTo Group furnished the results for the nine months ended September 30, 2023 and 2022. The information for the nine months ended September 30, 2023 is extracted from the consolidated financial statements of the Company as of and for the nine months ended September 30, 2023 (with consolidated financial information for the nine months ended September 30, 2022, that has not been reviewed and not been audited, disclosed as comparative) that has been prepared by the Management in accordance with the Indonesian Financial Accounting Standards. The information pertaining to the consolidated financial information for the nine months ended September 30, 2023 and 2022 that are in this document has not been audited, reviewed, examined, or applied any procedures. Accordingly, there are no opinions or any other form of assurance expressed with respect to the periods mentioned above.

Furthermore, in this document, GoTo Group also furnished the results of the three months ended September 30, 2023, June 30, 2023 and September 30, 2022 which have been prepared by and are the responsibility of management. The consolidated financial information for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022 have not been audited, reviewed, examined, or applied any procedures on. Accordingly, there are no opinions or any other form of assurance expressed with respect to any and all consolidated financial information for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022 presented in this document.

¹ GoTo Group calculates the Adjusted EBITDA, a non-IFAS financial measure, beginning with loss before income tax and adjusting for (i) depreciation and amortization expenses; (ii) finance income; (iii) interest expenses; (iv) loss on impairment of assets of disposal group classified as held for sale; (v) (reversal)/loss on impairment of investment in associates and joint ventures; (vi) loss on impairment of goodwill; (vii) fair value adjustment of financial instruments; (viii) loss on impairment of intangible and fixed assets; (ix) share-based compensation cost (including for the Gotong Royong Program); (x) unrealised foreign exchange (gain)/loss from cash remeasurement; (xi) share of net losses in associates and joint ventures; (xii) (gain)/loss on divestment and dilution of investment in associates and joint ventures, net (xiii) dividend income; and (xiv) non-recurring items.

² GoTo Group calculates the contribution margin, a non-IFAS measure, beginning with net revenue and deducting total cost of revenues, a portion of sales and marketing expenses relating to the promotional excess and product marketing and others consists of mainly withholding taxes related to sales and marketing expense and other insignificant expenses.

³ GTV means gross transaction value, an operating measure representing:

1. the sum of the time value of the transactions from On-demand Services.
2. the sum of the value of the product and services recorded on our E-commerce Segment.
3. the sum of the total payments volume, or TPV processed through our platform of Financial Technology Services.
4. and excluding amounts from inter-Company transactions between entities within the Company that are eliminated upon consolidation.

⁴ Gross revenue represents the total Rupiah value attributable to GoTo Group from each transaction, without any adjustments for incentives paid to driver-partners and merchant partners or promotions to end-users, over the period of measurement. For a reconciliation of net revenue to gross revenue, please refer to the section “Non-IFAS Financial Reconciliation.”

Contacts:

Media

GoTo Group: corporate.affairs@gotocompany.com

Investors/analysts

GoTo Group: ir@gotocompany.com

Piacente Financial Communications: goto@thepiacentegroup.com