GOTO - 3Q24 results: beating expectation

GOTO - 3Q24 results: beating expectation GoTo Gojek Tokopedia (GOTO) adjusted EBITDA turned positive of IDR137 bn (2Q24: -IDR70 bn; 3Q23: -IDR942 bn), driven by cost efficiencies, reduced cash fixed costs, and strong top-line growth. The Financial Technology segment, particularly in lending, saw a revenue soar 527% yoy to IDR565 bn, bolstered by increased GoPay transactions and stable NPL levels, positioning for positive adjusted EBITDA by 4Q24—one year ahead of expectations. GOTO's GTV reached IDR137 tn in 3Q24 (+13% qoq, -9.3% yoy), with its 9M24 of IDR393 tn (-11.3% yoy), largely propelled by FinTech Services (95.1% of total GTV) (+13.3% qoq, +38.2% yoy). The contribution margin expanded by +23.1 qoq or +32.7% yoy to IDR1.5 tn, with efficiencies in marketing services and growth in premium services. (Source : Company, KBVS Research) Comment : We are transferring GOTO coverage and will release a report soon. Our BUY outlook reflects GOTO’s strong strategic moves in FinTech and user understanding, supporting market share retention. Risks include new entrants like Xanh SM in 4Q24 and rising competition as tech rivals increase burn rates.