**GoTo Group Achieves Third Consecutive Quarterly Profit Amid Market Challenges**
GoTo Group, Indonesia’s leading internet company, has reported its third consecutive quarterly profit on an adjusted basis, marking a significant advancement in its efforts to manage costs and boost sales in a competitive ride-sharing and delivery landscape. In a statement released on Tuesday, the company announced adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 393 billion rupiah ($23.4 million) for the first quarter, a notable recovery from a pro forma loss of 101 billion rupiah during the same period last year.
The company’s net revenue, which excludes incentives for drivers and merchants as well as user promotions, surged by 37% on a pro forma basis, reaching 4.2 trillion rupiah. GoTo has been actively working to demonstrate its profitability to investors, implementing cost-cutting measures that include job reductions and the closure of underperforming business units. This strategic shift comes as user growth slows and competition from Singapore’s Grab Holdings Ltd. and other regional players pressures profit margins.
In a potential game-changing move for the regional market, Grab is reportedly considering a takeover of GoTo, valuing the company at over $7 billion. Although significant regulatory challenges exist, discussions between the two companies have reportedly intensified. Since going public in Indonesia in 2022, GoTo’s shares have plummeted by approximately 70%, yet they have rebounded by more than 30% over the past year as the company’s financial performance has improved, mirroring trends seen with Grab.
As part of its ongoing cost-reduction strategy, GoTo has transferred control of its unprofitable e-commerce division, Tokopedia, to ByteDance Ltd.’s TikTok in a deal valued at $1.5 billion. The company also ceased operations in Vietnam last year to concentrate on achieving profitability in its core markets of Indonesia and Singapore, while also expanding into consumer loan offerings.
GoTo has reaffirmed its expectation to achieve adjusted EBITDA of up to 1.6 trillion rupiah for the full year. Like Grab, GoTo is exploring new growth avenues in mobility, delivery, and consumer loans. To enhance user spending, the company has introduced a range of affordable and premium ride and delivery options, along with features that enable users to send money as gifts.
Despite a significant slowdown in growth rates compared to previous years, where triple-digit increases were common, GoTo remains optimistic about its future. Analysts suggest that strong prospects in fintech and on-demand services will likely support a solid net-profit trajectory, with the fintech segment expected to contribute at least 20% of EBITDA this year. The loan portfolio is projected to reach 8 trillion rupiah ($475 million), driven by high-margin buy-now-pay-later loans targeted at TikTok shoppers. On-demand services are anticipated to continue being a primary profit driver, bolstered by an increase in premium food delivery services and advertising from merchants.
**FAQ**
**What is GoTo Group’s recent financial performance?**
GoTo Group reported an adjusted EBITDA of 393 billion rupiah for the first quarter, marking its third consecutive quarterly profit, with net revenue increasing by 37% to 4.2 trillion rupiah.