• 2Q22 GTV up 39% year on year to Rp150.5 trillion
• 2Q22 gross revenue up 45% year on year to Rp5.5 trillion
• 2Q22 contribution margin and adjusted EBITDA as a percentage of GTV improved by 47 basis points and 69 basis points quarter on quarter, respectively
• Total Group contribution margin expected to turn positive by 1Q24
• On-demand services and e-commerce contribution margin expected to turn positive by 1Q23 and 4Q23, respectively

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Jakarta, Indonesia, August 30, 2022 – PT GoTo Gojek Tokopedia Tbk (IDX: GOTO, “GoTo Group” or the “Company”), the largest digital ecosystem in Indonesia, today announced its financial results for the second quarter and first half of 2022.

Andre Soelistyo, GoTo Group CEO, said: “In the second quarter, we continued to drive high-quality, sustainable growth. We saw strong growth in our total GTV and gross revenues, as well as continued improvements in our margins quarter on quarter, accelerating our path to profitability. Our strategic move away from subsidy-driven incentives towards product-led differentiation is working. It has increased user engagement among cross-platform customers and allowed us to heighten our focus on cultivating high-quality users - the essential customers who are loyal to our platforms and generate higher value, monetizable growth.

“As external, macro challenges persist, we have been solidifying our leadership position in Indonesia, by expanding the breadth and diversity of our ecosystem to gain stronger operating leverage. As a whole, our industry must continue to adapt to the rapidly changing environment. At GoTo, we will continue to play to our strengths by maximizing cost efficiency and driving synergies within our ecosystem.”

Jacky Lo, GoTo Group CFO, said: “We reported solid results for the second quarter of 2022, generating sustainable revenue growth while optimizing our cost structure. The improvements to our GTV, gross revenue and margins were made against a challenging geopolitical and macroeconomic backdrop, the continued impact of COVID-19, as well as seasonality due to the extended Ramadhan holidays. Looking ahead, we continue to moderate our spending supported by promising results from our investment in cross-platform and ecosystem integration. We expect the positive trajectory across our business segments to continue as we move toward our goal of reaching breakeven as an integrated ecosystem.”

2Q221 Group Financial and Operational Highlights

• GTV2 grew 39% year on year to Rp150.5 trillion.
• Gross revenue3 increased by 45% year on year to Rp5.5 trillion.
• Contribution margin as a percentage of GTV improved by 47 basis points quarter on quarter.
• LTM annual transacting users (ATU)4 grew 28% year on year to 67 million, with average spend per user up 17% year on year over the same period.
• Total orders grew by 34% year on year to 690 million.
• In 2Q22, Adjusted EBITDA5 loss narrowed by 14 percent quarter on quarter to Rp4.1 trillion from Rp4.8 trillion in 1Q22, marking the second consecutive quarter of improved Adjusted EBITDA loss. This compares with an Adjusted EBITDA loss of Rp3.9 trillion in 2Q21, a figure that reflects planned capital conservation ahead of the Gojek-Tokopedia transaction to allow for cross-platform investment and the significant impact of COVID restrictions.

Six Months Ended June 30, 2022 Financial and Operational Highlights

• GTV grew 42% year on year to Rp290.5 trillion.
• Gross revenue grew 49% year on year to Rp10.7 trillion.
• Adjusted EBITDA loss was Rp9.0 trillion, compared with a loss of Rp5.8 trillion in the same period in 2021, a figure that reflects planned capital conservation ahead of the Gojek-Tokopedia transaction to allow for cross-platform investment and the significant impact of COVID restrictions.

Summary of Key Operating and Financial Metrics

(Rp in millions, unless otherwise stated)

2Q22 Business Overview

The second quarter of 2022 centered around the pursuit of quality, sustainable growth underpinned by improved monetization, rationalized incentive spending and optimized operating expenses.

We achieved strong results in both GTV and gross revenue with GTV exceeding the higher end of our guidance range. Group GTV grew 39% year on year to Rp 150.5 trillion. Gross revenue continued to grow faster than GTV, up 45% year on year to Rp 5.5trillion. Our revenue and GTV growth was driven by our ongoing monetization efforts, which included updated merchant commissions for e-commerce, improved food delivery commissions and continued recovery in transport.

The second quarter of 2022 was very different compared with the same period in 2021. In particular, the 2022 period included an extended Ramadhan break in May, during which workers were able to travel back to their hometowns for the first time in two years following the lifting of COVID-19 restrictions. Despite the reduced activity associated with the holiday, we continued to see improved customer engagement. Average spend per user (measured by GTV divided by ATUs) grew by 17% year on year while annual transacting users grew 28% year on year to 67 million.

During the quarter, we increased customer engagement through a number of cross-platform integration initiatives including the roll out of our common rewards currency, GoPay Coins. This enabled us to increase the number of cross-platform users (or those who use both Gojek and Tokopedia) by over 80% year on year. Cross-platform users are resilient, loyal and have higher lifetime value than non-overlapping customers.

We reduced incentives quarter on quarter which, combined with stronger monetization, led to Group contribution margin improving 47 basis points and Adjusted EBITDA margin improving by 69 basis points quarter on quarter as a percentage of GTV, accelerating our path to profitability. This progress was supported by:

1. Improvement in monetization in our ecommerce and on-demand services segments which saw take rate improvements of 18 basis points and 60 basis points to 3.1% and 21.6% respectively. This was driven by changes in our ecommerce merchant take rate and the introduction of platform fees.
2. Reduction in total incentives as a percentage of GTV by 52 basis points quarter on quarter to -3.5%, supported by our continued focus on driving quality growth.
3. Better data utilization and machine learning models to drive more precise ad targeting and marketing and promotion spend ROI.
4. Successful ecosystem synergies such as the increasing adoption of GoPay Coins, have shown promising signs of driving efficiency and incremental contribution margin per user.

Our on-demand business continued to benefit from the sustained recovery in mobility services as social distancing restrictions eased. Second quarter gross revenue was Rp3.2 trillion, up 41% year on year. Gross revenue grew faster than GTV and was driven by a higher take rate, which was up 173 basis points year on year compared with 2Q21.

On-demand services GTV grew to Rp 14.9 trillion in Q2, an increase of 30% year on year. Mobility GTV grew 80% year on year and has recovered to 86% of pre-COVID-19 levels, a positive trend that we expect to continue as the economy reopens and traffic resumes across Indonesia.

In the midst of a recovery as people were returning to offices, we scaled GoCorp, our mobility offering for corporate clients. GoCorp GTV grew approximately 2.5x quarter on quarter as we signed on new clients and formed deeper partnerships with existing clients.

Despite the holiday break in May and the rising trend of consumers reverting to in-restaurant dining, GoFood has continued to post consistent GTV growth of 17% year on year. This is due largely to our focus on engaging with high quality customers. We have also experimented with new feature launches like Mode Hemat (Economy mode) which can capture demand from more price sensitive users.

We have moved food merchants into refreshed contracts that bundle base commission rates with value-added services. We have also refined our technology through initiatives such as an early detection system that allows us to proactively identify and target high quality users in order to improve efficiency. Through these initiatives, we have been able to improve our Food delivery monetization by over 195 basis points year on year.

The combination of monetization and optimization initiatives have supported positive contribution margin for overall on-demand services in Indonesia for the second quarter. We saw an improvement of 160 basis points quarter on quarter in our contribution margin as a percentage of GTV for the quarter. Similarly, if we exclude the impact of one-time incentives granted to drivers, the quarter on quarter improvement of on-demand services contribution margin would have accelerated by 356 basis points.

E-commerce gross revenue grew 59% year on year, more than twice as fast as GTV growth, as we continue to improve monetization and capitalize on value added services such as logistics, advertising and marketing tools. We saw take rates improve by 76 basis points year on year from 2.4% to 3.1% in 2Q22 driven by our upgraded commission scheme for C2C merchants, introduced in June 2022.

Our take rates also improved on a quarter on quarter basis, increasing by 18 basis points in 2Q22. Our focus on providing more value added services and commissions tiered by category margins, resulted in less than 1% of merchants opting out of the new commission scheme. Revenue contribution from advertising also continues to be strong, with ads revenue growing at over 50% year on year.

We continued to invest in our hyperlocal strategy. As a result, fulfillment orders on Tokopedia grew by 2.9x year on year. This translates into an increase in our fulfillment penetration to 3.6% of total Physical Goods orders. As the only e-commerce player with a fleet powered by a market leading on-demand platform, we want to improve customers’ hyperlocal experience. By making warehousing available locally, we can provide a faster, more convenient delivery service, assist our merchants with order fulfillment helping them expand their sales regionally, and give higher volumes and utilization for our driver partners.

Looking to the future, we have begun deploying our own in-house delivery service, starting with Dilayani Tokopedia (Fulfilled by Tokopedia) orders to three of our hubs, resulting in a significant reduction in same day delivery costs. Moving forward, we will continue to scale our fulfillment and delivery capabilities, the backbone that allows us to efficiently service a diverse spectrum of consumer needs: from 30-minute quick delivery to same-day and regular delivery.

We continue to experience strong category growth in our e-commerce business. The reopening of the economy has lifted the Automotive and Fashion categories while triggering a normalization in the Health category. Long tail categories such as Home & Living, Food & Beverage as well as Mom Baby and Kids Fashion continued to grow robustly as we are able to drive local availability through Dilayani Tokopedia (Fulfilled by Tokopedia) and the onboarding of local merchants. We improved our ability to monetize through advertising and we also optimized our spend on marketing and promotions, which was largely driven by optimization in new buyer acquisition and dormant buyer re-activation through benefit reduction and further optimization in cashback distribution. As a result of our efforts, our e-commerce contribution margin improved by 65 basis points quarter on quarter as a percentage of GTV in the second quarter.

Our financial technology services business maintained upward momentum during 2Q22. Fintech GTV and gross revenue grew significantly due to:

• Continued penetration of GoPay across our ecosystem, coupled with the roll out of GoPayCoins across GoTo;
• The acquisition of hypergrowth merchants along with growth from existing merchants;

As a result, we grew our fintech GTV by 87% year on year in Q2. Gross revenue also grew at a solid pace, increasing by 54% year on year, while take rate remained stable.

As of 2Q22, GoPay user penetration on Tokopedia hit a new high of 52%. This is important because it enhances monetization and we have seen that customers who use GoPay on Tokopedia are likely to spend over two times more compared with those that use other methods of payment. This results in better customer lifetime value. Average month on month retention on Tokopedia has increased, reaching 82% in the second quarter.

We continue to build out our offering in Fintech to better serve our customers across our expanding ecosystem. We also began introducing our PayLater Installment plan, augmenting our GoPayLater program, which lets users pay in installments on bigger ticket items in Tokopedia. The service was opened up to selected users on Tokopedia before being progressively made more widely available.

Environmental, Social and Governance (ESG)

As part of our commitment to deliver long-term value for all stakeholders, we have continued to integrate ESG best practices into the Company’s governance structure and operations. Outcomes from our 2Q22 efforts include:

• Publication of the first Group-wide ESG report, encompassing Gojek, GoTo Financial and Tokopedia’s performance on material ESG issues. Findings were assured by a third party and compliant with local regulatory requirements and global reporting standards.
• Replacement of 80% of packaging with 100% FSC recycled materials in Tokopedia’s fulfillment centers.

As a result we reduced operational expenditures for participating outlets.

• Scaled GoTo’s carbon offset feature across all of Gojek’s transport products, generating Rp2.8 billion in offsets within the first five months of launch.
• Exceeded the 2022 target of one million kms traveled by electric vehicles on Gojek’s platform through Electrum.
• Launched GoTransit as part of the Company’s emission reduction efforts for its ecosystem. GoTransit facilitates consumers’ shift to and use of public transport for the first and last mile.
• Shifted all GoTo headquarters to renewable energy-sourced power.
• Launched first iteration of driver loan and savings products with uptake of 220,000 drivers in the first half of 2022.
• Completion of sustainability-related modules by over 20,000 merchants across Gojek and Tokopedia platforms, as well as distribution of 11,000 loans to new Tokopedia merchant partners (MSMEs).

Company Outlook

The Company’s priority is to focus on quality, sustainable growth and accelerate its path to profitability with continued sequential improvement in both contribution margin and Adjusted EBITDA expected over the coming quarters. This will be driven by improved take rate, rationalization of promotion spend and the identification and retention of profitable users.

For the third quarter of 2022, the Company currently expects:

• GTV to be between Rp151 trillion and Rp156 trillion
• Gross revenue to be between Rp5.7 trillion and Rp6.0 trillion
• Contribution margin as a percentage of GTV to be between -1.3% and -1.2%

For contribution margin breakeven timeline, the Company currently expects:

• Group contribution margin to turn positive starting in the first quarter of 2024
• On-demand segment to achieve contribution margin positive by the first quarter of 2023
• E-commerce segment to turn contribution margin positive by the fourth quarter of 2023

The above outlook is based on the current market conditions and reflects the Company’s preliminary estimates, which are all subject to various uncertainties, including those related to the ongoing COVID-19 pandemic.

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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 + 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 communication 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 hereof and is based upon the opinions and estimates of management and the information available to management as of the date hereof. 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 financial statements and Management Discussion & 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.

Non-IFAS Financial Measures

To supplement GoTo Group’s consolidated financial statements, which are prepared and presented in accordance with SFAS in Indonesia (IFAS), GoTo Group uses the following non-IFAS financial measures including gross revenues, contribution margin and adjusted EBITDA, 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.

These 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 EBITDA 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 presented the Contribution Margin that may provide additional information to investors in relation to the results excluding the non-variable expenses and other income/ expenses. Contribution margin and adjusted EBITDA presented herein may not be comparable to similarly entitled measures presented by other companies, who may use and define this measure differently. Accordingly, you should not compare this non-IFAS measure to those presented by other companies.

Unaudited and Pro Forma Financial Information

GoTo Group furnished the pro forma consolidated statement of profit or loss and other comprehensive income as if Tokopedia had been consolidated by GoTo for all the periods presented in this earnings release. The pro forma consolidated statement of profit or loss and other comprehensive income have been prepared based on the Company’s combined historical financial information, excluding the amount of historical financial information recognised as intercompany elimination item. Pro forma consolidated statement of profit or loss and other comprehensive income is not intended to be a complete presentation of the GoTo Group’s financial performance or results of operations had the transactions been concluded as of and for the periods indicated. In addition, these pro forma information are provided for illustrative and informational purposes only and are not necessarily indicative of the GoTo Group’s future results of operations or financial condition as an independent, publicly traded company. The pro forma financial information included in this presentation has been prepared by and is the responsibility of management. This pro forma information has not been audited, reviewed, examined, or applied any procedures with respect to the pro forma financial information, included in this presentation. Accordingly, there are no opinions or any other form of assurance expressed with respect to any and all pro forma financial information presented in this presentation. The pro forma financial information included in this document (i) is presented based on currently available information and estimates and assumptions that the GoTo Group’s management believes are reasonable as of the issuance date of this document; (ii) is intended for informational purposes only; and (iii) does not reflect all decisions that are undertaken by the GoTo Group after the acquisition. While the pro forma financial information is helpful in illustrating the financial characteristics of the consolidated companies, it is not intended to illustrate how the consolidated companies would have actually performed if the acquisition of Tokopedia in fact occurred on the date of acquisition or to project the results of operations or financial position for any future date or period.

In addition, GoTo Group also furnished the result for the three months ended June 30, 2022 and 2021 in this release. This information is extracted from the consolidated financial statements of the Company as of June 30, 2022 and for the six months ended June 30, 2022 and 2021 that has not been reviewed or audited. The consolidated financial statements as of June 30, 2022 and for the six months ended June 30 2022 and 2021, have been prepared by and are the responsibility of management. This financial information has not been audited, reviewed, examined, or applied any procedures with respect to the consolidated financial information for the six months ended June 30, 2022 and 2021, included in this release. Accordingly, there are no opinions or any other form of assurance expressed with respect to any and all interim financial information for the six months ended June 30, 2022 and 2021 presented in this release.

Operating Metrics

LTM ATU or Last Twelve Months Annual Transacting Users means the number of unique transacting users in the trailing twelve months. GTV or Gross Transaction Value means gross transaction value, an operating measure representing the sum of (i) the value of on-demand services transactions; (ii) the value of e-commerce transactions for product and services; and (iii) the total payments volume processed through our financial technology services, excluding any inter-company transactions.

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1 Comparisons are made against the pro forma financial and operating metrics for 2Q21, which were derived from the audited and unaudited consolidated historical financial statements of GoTo Group and Tokopedia and certain adjustments and assumptions have been made regarding our Group after giving effect to the acquisition of Tokopedia. Such numbers are presented for illustrative purposes only and may not be an indication of what the Company’s financial position or results of operations would have been or for any future periods.

2 GTV means gross transaction value, an operating measure representing.

a. the sum of the time value of the transactions from on-demand services.

b. the sum of the value of the product and services recorded on our e-commerce segment.

c. the sum of the total payments volume, or TPV processed through our platform of financial technology services.

d. and excluding amounts from intercompany transactions between entities within the Company that are eliminated upon consolidation.

3 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 “Unaudited Financial Information and Non-IFAS Financial Measures”

4 LTM ATU means trailing twelve months of unique transacting users.

5 GoTo Group calculates the adjusted EBITDA, a non-IFAS financial measure, beginning with loss before income tax and adding back (i) interest expenses; (ii) depreciation and amortization expenses; (iii) loss on impairment of non-current assets and assets of disposal group classified as held for sale; (iv) loss/ (reversal) on impairment of investment in associates (v) loss on impairment of goodwill; (vi) loss on impairment of intangible and fixed assets; (vii) share based compensation cost; (viii) fair value adjustment of financial instruments; and (ix) special items and deducting finance income.

6 Excluding Mitra Tokopedia

7 Contribution margin is calculated by deducting net revenue with variable expenses

8 Similarweb insights are estimations and extrapolations based on information and content obtained by Similarweb from public sources and other third parties, and no representations or warranties are made to the accuracy of any such insights.

9 Financial Technology Services 2Q 2021 GTV and gross revenue in this specific section exclude the GTV and gross revenue of businesses which have been divested or spun-off in FY 2021

 

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Contacts:

Media

GoTo Group: corporate.affairs@gotocompany.com

Finsbury Glover Hering: GoTo-AP@fgh.com

Investors/analysts

GoTo Group: ir@gotocompany.com

The Piacente Group: goto@thepiacentegroup.com