Gojek parent GoTo’s earnings forecast tops estimates as cost cuts kick in
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GoTo has forecast a sharp increase in its underlying earnings for 2025, while also reporting its first full-year underlying profit for 2024.
PHOTO: BLOOMBERG
SINGAPORE - Indonesian ride-hailing and food delivery provider GoTo Group – which is reportedly weighing a merger with Singapore’s Grab Holdings – has forecast earnings for 2025 above analysts’ estimates, a sign of confidence as it battles intensifying competition.
GoTo, which owns Gojek and partially owns e-commerce platform Tokopedia, predicted 1.4 trillion rupiah (S$114 million) to 1.6 trillion rupiah in adjusted earnings before interest, tax, depreciation and amortisation (Ebitda), topping the 1.3 trillion analysts expect on average. It reached its goal of positive earnings on that basis for full-year 2024 and reported fourth-quarter revenue that exceeded estimates.
The forecast highlights GoTo’s efforts to reverse years of losses through drastic measures, including thousands of job cuts and large reductions in marketing spending.
GoTo has also struck deals to improve its profitability. In 2023, GoTo agreed to relinquish control of Tokopedia to ByteDance’s TikTok. And in a move that would upend the regional market, Grab is now weighing a takeover of GoTo at a valuation of more than US$7 billion (S$9.3 billion).
While the regulatory hurdles are considerable, both companies have accelerated talks for a combination to end years of losses, Bloomberg News reported.
Following years of rapid growth, the company has turned its focus on the bottom line after its shares lost 75 per cent since its initial public offering in Jakarta in 2022. But Grab is proving a tough rival, keeping prices low and margins thin for both companies as they battle it out in the South-east Asian market of 675 million people.
GoTo’s fourth-quarter adjusted Ebitda rose to 399 billion rupiah from 89 billion rupiah a year earlier on a pro forma basis, GoTo said. Net revenue, which strips out incentives to driver and merchant partners and promotions to users, jumped 90 per cent to 4.2 trillion rupiah on a pro forma basis, exceeding the 4.03 trillion rupiah average analyst estimate.
“If any inorganic opportunities come by, we would have to assess each one of them,” GoTo chief financial officer Simon Ho said in an interview on Bloomberg TV, declining to comment on Grab specifically. “It has to make sense and create value to shareholders.”
GoTo will continue to buy back shares “strategically” in 2025, Mr Ho said. The company announced a US$200 million repurchase programme in 2024, its first ever, and has bought back just under half of that amount at this point, he said. BLOOMBERG