Earnings call transcript: GoTo Q4 2024 sees strong revenue growth

GoTo Ltd., with a market capitalization of $5.2 billion, delivered robust financial results in Q4 2024, with a 28% year-over-year increase in group gross revenue and a significant surge in adjusted EBITDA. The company’s stock gained 2.07% following the announcement, reflecting investor optimism driven by strong operational performance and strategic initiatives. According to InvestingPro analysis, the company currently appears undervalued based on its Fair Value assessment.

Key Takeaways

• Group gross revenue rose 28% YoY in Q4.
• Adjusted EBITDA grew 348% YoY, reaching 399 billion rupiah.
• GoPay app expanded with new financial products.
• Stock price increased by 2.07% post-announcement.
• 2025 guidance targets significant EBITDA growth.

Company Performance

GoTo Ltd. reported a strong performance in the fourth quarter of 2024, highlighted by a 28% year-over-year increase in group gross revenue. This growth was driven by strategic expansions in its product offerings and operational efficiencies. The company maintained its leadership in the Indonesian on-demand services market, leveraging its ecosystem strategy to connect multiple service lines effectively.

Financial Highlights

• Revenue: 28% YoY increase in Q4.
• Adjusted EBITDA: 399 billion rupiah in Q4, a 348% YoY increase.
• Cash balance: 21 trillion rupiah as of December 31, 2024.
• Share repurchase: 23.6 billion shares worth 1.5 trillion rupiah.

Outlook & Guidance

GoTo Ltd. provided an optimistic outlook for 2025, with group adjusted EBITDA expected to range between 1.4 trillion and 1.6 trillion rupiah. The on-demand services segment is targeting at least 1.1 trillion rupiah in EBITDA, while the fintech segment aims for at least 300 billion rupiah. The company anticipates its loan book to exceed 8 trillion rupiah by year-end. With a relatively low beta of 0.66, the stock has shown lower volatility compared to the broader market. InvestingPro analysis reveals that the company maintains a FAIR overall Financial Health Score of 2.29 out of 5.

Executive Commentary

CEO Patrick Walujoh emphasized the company’s focus on innovation and efficiency, stating, "We are innovating across the business to lower unit costs and boost efficiency." He also highlighted the importance of their ecosystem strategy, saying, "Our ecosystem strategy and our culture of continual innovation are at the foundation of our performance."

Risks and Challenges

• Market competition: Intense competition in the on-demand services sector.
• Economic conditions: Potential macroeconomic pressures affecting consumer spending.
• Regulatory changes: Possible impacts from changes in fintech regulations.
• Cloud transition: Risks associated with transitioning to new cloud providers.

GoTo Ltd.’s Q4 2024 results demonstrate a solid growth trajectory, supported by strategic initiatives and a strong market position. The company’s focus on innovation and operational efficiency positions it well for future growth, despite potential challenges in the competitive and regulatory landscape. For comprehensive analysis and detailed financial metrics, including exclusive ProTips and Fair Value estimates, explore GoTo’s complete profile on InvestingPro.

Full transcript - Goto Ltd (GOTO) Q4 2024:

Joel Ellis, Head of Investor Relations, GoTo: Hello, everyone. This is Joel Ellis, Head of Investor Relations. Welcome to the PT Go to Gojek Tokopedia TBK Fourth Quarter and Financial Year twenty twenty four Earnings Conference Call. Please be advised that today’s conference is being recorded. On today’s call, Patrick Walujoh, President, Director and Group CEO and Simon Ho, Group CFO will deliver prepared remarks.

Following their commentary, we will open up the call for questions and be joined by Thomas Kastad, our Vice President, Director and President of Financial Technology, Hans Patuo, our Chief Operating Officer and Katharine Hindra Suchayo, our President of On Demand Services. We would like to highlight that the information presented today has been prepared solely based on unaudited, consolidated, selected financial information for the three month period ended 12/31/2024 and 2023. We have also submitted and published our consolidated audited financial statements as of and for the twelve months ended 12/31/2024. As a reminder, today’s discussion may contain forward looking statements about the company’s future business and financial performance, as well as certain non Indonesian financial accounting standard measures as complements to the Indonesian financial accounting standard disclosures. Before you can handle relying on these measurements and forward looking statements, please take note of our disclaimer and cautionary statements disclosed in our earnings presentation and press release.

During the earnings call, we will review the results of our operations and earnings presentations, which can be found on our website. Our reporting currency is the Indonesian rupiah, and we will denote the US dollar equivalent by applying an exchange rate of 16,162 rupiah to 1 US dollar based on the middle rates published by Bank Indonesia as of the December 2024. We will refer to pro form a figures to facilitate like for like sequential and year on year comparisons of our performance following the closing of our announced agreement with TikTok and a deconsolidation of GoToLogistics. These pro form a figures assume that Tokopedia and GoToLogistics were deconsolidated on 01/01/2023. For more information and additional disclosures on our recent business and financial performance, please refer to our earnings press release and supplemental presentation, which can be found on our IR website.

With that, I will turn the call over to Patrick.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you, Joel. Hello, everyone and thank you for joining us today as we share our Q4 and full year 2024 results. Throughout 2024, we remain focused on finding fresh and effective ways to win the intense battle for the Indonesian consumer. As a result, GoTo delivered its strongest year ever in 2024 breaking all time highs for GTV, revenue, adjusted EBITDA and margins with consistent quarter on quarter improvement across each of these key metrics. Our fintech business also continued on its record breaking run.

We expanded our loan book to a new high while also closing the year with the highest number of monthly transacting users and GoPay App transactions we have ever seen. This progress meant we surpassed our target to achieve group level adjusted EBITDA breakeven for the year posting $386,000,000,000 rupiah or 24,000,000 US dollars. At the same time our Fintech segment became adjusted EBITDA positive in the fourth quarter as per our guidance. Our ecosystem strategy and our culture of continual innovation are at the foundation of our performance. By innovating both operationally and at the product level we are able to deliver more targeted and personalized services that match customer needs.

This approach enhances customer experience, strengthens merchant partnerships, and boosts revenue. For example, in ODS we deepen our penetration of both food express delivery and higher value mobility services empowering users to choose what matters most to them time or cost. At the same time, GoPay in its first full year as a standalone app gained millions of users while BNPL and lending integration boosted mass market reach. Each service strengthens our ecosystem creating synergy that fosters multi product adoption and deeper user engagement while improving user acquisition efficiency. This ecosystem synergy has driven increased usage of our services with with monthly transacting users transacting users up 16% over the course of the year and 22% year on year in Q4 alone.

This in turn has supercharged our top line with group core GTV hitting an all time high of 79,000,000,000,000 rupiah of 4,900,000,000.0 US dollars growing 66% year on year in Q4 and 58% over the full year. Gross revenue also hit all time highs reaching 5,000,000,000,000 rupiah or $3.00 7,000,000 US dollars an increase of 28% year on year in Q4 and 30% over the full year. We are innovating across the business to lower unit costs and boost efficiency in areas like delivery, incentives and cloud computing while our large language model Sahabat AI is poised to deliver a significant cost advantage across many enterprise use cases. Disciplined cost management has driven down recurring fixed cost as percentage as a percentage of GTV and revenue year on year in 2024. Taken together, these measures bolster operating leverage and reinforce our path to sustain profitability.

I will now move on to our business units starting with Fintech. In 2024, our Fintech business transitioned from a driver of ecosystem growth to a driver of both growth and profitability. Notably, the success of lending initiatives propelled the segment to positive adjusted EBITDA in Q4, a full year ahead of previous guidance. This success was due to two key innovations, the standalone GoPay app as well as the expansion of our consumer loan offerings. Turning first to the GoPay app.

Since launch, the app has proven to be a powerful tool for user acquisition and deeper customer engagement driving a 35% year on year increase in the number of monthly transacting users across the fintech business to 20,200,000 as the fourth as of the fourth quarter. Ultimately, the standalone GoPay app serves as both a front door for new customers and a growth catalyst for our ecosystem of financial products. By launching a lighter standalone GoPay app tailored to a broader user base, we significantly expanded our audience. As a result, average monthly transactions per user climbed by 18% year on year in Q4 as customers increasingly use GoPay as their primary digital financial tool. Moving on to consumer loans.

Our loan book expanded by 172% year on year in Q4 driven in large part by the growth of users across our ecosystem. This loan book growth has been driven prudently as our ecosystem data which provides deep insight into our users allows us to prior risk to price risk effectively and maintain stable delinquency rates even as our lending portfolio continues to scale this quarter. Another advantage that we have is low acquisition cost for new borrowers as these users are already part of our ecosystem. This significantly reduces our marketing spend compared to those typically required by non ecosystem lenders. The result is a lending business that not only grows weekly but does so with strong margins and manageable risk.

This structural advantage has contributed significantly to our fintech business’ profitability and we will continue to drive the responsible growth of our loan book over the course of 2025. Moving now to on demand services. In Q4, our on demand services strengthened market leadership, achieving robust top line gains in both transport and food delivery. This strong performance produced a record breaking quarter of adjusted EBITDA which reached Rupiah $267,000,000,000 or $17,000,000 underscoring our ability to balance both growth and profitability. We successfully optimized incentive spending in 2024 driving a 28% year on year increase in ODS contribution margin to 3,400,000,000,000.0 rupiah or or $2.00 $9,000,000 an improvement of 61 basis points year on year as a percentage of GTV.

As margins sequentially improved in the fourth quarter, we ended the year with real momentum fueled by operational excellence across our ODS business. A key driver of our success has been ongoing product innovation and the optimization of our product mix. We continue to refine our offerings so customers can choose to save time or save money, including expanding premium services in both food delivery and mobility. Express Food Delivery orders, for example, contributed 28% of total food GTV in the fourth quarter just one year after launch. We have optimized the GoGeek app to deliver more targeted services across our user base.

These improvements ensure that we are providing the right service to the right user at the right time. And as a result, we are seeing more users than ever engaging with a wider variety of our products. In addition to revenue growth from premium offerings, our margin expansion has been driven by several product innovations. I will highlight three of them here. Firstly, our Special Delivery Fleet program assigns driver partners to operate exclusively within high demand areas, leveraging advanced data analytics, algorithms and order backing to channel a higher volume of orders their way.

This approach reduces delivery costs which is passed on to consumers, boost driver partners income and improves our profitability. Secondly, our advertising business is becoming a more significant driver of profitability. In 2024, advertising revenue rose 92 year on year transforming what was once an early stage offering into a significant revenue stream. This momentum carried through to the fourth quarter as the advertising businesses share of put GMV rose from 1.1% to 1.6% within just twelve months. These gains reflect our deliberate investments in ad relevance, self serve tools and merchant partnerships.

We expect the advertising segment to continue growing faster than our already solid food GMP trajectory and our expectation is to move the business significantly closer to global benchmarks over the next three years. Thirdly, merchant funded promotions have been significantly enhanced through our ongoing product innovations enabling more detailed targeting and segmentation so merchants can reach the right customers. This creates real value for merchants while also delivering more relevant offers to users elevating the overall customer experience. As a result, we have seen pricing merchant participation and willingness to invest in promotions with merchants’ total spend increasing by 190% year on year in 2024. We are working especially hard to improve the return on investments for merchants, increasing their propensity to participate in funding promotions.

This strategy leads to a reduction of our own incentive spending while maintaining strong returns for merchants. At the group level, technology remains central to our ability to scale and enhance our business. In line with this focus, AI will increasingly shape our ecosystem, enhancing user interactions, helping merchants to operate more efficiently, and redefining how people experience our services. At the heart of this evolution is Sabahat AI, an open source large language model developed primarily in Bahasa Indonesia along with other long along with other local languages to address local needs. Launched in November 2024 through a partnership with Indosat, NVIDIA AI Singapore and multiple Indonesian institutions including Compass Gramedia and the University of Indonesia.

Sabat AI has demonstrated very strong results in numerous in numerous benchmark tests for Indonesian language specific tasks showing high accuracy when reading and interpreting local text compared with global AI models. We plan to leverage Sahabat AI for a range of applications. Currently we are experimenting with chatbots and optical character recognition or OCR for merchant menus both aimed at enhancing customer experience and simplifying merchant onboarding. Ultimately, we see developing our own AI capabilities as a strategic advantage, reducing costs, improving user experiences, and fostering local tech talent over the long term. Our transition to Alibaba Cloud and Tencent Cloud announced in September 2024 exemplifies how we are refining our technology infrastructure to reduce costs and enhance data sovereignty.

The migration is on track and set for completion within Q3 and will reduce our cloud expenses by more than 50% compared to pre migration levels with the financial impact beginning to be realized in q four twenty twenty five. Looking ahead, our team remains focused on CRE growth drivers that will strengthen our top line and drive margins while maintaining our market leading position in Indonesia. There’s significant headroom for margin improvement and we anticipate an upward trajectory over the course of 2025. In fintech, our GoPay app will continue to fuel expansion by bringing millions of new users into our ecosystem. While our lending book is set to exceed 8,000,000,000,000 rupiah or $495,000,000 US dollars by the end of the year.

By leveraging risk ecosystem data and prudently deploying risk based parsing, we will scale our lending portfolio while maintaining strong risk adjusted returns driving further EBITDA growth. In on demand services, we are driving top line growth and margin improvement by targeting high spending segments and optimizing incentive spending. Meanwhile, we have enhanced margins on our affordable products which serve as a funnel for new users who can later transition to higher value offerings across our ecosystem. By optimizing our product mix while managing promotional costs more effectively, we have positioned ourselves for sustained revenue and earnings growth as we move into 2025. In summary, 2024 was a landmark year for GoTo, during which we demonstrated the strength of our integrated ecosystem and our commitment to operational excellence.

Our strategy is working. As a result, we are today providing ambitious new profitability guidance for 2025 as we expect adjusted EBITDA to be in the range of RUB 1,400,000,000.0 to RUB 1,600,000,000,000.0 or 87 to 99,000,000 US dollars for the full year. Thank you for joining us today. I will now hand over to Simon who will provide a review of our financial performance.

Simon Ho, Group CFO, GoTo: Thank you, Patrick. It’s a pleasure to speak with everyone today and thank you all for joining our call. We ended 2024 on a high note with robust revenue growth, disciplined cost management and our first full year of positive adjusted EBITDA. In Q4, group gross revenue grew by 28% year on year contributing to a 30% increase

Thomas Kastad, Vice President, Director and President of Financial Technology, GoTo: for the full

Simon Ho, Group CFO, GoTo: year. Meanwhile, we reduced recurring cash fixed costs by 3% year on year demonstrating our commitment to efficiency. As a result, group adjusted EBITDA reached Rp $386,000,000,000 or $24,000,000 US dollars for the full year. And in Q4, it surged 348% year on year to $399,000,000,000 rupiah or 25,000,000 U. S.

Dollars. This strong financial foundation places us on solid footing to continue executing our strategies in 2025. We maintain a strong cash balance. As of 12/31/2024, we had Rupiah 21,000,000,000,000 or 1,300,000,000 in cash, cash equivalents and short term time deposits. Returning value to our shareholders remains a top priority.

And as of the February 2025, we have repurchased around 23,600,000,000.0 shares amounting to approximately 1,500,000,000,000.0 rupiah or 91,000,000 US dollars. Additionally, we completed the cancellation of treasury shares in November as expected, reducing the number of Series A shares in circulation by approximately 10,300,000,000.0 shares. In e commerce, our service fee revenue in the fourth quarter from Tokopedia was Rupiah $2.00 4,000,000,000 Rupiah or $13,000,000 excluding VAT, the net total amount was Rupiah 183,000,000,000 Rupiah or $11,000,000 This brings the total service fee revenue for the year to $622,000,000,000 rupiah or 38,000,000 US dollars excluding VAT.

Patrick Walujoh, President, Director and Group CEO, GoTo: Looking

Simon Ho, Group CFO, GoTo: ahead, leveraging the foundation established in 2024, we are well positioned to drive top line growth while maintaining disciplined cost management to further accelerate profitability throughout 2025. Finally, before we open the call to questions, I’d like to address the Indonesian government’s guidance regarding holiday bonuses for driver partners. As a homegrown Indonesian technology company, Go to recognizes that driver partners are the foundation of its business and their well-being is directly tied to the sustainability of the company. Go to generates significant income for driver partners amounting to a total average of 1,500,000,000,000.0 rupiah per month. While the Indonesian government acknowledges that driver partners are not employees, Go to fully supports its guidance to provide an additional holiday bonus during Hari Raya to driver partners who are productive and high performing.

The company will manage the additional costs within its existing plans. With that, we would now like to open the call to your questions. Joe, please go ahead.

Joel Ellis, Head of Investor Relations, GoTo: Thank you, Simon. For those analysts who wish to ask questions, please use the raise hand function on Zoom. When you are called, you may unmute yourself to ask your question. First question is from Ryan Davis at Citi. Ryan, please go ahead.

Ryan Davis, Analyst, Citi: Thank you, Joel. Yeah. Thank you. Go to management, Patrick, Simon, and also the team for the briefing. And also congratulations for the good performance.

I’d like to ask several questions. For the first one, I think, would you be able to walk us through the competition landscape, especially in the on demand services? Second question, would be quite interested to understand how the company would be able to provide any target for the e commerce service fee growth in 2025. I think, third, I think you have actually provided a full year 2025 guidance of a group adjusted EBITDA 1.4 to 1,600,000,000,000.0. Would you mind to elaborate what is the outlook for the fintech and also the on demand services segment, especially in terms of growth and also profitability, checking if you’ll be able to provide medium term guidance on EBITDA margin, if possible?

And also lastly, there remains some concern, I guess, across asset quality on the banks that have been coming down in the past few months. Are you actually worried about the quality of the loan book itself? Thank you.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you. It’s a long list of questions. Can we just first, take take stock of the questions, Joel? Can you, just, you know, to make sure that we can address all the questions?

Joel Ellis, Head of Investor Relations, GoTo: Sure thing. So first, we have competition landscape in on demand services. Second, e commerce. So our target around the e commerce segment, the e commerce segment. Three, regarding our guidance of 1.4 to 1,600,000,000,000.0 rupiah.

So what’s our outlook for the fintech as well as the ODS segments in 2025 in terms of growth and profitability. And then likewise, asset quality, around the asset quality for our fintech business as well.

Patrick Walujoh, President, Director and Group CEO, GoTo: Okay. Maybe I’ll let, Catherine, the president of our Omnimide Services to answer questions regarding, competition.

Katharine Hindra Suchayo, President of On Demand Services, GoTo: Thanks, Pat. Hi, Ryan. Good to meet you again. Thank you for the question. So let me address this one.

As you know, we recognize that, this is a highly competitive space, but as, Pat mentioned earlier in the remarks, right, we are confident in our market position. We are in 2024 not only maintained, but we actually strengthened our market leadership as well here. So this is where we are belief we will continue to strengthen as well going forward. I would like to highlight here basically how we see this is this is the power of our ecosystem. This is in Go to, right?

It’s not just about the ODS services where, of course, we will remain committed to maintain our portfolio strategy between our premium regular as well as the affordable product strategy. But also this is coupled with, our robust fintech arm. As you see earlier, right, by us combining this on demand services, serve products with our most prevalent e wallets, Copay is one of Indonesia most prevalent wallets, as well as integrated lending services. This is where we bring the flywheel. This is where the synergy really added value to our users through this, through this, combination of the elements in our ecosystem.

So as mentioned, we continue to strengthen our market leadership in the three core ODS verticals. This is our two wheeler, our four wheeler transport, as well as our food delivery. This leadership actually underpin our ability, as Pat mentioned as well in balancing growth and profitability. As you see the last few quarters, we continuously, showing how we managed to to balance these two, well. So going forward, how we are seeing, we will continue to establish this leadership is by few key initiative.

It was mentioned briefly as well, if I may summarize a little bit. A lot of the innovation, on our products, on our technology, lynching on that, number one, for example, is our special delivery fleet. This is our innovation on our logistic cost saving. This is not only enable our customer to be able to get, to be able to to enjoy affordable kind of pricing, but also to maintain, if not boost our driver partner productivity and earning. That’s number one.

This is, of course, using our system and technology. Second one is our advertising business. Similarly, we are using our data. We are using our ML technology and stuff, How we are growing this business, as you see, it is now growing faster than the underlying GMV and becoming a very significant revenue driver. Third one, is our merchant funded promo.

We know we have to continue improve our margin. So one of the one of the balancing act we have been successfully doing is basically by inviting our merchant to do their merchant funded promotion as well. Of course, doing this, we have to make sure that they are having a good ROI as well. And as you see in our result, actually, merchant participation on this MFP, we call it, as well as the retention for them to keep coming back and doing more and more of this proof that our product has shown a good result for them. Last but not least, we understand incentive remains to be one of our big cost items, so we will continue to optimize this leveraging technology.

We invest a lot on our data and our kind of recommendation engine and on our kind of optimization engine as well to continue work on this one. So, yeah, this is a competitive kind of a landscape. But having said that through through my answer, I hope you can say that we are very well positioned. We are very confident for us to continuously commit up to our sustainable and profitable things.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you, Catherine. I will then ask Simon to address the questions about e commerce and also the guidance for profitability this year.

Simon Ho, Group CFO, GoTo: Thank you. Thank you. So on the e commerce front, I just wanted to first of all remind everyone that, our 25% stake in Topopedia, means that we don’t actively manage that business on a day to day basis. During the course of 2024, you’ll see that we received a service fee of around $39,000,000 and this is over the eleventh month period, which which is after the the Tokopedia transaction. We would looking into 2025, we would expect that the combined Tokopedia and TikTok shop business to grow, and also improve its market share and at the same time improve profitability.

I think those are currently the expectations for that business. Now moving on to your next question, which is about the 2025 guidance. Of course, just providing a bit more color below the group adjusted EBITDA target of 1.4 to 1,600,000,000,000 and what that may look like in terms of some of our expectations between the ODS business and the fintech business. So starting off with ODS first, we our expectation or our thinking currently is that the overall market for the ODS business will likely grow in the sort of low mid teens range in Indonesia. Now I have to caveat that the global macro is looking a little bit uncertain right now.

So I think we need to obviously, you know, take this into account. And within that, our our goal is to, we’re aiming to match or exceed these market growth rates overall. So we will look to continue to strengthen our market leadership across each of the on demand verticals in 2025. And also at the same time, we will, as Catherine just highlighted, we will aim to improve margins and some of those levers, initiatives, obviously, we’ve discussed, including logistics costs, advertising revenues, merchant funded promotions, and also optimizing our incentives into 2025. And if I look at the adjusted EBITDA for ODS, we our thinking right now is to we’re going to aim for at least RUB 1,100,000,000,000.0 in 2025.

That is the adjusted EBITDA for the ODS business. And now if I may turn to the fintech side of the business, obviously some of the expectations we’re looking for here on the consumer payment side, GoPay, we will look to continue to onboard millions of new users and expand our overall fintech ecosystem. As on the loan book, we’ve covered earlier, our guidance on loan book remains intact from what we gave in the last quarter, which is going to be more than Rupiah 8,000,000,000,000 sorry, Rupiah 8,000,000,000,000 by the end of twenty twenty five compared to the Rupiah 5,200,000,000,000.0 at the end of twenty twenty four. Our delinquency rates currently remain stable and I’ll let Tom address that in the next question. And, overall for the fintech business, we’re expecting adjusted EBITDA in 2025 of at least Rupiah 300,000,000,000 Rupiah.

And I hope that helps to give more color in terms of the two main business segments that we are expecting in 2025.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you, Simon. Tom, would you be able to answer the question of asset quality?

Thomas Kastad, Vice President, Director and President of Financial Technology, GoTo: Sure. Happy to do that. Hi, Ryan. Thanks for the question. It’s an especially good one right now given the market dynamic that we’re in.

But as a team, I can assure you that we are closely following the macroeconomic trends in Indonesia and globally and as well as the asset quality of our competitors and the big banks. Fortunately, our situation has been a little bit different. In Q4, we were able to grow our loan book by 20%. At the same time, we did not see any material deterioration in credit quality. And we’ve been thinking about this quite a bit.

And I think there’s a number of factors that are really working in our favor. First, we have a different ecosystem and we think it provides very unique data set, especially for the consumer lending business. And I want to highlight that the success of the GoPay app in 2024, which was really the first year that was fully launched and scaled significantly, launched a bunch of new products on that. So now you have multiple products on the GoPay app and that makes our dataset even better. Secondly, on our risk model, it’s dynamic and we can adjust it relatively quickly to market changes.

And on top of that, we’re constantly running lending experiments to validate the risk model output and making adjustments based on those experiments. Thirdly, and I think this is another thing that sets us apart from maybe some of the other lenders, not our competitors, but some of the more traditional lenders, our loan book has a fairly short duration than what you typically see especially in banks. The average life of the portfolio and this would be excluding the vehicle financing, we typically see around three months of an average life. And this is important because we can make quick changes if we see some worrisome credit signals in the future. And the way I think about it is if we were to significantly tighten our credit standards in the light of some really negative signals coming out, then the immediate impact would be one, to our loan growth.

But the loan quality would probably be okay as the runoff on the portfolio is very fast, again, due to this short duration of the A lot of work. And finally, I want to say that on the lending business, this remains highly profitable even in this market today. And the team is highly focused on execution of this business in 2025. And as Simon alluded to, we’re guiding to a loan book of more than $8,000,000,000,000 versus the $5,200,000,000,000 that we closed 2024 at. Thank you, Ryan.

Ryan Davis, Analyst, Citi: Thank you so much. Good to team. All the best.

Simon Ho, Group CFO, GoTo: Thank you, Ryan.

Joel Ellis, Head of Investor Relations, GoTo: Thank you, Ryan. The second question is going to be from Ari Jahan from Macquarie. Ari, please unmute yourself and go ahead to ask your question.

Ari Jahan, Analyst, Macquarie: Thank you, Joel. Hi, Patrick, Simon and Go to team. Well done for a record breaking quarter. Thanks for taking my questions. And first on the merger news flow, what are your thoughts on the recent media reports regarding the possible corporate actions involving Grab?

And then second set of questions on demand services. How do you see the growth outlook for mobility as compared to food delivery this year? And can you also please share updates on how the subscription services have contributed to growth? I’ll start here. Thank you.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you, Ari. In regard to your questions about recent media reports, we are aware of recurring media speculation about this potential M and A discussion. I would like to refer, analysts and investors to the disclosure that we made on the Indonesian Stock Exchange in February when we were asked by the Indonesian Stock Exchange about the rumors, and nothing has changed since then. We continue to focus on our business execution. The market is still has a lot of potential.

We strive to continue to strengthen our market leadership in Indonesia, grow our fintech business to become the most popular financial solution in Indonesia. And we also are focusing to improve our profitability. It’s a lot of work. We are confident that we are confident in our ability to deliver and we will continue to stay focused on that. We cannot comment further on market rumors and speculation.

Right? And then the next question about, on demand services, subscription service, I’ll have, Catherine to try and stop.

Katharine Hindra Suchayo, President of On Demand Services, GoTo: Thanks, Pat. Hi, Adi. Thank you for the question. So I’ll address, one by one. The first one, your question on the growth of the mobility and deliveries.

I think, Simon mentioned it earlier that, we remain committed this year from, for mid teens growth. This is continuing our last year growth as well. As I mentioned, this is our goal is to strengthen further strengthen our market leadership. So this is across the board of all of our key products. This is mainly the two wheel or wheel transport as well as the food as well as the deliveries.

Mani, I would like to highlight here maybe to your question, how do we see this? So we are going even deeper this year more granular at how we are seeing the pop up of the potential growth. I think Patrick mentioned a little bit earlier about the focus on the customer segment, the higher spending customer segment in this product. As you see, our premium products has a great kind of a track record trajectory of the growth. At the same time, we are also continue to, to build the the the lever, right, to also acquire, new users still as well.

So, yeah, we are, sum it up, we are remained growing on the mid to high teens at the rate of both our products. On your question on the subscription, thank you for asking this question. This is definitely one of the highlight of 2024 in term of the product that we launched and managed to grow in 2024. Gojekt Plus subscribers rose 70% in the past six months. So this is, if you remember, sometimes in last year, we expanded the subscription product we have from originally when we launched it only to cover food product.

Now is to all of the product portfolio in, in Gojek. Right? So this is reflecting a very strong, kind of the quality of our users as well. What is really interesting about the subscription is basically it’s generate, the subscriber, the user who’s subscribing to Gojekt Plus, they generate around three times higher GTV than a non subscriber. And, the we we we spent a lot of time last year to continuously improve the profitability of these users as well.

Right? So because of, basically, we are deepening the wallet share of these users by encouraging encouraging them to do more frequent kind of usage. We cross poly between different product. Some user previously only use transport maybe because of the GoJet Plus. They started trying out food or the other way around, and this is basically improve the improve the the wallet share of the of the users and thus improve their margin, as well in our portfolio in our ecosystem.

Another one is really interesting here. We’d like to highlight, the subscription also proved to be a really, really good tools for us to improve retention of these users. As mentioned earlier, this is a very competitive, competitive landscape here. Having a a re effective retention tools is very, very important. This is what so far has been successful in helping us to do to do so.

So, yeah, I think I think going forward, we will continue to focus on the furthering the subscriber’s growth. We believe there’s still there’s still room, in that. At the same time, further, harnessing the profitability of this transaction of this user segment. And we are also currently, gonna be expanding the Gojekt Plus products partnership with other offerings as well. Yeah.

That’s I believe I answered both of your questions.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you, Kat. Thanks, Kat.

Katharine Hindra Suchayo, President of On Demand Services, GoTo: Thanks, Kat.

Ari Jahan, Analyst, Macquarie: Thank you, Takal Devan, and all the best for Guto team.

Katharine Hindra Suchayo, President of On Demand Services, GoTo: Thanks, Arie.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you.

Joel Ellis, Head of Investor Relations, GoTo: Thanks very much, Ari. Our third question will come from Adrian Joseph at Mandeiry Securitas. Adrian, please unmute yourself and go ahead.

Adrian Joseph, Analyst, Mandeiry Securitas: Thanks, Joe, for the opportunity to ask questions. And congratulations, Patrick and Simon, and the GoTo team for the great results. So three questions from myself. The first one is, I think you did mention about a bit of the guidance for the ODS. Right?

So just just wondering, I mean, what’s going to be the medium term target for the EBITDA margin? Because I think when I look into the q four, you have actually reached about 1.6% EBITDA margin. But if I actually take a look into your guidance for ’25, which is low to mid teens, and if we assume 12 to 15%, and with 1,100,000,000,000 EBITDA, that means you’re assuming a flat margin of 1.5 to 1.6% for this year. So that’s a question on the margin. And the second one is actually, I think you did touch a lot on the premium offerings and the trend.

So my question is with regards to the mass market and the variable products, can you actually provide some updates? And the last question is actually just a bit of color on the loan book that is being channeled to BankJago. And going forward, how should we actually see the contribution to your loan bookings through Jago? Thank you.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you, Adrian. I’ll have Simon address your question about EBITDA margin in the medium term for ODS. And then I’ll ask Kath to talk about our mass market of affordable strategy. And, Tom will be answering your question about our cooperation, with Ben and Jerry. Simon?

Simon Ho, Group CFO, GoTo: Yeah. Thank you. Thank you, Adrian. We’ve I mean, you make a very good observation there. I would say that, you know, we did obviously stress that those are sort of our minimum goals and targets.

So hopefully, I think as the year progresses, we will continue to execute on those, those drivers that we’ve been highlighting, and we would obviously continue to see some expansion continued expansion in the adjusted EBITDA margin for the for the for the ODS business. Look, I think, we we we we don’t provide haven’t provided any long term targets. But I think directionally, what we’re trying to achieve, I hope, is is very clear. We have seen, obviously, margin improvements for several consecutive quarters right now, and we are also expecting directionally, continued improvement over the course of 2025. So, you know, we do hope that as we continue to innovate on our products, achieve operating operating efficiencies, and some of these strategic initiatives continue to take hold that we will continue to expand our margins in the ODS business in both the mobility and the delivery side.

I hope that helps to give a bit more color to your question maybe. Thank you. Helen?

Katharine Hindra Suchayo, President of On Demand Services, GoTo: Yes. Thank you. I’ll answer your question on the mass market affordable. So did you thank you for asking this question. You’re right.

So I think I hinted on it it previously. We still believe that we do believe, and the result has shown as well to prove, our strategy of this, the effectiveness of what we call the portfolio, approach. Right? As as you know, we talk about premium product. We talk about regular product.

We talk about the mass market slash portable products. Again, the way we see it is this is not just talking about the user segment, but also the use cases. I think, I mentioned last time that we we truly believe that, for example, I during during lunchtime, I just wanna save money. I will go for a more affordable product. But when on weekend, I want to splurge.

I will go for the premium product. And as you see, both of these products, has continued to grow in our portfolio. Pat mentioned about the food express, for example, which is now contributing to 28% of our food businesses. Similarly, on our affordable product in transport also continue to grow. One thing that we we are being very, very mindful here as well, This is our task to continue balancing between the growth as well as the profitability.

So very happy to share here as well, including our mass market affordable products that actually the margin improvement quarter on quarter has been there as well. This is being done by us using our technology to do better targeting, better kind of segmenting of of this product to the customer as well as the use cases that we are targeting today. One thing I also would like to highlight here, the the one that’s really interesting is we believe this portfolio strategy is actually play to the ecosystem synergy. What do I mean by that? Right?

Seven about 70% of the user who are using affordable service is specifically it’s become an entry point for them. The moment they start using our services, they start upsell, cross sell using all the, all other product. This is where deepening again. I mentioned about the the wallet share, deepening their wallet share, and thus, improving the user level, profitability as well. So again, we we we are seeing this different product portfolio is complementing each other.

We are focusing on how we can be better targeting on them. So as an offer all, it’s become a better engine of growth as well as the profitability there.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you. Thank you, Cath. Tom, would you like to give an update of our working relationship with Renkadu?

Thomas Kastad, Vice President, Director and President of Financial Technology, GoTo: Yes. Sure. Happy to do that. Hi, Adrian. It’s good to hear your voice again and thanks for the question.

In regards to Jago, I think it’s important to be honest. I think all sides acknowledge that we had a relatively slow start to our partnership. However, I think we’re really gaining momentum now. And to be clear, Jago remains our primary bank partner and there’s really two reasons for that. Okay.

First, I mean, as you know, we own 21% of the bank and have held that position for some time. And secondly, what people have not seen in the background is that we spent a lot of time and effort doing deep product integrations with the bank. And probably the most important one is the loan channeling systems that we have at Jago. And when I step back and kind of think about 2024 and the journey we took in 2024, it’s clear that it was really a breakout year for the Go to Lending business. And frankly, along with that, it was a test of the Jago channeling systems.

So just to throw some numbers out, right, last year, we grew the lending book by 2.7x. And in aggregate, more than 70% of those loans were channeled to JAGO. Very few hiccups, smooth and we’ve worked quite well with the team over there. So at this point, my observation is that everything is working well. I expect the relationship to be ongoing and to be positive and we continue to expect to channel majority of the loans to Jago going forward even as we kind of enter into this 2025 growth season.

Hope that answers the question, Adrian. Thank you.

Adrian Joseph, Analyst, Mandeiry Securitas: Thanks, everyone.

Patrick Walujoh, President, Director and Group CEO, GoTo: Thank you, Adrian.

Adrian Joseph, Analyst, Mandeiry Securitas: Thank you.

Joel Ellis, Head of Investor Relations, GoTo: Thanks very much, Adrian. For our final question, we will open up the line for Pang Viet of Goldman Sachs. Pang, please unmute yourself and go ahead.

Pang Viet, Analyst, Goldman Sachs: Hi. Thank you very much for the opportunities and good evening, Patrick, Simon and the management team and thank you Joel as well. Two questions from my side. Number one, just wanted to go back to the questions around the macros, right? I think not just on the loans perspective, but just wanted to ask you around the latest strain that you see in terms of consumer spending and everything.

I think there’s been a growing concern overall from the investor looking into Indonesia across segments that there might be some weakening in the spending. So if there’s anything you could share around that would be helpful. That’s question number one. Question number two, going back to the questions on the on demand segment, I think one thing that we are just trying to understand is how the market share shift was in last quarter. I think if we’re looking at your quarter on quarter growth last quarter, it seemed to come in at low single digit versus your competitor that seemed to deliver it in high single digits.

So I’m wondering whether there’s anything that you’ve seen in particular that could explain the difference here.

Patrick Walujoh, President, Director and Group CEO, GoTo: Okay. Thank you, Peng. Good to hear your voice. On the macro, I think we are all watching, this very carefully at this moment. We acknowledge that the global macro seems to be causing concern, something that we have to closely monitor.

I think what I can say is that based on our 2025 early results, the business performance has met our expectations, adjusted to seasonality and all that. This is, again, this is something that we are monitoring. We are monitoring closely and our, business plan on our guidance, we believe, is, is quite, well, thought off considering all these macro risks. And, you know, we will we will, project we we are ready to react quickly if, there are reasons for us to be to be concerned. And then, the second question is about, market share.

We believe that we remain to be market leaders in on demand services across our different products. And that is the most important thing. We balance our growth with profitability, and fluctuation 1% or 2%, is something that we monitor. But, again, it’s about balancing between growth and and and profitability. So I think that’s that’s all I can say at this moment.

Pang Viet, Analyst, Goldman Sachs: Thank you. Perhaps can I actually just ask one quick follow-up? Right? You mentioned earlier in the opening remarks around the Ramadan bonus. Just wondering whether there’s any further color you can provide in term of how this may impact the margin trend coming into this first quarter.

Patrick Walujoh, President, Director and Group CEO, GoTo: I think, what Simon mentioned reflects the whole information we have so far. And as Simon mentioned, the holiday bonus is designed for our most productive and most productive and best performing, private partners in the ecosystem. And, so far we believe that, the impact is within all the guidance we have provided. And until further notice, I think that’s all that we can share at this moment.

Pang Viet, Analyst, Goldman Sachs: Thank you very much.

Joel Ellis, Head of Investor Relations, GoTo: Thank Thank you very much, Pang. And thank you, everyone, for participating in the call. With that, we will call the session to a close. Have a good evening.

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