GoTo 2Q22 results: Inline performance, lags Grab and Sea Ltd sequentially
- GoTo’s sequential growth in on-demand services revenue in 2Q22 is much lower than Grab
- GoTo’s sequential growth in e-commerce revenue in 2Q22 is also lower than Sea Ltd
- GoTo’s fintech segment also lagged in sequential revenue growth compared to Grab and Sea Ltd
- Overall, GoTo EBITDA losses dropped more sequentially compared to Grab and Sea Ltd although GoTo’s EBITDA loss margin at 75% of gross revenue is much higher.
- 3Q22F guidance point towards 3.8% take rate and contribution breakeven for the Group is touted to happen by 1Q24F.
GoTo’s on-demand services revenue rose 3% q-o-q, while Grab grew 45%. GoTo’s on-demand services GTV – comprising mobility and delivery was flat q-o-q at Rp14,940bn compared to Grab’s 3.4%. On revenue, GoTo improved by 3.3% q-o-q while Grab recorded a significant q-o-q improvement of 45%. GoTo on-demand take rate in 2Q22 was 21.6% (1Q22 at 21.0%) while Grab’s was 8.4% (1Q22 at 6.0%). This can be explained by the sharper rise in take-rates at Grab across markets outside Indonesia where competition is less intense.
GoTo’s e-commerce revenue rose 10% q-o-q vs 15% at Sea Ltd. GoTo’s e-commerce arm (Tokopedia) witnessed a TPV growth of 3.4% q-o-q to Rp67,343bn while Southeast Asia’s leading e-commerce player Shopee saw a 9.3% q-o-q rise, in 2Q22. On revenue, GoTo’s e-commerce segment rose by 9.7% vs Sea Ltd’s 15.4%. Overall take rate in GoTo’s e-commerce segment increased by 0.2% q-o-q to 3.1%. Managed ads and new platform fee supported the rise in take rate for GoTo.
GoTo’s fintech segment witnesses higher sequential growth in TPV but lagged in revenue compared to Grab and Sea Ltd. GoTo’s fintech arm saw its TPV and revenue rising by 13% and 12% q-o-q, respectively. Grab’s fintech rose by 4.9% and 18% resepctovely while Sea Ltd’s fintech TPV and revenue increased by 9.3% and 15% q-o-q. Take rate at GoTo’s fintech arm was stagnant at 0.5%, like Grab’s which was at 0.3%. While Sea Ltd continues to exhibit improving take rate (5.0% in 2Q22 vs 4.7% in 1Q22).
GoTo witnesses the highest adjusted EBITDA loss reduction. Adjusted EBITDA loss in GoTo during 2Q22 stood at Rp4,143bn, a 24% q-o-q drop in losses compared to Grab’s 19% and Sea Ltd’s 1% drop.
3Q22F GoTo guidance estimates a take rate of 3.8% vs 3.7% in 2Q22. Improving take rate in e-commerce is a better sign for Tokopedia. And on-demand take rate might witness stagnant or slight improvements owing to the intense competition from Grab in on-demand services. Group contribution is expected to achieve breakeven by 1Q24F and on-demand services and e-commerce contribution breakeven are expected to happen by 1Q23F and 4Q23F.
The stock may come under pressure in Nov 2022 post expiry of lockup period as the stock is insanely expensive at 20x FY23F revenue versus Sea Ltd and Grab at less than 2x despite a much delayed EBITDA breakeven at GoTo in the future.