Indonesian superapp and e-commerce platform GoTo has announced a significant reduction in its net loss for the first half of the year, attributed to strategic cost-cutting measures and a surge in revenue. The company reported a net loss of 7.2 trillion rupiah ($470 million) for the January-June period, a substantial decrease from the 14.17 trillion rupiah loss recorded during the same period in the previous year. The company’s revenue for the first half of the year doubled to 6.8 trillion rupiah.
This improved financial performance is part of GoTo’s ongoing efforts to transition towards profitability. In 2022, the company posted a net loss of 40.4 trillion rupiah, marking a 56% increase from the previous year. Despite consistent struggles to achieve profitability, GoTo has been making strides in narrowing its losses. The net loss decreased by 40% to 3.86 trillion rupiah in the first quarter of 2023 compared to the same period in the previous year. Additionally, the company reported a net loss of 3.3 trillion rupiah for the April-June period.
Key factors contributing to the improved earnings include a 43% reduction in incentives and product marketing during the second quarter, resulting in savings of 2.7 trillion rupiah for that period.
The company, which was formed in May 2021 through the merger of ride-hailing and food delivery firm Gojek and local e-commerce giant Tokopedia, has set a goal to achieve profitability on an adjusted EBITDA basis by the fourth quarter of this year. Patrick Walujo, GoTo’s CEO since June, emphasized the importance of consistent profitability during an earnings conference. He stated, “We understand that achieving adjusted EBITDA break-even is not the end goal. We have wasted no time and started to take decisive actions.”
Walujo highlighted the company’s efforts to streamline its operations, including a 24% reduction in its workforce over the past three quarters. He also noted that GoTo is divesting noncore assets, focusing on its core strategy, and pivoting its product mix toward the mass market.
GoTo’s strategic initiatives include its recent move to make its GoPay app accessible throughout Indonesia, aiming to tap into a broader market segment without access to traditional banking services. Despite facing challenges, the company’s shares rose by 6.6% following the announcement of its improved financial results.
As Southeast Asia’s tech ecosystem continues to evolve, with competitors such as Sea and Grab also witnessing improved earnings this year, GoTo remains dedicated to its long-term strategy for sustainable and profitable growth. With a focus on disciplined cost management and strategic pivots, the company is navigating the path towards becoming a strong player in the ever-changing landscape of the region’s digital economy.