GoTo’s Astute Cost-Cutting Drives Q2 Loss Reduction by Millions Amidst Market Reshaping

Indonesia’s tech giant GoTo slashes Q2 losses to 1.2 trillion rupiah ($78.25 million) from 4.3 trillion rupiah YoY, attributing the improvement to stringent cost-cutting initiatives amid SoftBank Group and GIC backing. While continuing cost discipline, GoTo remains focused on expansion and profitability, despite challenges from rivals and shifts in product strategy.

18 August 2023 – Indonesia’s leading technology giant, GoTo (GOTO.JK), has announced a significant reduction in underlying losses for the second quarter, with losses shrinking from 4.3 trillion rupiah to 1.2 trillion rupiah ($78.25 million), attributed to a focused cost-cutting strategy. This turnaround has been facilitated by the company’s rigorous efforts to streamline operations, buoyed by support from its investors, Japan’s SoftBank Group (9984.T) and Singapore’s sovereign wealth fund GIC.

GoTo, which encompasses ride-hailing, e-commerce, and financial services, has undertaken decisive cost-cutting initiatives including workforce reductions, following a substantial decline in its market valuation after going public in April the previous year. Patrick Walujo, the recently appointed Group CEO, affirmed the company’s commitment to maintaining “cost discipline” while simultaneously expanding its customer base.

Walujo stated, “We are developing a long-term strategy for achieving this, and in the meantime we will continue to operate with absolute cost discipline as we pivot our product mix towards the mass market.”

The company remains steadfast in its objective to achieve profitability by the year’s end. Buoyed by positive outcomes in the first half of the year, GoTo has adjusted its 2023 adjusted EBITDA outlook to anticipate a loss ranging between 4.5 trillion rupiah and 3.8 trillion rupiah, revised from a prior projection of between 5.3 trillion rupiah and 4.6 trillion rupiah.

In the second quarter of 2023, net revenues surged to 3.6 trillion rupiah, marking an impressive 86.7% increase compared to the previous year. The company’s overall gross transaction value for the same period reached an impressive 143.7 trillion rupiah.

GoTo reported a remarkable 48% reduction in losses for the first half of the year when compared to the same period a year earlier. The company’s e-commerce arm, Tokopedia, emerged as Indonesia’s second-largest online marketplace in the previous year, despite intensifying competition from nimble contenders, notably TikTok, in Southeast Asia’s largest economy.

Shares in GoTo, abbreviated as GoTo Gojek Tokopedia, rallied by 6.59%, reaching 97 rupiah per share upon closing, underscoring investor optimism prior to the earnings announcement. – reference: Reuters

Author: Terry KS

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