Earnings call transcript

PT GoTo Gojek Tokopedia 3Q24 Earnings Call Transcript

CorporateParticipants

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,GroupCEO

Thomas Husted PT GoTo Gojek Tokopedia Tbk-VicePresidentDirector,President,Financial

Technology

SimonHoPTGoToGojekTokopediaTbk-GroupCFO

HansPatuwoPTGoToGojekTokopediaTbk-GroupCOO

CatherineHindraSutjahyoPTGoToGojekTokopediaTbk-President,On-DemandServices

ReggySusantoPTGoToGojekTokopediaTbk-HeadofInvestorRelations

ConferenceCallParticipants

AdrianJoezerMandiriSekuritas

AriJahjaMacquarie

FerryWongCiti

RyanWiniptaIndopremier

DivyaGangharKothiyalMorganStanley

PangVittayaamnuaykoonGoldmanSachs

Presentation

ReggySusantoPTGoToGojekTokopediaTbk-HeadofInvestorRelations

Hello, everyone. This is Reggy Susanto, Head of Investor Relations. Welcome to thePTGoTo

Gojek Tokopedia Tbk third-quarter 2024 earnings conference call. Please be advised that today'sconferenceisbeingrecorded.

Joining us todayarePatrickWalujo,PresidentDirector,andGroupCEO,andSimonHo,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 Patuwo, our Chief Operating Officer, and Catherine Hindra

Sutjahyo, our President of On Demand 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 and nine months period ended September 30th,

2024and2023.

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 standards disclosures. Before using and or relying on these measurements and

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 1 forward looking statements, please take note of our disclaimer and cautionary statements disclosedinourearningspresentationandpressrelease.

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 15,138

Rupiah to $1 based on the middle rates published by Bank Indonesia as of the end of

September2024.

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 GoTo Logistics. These proforma figures assume that

TokopediaandGoToLogisticsweredeconsolidatedonJanuary1st,2023.

For more information and additional disclosures on our recent business and financial performance, please refer to our earnings press release and supplemental presentation, whichcanbefoundonourIRwebsite.

Withthat,IwillturnthecallovertoPatrick.

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,CEO

Thankyou,Reggy.Helloeveryone,andthankyouforjoiningustoday.

We are pleased to report another quarter of strong performance across GoTo, with all cylinders firing as our business accelerates. Our strategy works because each part of our ecosystem adds value to the others, giving us a competitive edge that our peers cannot replicate. This model is increasingly bearing fruit as we aggressively pursue new users and enhanceprofitabilityacrossourrapidlyexpandingplatform.

We are seeing real success in terms of user acquisition, with monthly transacting users increasing by 21% year on year. This, along with the qualityanddepthofmonetizationacross our platforms, has driven74%yearonyeargrowthinGroupCoreGTV,aswellas34%yearon yeargrowthingrossrevenues.

As our top line has increased, we have maintained strong discipline in managing our costs, with recurring cash fixed costs declining by 3% year on year, creating significant operating leverage for the business and helping to drive today'spositiveresults.Furthersavingswillbe

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 2 realized as we migrate to the new cloud service providersannouncedlastmonth,whichIwill discussshortly.

Group Adjusted EBITDA turned positive in the third quarter, reaching its highest everlevelof

137billionrupiahor9millionUSDollars,animprovementof696billionrupiahor46millionUS

Dollars year on year. We expect this to remain positive in the fourth quarter. And we are squarely ontracktohitourtargetofadjustedEBITDAbreakevenforthefullyear,atargetthat we communicated to the market back in March of this year. The significant improvements were driven by contributions within both our Fintech and On Demand businesses, each of whichIwillnowdiscuss.

Moving first to Fintech, we are seeing great progress as our strategy is turning the segment intoadriverofbothgrowthandprofitability.

Just over a year ago, we launched the GoPay app to better serve the mass market by increasing access to our services, particularly among non Gojek users. Ourgoalwastogrow ourbusinessbyreachingmoreuserswhocouldultimatelybenefitfromlendingservices.

This strategy is now delivering promising results as consumer loans outstanding tripled on a year on your basis, reaching 4.3 trillion rupiah or 287 million US Dollars. NPL has remained stable as we focus on responsible lending and reducing risk using our comprehensive ecosystemdata,whichallowsustoeffectivelyassesscreditworthiness.

This shows that our ecosystem is working as designed, with our range of products and use casesdrivingusergrowthwhiledeepeningloanpenetration.

As I mentioned, our ecosystem model means that each verticalmustaddvaluetotheothers.

This is very much exemplified by our loanbook.Roughly45%ofloansoutstandingoriginated from ecommerce users. 40% from On Demand Service users and the remainder from GoPay app users. This diversification across our platforms highlights the cross selling potential we have.

More broadly, monthly transacting users in the Fintech segment grew 35% year on year to

18.8 million. Core GTV was up 82% year on year as the prevalence of the GoPay app drove growth in consumer payments in addition to the scaling up of our lending business. Despite launching just 15 months ago, the GoPay app is proving to be a highly effective channel for cross selling financial services. Its growth momentum is strong and we see a great deal of room for furthergrowthacrossIndonesia'slargepopulation,providinganincreasingsourceof fuelforourpaymentsandlendingbusinesses.

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Significantly, we are not generating growth by burning cash. Instead, we are becomingmore efficient in customer acquisition and more disciplined in managing costs. Our revenueswere up 128% year on year. While at the same time, recurring cash fixed costs grew significantly lessat26%yearonyear.

The success of our strategyhasledtoasharpnarrowingofadjustedEBITDAlossesfrom388 billion rupiah or 26 million US Dollars a year ago, to just 65 billion rupiah or 4 million US

Dollars thisquarter.Duetothisrapidbusinessprogress.WenowforeseetheFintechsegment delivering positive adjusted EBITDA for the whole Q4 2024, one year ahead of our previous guidance.

We are pleased with this early success and believe far more can be achieved, especially as we continue to focus on mass market products. Loan penetration is low atjustafewpercent of total users and can go much further as demand for credit is substantial with one in seven transacting users of GoPay andGojekservicesoverthelast12monthsapplyingforcredit.We therefore see significant additional upside in this business, as we drive further adoption and believe loans outstanding could double versus September 2024 levels by the end of next year.

Moving to On Demand Services, ourstrategyistofocusonusergrowththroughmassmarket products, while utilizing premium products to deepen wallet share among affluent users. We saw solid performance this quarter as orders grew 30% , and GTVincreasedby25%yearon year. These numbers exclude Vietnam due to the closure of our Vietnamese operations on

September 16th. All products are going well with particularly strong progress in our mobility segment. And this growth was achieved while keeping our incentive and product marketing spendstable.

In addition to growth, we have also focused on margin improvements as promised last quarter. By actively managing our portfolio of On Demand products, balancing growth and profitability across the product range,wehaveimprovedadjustedEBITDAmarginby36basis points versus the second quarter, in line with our guidance. Marginimprovementscamefrom three main areas. The optimization of mass market products, the expansion of premium products,andthegrowthofouradvertisingbusiness.Totakeeachoftheseinturn;

First, as mentioned, mass market products in both Fintech and ODS, were developed primarily to drive growth, but we must also ensure they contribute toourbottomline.Weare doing this by optimizing our incentive spend whilepersonalizingtheproductexperiencesoit alignswithuserpreferences.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 4

Second, our effort to deepen wallet share to our premium offerings also continues to yield results. Premium offerings not only enhance user satisfaction, but also carry higher margins than standard offerings. One such premium offering is GoFood Express, which launched in the second quarter,allowinguserstopayextraforfasterfooddeliverytimes.GoFoodExpress isgrowingrapidly,accountingfor22%ofGoFoodGTVinthethirdquarter.

Finally, advertising is another avenue for enhanced monetization within our ODS business.

Our advertising revenue grew 96% year on year to 1.3% of food GMV in the third quarter, supplementingmarginsacrossthebusiness.

We are confident that our On Demand Services business is on the right track and we are moving closer to the ideal balance that will allow us to continue to grow the business while improvingprofitabilityacrossthesegment.

If we take a step back and look at the On Demand Services and Fintech segments together, we can see howthetwobusinessesareincreasinglycomplementingeachother,ensuringthe wholeisgreaterthanthesumoftheparts.

In the GoPay and Gojek apps, we have two extremely powerful tools to help us acquirenew users, particularly in the mass market segment. The GoPay app was designed from the beginning to service the mass marketwithitssimple,lightweightdesign.WhiletheGojekapp has been recalibrated over the past year to offer broader appeal to the mass market audience.

As user numbers across our ecosystem increase, so too does the opportunity toresponsibly cross-selllendingservices,drivingthegrowthandprofitabilityoftheFintechsegment.

Ultimately, we want users to enjoy the benefits of everything our payments and On Demand products can offer, and for this to act as a funnel through which the right users find and benefit from our lending products. As our ability to monetize through On Demand Services and loans increases, this in turn willprovideuswiththefirepowerweneedtodriveadditional growththroughouttheecosystem.

At the group level, we announced the signing of five year cloud contracts with Alibaba and

Tencent in September. Over the next nine to 12 months, we will be migrating our cloud infrastructure to their platforms, which will result in a reduction in cloud costofmorethan50 percent once fully implemented. This is a key part of our broader strategy to improve efficiency and optimizeourcoststructure,ensuringthatwecancontinuetoscaleourservices without sacrificing profitability. These new contracts will allow us to reinvest the cost savings

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 5 from cloud into advanced technologies such as AI, while also ensuring that our user data is heldonshoretosupportdatalocalizationinIndonesia.

In addition, Alibaba hasreaffirmeditscommitmenttoourlongtermpartnershipbycommitting to maintain its current shareholding in GoTo for at least the duration of this five year agreement. This is significant for us as working with world class partners such as Alibaba as wellasTencent,TikTokandmanyothersbringsignificantbenefitsforourbusiness.

Looking ahead, we remain confident in the strength of our business and the value of our ecosystem. Our financial results this quarter underscore the progresswehavemade,andwe believe there is still significant room for growth. Indonesia is a compelling market with a populationofover280million,andourconfidenceisincreasedbythenewadministrationand the president Prabowo Subianto anditsvisionforthecountry.Asdemonstratedinourresults, we have the capability to accelerate user acquisition while monetizing effectively. We will continue to grow in the mass market, expanding our total addressable market while staying focusedoncustomersbystrivingtoprovidethemwithvalue,convenience,anddelight.

Thankyou.AndIwillnowhanditovertoourCFOSimonforthefinancialreview.

SimonHoPTGoToGojekTokopediaTbk-GroupCFO

Thank you, Patrick. It's a pleasure to speak with everyone today, and thankyouallforjoining our call. As a reminder, I will be discussing pro forma financials to facilitate like-for-like sequential and year on year performance comparisons. Our proforma figures assume

Tokopedia and GoTo Logistics were deconsolidated on January the 1st, 2023. For your reference, as reported operating and financial results are included in theappendixoftoday's presentation.

As Patrick discussed, our business is accelerating, while we continue to be prudent in terms of cost management. This is clearly reflected in our top line growth and bottom line improvements, both by business segment and at the group level, with the third quarter markingourninthconsecutivequarterofyearonyearadjustedEBITDAimprovement.

Group GTV has grown year on year each quarter in 2024, reaching 137.4trillionrupiah,or9.1 billion US Dollars in the third quarter, up 37% year on year.OurcoreGTVgrewevenfasterat

74% year on year to 72 trillion rupiah or 4.8billionUSDollars.Grossrevenuesincreased34% yearonyearto4.7trillionrupiahor311millionUSDollars.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 6

Spending is now moredisciplinedandalignedwithourgoaltogrowourbusinesssustainably.

Inthethirdquarter,wereducedourrecurringcashfixedcostsby3%yearonyear,to1.4trillion rupiah or 89 millionUSDollars.Reportedrecurringcashcorporatecostsalsodeclinedby37% year on year to 117 billion rupiah or 11 million US Dollars. The steps we are taking tomanage ourexpenses,includingthemeasureswearetakingtoreduceourcloudcosts,willallowusto invest in the customer experience, helping us to grow our business in a highly competitive environment.

Under this strategy, which is generating significant operating leverage, group adjusted

EBITDA returned to positive for the period at 137 billion rupiah, or 9 million US Dollars from negative adjusted EBITDA a year ago. As Patrick mentioned, we expect adjusted EBITDA to remain positive in the fourth quarter, and we are confident of hitting ourtargetofbreakeven forthefullyear.

Taking a closer look at our financial performance by segment, I'll start with our financial technologybusiness.

The segment has grown substantially in a relatively short period of time. GTV grew by 38% year on year, with core GTV up 82% year on year, led by rapid growth in consumerpayment volumes, especially in use cases, such as online and offline payments, and fundtransfers,as well as the scalingupofourloanbook.Asaresult,Fintechrecordedgrossrevenuegrowthof

128% year on year to 1 trillion rupiah, or 68 million US Dollars. Lending revenues grew significantly by over six times year on year, driven by the tripling of loans outstanding, and accounted for 14% of group net revenues in the third quarter. Roughly 80% of total loans outstanding originated by us are funded by Bank Jago. This percentage has been relatively stableinthethirdquarter.

As Patrick mentioned, while we continue to actively invest in growth, our ongoing cost management efforts have resulted in significant operating leverage contributing to the reduction in our adjusted EBITDA loss by 83% year on yearto65billionrupiahorfourmillion

US Dollars. This has prompted us to change our profitability guidance for Fintech, which is nowexpectedtoreachpositiveadjustedEBITDAforthefourthquarterof2024.

In On Demand Services, GTV, excluding Vietnam, was up 25% year on year, demonstrating the success of our strategy to expand our reach in the mass market, while deepening wallet share among affluent users.Grossrevenuescontinuetogrow,increasingby15%yearonyear on a like for like basis, which excludes Vietnam, and adjusted for the change in our delivery servicesmodelfromanagencytoaprincipalmodel,whichtookeffectinJanuary2024.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 7

Weremaineddisciplinedwithourcosts,asrecurringcashfixedcostsdecreasedby3%yearon year to 640 billion rupiah, or 42 millionUSDollars.ThissupportedanadjustedEBITDAof156 billion rupiah or 10 million USDollars,anincreaseof204billionrupiahor13millionUSDollars yearonyear.

In e-commerce, we have now recorded a second full quarter of e-commerce service fee revenue from Tokopedia of 191 billion rupiah or 12.6 million US Dollars for the third quarter.

ExcludingVAT,thenettotalamountwas172billionrupiah,or11.4millionUSDollars.

Our total cash balance remains strong as of September 30, we had 21 trillion rupiah or 1.39 billionUSDollarsincash,cashequivalents,andshort-termtimedeposits.

We continue to return value to our shareholders through the 200 million US Dollar share buyback program that was approved by shareholders in June. As of September 30th, we have repurchased around 14.1 billion shares amounting to approximately 743 billionrupiahor

49 million US Dollars, meaningthereisstillflexibilityintermsofbuybackdeployment.I'malso pleased to announce that all measures at our August Extraordinary General Meeting of

Shareholders passed, including the cancellation of Treasury shares, which we expect to complete in early November. ThiswillresultinareductioninthenumberofSeriesAsharesin circulation,amountingtoaround10billionsharesintotal.

Looking ahead, we expect to continue on our growth trajectory over the coming months, while managing costs effectively and solidifying improvements in our bottom line. Our disciplined approach, along with the resilience we are hardwiring into ourecosystem,means wearewellpreparedfortheroadahead.

Withthat,wewouldnowliketoopenthecalltoyourquestions.Reggy,pleasegoahead.

Q&ASegment

ReggySusantoPTGoToGojekTokopediaTbk-HeadofInvestorRelations

Thank you, Simon. We will now start our Q&A section. Please use the raise hand function to ask your questions. Please wait a moment while we assemble our roster. The first question comes from Adrian Jozer of Mandiri Sekuritas. Please go ahead, Adrian, and ask your question.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 8

AdrianJoezerMandiriSekuritas

Thankyou,Reggy.Ihopeyoucanhearme.Okay.Thankyou.Andcongratulations,Patrickand

Simon for very strong results. So I have 3 questions. The first one is actually with regards to the latest status of the partnerships synergies with TikTok ecosystem across not just the

Fintech,butalsoonthefooddelivery.

And the second question is, I think you mentioned the drivers of the strong growth for ODS

GTV being the penetration into the mass market, and also deepening wallet shares on the premium segments.Butthequestionisactually,asyoucontinuetodevelopyourmassmarket products, willthisleadtomargindilutiongoingforwardandcanyouactuallymentionanylong termmarginsforODSinthefuture?

And the last one is I think in the previous earnings call, it was mentioned that there was an agreement to actually acquire the multi voting shares, the series B shares by Patrick Walujo andcanyougiveussomeupdatesonthisone?Thankyou.

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,CEO

Thank you, Adrian. Maybe I'll answer the last question first. The discussions with the MVS holders are progressing. We are actively consulting with relevant regulatorstomakesurefull compliancethroughoutthetransferprocess.

And, your first question is about the status of our partnership with TikTok and Fintech and food delivery. In Fintech, we launched our BNPL product in Shop Tokopedia a few months ago. At this moment the contribution of this product toourloanbookisstillsmall,andweare in constant discussions with the TikTok team. Our performance on the platform is improving.

However, there are a fewthingsthatoneneedstobearinmind.Numberone,thepenetration of PaylaterinShopTokopediaisstillrelativelysmall.Andsecond,theaverageordervalueson

TikTok shop are typically smaller than Tokopedia. And finally, there are in total threePaylater providers, and we are the newest provider.Havingsaidthat,ourperformanceisimproving.In food delivery, the contribution from TikTok to food delivery is still small. And we are readyto scaleuponcethisservicebecomesapriorityforTikTok.

And in regard to your questions about ODS growth margins, I will hand it over to Catherine, thePresidentofODStoaddress.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 9

CatherineHindraSutjahyoPTGoToGojekTokopediaTbk-President,On-DemandServices

Thanks, Pat. Hi, Adrian. Thank you for your question. So let me try to address your question, right? The first one is the driver. You are absolutely right. As mentioned earlier, this quarter, our GTV grew by 25% year on year. The users grew by 30% year on year. As you correctly pointedout,it'samultipleprongapproach.

The first one we continue to add users into ourplatform,bothonourmassmarketaffordable product, as well as the premium segment. What is interesting to highlight here is actually as per our hypothesis, it's proven that the affordable, the mass-market product is basically becoming the acquisition engine that brings the customer through our ecosystem. And then once they enter and start trying the product and using it in our ecosystem, it helps to also crossselltothemorepremium;conveniencekindofproduct.

So this combination of these use cases, not only help us to increase the frequency, but also the retention of the users. And in fact, most of the users engage with this multiple product portfolio. It's a majority of the users. So regarding the question on the margin, aswepointed out last quarter, we will continue to improve our margin. We will optimize further. So yes, in this third quarter, as Simon shared earlier, the margin has improved. At the same time, we managed to also continue the growth. So this is done by carefully managing our incentive efficiencies, driving the balance between our mass market and more convenience/ premium offerings, the cross selling that I mentioned earlier, as well as growing our advertising business.

So the way you look at it is our mass market/ affordable product is the funnel, is the acquisition engine opening up our ecosystem for the user to start being part of our ecosystem. And then once they enter, once they experience our product, we start to kind of like up-sell, cross-sell them. And one thing I wouldliketohighlighthere,itisnotonlytoother

ODS products, but also importantly here also to the lending products in Fintech. Therefore, this investment that wearedoingwillbeaccretivetotheprofitabilityofthegroup.Further,the affluent segment itself, as Pat mentioned, we continue to develop that to expand our wallet share.

GoFood Express was mentioned earlier. This continues to increase the frequency and of course the marginofthebusiness.Onthelongtermmargintarget,wehavenotdisclosedthis since we believe at this time our focus remains to be growing the market, particularly

Indonesia, where there is still significant potential and large total addressable market remaininginthecountry.Hopethatanswersthequestion.Thankyou.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 10

ReggySusantoPTGoToGojekTokopediaTbk-HeadofInvestorRelations

Thanks, Adrian. Our nextquestioncomesfromthelineofAriJahjaofMacquarie.Ari,yourline is now open. Please unmute your microphone to ask your question.

AriJahjaMacquarie

Thank you, Reggy, for taking my questions. And hi, Patrick, Simon, GoTo team. Well done for the solid quarter. So first question onODS,goodtoseethestronggrowththere.Andcanyou pleasesharecoloronthelatestcompetitivedynamicsforboththefooddeliveryandmobility?

And second question on Fintech. Previously, you mentioned that it is targeted to reach breakeven by the end of next year, which is accelerated to the fourth quarter of this year.

What will be the main drivers of this accelerated profitability guidance? And can you please provide more color on the profitabilityofeachofthepaymentsandlendingbusinesseswithin

GTF?Thankyou.

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,CEO

Thank you,Ari.MaybeIwillletCathanswerthequestionaboutODScompetitivedynamicand

TomHustedwillanswerthequestionsregardingFintech.So,Cath,pleasegoahead.

CatherineHindraSutjahyoPTGoToGojekTokopediaTbk-President,On-DemandServices

Sure, Pat. Hi, Ari. So, yeah, competitive dynamic in ODS, we believe it remains intense, the competition as we see here. But I think I would like to highlight again, this is something that we continue to pay attention to by the same time, despite that fact. As you see this quarter, happy to share that not only we continue to grow but also managed to improve our margin thisquarter.

This is all attributed to our ability to continue to optimize, to improve our efficiencies, our segmentation and stuff in our incentive and discount. Going forward, we will definitely continue to manage this balance between growing our user, managing the productusecase portfolio balances, as well as capture the market opportunity while optimizing between this growthandmargin.I'llpassittoTomfortheFintechquestion.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 11

Thomas Husted PT GoTo Gojek Tokopedia Tbk - Vice President Director, President,

FinancialTechnology

Hi, Ari. Thanks for the question. So just as a recap,Ithinkyouwantedtounderstandsomeof themaingrowthofthedrivers.Andthenalsosomecoloronprofitability.

So let me start with thefirstone.Sothisyear,asPatrickandSimondiscussedintheiropening remarks, we've been able to grow the consumer loan book by about 3 times over the last year, and the strategy therehasreallybeenafocusoncustomeracquisition,asmentionedby

Cath, Simon and Pat. And the customer acquisition has focused on the channelsonboththe

GoPay app, ODS and TikTok Tokopedia. And this year, what I think has really changed is as we've acquired those customers, we've purposefully started to cross sell financial services and especially our loan products. And this integratedapproach,I'dsay,isfairlynewfor2024.

And frankly, I think we're encouraged by the overall results. In 2025, the plan is to double down on this strategy of customeracquisitionbeingviaallofthechannels,andthencontinue tocrosssellthefinancialservices.

We've been tightly coordinated this year, particularly thinking about the GoPay app, which is really an open loop app, and also the Hemat products on ODS. And I think the results really speak for themselves. We're very pleased, and the strategy going forward is we're going to double down on that. We think that on the loan book, we're comfortabletothinkwe'regoing to doubletheloanbook,fromabout4.3trillionthisquarter.Ithinkwecandoubleitbytheend ofnextyear.

And then on the overall overall subject to the loan book. The expectation isthatwe'regoing to be able to roll out this vehicle financing pilot project; we've been workingonthiswithBFI.

So, my sense is, we're going tobeabletorollthatoutfortheoverallplatforminmid2025,so

Ithinkthosearethemaindriversofgrowth.

And then a little bit of color on profitability. I think first, let me give a little bit of historical context. The payment business, as many of you know, was really set up originally to solely support the ODS business. And then last year, we went ahead and I think it was really 15 months ago. We launched our standalone GoPay app and frankly, this has been a game changer for both GTF and the payments business.Thecoreapp,thecoreproductinthatapp was originally payments and transfers. But if you've been following or using the GoPay app, whatwe'vedoneiswe'vesteadilyrolledoutadditionalproductsoverthelastyear.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 12

So, the additional products now include things like automated bill pay. There's a savings function, which is, you know, an integration with Jago on the back end. We'reofferingBNPL, cash loans, insurance, and as I previously mentioned, we're going to start to roll out some vehiclefinancingontheentireproduct.

So, when we step back and really think about where we are,whatwe'veseenisasignificant increase in transacting users each month. And then those users are adopting moreproducts at afasterrate.Andthismonetizationjourneyisallowingustoreinvestandgrowthebusiness without burning cash. And again, I think this is really the first year where we've put these pieces of the puzzle together and it's a good result. So that's,that'skindofthemacropicture nowon.

Some of the color of profitability, particularlyaroundpaymentsandlending.Thisissomething that Simon, Patrick and I have been speaking about where we've received fairly consistent feedback from investors that we need to increase the color and some of the detail of the disclosures for the product set in GTF. And we're going to work with Simon and create that.

So I think youcanexpecttoseemoredetailsin2025aswegetintothefullyear2024review inMarch.Ihopethataddressesthequestions.

ReggySusantoPTGoToGojekTokopediaTbk-HeadofInvestorRelations

Thanks Ari. Our next question comes from the line of Ferry Wong of Citi. Ferry. Your line is nowopen.Pleaseunmuteyourmicrophonetoaskyourquestions.

FerryWongCiti

Yeah, thanks, Reggy. Yeah, hi GoTo management. Yeah, I have 3 questions, the 1st one is on the e-commerce division. From the e-commerce service, it seems thattheGMVofTokopedia and Shop Tokopedia grew by close to 9.5 %quarter on quarterinthethirdquarter.Couldyou provide some coloronthecompetitiondynamicsine-commerce?Andisthereanyoutlookfor the growth going forward?AndcouldyoupleasecommentontheTEMUpotentialentriesinto theIndonesianmarket.

And the secondquestionisontheGoTofinancialloanbook.Youmentionedthatyou'regonna double it in 2025, from about like 4.3 trillion this year.Couldyouprovidesomecolorinterms of the composition of the lending book for 2025? Whether it's going to be likeBNPLorcash loan?What'sgoingtobetheproportionofthatthisyearandalsonextyear?

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 13

And then my third question is on the credit quality on this financial loan. What is the cost of credit, NTL, and what do you think will be the trend movingforwardoverthenextonetotwo years?Thanks.

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,CEO

Thank you, Ferry. I'll answer your question about e-commerce. As we are all aware, TikTokis the controlling shareholder of Tokopedia and has full control of Tokopedia and shop

Tokopedia. We are in constantdiscussions.Weareveryhappywiththepartnership.However, we are unable to comment on their behalf. On our side as a shareholder of the e-commerce entity, we are extremely happy with the development of the business and we are confident that the business is in good hands and our partner, namely TikTok, will continue to execute well.Andwiththat,maybeIwillhandoveryourquestionsaboutFintechtoTom.

Thomas Husted PT GoTo Gojek Tokopedia Tbk - Vice President Director, President,

FinancialTechnology

Hi, Ferry. Thank you. Thank you for the question. So the first question was in regards to our ability to double the loan book in 2025 and some color onthecompositionandwhatarethe drivers going to be? So when we look, I think Patrick and Simon covered in the intro comments. What we're seeing, and I think this is part of the surprise and part of the reason why we've adjusted a number of our assumptions and have been able to pull forward the profitability of GTF so aggressively. What we're surprised about was the demand of the lending business on the ecosystem ,particularlyinboththeODSplatformandtheGoPayapp onthecashloanside.

TheBNPLproductremainsstrong,butthegrowthonthecashloansidehasbeenremarkable.

And, you know, that is the more profitable product. And I think from a management perspective, we've been trying to optimize how we run the book. And to make sure that we areworkinginaconstructwherewe'rethinkingaboutgrowingresponsibly,butalsoprofitably.

Andwe'regoingtocontinuetodothat.

On the color of the composition of the book, we have been aggregating the book as one number and this is some of thefeedbackthatwe'vereceivedfrominvestorswheretheywant us to start to think about aggregating and providing more detail on that. And that was my

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 14 reference for the last question that Ari asked in regards to, you know, how are we thinking aboutitgoingforward?Andwewillprovideamoreincrementalcoloronthat.

And then on the NPL side, the second part of your question was NPL. And happytoreport,I think this is a kind of a continuingtheme.Similartopreviousorders,weareseeingsignificant loan book growth with stable metrics on the creditside.NPLsatthispointcontinuetoremain around 1%. And we continue to do the monitoring of both the Indonesian macroeconomyas well as the competitors that we see in the market. And, you know, in terms of disclosure, we've been benchmarking ourselves to the competition. And this is where we're goingtobe reflecting more and thinking about how we can provide incremental exposure so that we analyze, you know, not incrementalexposure,butincrementaldatasothatpeoplecanlookat thebusinessandunderstandabitmore.

I do want to underscore, we do have very detailed reviews on the credit side. And we have not seen any significant deterioration. If we do, we're goingtomovequicklyandprudentlyto adjust the credit acceptance criteria for our customer base. And really the number one goal, as mentioned, and this is kind of the north star, is that we want to grow the loan book responsibly first and absolutelymaintainprofitability.Wecouldhavegrownsignificantlyfaster, but we didn't feel comfortable that we could do that in aresponsiblemanner.Sowe'regoing tomaintainthosekindsofguardrailsofresponsibilityandprofitabilityaswegoforward.Thank youFerry.

ReggySusantoPTGoToGojekTokopediaTbk-HeadofInvestorRelations

Thanks Ferry. Our next question comes from the line of Ryan Winipta of Indo Premier. Ryan, yourlineisnowopen.Pleaseunmuteyourmicrophonetoaskyourquestions.

RyanWiniptaIndopremier

Yeah, thanks to the GoTo team for the opportunity. I'm RyanfromIndopremier.Ithinkjustone questionfrommysideregardingthegrowthandalsoprofitabilityoutlook.

I'm just wondering what kind of growth that we should be looking at for 2025, especially for the ODS business and regarding adjusted EBITDA margin. I know earlier from Adrian's question that you don't provide any sustainable or long term margins. But would we be able to get a sense on what kind of adjusted EBITDA margin that we should expect in 2025, for bothODSaswellastheFintechbusiness.Thankyou.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 15

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,CEO

Thank you for your question. Wearestillinthemiddleofthebudgetingprocessfor2025.We believe that ODS will continue to grow its user base, increase users frequency, increase retention, drive product adoption and improve efficiency and incentives and spending. In regard to your question about long term margin, I think we will address that in the next earnings call, once we are done with the budgeting process. And in Fintechwewillcontinue to grow our lending book as Tom mentioned, we will accelerate our payments business as well.Andwebelievethatloansoutstandingcoulddoublebytheendofnextyear.

In regard to the remaining of the year Q4, we think we will continue to grow on quarter by quarter basis. We start seeing some headwindsinthemacroenvironment,whichmaytemper performance, especially in the ODS segment. But having said all of that, we still have strong confidenceontheperformanceofthetwobusinesssegments.

ReggySusantoPTGoToGojekTokopediaTbk-HeadofInvestorRelations

Thanks, Ryan. Our next question comes from the line of Divya Kothiyal of Morgan Stanley.

Divya, your line is now open. Please unmute your microphone to ask your questions.

DivyaGangharKothiyalMorganStanley

Thank you so much, Reggy. A couple of questions from me. The first one is on the On

Demand Service business. You had a very strong GMV growth inthethirdquarter.Couldyou give us some color between mobility and food as well as trends in October? You just mentioned some headwinds in year on year growth comparison, so just wanted to get a senseonhowthingshavebeen.

The second question is onadvertising.Iunderstandtheadvertisingdoubledyearonyear,but what was the trend quarter on quarter? And could you give us thecontextonwhatwouldbe the target for this and the implications on margins should be pretty strong. So is there any offset on margins, which is why we haven't seen the margins go back to the 1.2% levels that wesawpreviously,despitethishighermarginsegmentcontributingsowell.

And then just the last question is ontheFintechbusiness.YoudidmentiontheNPLisonly1% and you're clearly managing that well. But curious to know what the target market for this

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 16 growth has been. You know, where,whatkindofloans,whatkindofdemographicsaretaking these loans? If you can give some color on where this incremental growththatsurprisedyou iscomingfrom,thatwouldbeveryuseful.Thosearemythreequestions.Thanks.

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,CEO

I hope somebody'stakingdownallthequestionssowecantrackthem.Butanyway,Divya,on your question about ODS, we don't providebreakdownsofourmobilityandfoodbusinesses.

But as we mentioned early on, transportation has beenastarperformerforus.Asamatterof fact, I think we in certain segments, we actually have to increase supply to meet the level of demand.IwillprobablyhanditovertoCatherinetoaddmorecolor.

CatherineHindraSutjahyoPTGoToGojekTokopediaTbk-President,On-DemandServices

Sure. Hi, Divya. Thank you for the question. Yeah, as Pat mentioned, actually, quarter three has been a very strong quarter. All our three key products-- car, ride andfood,actuallygrew.

Although, as Pat mentioned, thatthetransport,themobilitysegmentgrewfastercomparedto the deliveries. Having said that, we see your question on , how do we see it on the quarter?

This is the current quarter. We mentioned the headwind a little bit. I think this is due to the macro situation. We see a little bit of a tempering, but, so far we still see the growth, the quarter on quarter growth, as Pat mentioned. We will still see strong quarter on quarter growth.

In the advertisement, yes. So this has doubled year on year as you heard earlier. This is definitely the area that we started focusing more and more the past few quarters. It's also growing, mainly from the numberofmerchantparticipantsthatcontinuetousethisproductof ours and then the retention of them as well. We'll continue to focus on this. This is actually going to be like one of the levers for us to continue to push to improve our margin going forwardaswell.

Your question is there any offset? No, I think because this is like,weare,wearelookingatit, but we disclosed earlier is the total 1.3, I believe, ads revenue as a percentage offoodGMV.

Thisisalsocontributingtoourmarginimprovementonthequarterbyquarter.

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 17

PatrickWalujoPTGoToGojekTokopediaTbk-PresidentDirector,CEO

Okay, and on Fintech, the question is about a target market in terms of demographics, tenures,NPL.Tom,pleasetakethisquestion.

CatherineHindraSutjahyoPTGoToGojekTokopediaTbk-President,On-DemandServices

Sure. I'm happytotakeit.Divya,thanksforthequestion.Ithink,youknow,contextually,Ithink it's important for everybody to remember that the lending business is really new. We had made some furtive efforts in 2022, early 2023, but I'd say we really got serious about the business in 2023. And that seriousness corresponded with a few really critical events inside ofthecompany.

One was theTikTokTokopediatransactionthatwasdone,andmakingsurethataspartofthat transaction, we locked inchannelstherefor,forbothcashloansandBNPLandtheTokopedia app, and then BNPL on the TikTok platform. Likewise, the GoPay appwaslaunchedlastyear, and that targeted a completely different segment from the ODS business, historically. ODS was largely considered to be a premium product, and the GoPay app was designed for the mass market. So when we, when we think about the diversity of the channels that we really have, we can kind of reach across many ofthedemographicswithinIndonesiathroughthese diverse channels. And thenwemadeadecisiontoinvestinsystemsandpeopleandreallytry topushonthisbusiness.

So, when I think about the product mix, which is what you asked about, BNPL, the way we think about it is largely an acquisition tool and a customer engagement tool. It will never be tremendously profitable. But it's a critical part of the portfolio because it retains customersin the ecosystem and then we can start to sell incremental products, from financial service products, including cash loans. So, when I think about it, BNPL and Toko and ODSaregood.

They've been established for quite some time now for a number of quarters. On BNPL on

TikTok, it has just started. And I think as Patrick alluded to in his comments earlier, this is a business where we'regoinginwiththreecompetitors.And,thesearesmall,soweseethere's opportunity there. We need to manage thecreditriskbecausethecustomerbaseisdifferent.

And we're being very scientific and working with the TikTok folks in a very collaborative way tomakesurethatwecangrowthatbusinesssustainably.

In the cash loan business,thisistheprimarydriverofprofitability.Andwe'veseenverystrong demand, both within ODS, Toko, and also the GoPay app. And the GoPay apphasbeen,you

PTGOTOGojekTokopedia3Q24EarningsCallTranscript 18 know, the most interesting. I think earlier there was a quote, like, you know, 1 out of 7 of the people intheecosystemareapplyingforloans.Sothisiswherewearethemostencouraged.

Now we're thinking, we're doing all the usual things that you do when you run a large credit portfolio or a growing credit portfolio. We're thinking about how we make sure we maintain the cost of credit appropriately. And then we're thinking about things like, how do we add duration? Right? If you have short term loans of, say, 1 to 2 months only, it feels like you're constantly on this, this kind of, let's call it a treadmill, right? Because you're just trying to disperse to keep up with the growth. As you add duration, you can slow down that pace becausethentheloanbookwillnaturallygrowandthefalloffwillbelessso.

That's in part where we're looking at vehicle financing, because by definition, that's a significantly longer tender product.Andwe'reputtinginsomedevelopmenteffortsthere.And then on the cash loan within our credit scoring ecosystem, we'relookingatasubsetofusers that have high credit ratings. They have had lending experience withusinthepast,andthen we're going to start rolling out significantly longer tenure loans that are effectively priced based on their credit portfolio credit history withus.So,thisishowwewanttotrytocontinue