GoTo Gojek Tokopedia PT

Hello, everyone. This is Joel Ellis, Head of Investor Relations. Welcome to the PT GoTo Gojek Talkopedia TBK First Quarter 2025 Earnings Conference Group. Please be advised that today's conference is being recorded. On today's call, Patrick Walluio, 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 Husted, our Vice President Director and President of Financial Technology, Hans Patuol, our Chief Operating Officer, and Catherine Hindra Suchayo, our President of On Demand Services. We would like to highlight that the information presented today has been prepared solely based on unordered, consolidated, selected financial information for the three-month period ended March 31, 2025. 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. For using and or 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 call, we will review the results of our operations and earnings presentation, 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 16,588 rupiah to one US dollar based on the middle rate published by Bank Indonesia as of the end of March 2025. We will refer to pro forma 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 the deconsolidation of GoToLogistics. These pro forma figures assume that Tokopedia and GoToLogistics were deconsolidated on January 1, 2024. Starting this quarter, we are adding additional disclosures for both our on-demand services and FinTech businesses. For on-demand services, we will now report GTV, net revenue, and adjusted EBITDA at business unit level for mobility and delivery. For FinTech, we are introducing delinquency metrics to our consumer lending book, which includes both off-balance sheet and on-balance sheet consumer loans. As a reminder of the seasonal impacts, the first quarter of 2025 included the entire 30 days of fasting for Ramadan, compared to only 20 days in the first quarter of 2024. For reference, we have included a table in the appendix of our presentation summarising the seasonal impact across our four business lines. 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.

Hello, everyone, and thank you for joining us today as we share our results for the first quarter of 2025. We have started the year with real momentum, boosting another record-breaking profitable quarter across our ecosystem. We achieved this even as the passing month of Ramadan, a period when growth typically slows at the group level, fell entirely within the first quarter. This performance has come about as a result of the disciplined execution of our strategy, as well as the resilience and agility of our business model. Throughout the quarter, both our fintech and on-demand services segments delivered their highest ever adjusted EBITDA. The strong performance by each of our segments led to robust performance at the group level. As group core GTV and net revenue grew 54% and 37% year-on-year respectively, while group-adjusted EBITDA improved by 494 billion rupiah or 30 million US dollars year-on-year to 393 billion rupiah, equivalent to 24 million US dollars. In the first quarter, we achieved positive operating cash flow of 301 billion rupiah or 18 million US dollars. We view these results as a strong baseline for the rest of the year that demonstrates our team's ability to successfully navigate a changing market environment. Building on this momentum, we expect to deliver continued growth throughout 2025. Our resilience also shows the power of our ecosystem, with its business reinforcing the others. This integrated model delivers cost efficiencies, strengthens customers' engagement, and supports profitable cross-selling. From mass market users adopting our FinTech solutions to meet and affluent customers leveraging on-demand services. By harnessing these synergies, we broaden our reach, optimize margins, and position the company for sustained growth. We have continued to refine our product offerings while optimizing our customer base with a strong focus on high-spending users who demonstrate high engagement and resilient spending patterns. At the same time, we continue refining our product offerings across all customers years to support broader growth. Taken together, these outcomes reaffirm both the strength of our ecosystem model and our continued path towards sustained and scalable profitability. I will now turn to each of our business segments, starting with fintech. Our fintech segment delivered strong results in the first quarter of 2025, achieving adjusted EBITDA of 37 billion rupiah or $2.8 million, a 295 billion rupiah year-on-year improvement, equivalent to $7.8 million, and a 236% increase from the previous quarter. Net revenue grew 90% year-on-year, while core GTV rose 57% year-on-year. Ramadan contributed to our strong payment performance, driven by increased gifting and online shopping activity. To capture this seasonal opportunity, we introduced GoPay Hadia THM, a digital gifting solution designed for the festive period. This initiative drove a 35% month-on-month increase in transform monthly transacting users in March, reinforcing GoPay's role as both a platform for meaningful everyday financial interactions and an entry point into our broader ecosystem. While Ramadan naturally encourages gifting, the flexible design of GoPay Hadiya THM allows it to be used for other occasions throughout the year, supporting additional opportunities for growth in transactions. Product innovation remains at the heart of our strategy, and we will continue to develop our products to enhance customer experience and drive user engagement. In the first quarter of 2025, Our loan book rates 5.7 trillion rupiah or $345 million, an increase of 108% year on year. Given the risks of the present global economic environment, we are placing an even stronger emphasis on prudent risk management. Our tech-driven operating model and integrated ecosystem allow GoTo's fintech business to adapt quickly, but we recognize that discipline underwriting and asset quality will be critical in the months ahead. A robust data-driven framework informs our lending decisions, drawing on our use of behavior, transaction patterns, and reputable third-party information. This comprehensive approach helps us more accurately price and structure loans, mitigate default risks, and offer competitive solutions that align with its borrowers' profile. We remain optimistic about our fintech prospects. Monthly transacting uses reached 20.6 million in the first quarter, a 30% year-on-year increase that underscores strong engagement across our financial ecosystem. By continuing to refine our data-driven approach and responsibly expanding our product suite, we expect to achieve continued growth throughout 2025. Moving now to on-demand services, where we delivered another strong quarter of profitability and operational momentum throughout the first quarter. Even though the seasonal fasting period is typically a time of lower demand, the business posted record adjusted EBITDA of 314 billion rupiah on 19 million US dollars, an 89% increase year-on-year, and an 18% increase quarter-on-quarter. Our adjusted EBITDA margin expanded to 2%, up 80 basis points year-on-year and 43 basis points quarter-on-quarter, marking our third consecutive quarter of margin improvements. GTV rose 17% year-on-year, while net revenue climbed 33% year-on-year. These gains underscore our ongoing efforts to drive operational efficiency and profit-focused execution. Throughout the first quarter, A significant driver of our profitability was the continual improvement of our incentive spending. By leveraging enhanced engineering, analytics, and more refined targeting capabilities, we have been able to deploy incentives more effectively, focusing on users who are most responsive to them. This data-driven approach enables us to gauge the elasticity of demand at an individual level and adjust incentives where they are most likely to drive incremental transactions. Throughout 2025, our overarching goal is to continue optimizing our incentive spending as a percentage of GTV while maintaining healthy growth. Profitability in our on-demand services business continues to benefit a growing segment of affluent premium customers who demonstrate strong and consistent spending behavior. A clear indicator of this strength is the ongoing growth in wallet share from these high-spending users across our premium outbreaks. In delivery, our premium option, Food Express, increased its share of total food GTV for the fifth consecutive quarter, contributing to improved margins and greater operational efficiency. In our mobility business, certain premium features such as favoritas generate significantly higher margins compared to standard rights. We focus on delivering greater value to customers year-round through targeted upselling, ensuring that those who seek enhanced services can easily access them. We tailor our value-driven upselling to help customers make the most of festive periods such as Ramadan. Strong upselling and distribution of these premium services contributed to a 156% year-on-year surge in premium mobility orders in the first quarter. In parallel, we remain committed to driving product growth by optimizing our regular and affordable product lines, ensuring we capture a wide range of customer demand while maintaining strong margins. Penetration of our special delivery fleet continues to improve. driving higher service density and greater delivery efficiency. This model reduces cost for our customers, merchants, and go-to, while also enhancing the earning opportunities for our driver partners. Our advertising business also grew, with revenue increasing 45% year on year, supported by continued investments in product enhancements, expanded add inventory, and improve targeting capabilities. These improvements have led to stronger returns for merchants, resulting in greater demand for advertising on our platform. Over the past year, advertising revenue as a proportion of food GMV increased from 1.3% to 1.7% at the end of the first quarter 2025, underscoring the sustained potential of our advertising segment. As we further develop this segment, advertising gains will contribute positively to our overall margin profile. Our merchant-funded promotions continue to deliver strong results, with merchant promotional spending growing by over 150% year-on-year in the first quarter. As we continue to enhance our analytics and customer targeting capabilities, merchants are seeing clearer returns on their promotional investments, leading to higher spending on promotions improved margins for Gotoh, and more relevant offers for customers. Subscription profitability continues to improve, supported by strong subscriber behavior. On average, subscribers spend more than three times as much as non-subscribers and exhibit significantly higher retention. We plan to further scale the program to our 2025 to further drive both engagement and profitability. We expect revenue and profitability in on-demand services to grow through 2025. We remain confident in our ability to deliver sustained improvements in unit economics and overall performance across our on-demand services business. At the group level, we continue to focus on technology enhancements that benefit consumers. The development of Sahabat AI, which I summarized last quarter, continues to get a pace with more partners joining the ecosystem and more use cases, both internal and external, under development. We will be making further announcements on this fast-moving area in due course and will continue to develop Sahabat AI in the best interests of Indonesia. It is my firm belief that having our AI capabilities will be a strategic advantage that reduces costs improves user experience and fosters local tech talent over the long term. Finally, these record results show the strength of our ecosystem and our ability to navigate global macroeconomic challenges. With a solid start of the year, we remain on track to achieve our full year guidance of 1.4 to 1.6 trillion rupiah, driven by disciplined execution continued innovation, and strong operational fundamentals. I will now hand the call over to our CFO, Simon Ho, to provide further details on our financial performance.

Thank you, Patrick. It's a pleasure to speak with everyone today, and thank you all for joining our call. Before I begin, I would like to highlight some changes we have initiated this quarter. As Joe mentioned, we are providing expanded disclosures for our FinTech and on-demand services segments. In FinTech, as our loan book has expanded and FinTech becomes a progressively larger part of our business, we want to ensure investors have access to the right data to analyze the business in more detail. To support this, we are now disclosing a delinquency schedule that combines both on and off balance sheet consumer loans, In on-demand services, we are now providing separate reporting for mobility and delivery, along with historical performance data for both segments. As mobility and delivery have distinct business models, we believe providing separate disclosure of GTV net revenue and adjusted EBITDA will give investors greater insight into the performance and improvement of each business. We are also refining our adjusted EBITDA definition to exclude realized foreign exchange gains and losses. Historically, these impacts were negligible. However, with increased currency volatility and some depreciation of the rupiah, realized foreign exchange gains have become more material, particularly given our US dollar net asset position. To ensure that adjusted EBITDA accurately reflects course of action is to exclude these items going forward. For context, realized foreign exchange gains were 73 billion rupiah or 4 million US dollars in the fourth quarter of 2024. Excluding these gains, our adjusted EBITDA improved by 21% quarter on quarter in the first quarter of 2025. Looking ahead, should the rupiah continue to depreciate, We expect realized foreign exchange gains to persist, but these gains will no longer impact our adjusted EBITDA, allowing for a clearer view of underlying business performance. Moving now to our financial performance. We entered 2025 with strong momentum, despite increasing global financial market volatility. We delivered continued growth and improved profitability across the business with first quarter group core GTV growing 54% year on year, group net revenue rising 37% year on year and group adjusted EBITDA reaching 393 billion rupiah or 24 million US dollars and improvement of 494 billion rupiah or 30 million US dollars year on year. Adjusted EBITDA in the FinTech segment reached 47 billion rupiah or 2.8 million U.S. dollars, an improvement of 295 billion rupiah, or 17.8 million U.S. dollars year-on-year. On-demand services adjusted EBITDA was 314 billion rupiah, or 18.9 million U.S. dollars, up 89% year-on-year, reaching 2% of TTV and marking the third consecutive quarter of margin expansion. Looking at the on-demand services segment, each business continued to deliver strong growth and profitability. Both posted 17% year-on-year growth in GTV with net revenues rising by 20% for mobility and 39% for delivery. Adjusted EBITDA for mobility grew 33% year-on-year, while delivery adjusted EBITDA surged 142% year-on-year. Profitability also improved in both segments as adjusted EBITDA margins expanded by 61 basis points for mobility and 72 basis points for delivery. Notably, each of these businesses has now achieved three consecutive quarters of sequential adjusted EBITDA margin growth. In our e-commerce segment, service fee revenue from Tokopedia in the first quarter reached a record high of 217 billion rupiah or 13.1 million US dollars benefiting from the seasonal strength in e-commerce during the Ramadan period. Our cash position remains healthy. As of March 31st, 2025, we held 21 trillion rupiah or 1.3 billion US dollars in cash, cash equivalents and short-term deposits, giving us the flexibility to invest in long-term growth while maintaining a strong financial foundation. We have been actively acquiring shares in the market as part of our share buyback program. By the end of the first quarter, we had repurchased approximately 25.9 billion shares totaling around 1.6 trillion rupiah or 99 million US dollars. Looking ahead, our focus is on building upon the progress we have already achieved and we remain confident in our ability to drive consistent, profitable growth throughout 2025. With that, I will hand the call back to Joe.