GoTo Gojek Tokopedia PT

This is Joel Ellis, Head of Investor Relations. Welcome to the PT GoTo Gojek Tokopedia TBK second quarter 2025 earnings conference call. Please be advised that today's conference is being recorded. On today's call, Patrick Waluyol, 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 Catherine Hindra Suchayo, our Deputy CEO and Vice President Director, Hans Patuo, our President of On-Demand Services and Chief Operating Officer, and Sudhanshu Raheja, our President of Financial Technology Services. We would like to highlight that the information presented today has been prepared solely based on unaudited, consolidated, selected financial information for the three-month period ended June 30, 2025. We have also submitted and published our consolidated financial statements as of and for the six months ended June 30, 2025 that have been reviewed. 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. Before 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 earnings 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 16,233 rupiah for one US dollar, based on the middle rates published by Bank Indonesia as at the end of June 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. We will also refer to Group EBITDA, which is calculated from profit and loss from operations excluding depreciation and amortization as well as non-recurring items. Further, we will also refer to adjusted operating cash flow, which is operating cash flow after adjusting for cash flows related to the lending disbursements and pass-through funds. 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. In the second quarter, Goto Group set new records across the board, with Group Core GTV growing 43% year-on-year, net revenue rising 23%, and adjusted EBITDA hitting a new high of Rp427 billion, or $26.3 million, growing Rp491 billion, or $30.2 million year-on-year. Our profitability journey has progressed substantially over the past few quarters, and I am pleased to note that during Q2, we generated positive Group EBITDA for the third consecutive quarter, totaling 292 billion rupiah, or 18 million US dollars. Group EBITDA shows the recurring EBITDA of our core business, demonstrating significant ongoing efficiency improvements. In addition, we delivered positive adjusted operating cash flow of 313 billion rupiah on 19.3 million US dollars, demonstrating the strength of our strategy and sustained momentum in the business. Both fintech and on-demand services also delivered their best ever adjusted EBITDA, which I will discuss in more detail shortly. These results keep us firmly on track. to meet our full year adjusted EBITDA guidance of 1.4 to 1.6 trillion rupiah as we seek to create a customer centric technology business that supports the livelihoods of countless tribal partners and merchants across Indonesia. Indonesia is one of the world's largest yet still under penetrated digital markets, which gives us a long runway for growth. To capture it, we must ensure we are fully equipped with the best people and technology. The main barriers we identified were legacy tech infrastructure, which was built over a number of years, as well as the fact that our tech talent pipeline was unable to keep up with the demands of a rapidly growing business. In the second quarter, we tackled our tech infrastructure problem by replacing our cloud systems, which were becoming increasingly inefficient and costly with brand new infrastructures provided by Alibaba Cloud and Tencent Cloud. We completed the migration in the second quarter on time, resulting in a lighter, more agile platform that will accelerate our product pipeline, enabling quicker cross-business product rollouts and innovations. This project ranks among the most complex of its kind globally. It required coordinating full cloud providers across four geographies and moving all core business lines in under a year, all without material downtime or user disruption. All go-to data is stored and processed on Indonesia-based infrastructure, ensuring full data sovereignty compliance and enterprise-grade security for consumers and partners. While capability and speed were the priority, the financial impact is clear. Cloud costs will step down materially by at least 50%. Delivery and fintech and the larger, more capable engineering bands at home on top of the efficiencies from our cloud foundations. This talent-first model optimizes how we build, launch, and scale, translating technology into better customer and partner experiences and durable value creation. Turning now to how we are unlocking the bottleneck around our talent pipeline. Our goal is simple, build the best engineers. We are committed to growing the talent pool at home, while we must also go to where the talent currently lies. This is why we opened technology hubs in China, one of the deepest pools of engineering and data science expertise to work alongside our existing teams. By collaborating together, this arrangement will raise the bar across the organization, providing benefits to all our engineering teams in Indonesia, Singapore, and India. Ultimately, the benefits will be faster time to market, stronger core platforms across mobility, delivery, and FinTech, and a larger, more capable engineering bench. With strong infrastructure and talent in place, we are in an excellent position to really invest in our AI capability, which is already market-leading in Indonesia. In the second quarter, we launched Sahabat AI's 70 billion parameter foundation model and hosted entirely in Indonesia. Global models are powerful, but often miss Indonesian language nuance and can be costly at scale for low to mid-complexity work. Sahabat.ai gives us high quality, locally optimized performance and lets us adapt quickly. We are embedding Sahabat.ai modules across the ecosystem to create operating leverage. Faster decisions, better accuracy and lower cost to serve. Running Sahabat.ai in Indonesia reduces latency and we combine it with best-in-class external models where they fit the use case. Together, this approach delivers quicker product cycles, richer experiences for customers, and meaningfully lower unit costs as we scale. With all this in place, we are ensuring our business is optimized for faster, more agile execution while providing improved experience for consumers, driver partners, and merchants as we embark on our next phase of growth, unlocking the huge potential that Indonesia has for our ecosystem. Turning now to FinTech, payments is the backbone of our ecosystem. As it becomes a bigger part of everyday life through multiple use cases across Gojek, Tokopedia, QR code payments, bill payments, pop-ups and transfers, it will bring more Indonesians onto the platform. This makes GoPay a very powerful code engine for the ecosystem. The rich, real-time data it provides lets us match customers with the products and services they genuinely want. Customers enter via GoPay and move seamlessly across mobility, food, and financial services, broadening our reach into the mass market and strengthening retention. In short, payments is the current that powers the go-to flywheel, driving deeper engagement, better economics, and wider reach. Our FinTech business achieved another milestone this quarter, delivering a record-adjusted EBITDA of 88 billion rupiah of 5.4 million US dollars, growing by 87% from the prior quarter and up by 256 billion rupiah of 158 million US dollars from a year ago. Monthly transacting users reached 22.4 million, up 29% year-on-year. For GTV, net revenue grew by 46%, and 76% year-on-year respectively. Two years on from its July 2023 launch, the standalone GoPay app is a key driver of that performance. Since launch, FinTech MTUs are up 68%, CoreGTV is up 2.4 times, and average payment transactions per user have risen 26%. Every day, GoPay use cases deepen engagement And with digital payments penetration in Indonesia still low, we see substantial runway ahead and expect continued rapid user growth. Consumer loans outstanding expanded to 6.6 trillion rupiah of $406 million, up 90% year-on-year and 15% quarter-on-quarter, marking the ninth consecutive quarter of strong loan book growth. Assets quality remains strong and stable, underpinned by our unique ecosystem advantage. During one of Indonesia's richest pools of transactional data, we acquire customers efficiently, price risk accurately, and manage the portfolio proactively. Key delinquency and non-performing loans ratios remain comfortably within our target range, highlighting discipline underwriting and prudent portfolio management. Cross-selling continues to accelerate. loans disbursed to GoPay and Gojek users rose 96% year-on-year, and the share of active users with at least one lending product continued to increase. This deepens relationship, lifts lifetime revenue, and adds scale with minimal incremental acquisition cost. Let me turn to strategic partnerships. With Indonesia's most comprehensive digital ecosystem and tens of millions of customers, GoTo offers partners brand enhancing reach and trusted distribution while our payment rails provide tangible value add to their users and merchants. We selectively work with high quality platforms that have large user base where they are clear two way synergies. Better, more convenient experiences for their customers and more users, more transactions and deeper engagement for both sides. Recent examples include our work with Telkomsel and TikTok, where GoPay is embedded directly into everyday journeys. These integrations extend to our FinTech reach, lift payment activity and open new use cases, all while improving customer experience. In the second quarter, we launched TikTok Sympathy, a joint product from Telkomsel, TikTok, and GoPay that offers TikTok-specific data packages including options designed for creators. Customers can purchase TikTok data package without leaving the GoPay app, improving convenience and the overall experience on TikTok. For GoTo, the integration broadens our reach, increases payment activity in GoPay, and deepens engagement in a fast-growing segment. We also launched Tacom Cell Wallet by GoPay, a co-branded digital wallet embedded directly within the My Telkomsel app. This enhances Telkomsel customer experience by providing them with access to instant refunds and seamless payments leveraging GoPay's infrastructure. The partnership combines the strengths of both ecosystems and creates a solid foundation for future growth. In the second quarter, we launched a cash loan product called GoPay Pinjam on TikTok Shop, making us the first in Indonesia to enable cash loans within the platform. The integration gives eligible users a convenient in-app option to access credit without leaving the shopping experience. This initiative is consistent with our focus on building products and partnerships that enhance customer experience and convenience. Looking ahead, we are confident in meeting our fiscal year 2025 targets to increase our loan book to 8 trillion rupiah while achieving at least 300 billion rupiah in adjusted EBITDA. Turning on to on-demand services, we are executing a clear two-track strategy. First, scaling our business, particularly in the mass market with reliable great value service options. Second, monetizing premium services for customers who prioritize time and comfort. With our upgraded technology stack, we are set to roll out the largest product release pipeline in on-demand services to date, with features tailored to each user segment and designed to raise the experience for customers and driver partners alike. We delivered record-adjusted EBITDA of 328 billion rupiah, approximately 20.2 million US dollars in the second quarter. This represents an increase of 264% year-on-year, while GTV and net revenue grew by 9% and 13% year-on-year, respectively. Despite the tightening in discretionary consumer spending and intensified competition, our disciplined strategic approach ensured that we successfully maintained our market share in on-demand services. We did this by tailoring our platform for user groups so that it appeals to both premium high spending users who spend more and bring higher margins, as well as mass market consumers who bring volumes and growth. Maximizing ecosystem synergies is central to our strategy. By strengthening the links between our services, we enable customers to move more seamlessly across services, driving growth and elevating the experience for all stakeholders. In delivery, we increase wallet share among higher income users while widening rates across the broader customer base, marking the businesses' fourth consecutive quarter of margin expansion. Premium Food Express recorded its seventh sequential increase in GDP penetration, fueled by time-sensitive customers who value faster delivery. We are expanding the offering with new premium features designed for this high spending usage, deepening engagement, and encouraging repeat orders. Our merchant-facing revenue streams continue to gain traction this quarter. Advertising revenue rates 1.8% of GMB, its fourth straight quarterly increase, while merchant-funded promotional spend rose 118% year-on-year. Our targeting algorithm aligns offers with customer preferences, generating measurable sales uplift for merchants, prompting them to recognize the value of our advertising and promotion goals. This dynamic deepens merchant relationships, enhances customer experience, and drives high-quality growth for go-tos. In mobility, competition intensified during the quarter. We moved quickly with targeted market-specific responses and successfully protected our market shares. The rise in competitive intensity had a near-term impact on mobility margins, and we will continue to calibrate our approach to balance market share protection with discipline, long-term growth and profitability. Operational performance continues its upward trajectory with improved supply positioning, allowing us to complete more right requests and deliver a smoother experience for customers. Upcoming tech and driver app upgrades in the second half will build on this progress. Innovation remains central to how we serve both customers and driver partners. Since premium services were launched in 2024, it has become a meaningful contributor to mobility revenue. We are executing a two-track strategy, deepening monetization in the premium segment, where features like faster search resonate with time-sensitive users. while pursuing a clear mass market or strategy focused on the rates, reliability and great value for everyday trips. In the second half, we'll build on this momentum with features that better align service levels to customer needs and elevate the experience for consumers and driver partners alike. Looking ahead, we remain confident in achieving our full year 2025 adjusted EBITDA targets. We will continue to invest in technology particularly to strengthen our personalization, optimization, and AI capabilities, reinforcing our competitive edge and laying a robust foundation for sustained long-term growth. Finally, I would like to address recently announced updates to our management team. At our general meeting of shareholders in June, we took a meaningful step forward in strengthening our executive branch, bench, These changes reflect our commitment to continuity and operational excellence. First, I am pleased to announce that Catherine Indra Suchahio has been appointed Vice President Director and Deputy CEO. Under her leadership, On Demand Services achieved strong growth and continued profitability improvement. In her new role, she will work closely with me to coordinate strategy across the ecosystem and deepen stakeholder relationships, ensuring we remain focused on both discipline execution and long-term value creation. Hans Patuo assumes an expanded role as President of On Demand Services while continuing as Group COO, now overseeing both ODS and FinTech. Hans brings truly fully holistic experience He originally served as COO of Gojek before moving to become president of FinTech, then GoTo Group's COO. This gives him deep insight into every aspect of our operations, meaning he is ideally pleased to lead our operations through its next phase of growth. We also welcome Sudhanshu Raiheja to the board of directors as president of GoTo Financial. Sudanshu built our payment platform, guided FinTech to profitability, and spearheaded the launch of the standalone GoPay app, driving a significant expansion of our user base. His track record makes him a natural fit to steer Goto Financial on its current growth trajectory. To broaden and strengthen representation on the board of directors, we have elevated several senior leaders from across the organization. William Shong, our chief technology officer who led our cloud migration. Monica Milene Mulianto, chief people officer. Kusumo Hadiani, director of legal and corporate secretary. And Ade Mulyana, director of public affairs and communications. Together, my leadership brings deep expertise in technology, talent, governance, and stakeholder engagement, capabilities that will accelerate our growth, enhance customer and driver partner experiences, and create value for all stakeholders. I look forward to working closely with them as we unlock the full potential of the GoTo platform. I will now hand over to Simon to talk through our financial comments. Thank you, Patrick.

We delivered continued growth and improved profitability across the business with second quarter group or GTV growing 43% year on year, Group net revenue rising 23% year on year and group adjusted EBITDA reaching 427 billion rupiah or 26.3 million US dollars. An improvement of 491 billion rupiah or 30.2 million US dollars year on year. As mentioned earlier, we also delivered our third consecutive order of positive quarterly group EBITDA. Group EBITDA differs from adjusted EBITDA as it includes share-based compensation. It totaled 292 billion rupiah or 18 million US dollars and improvement of 874 billion rupiah or 53.8 million US dollars year on year. The group generated 313 billion rupiah or 19.3 million US dollars in adjusted operating cash flow, which is our reported operating cash flow, but excluding cash flows related to loan disbursements in our lending business and customer fund flows in our payments business. Adjusted EBITDA in the fintech segment reached 88 billion rupiah or 5.4 million US dollars, an improvement of 256 billion rupiah or 15.8 million US dollars year on year. Looking at the on-demand services segment, adjusted EBITDA was 328 billion rupiah, or 20.2 million US dollars, up 264% year-on-year, reaching 2% of GTV. Mobility and delivery posted GTV growth of 10.4% and 7.8% year-on-year respectively, with net revenues rising by 12.7% for mobility and 13.6% for delivery. Adjusted EBITDA for mobility grew 15.8% year on year, while delivery adjusted EBITDA surged by 193 billion rupiah or 11.9 million US dollars year on year. In our e-commerce segment, service fee revenue from Tokopedia in the second quarter reached 199 billion rupiah or 12.3 million US dollars our cash position remains healthy. As of June 30th, 2025, we held 18.2 trillion rupiah or 1.1 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. 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 Joel.