GoTo posts profit, bets on fintech amid Indonesia economy jitters

Just over a year since GoTo Group separated from its ecommerce business, Tokopedia, it’s experiencing a post-breakup glow-up.

According to its latest financial numbers, net revenue for 2024 was up by 93%, and the company achieved positive annual adjusted EBITDA for the first time. That said, it is still loss-making.

It even received an alimony of sorts from Tokopedia – which it still owns 25% of – in the form of an “ecommerce service fee” of US$38 million in 2024.

Investors sent GoTo’s shares down by 2.4% in the trading day that followed the release of its results.

Hiving off Tokopedia has allowed GoTo to focus on its ride-hailing, food delivery, and fintech businesses, where it faces competition not just from the likes of existing players like Grab and Sea, but also new entrants such as VinFast-linked electric taxi company Xanh SM.

GoTo is reported to be in merger talks with long-time archrival Grab, which announced a strong set of results last month. A combined entity would enjoy greater market share, lower expenses, and a fatter bottom line, although whether it can get regulatory clearance is uncertain.

Following efforts to streamline the business, GoTo expects to earn between 1.4 trillion and 1.6 trillion rupiah (between US$87 million and US$99 million) in adjusted earnings this year, more than double 2024’s figure and above analysts’ estimates.

Whether the company’s optimism is justified will hinge on how much it can sustainably scale its consumer lending business. Rising costs of living in Indonesia and a slowing economy may affect not just loan quality but also demand for GoTo’s products and services.

Money money money

As with Grab and Sea, GoTo’s fintech business – which includes its lending services as well as e-wallet GoPay – was a key driver of overall top-line growth, with gross revenue for this unit expanding by 95% in 2024.

Outstanding consumer loans were 2.7x higher over the year, while lending revenue grew 4.7x. This beat the year-on-year growth sported by Grab and Sea during the same period, although the latter two’s loan portfolios are larger.

Adjusted EBITDA for GoTo’s fintech segment improved by 70% in 2024, although it was still in the red. However, the unit recorded around US$900,000 in positive adjusted earnings in the fourth quarter of 2024, going into the black a year ahead of company projections.

GoTo said that it did not have to spend as much on sales and marketing as other fintech lenders to attract borrowers, since it has an existing ecosystem of users to lend to.

In Q4 2024, 20.2 million users made a fintech transaction monthly, up by 35% year on year. According to the company, “millions” of these users came from the stand-alone GoPay app.

See also: Going solo could give Amazon Pay the edge in India

GoTo expects its lending book to reach US$495 million by the end of this year, 53% larger than end-2024.

Power of two

Good value for buybacks