GoTo Gojek Tokopedia PT

Hello, everyone. This is Joel Ellis, Head of Investor Relations. Welcome to the PT GoTo Gojek Tokopedia TBK Third Quarter 2025 Earnings Conference. 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 Catherine Hindra Suchayo, our Deputy CEO and Vice President Director, Hans Patuo, our Group Chief Operating Officer and President of On Demand Services, and Sudhansha 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 September 30, 2025. We have also submitted and published our consolidated financial statements as of and for the nine months ended September 30, 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. 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 16,680 rupiah to one US dollar based on the middle rates published by Bank Indonesia as of the end of September 2025. We will also refer to adjusted free cash flow, which is adjusted operating cash flow minus capital expenditures. Further, we will refer to adjusted pre-tax profits, which is calculated starting with loss for the period and adding back income tax expenses and share of net losses from PT Tokopedia. 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. I am proud to announce that this quarter, For the first time, our business generated an adjusted pre-tax profit amounting to 62 billion rupiah or 3.7 million US dollars. We also achieved an all-time high adjusted EBITDA of 516 billion rupiah or 30.9 million US dollars, an increase of 239% year on year, as well as adjusted free cash flow of 247 billion rupiah or 14.8 million US dollars. Given this rapid progress, we are raising our full year adjusted EBITDA guidance from 1.4 to 1.6 trillion rupiah to 1.8 to 1.9 trillion rupiah or 108 to 113 million US dollars. Both of our major business units, FinTech and on-demand services are on track to comfortably exceed their individual guidance as communicated over previous quarters. Group-level growth has also been strong, with core GTV growing 43% year-on-year to 102.8 trillion rupiah or 6.2 billion US dollars. Annual transacting uses in Indonesia are up 33% year-on-year to 61.1 million, amounting to around 30% of the adult population of the country, demonstrating the sheer scale of our ecosystem. These results reflect continued progress on our strategy to deliver consistent, reliable, and cost-effective solutions for consumers while strengthening our position as a preferred partner to driver partners and merchants. Turning to fintech, we achieved a record quarter with adjusted EBITDA reaching 136 billion rupiah or 8.2 million US dollars, an increase of 201 billion rupiah or 12.1 million US dollars year on year. We also saw 48% year-on-year growth in core GTV as transactions increased by 54% year-on-year. Fintech is a powerful growth engine for Gotoh. Indonesia's digital payments and everyday financial services have a huge total addressable market, which is significantly under-penetrated, meaning we have much further to run. Our strategy is straightforward. Grow user numbers and user frequency at scale through the GoPay app. Then extend appropriate credit to active users on the same integrated platform. The GoPay app is proving to be a resounding success as a driver of growth. We are winning in the affluent market, ranking as the number one e-wallet with multiple premium merchants across categories such as travel and streaming. including Netflix, for example, where we are the number one e-wallet in Indonesia. As this solid foundation among affluent users is firmly in place, the GoPay app's core focus is on driving growth among mass market users, unlocking the millions of consumers who stand to benefit from Indonesia's digital economy. Success in the mass market is driven by the utility of the GoPay app with features like free transfers and queries providing users with services that make a real difference to their lives. We are seeing great success in this space as we surpassed 500 million transactions in a single month for the first time in September, with monthly transacting users rising 29% year-on-year to reach 24.2 million. A key driver of this success is the work we are doing to keep GoPay top of mind among consumers. Daily check-ins and over 400 mini games, including GoPay Pet, a playful virtual pet experience, now rates 24% of monthly active users. Mini games are an increasingly useful tool for retention and everyday usage, and we will continue to focus on this over the coming quarters. As mass market adoption grows, so too does our lending business, a key driver of profitability for the group. The consumer loan book expanded 76% year-on-year to 7.6 trillion rupiah or 457 million US dollars, the largest quarterly increase on record, putting us firmly on track to exceed our full-year target of at least 8 trillion rupiah or 480 million US dollars. This momentum reflects the power of our ecosystem flywheel. As more users transact through group pay, they gain access to seamless, responsible credit and financial products. That said, fintech's growth is about more than just numbers. It's about enabling participation and trust. We work hard to maintain this by actively discouraging illicit use cases. Ensuring GoPay remains a safe, trusted wallet for users as we build an ecosystem that rewards engagement, creates opportunity, and supports financial inclusion across Indonesia. Turning now to on-demand services. We delivered another record quarter of profitability in this segment. As suggested, EBITDA grew 115% year-on-year, reaching 336 billion rupiah or 20.1 million US dollars, a new all-time high. However, core GTV growth slowed, rising only 2.4% year-on-year to 16.7 trillion rupiah or 1 billion US dollars, reflecting a tougher operating environment. We recognize that growth is not currently where we want it to be and improvements must be made. we remain absolutely committed to protecting and growing our market share while accelerating growth sustainably. This means lowering the cost to serve, thereby generating more demand and increasing our scale. Our strategy for achieving this can be divided into two parts. Firstly, creating differentiated products for both affluent and mass market segments. And secondly, unlocking further ecosystem synergies. Turning to the former, we know our offline users value speed and convenience, whereas our mass market uses value price. We have started building different products to serve its segment. A good example is the two-wheel commuter strategy we implemented in the third quarter. Through this initiative, we implemented everyday low prices at transit hubs for those who want predictable fares and are prepared to wait longer. At the same time, we reduced discounts and improved prioritization for use cases that are time sensitive and convenience driven. Early results are promising with two wheeler daily commuter transactions in September growing 10% versus June. In addition, we have improved the speed and reliability of our services that cater to the affluent segment. For example, reliability in our four wheel services has increased with booking completion rate up two percentage points versus June. Delivery times for GoFood have also improved with average actual time to arrival in September, 7% faster versus June. Hence, while our mass market offerings focus on lowering cost to serve, our affluent offerings seek to continuously differentiate based on speed and reliability. A third example of our product differentiation strategy is the work we are doing with merchants, another key customer group. Our GoFood merchants have varying growth strategies and we have been developing promotional tools to help them grow in the way that fits them best. This has resulted in advertising revenue reaching 2% of the GMB as well as a 70% year on year increase in merchant funded promotions. Turning now to the second part of our strategy, ecosystem synergies. Whilst we have improved synergies over the years, recent reviews make us believe that even more is possible. Our goal is to drive growth by expanding our fleet, making it the best, biggest, and fastest delivery network in Indonesia. In this way, we can generate economies of scale that will lower our cost to serve, provide better pricing for our consumers, and generate more demand. This will drive income for our driver partners and merchants in a sustainable way. We have recently launched an initiative on this and will provide details of our progress over future quarters. As a result of our early successes with these strategies, we expect that the third quarter will be the bottom in terms of GDP growth, with improvements taking shape from the fourth quarter onwards. At the same time, we will continue to monitor our bottom line ensuring we are growing through product innovation, ecosystem synergies, and lowering the cost to serve, making us less dependent on incentive spending. Turning to technology, throughout Gotos, we are progressively integrating AI across the product lifecycle, from research and customer validation, through design, development, testing, deployment, and go to market. This will ultimately enable us to substantially improve user experience while reducing time to market and costs. Customer service is a clear area where AI is providing benefits. Automation has helped lift food customer satisfaction by 6 percentage points since the start of the year, as initial response times are reduced and resolutions are reached quickly. Pilots in our collections operations are also delivering better connection and repayment performance than third-party tools at a lower cost to serve. In addition, we are now training our go-to large language model. It is more efficient using fewer GPUs, yet stronger than our prior 70 billion parameter model, and integration into current and upcoming products is underway. We are also rolling out an internal platform that gives teams standardized access to GPUs, models, and reusable AI components, lowering costs and increasing development velocity over time. Taken together, all these investments compound, resulting in improved customer experiences, lower unit costs, and the ability to iterate faster over time, turning technology progress into durable operating leverage for both fintech and on-demand services. In summary, as we look ahead, our focus remains clear. To deliver consistent, delightful, and cost-effective solutions to consumers while being the partner of choice for driver partners and merchants. This is enabled by our drive to build world-class operations underpinned by world-class technology that is fast to market, reliable, and cost-efficient. With nine consecutive quarters of core GTV growth, six quarters of adjusted EBITDA expansion, as well as positive adjusted free tax profit and adjusted free cash flow, we have built a resilient foundation for our long-term value creation. Our team is working with a single goal to make Goto indispensable in the daily lives of every Indonesian. I am very proud of what we have achieved so far and even more confident about what lies ahead. I will now hand over to Simon to walk through the financial details. Thank you, Patrick.

In the third quarter, we delivered strong top-line growth and record profitability for the group. Group net revenue maintained strong momentum, growing 21% year-on-year to 4.7 trillion rupiah, or 284 million US dollars, driven by growth across the segments. In fintech, net revenue grew by 55% year-on-year to 1.5 trillion rupiah or 92 million US dollars. This is fueled by both core GTV growth and loan book expansion of 76% year-on-year to 7.6 trillion rupiah or 457 million US dollars as the ecosystem continues to scale. In on-demand services, net revenue grew by 10% year-on-year to 3.2 trillion rupiah, or 192 million US dollars, with mobility and delivery at 11% and 10% respectively. Net revenue growth was driven by growth of advertising revenue, disciplined incentive spend, and changes in product mix. In e-commerce, service fee revenue from Tokopedia reached 211 billion rupiah, or 12.7 million US dollars in the third quarter, showing solid growth year on year. Net revenue growth translated into bottom line improvement, enhanced by disciplined cost controls, resulted in recurring cash expenses growing slower than revenue. As a result, group adjustments percent year-on-year to 516 billion rupiah or 30.9 million US dollars, making our sixth consecutive quarter of sequential improvement. On a segment level, fintech-adjusted EBITDA improved by 201 billion rupiah or 12.1 million US dollars year-on-year to 136 billion rupiah or 0.2 million US dollars in ODS adjusted EBITDA rose 115% year-on-year to 336 billion rupiah or 20.1 million US dollars, the fifth consecutive quarter of sequential improvement. Group adjusted EBITDA increased coupled with lower share-based compensation costs drove up EBITDA by 455 billion rupiah or 27.3 million US dollars year-on-year, to 369 billion rupiah or 22.1 million US dollars, positive for the fourth consecutive quarter. Improvement in operation results allowed us to book an adjusted pre-tax profit of 62 billion rupiah or 3.7 million US dollars for the first time in the group's history. And as a reminder, this adjusted pre-tax profit is net loss for the period, adding back income tax expenses and the share of net losses from PT Tokopedia. We also generated positive adjusted fee cashflow defined as adjusted operating cashflow, less capital expenditures of 247 billion rupiah or 14.8 million US dollars for the quarter, a clear indicator management. Our balance sheet remains solid. As of September 30th, 2025, we held 18 trillion rupiah, or 1.1 billion US dollars in cash, cash equivalents, and short-term deposits, maintaining the flexibility to invest in technology, product innovation, and long-term growth initiatives. We remain highly confident of our ability to meet our revised full year 2025 guidance, positioning GoTo for sustainable, profitable growth in the years ahead. With that, I'll hand the call back to John.