GoTo Earnings: Losses Narrow Significantly After Sale of E-Commerce Unit, but New Strategy Untested

We maintain our fair value estimate for GoTo of IDR 66 after it reported first-quarter 2024 revenue of IDR 4.1 trillion, compared with our estimate of IDR 2.6 trillion. The beat was due to a change in GoTo’s revenue recognition using the principal rather than agent model, meaning that revenue is recognized more on a gross basis rather than the previously used net. Recurring operating losses narrowed to IDR 942 billion from IDR 4.04 trillion a year ago following the sale of Tokopedia, as the e-commerce unit had suffered significant losses. In the future, we expect growth of the on-demand and financial services businesses to dictate GoTo’s valuation.