More Efficient Business, GOTO Q2-2022 Contribution Margin Soars
By : Abraham Sihombing | Wednesday, August 31 2022 - 12:26 IWST
GoTo is a blend of Gojek and Tokopedia. (Photo: republika.co.id)
INDUSTRY.co.id - Jakarta - A technology issuer with a leading ecosystem in Southeast Asia, PT GoTo Gojek Tokopedia Tbk (GOTO), releases the first half of 2022 financial performance to the same period in 2021 (year on year/yoy).
Based on the company's financial report published on Tuesday (30/8/2022), GoTo recorded an increase in terms of contribution margin for January to June 2022. The adjusted contribution margin and EBITDA as a percentage of the Gross Transaction Value (GTV) grew by 47 basis points (bps) and 69 bps respectively in the second quarter 2022 compared to the previous quarter.
The GoTo Group is expected to achieve a positive contribution margin in the first quarter of 2024. While, the on-demand services and e-commerce segments are expected to achieve positive contribution margins in the first quarter of 2023 and the fourth quarters of 2023, respectively. The contribution margin is the ratio of the profitability value of each product in the GoTo company before being reduced by headquarters costs or operating expenses.
Andre Soelistyo, the President Director of GoTo Group, disclosed, the company in the second quarter continually focussed on the sustainable and quality business growth.
“In the second quarter, we’re supporting a quality business growth. Compared with a year earlier, we’d succeed to increase the company’s GTV and gross revenue. The growth was also happened in the company’s business margin compared with a quarter earlier. It was a reason for our measures to achieve profitabilities,” Andre explained in an official statement, quoted on Tuesday (30/08/2022).
Furthermore, the company’s strategic to promote a product differentiation as well as shifting from incentive-based business has produced good results. Since implementing the strategy, cross-platform usage has increased as well as providing room to sharpen focus, increasing the number of loyal customers with high-value monetization.
The company has also reduced the amount of incentives as a percentage of GTV by 52 bps compared to the a quarter earlier along with the monetization strengthening. This matter has increased the Group's contribution margin by 47 basis points, and the adjusted EBITDA margin as a percentage of GTV raised by 69 bps on a quarter-on-quarter basis, thereby accelerating the company's pace towards profitability.
This progress was supported by, first, an monetization increase in the on-demand services and e-commerce segments, with the take rates increase by 60 bps and 18 bps, respectively, to 21.6% and 3.1%. This growth was driven by the merchant take rate scheme renewal in the e-commerce business as well as the platform fees implementation.
Second, the total incentives as a percentage of GTV reduced by 52 basis points quarter-on-quarter to -3.5%, supported by the company's focus on producing quality growth.
Third, better utilization of machine learning funds and models to improve the accuracy of advertisement targeting and the results of any marketing and promotional spending expenditure.
At last, the ecosystem synergies, such as the wider utilization of GoPayCoins, have begun to drive efficiency as well as an increase in contribution margins per consumer.
According to the financial statement as of June 2022, the GOTO’s gross revenue raised by 49% year on year to Rp10.7 trillion compared to the same period in a year earlier of Rp7.19 trillion. Meanwhile, the company’s GTV soared by 42% to Rp290.5 trillion compared to the same period in a year earlier.
Especially for the second quarter of 2022, GOTO recorded the GTV value of Rp150.5 trillion, exceeding its target around Rp142-150 trillion. Meanwhile, its gross earnings for the second quarter of 2022 was of Rp5.5 trillion, reaching the upper limit of its quarterly revenue target.
However, the company’s adjusted EBITDA loss for the first half of 2022 was of Rp9.0 trillion, compared to the same period in 2021 of Rp5.8 trillion.
Meanwhile, the company’s net revenue for the first half of 2022 was recorded of Rp3.39 trillion, rising by 73% compared to the first half of 2021 of Rp1.96 trillion.***