GoTo Earnings: Raising Fair Value by 10% After Modest Growth Coupled With Further Loss Narrowing

We increased our fair value estimate for GoTo by 10% to IDR 73 per share from IDR 66 after its third-quarter results showed loss improvement and modest gross transactional value growth. Overall, GoTo’s third-quarter revenue grew 8% year on year while operating loss margin narrowed by 1320 basis points to 8.3%, sequentially. GoTo’s on-demand services GTV grew 21% year on year while revenue grew 108% as it significantly reduced the subsidies given to customers for the third consecutive quarter in its continued effort to focus on profitability.