Hello, everyone. This is Joel Ellis, Head of Investor Relations. Welcome to the PT GoTo Gojek Tokopedia Tbk First Quarter 2026 Earnings Conference. Please be advised that today's conference is being recorded. On today's call, Hans Patuwo, our 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 Sutjahyo, our Deputy CEO and Vice President Director, and Sudhanshu Raheja, our Group COO, along with members of GoTo's board of directors. 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 March 31, 2026.
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 IDR 16,993 to $1 based on the middle rates published by Bank Indonesia as of the end of March 2026.
We will also refer to adjusted free cash flow, which is adjusted operating cash flow minus capital expenditures. 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 Hans.
Thank you, Joel. Hello, everyone, and thank you for joining us today. I'm very pleased to announce that in the first quarter of 2026, GoTo has delivered a net profit for the first time in our history. We achieved a net income of IDR 171 billion, a substantial turnaround from a net loss of IDR 367 billion during the same period last year. At the same time, we continue our rapid growth. Our annual transacting user base grew to 69 million, an increase of 22% compared to a year ago. Our core GTV rose even higher at 65% year-on-year. These achievements are the result of a multi-year effort to transform GoTo into a profitable business, characterized by a laser focus on our customers and financial discipline.
On behalf of the company, I would like to express our thanks and gratitude to everyone who has contributed to our journey. This milestone could not have been achieved without our driver partners and merchants. They are the ones who have powered our platform since day one. Thank you, too, to our employees, both past and present, and our shareholders who continue to believe and support us in our mission. While we celebrate reaching net profit, there is still a lot to be done. We are, however, entering into a new chapter and hence we will be making three adjustments to our strategy. One, we will place a stronger emphasis on sustainable growth in on-demand services. We are proud of the profitability improvements, but growth is not yet where we want it to be, particularly in the mass market segment.
Two, having completed our cloud migration, it is now time to look forward. In this next stage, we will execute an AI transformation that will change the way we operate and revolutionize our ability to serve customers. Three, it is time to review our capital allocation and buyback strategy. Our adjusted free cash flow has been positive for three quarters in a row. As our share price does not currently reflect our intrinsic value, we see an opportunity to return capital to shareholders. Looking ahead, we are maintaining our full year adjusted EBITDA guidance of IDR 3.2 trillion-IDR 3.4 trillion. While we have achieved IDR 907 billion in adjusted EBITDA in the first quarter, we have chosen to be conservative and not raise our guidance in light of ongoing macroeconomic uncertainty. We are closely watching oil and energy prices.
Indonesia's fuel subsidies are currently cushioning the impact. We remain vigilant for broader effects on consumer purchasing power and the potential impact it may have on demand and on credit risk. Regardless of the uncertainty, we will continue to develop products and services that help our customers, be they consumers, driver partners, or merchants, and build the capabilities needed to serve them even better. Doing so ensures the best possible outcome for GoTo, no matter how the world changes. Let me now turn to our business units. Our fintech business continues to grow rapidly in both top line and bottom line. Adjusted EBITDA grew 674% year-on-year, reaching IDR 364 billion. We are benefiting from operating leverage as net revenue grew by 58%, while fixed costs increased by only 12%. We expect this trend to continue.
More people are using more of our services and doing so more frequently. Monthly transacting users reached 27.5 million, up 33% year-on-year. Total transactions crossed 2 billion for the first time, up 84% year-on-year, and core GTV exceeded IDR 130 trillion, up 72% versus a year ago. Our loan book also grew 59% year-on-year to IDR 9.9 trillion in the quarter as we converted more payment users into lending. This loan book growth has come whilst maintaining our credit risk. For the past four quarters, NPL ratio has remained consistently below 1%. We will continue with this prudent approach, all the more so given the uncertainty in the macro environment. For those who want to know more, our earnings presentation includes disclosure of our delinquency rates starting from one day past due.
We draw additional confidence from two facts. One, we do not lend to users whom we know little about. Our borrowers are almost always existing transacting users in our ecosystem, meaning we have sufficient data to assess their credit risk accurately. Two, the short-term nature of our loans, which are on average four months in tenure, allows us to adjust quickly in response to changing macro conditions. Taking a step back, despite near-term uncertainty, the longer-term opportunity remains large. Our monthly transacting user base for payments represents less than 15% of the Indonesian adult population. Over the longer term, there are still a lot of opportunities and the ceiling is high. Moving on to our on-demand services business. The bottom line is solid, with adjusted EBITDA growing 40% year-over-year to IDR 439 billion.
On the top line, net revenue grew 12% year-on-year to IDR 3.4 trillion. However, GTV growth at 4% year-on-year is not yet where we want it to be. Going a little deeper, we continue to do well with affluent users. For example, our very high spender user cohort grew by 18% year-on-year. They are drawn to premium services like our faster food delivery service, GoFood Express, which saw transactions jump 84% year-on-year. In the mass market, we are seeing progress in deliveries, however, lower performance in mobility. Seasonality played a role. Q1 included the Idul Fitri holiday period, and we also saw more days of heavy rain in Greater Jakarta. Fewer business days and an additional work from home day also negatively impacted volumes. Nevertheless, seasonality is not the sole driver.
We are working to accelerate growth and have started piloting new features that we will roll out in Q2 and Q3. We are dealing with this and will provide updates in future calls. Moving on to technology. If cloud migration was our focus for 2025, our focus for 2026 onward will be AI transformation. We began making AI investments 18 months ago, developing solutions using both proprietary and commercial models while deploying the technology into our operations. There are now more than 50 AI projects going on throughout the company, and while such projects have been making an impact, it is time to bring them together into a single integrated program and take it all to the next level. AI has become everything, everywhere, all at once.
Our AI transformation will stay grounded to deliver two clear objectives, reducing cost to serve and increasing user conversion rates. Reducing cost to serve started with automating internal processes and replacing third-party software, though the goal is to embed AI throughout our tech stack. Similarly, AI helps us to get more users through the acquisition to retention life cycle. One way we have been doing this is through personalization. We have recently refreshed the GoPay app with a more personalized interface and nudges based on AI-driven recommendations. We will extend this to the Gojek app as well. These are only snippets with much more to come. In conclusion, we are encouraged by the net income milestone we achieved in Q1. We also acknowledge there is more to be done and remain committed to building a business that delivers sustainable growth and value for all of our stakeholders. Thank you, everyone.
Thank you so much. I will now hand it over to Simon to talk us through the financials.
Thank you, Hans. Before I review our financial performance, I'd like to first elaborate on two topics that were touched upon by Hans. First, our earnings guidance. In the first quarter, we already achieved more than 1/4 of our full year adjusted EBITDA guidance of IDR 3.2 trillion-IDR 3.4 trillion. Under normal circumstances, we would be reviewing our guidance at this point, but given the continuing uncertainties globally, we have decided to be prudent and maintain our current guidance for now and wait for more stability in the Middle East. We started the year strongly, and we believe that if the global conflict does not become overly prolonged and severe, we are confident in achieving and even exceeding the full year guidance of IDR 3.2 trillion-IDR 3.4 trillion in adjusted EBITDA. Second, on capital allocation.
Given our achievement in net income profitability and the strengthening of our cash flows with adjusted free cash flow reaching IDR 1.3 trillion in the first quarter, this is a good time to review our stance on capital allocation. Since June 2024, we have in total spent $140 million on share buybacks, and in the first quarter of 2026, we spent $12 million on share buybacks. Going forward, we plan to review our strategy, and we look to increase the pace of share buybacks in line with improvements in our adjusted free cash flow. We will, at the same time, maintain a comfortable and reasonably high level of cash to provide us the flexibility to capture opportunities should they arise or to respond to competitive needs. Now turning to our financial performance.
My comments will focus on year-on-year comparisons for the first quarter of 2026. The first quarter was a strong start to the year for GoTo, delivering significant top line and bottom line growth. Annual transacting users grew 22% to 69 million. Net revenue grew 26% to IDR 5.3 trillion or $314 million, driven by growth across all business segments. Cash recurring fixed costs, excluding the cost of credit, increased at a slower rate of 8%. This healthy top line growth, coupled with positive operating leverage, resulted in adjusted EBITDA increasing by 131% to IDR 907 billion, or $53 million. Crucially, this strong operational performance flowed through to our bottom line.
For the first time in GoTo's history, we achieved a quarterly net profit of IDR 171 billion or $10 million, marking a significant milestone in our journey. Turning to our segment results. fintech continued its strong momentum. Net revenue grew 58% to IDR 1.9 trillion or $112 million, driven by robust user acquisition, strong growth in our payments business, and the continued expansion of our loan book. Outstanding loans expanded by 59% to IDR 9.9 trillion or $582 million. Note that starting this quarter, we have expanded this outstanding loans metric to include merchant loans as well as consumer loans previously. The outstanding balance of merchant loans is not large. It's roughly half a trillion rupiah out of total loans of IDR 10 trillion.
Including this would provide a more comprehensive view for investors of our total lending activities, and we have also included historical figures in the earnings presentation to allow for comparison. Consequently, fintech adjusted EBITDA reached IDR 364 billion or $21 million, reflecting an increase of more than 7x . In on-demand services, we achieved record profitability, demonstrating our ability to manage the bottom line despite seasonal headwinds in the first quarter. Net revenue increased 12% to IDR 3.4 trillion or $198 million in the first quarter. By product, mobility and delivery net revenues grew 8% and 13% respectively. This net revenue growth was driven by product mix changes and rationalization of incentive spending.
These efficiencies flow through to our bottom line, driving adjusted EBITDA up 40% to IDR 439 billion, or $26 million. Turning to e-commerce, we saw continued growth in our service fee revenue from Tokopedia, which increased 33% to IDR 288 billion, or $17 million in the first quarter. Driven by our strong overall performance, we generated adjusted free cash flow of IDR 1.3 trillion, or $74 million, a clear indication of our strengthening business fundamentals. We ended the quarter with a robust balance sheet, holding IDR 23 trillion, or $1.4 billion in cash equivalents, and short-term deposits. To conclude, our strong first quarter performance sets a solid foundation for the business.
We are fully equipped to execute our strategic priorities and remain committed to driving sustainable growth and expanding shareholder value as we move through 2026. With that, I will turn the call back to Joel.
Thank you, Simon. We will now open up the call for questions. If you wish to ask a question, please use the Raise Hand function on Zoom, and then we will call on you. I'll repeat. Please use the Raise Hand function on Zoom, and we will call on you. Our first question comes from Ari Jahja from Macquarie. Ari, please unmute yourself and go ahead.
Thank you, Joel, for taking my questions. Hi, Hans Patuwo and GoTo team. First on the risk, how do you view the risk to your business from higher fuel prices, LPG price hikes, work from home recommendation, as well as pass-through inflationary pressure? Secondly, congratulations for your net profit. Looking ahead, how should we think about your guidance for the remaining of the year and also heading into 2027? Would this be the level of profitability as a new baseline? I will start here. Thank you.
Hi, Ari. Thank you very much for the questions. Let me take the first point on the oil prices, and I will ask Simon's help to answer the question on net profit. Ari, as you can imagine, if the global oil prices stay high for a sustained period, we do expect that it will have a dampening effect on the economy, and by extension, therefore, also to us. I think the risk is not just on the oil price, but it is also on the broader changes or trickle-down effects. For example, the increased prices of transportation, the increased prices of plastics, and so on and so forth. The risk will be lower consumer buying power, which of course will affect demand, and the risk is also could be to our credit risk.
Putting all of these together and given the uncertainty, that goes back to why we have decided to keep our adjusted EBITDA guidance unchanged and be, err a little on the conservative side. Far, though, the risks have been quite manageable. I guess perhaps we are still in the, in the early stages, and also the government's decision to keep the subsidized fuel prices at the current price, is quite helpful. Although we are also monitoring the supplies and any potential, knock-on impact on inflation. If the situation were to worsen, we would consider passing on some of the increased costs that were borne by our driver partners and merchants, to our consumers, particularly the affluent ones, because they tend to be a bit more resilient and less price sensitive.
I think on the fintech business, this is one where we are spending extra time and attention. The team has just completed a stress testing exercise. We tested it through our portfolio through four levels of severity. We now have a pretty clear plan on what to do, what are the signals to monitor, and how to respond quickly. The stress testing at the four levels of severity also goes back and draws on the lessons all the way as far back as the crisis in 1997 and 1998. I think overall, it's still relatively early stages. We're not seeing too much impact yet. We do feel that the future remains uncertain. We acknowledge the risk, and we have contingency plans in place. Hopefully it does not come to that.
I hope that answers your questions, Ari. Simon, over to you.
All right. Thanks, Ari, for the question. On net profitability, let me share with you some thoughts. First of all, of course, achieving the first ever net profit positive is a huge milestone for us, and it's proving that our two core engines, on-demand services and fintech, are really firing well. This is the result of many years of deliberate, disciplined execution. Now, on whether your question on whether this is the new baseline, I would say yes, the operational profitability here is sustainable. The structural improvements we have made across our, the cost base, our profitability, and all the business metrics are permanent.
Both of our core businesses are demonstrating that they can grow and remain profitable simultaneously. However, I do want to note that there are parts of our P&L that are impacted by external factors and are not fully in our operational control. For example, our share of results from Tokopedia, the fluctuations in the value of our portfolio of investments. These items can move net income from quarter to quarter, although they are not a reflection of our core operating health. Just to sum this up, I think the underlying business is getting stronger. We have now delivered seven consecutive quarters of positive and expanding adjusted EBITDA. With this momentum, we do expect the broad direction is positive and would expect to deliver future quarters of net profitability as we progress through 2026 and beyond.
I hope that helps to answer your question, Ari. Thank you.
Thanks very much for your question, Ari.
Thank you.
The next question will come from Adrian Joezer from Mandiri Sekuritas. Adrian, please go ahead.
Thanks, Joel. Congratulations for the good results, Hans and Simon. Two questions from my end. The first one, you've been leaning heavily into the mass market segment to drive volumes and growth. As you scale these more affordable product lines across mobility and delivery, how should we actually think about the blended margins going forward? Do you have updates on the rollout and results of specific mass market initiatives? My second question is with regards to the fintech side. Could you actually provide your latest guidance for the loan book growth for the rest of 2026? Could you also provide an update on the current asset quality, especially with the ongoing macro situation? Thank you.
Thanks a lot, Adrian . I'm happy to take the first one, maybe Sudhanshu will need your help on the loan book here. I think, Adrian , thank you again for your question. As previously mentioned in the prepared statements, growing the mass market is really imperative for us. Growth in ODS, you know, particularly the mass market, is really a strategic priority, especially in this new chapter. I think the sense though is that the goal is also to grow profitably, right? We're not trying to, you know, burn money to rent market share. What that means then is, as mentioned, when we grow to grow the mass market sustainably, we're expecting that this to be delivered through product features that cater specifically to this segment, right?
It caters to the trade-offs that this segment is willing to accept, such as, you know, longer time for cheaper price. You know, we have several new such product and features. We have been working on them for the past one to two quarters, and they are currently undergoing some pilot trials, and we expect that to scale them up soon throughout Q2 and Q3. These kind of products that are going through pilot trials cover both mobility and deliveries. Going back to your question on margins, right? As these products continue to scale, do we expect them to be margin accretive, right? Going back to the point about growing profitably. We expect that the overall absolute margin should increase, though perhaps on a percentage basis, it may not continue to increase further.
Those are our thoughts on the mass market. Absolutely imperative. We expect it to be margin accretive on an absolute basis. Perhaps not necessarily fully on a percentage basis. To continue to grow further. Sudhanshu, on loan book.
Thank you, Hans. Hi, Adrian. Thanks for the question. On loan book growth, we continue to see a very large opportunity ahead. We've reached about IDR 9.9 trillion this quarter, and we are growing roughly 59% year- on- year. Our view is that we are still very early in the journey. Payments penetration is still, compared to the whole country, is still low, and lending penetration in our platform is about mid-single digits. We have a lot of room to grow over the next 10 years. That being said, we are not trying to chase growth for its own sake. We launched roughly about four years ago, and we have scaled this business in a very measured way. We've only expanded when supported by data.
Now, demand is very strong, and our approval rates run in mid-to-high teens, and we are intentionally very selective to ensure long-term portfolio quality. On asset quality, we continue to take a very conservative stance given what's going on in the world today. Our primary focus is maintaining a stable loan at risk and an NPL profile, and we manage this tightly through closed monitoring of our DPD buckets and the flow rates, which allows us to keep the asset quality very stable and predictable. A stable LAR gives us the confidence that our underwriting policies are working as intended. In addition, we take a prudent and forward-looking approach to provisioning. We maintain a high provision coverage ratio with over 100% provisioning on delinquent loans. To be clear, this is not reactive.
It reflects a very deliberate strategy to build provisioning ahead of time, ahead of potential macro issues, even though our underlying asset quality remains very stable, as we just shared. Structurally, our book is also designed to be very, very resilient, which means we operate on small ticket sizes and short tenures of about three to four months, which means we can very quickly adjust if conditions change. From a macro perspective, we are monitoring the conditions closely. At this stage, we have not seen a meaningful impact on the ground. With that being said, we remain very, very cautious and fully prepared to moderate growth if needed. It is not a difficult trade-off for us. Lastly, to your question on guidance on loan book growth, we are not providing a specific loan book guidance this year.
This is intentional and reflects our focus on maintaining the flexibility for stable growth. Once the macro improves or gets better, we will come back and be able to predict this more accurately. All in all, we believe that the right approach in lending is to prioritize sustainable growth, and that continues to guide how we scale the business. Thank you.
Thank you.
Thank you very much for that, Adrian. Our next questions will come from Ferry from Citi. Ferry, please go ahead.
Yes. Hi. Congratulations on GoTo team. Hi Hans, hi, Simon and management team. Yeah, I have two questions. Practically, number one, within the on-demand services, growth came in quite low, especially on the mobility, and it appears to be experiencing a negative growth. Are you seeing intensified pressure from competitor or are there other factors driving this? The second question, GoPay has posted great top-line user and payment growth this quarter. Given the digital wallet space and competition in Indonesia, what is the core driver behind this rapid top-of-funnel acquisition? How effectively are you converting this user into your lending products? Thank you.
Hi, Ferry. Thank you so much for your questions. Can I ask Sudhanshu's help to answer these questions?
Sure, Hans. Hi, Ferry. Thank you for the question. Maybe I'll start off with the one on Gojek. On growth in Gojek, there are a few factors to call out. First, we've already achieved profitability in the on-demand business, so now our focus is on shifting towards driving growth from that base. This naturally creates some near-term trade-offs versus peers who might be still prioritizing growth more aggressively. Second, this quarter was affected by seasonality. As Hans talked about earlier, we saw heavier than usual rainfall, full Ramadan in this quarter versus a split last year, and generally fewer working days. These factors affected both demand and supply. On competition, the environment remains intense but rational.
We continue to perform well in deliveries while we are slightly behind in mobility, particularly in the mass market segment. That leads to the most important point, which is the mass market. This is definitely an area that we know we need to improve in. We have grown in this segment in GoPay, and it is now a key focus for us in Gojek. We are actively building capabilities for zone-based operations and efficient allocation capabilities to grow density and to drive high volumes. I'm very excited by the initial pilots, and will continue to share more as these capabilities scale progressively throughout this year. Now, at the same time, we are seeing a very strong momentum in the affluent segment. Our very high spending cohort grew 18% year-over-year, and our guaranteed 30-minute delivery on food grew over 80%.
All of these reflect our continued strength in our premium offerings. Importantly, this is translating into a very healthy financial performance, as you can see in the margins this quarter. Net revenues are roughly up 12% year-on-year, and this reflects the quality of growth and improved monetization. For the full year ahead, we continue to expect high single-digit GTV growth with higher growth expected more towards the second half of the year as the new capabilities continue to roll out. Moving over to your question on GoPay. It has been over five years since we began building what GoPay is today, and that growth that you are seeing is not something that happened overnight. It is a result of us building the ecosystem in layers over time. We started with the payments infrastructure back in 2021.
We added lending in 2022, went on to launch the GoPay app in 2023, and by 2024, these components began to work together as an integrated ecosystem. What you're now seeing is a system that's compounding in both users and profitability, and we expect this trend to continue. Now in terms of top-of-funnel acquisition, the single biggest driver over the last few years on the GoPay app has been free transfers.
Through deep integrations with banks and other partners, we were able to reduce transfer costs by about 98%, making GoPay one of the most cost-effective options for everyday transactions. This has become a very strong and scalable acquisition engine, we saw this strength again very clearly during Ramadan this year, where March was our highest growth month ever, both for new user acquisition as well as increased transaction frequencies. Now, on retention, our approach is structural rather than promotional. We are consistently among the cheapest options for daily use cases, users continue to come back without relying on incentives. We call this Murah, which is our everyday low price. This is reflected in the scale of the activity. On average, GoPay app users transact close to 19x a month, all in all, we ended up doing over 2 billion transactions in Q1 2026.
A lot of users and a very high frequency creates a very natural flywheel. Payments drives acquisition and engagement and builds a rich data layer, and that data allows us to underwrite and scale lending very effectively on the platform. On conversion, I believe, we are still early but making tremendous progress. We now have about 27.5 million monthly active users, monthly transacting users, and our lending penetration is only at mid-single digit. This is intentional, and we're scaling this in a very disciplined way, prioritizing credit quality over fast expansion. What differentiates us is the combination of low CAC and rich proprietary data. Standalone fintech players typically face significantly higher CAC and are much more limited on data. Our ecosystem allows us to do both with much greater confidence.
Lastly, if I think about growth from the perspective of headroom, today, only about 13% of Indonesian adults are using us monthly. That gives us a very significantly long runway for future growth. Thank you.
Thank you.
Thank you very much for your questions, Ferry. Our next question come from Ryan Winipta from Indo Premier. Ryan, please go ahead.
Yeah. Thanks, Joel. This is Ryan from Indo Premier. Hi, Hans and Simon. Two questions from my side. The first one, I think it's related to the AI product. We've seen some of the regional peers recently unveil some kind of like comprehensive AI product suites that is also both aim at the both the merchants and also consumers. Just wondering on the GoTo overarching AI strategy, and specifically, is there any new AI-driven features or products that have been introduced recently? Just wanted to see the correlation with the costs. My second question is, related to, I think you mentioned about the share buyback strategy as well as your capital allocation.
Just wanted to understand on the expected size as well as the timeline for the upcoming buyback. I think that's all from me. Thank you.
Hey, Ryan. Thank you so much. Let me take on the strategy for AI and Simon can help with the buybacks. Ryan, I think on the coming back to the AI strategy, we have had dozens of AI projects over the past 18 months, and we've actually built some capabilities throughout the company. However, we do think that it's time that we pull it all together into a single coherent, integrated effort, right, throughout the whole company. We'll be sharing more about this in subsequent calls. Some of the examples I can share that we have done or are doing on the cost side, for example, is replacing a third-party software. We have several instances where we are paying, you know, seven figures for third-party software, and we are replacing them with our own in-house AI tools.
They are both cheaper, and because they're more tailor-made for our needs, have also proven to be more effective. I think we need to have more and more examples of this, and we also need to extend this into our core tech stack platforms, be it our infrastructure platform, our engineering platforms, our QA platforms and so on and so forth. We have lots of projects ongoing. We now need to pull it to a coherent whole. At the same time, it's not just about internal cost to serve. It's also about external-facing, to your earlier remark, customer-facing suites or AI solutions. We're focusing on conversion rates, right? Ultimately, higher conversion rates drive better economics and also increased retention. There, we shared in the prepared statements, the GoPay personalization on the home screen.
I think another one that is really working quite well for us is the search and recommendation engine for GoFood. Quietly, over the past few months, we have been making some fairly significant architectural changes in the way that our search and recommendation engine and algorithms work for GoFood. In certain cases today, we have seen click-through rates that is actually 2x versus what they were before these AI-driven changes. I think as we integrate the AI strategy across the entire company, allow us a little bit of time. I think we'll come back to you and we'll come back to everyone with a coherent strategy. I do expect that our rollout of AI features to accelerate in the months to come.
With that, Simon, if you can help with the buyback question.
Sure. Sure. Thanks for the question, Ryan. Let me share a bit more thoughts on our thinking behind capital allocation. Timing-wise, it is a good time to revisit how we approach this. Our underlying business fundamentals are getting stronger. Adjusted free cash flow is improving. We do believe this trend is sustainable. We have two objectives on capital allocation. One is, our liquidity position today is already currently strong. We have gross cash of around $1.4 billion, and we do want to maintain this for flexibility and contingency. Secondly, as we become more profitable and cash generative, we want to sustainably and systematically return capital to shareholders through buybacks. We are therefore actively reviewing our broader capital allocation strategy to drive long-term shareholder value.
We are not at this moment providing a specific dollar quantum, but as part of this ongoing strategy, we would expect that our share buybacks over the coming quarters may outpace our activity in the previous few quarters. I think that we can point towards. Yeah. Thank you, Ryan.
Thank you, Ryan . Also, I would like to remind everyone that we do have around about 15 minutes to go. Anyone who wishes to ask a question, please go ahead and you can use the Raise Hand function. Raise your hand, and then we will call upon you. Alternatively, you can also use the question function within Zoom. Once again, if you do wish to ask a question, you can either type in the question in the question function, or you can raise your hand. The first person that we'll go to, we've got Norman Choong from CLSA. Norman, please go ahead.
Hello?
Hi, Norman. We can hear you. Go ahead.
Yeah. Hi, Joel. Hi, Hans. Hi, Simon, other management team. Congrats on the first profit being booked. My question is still on the back of the direction of ODS back into market share, right? Understand that there are some seasonality in play, but if you were to look at second quarter into second half, we should be expecting, you know, I know you don't guide GTV growth or top line, but should we be expecting, you know, the 4% to be somewhat closer to perhaps high single digit or low teens? In terms of, you know, some data on April, how is it looking?
If the growth will still be prioritized on whether maintaining adjusted EBITDA or you know, you will spend a bit more on that side. That's my first question. The second question is back to the, there was some concern on drivers' commission cap a few months ago. I just wanted to hear what's the update on that front. Thanks.
Hey, Norman. Thank you so much for your questions. Let me address them a little bit, then I'm gonna ask Sudhanshu and Cath also to chime in to help. I think on the ODS market share, you're right, we do not guide top line. I think the 4% is not where we want to be. We are expecting higher than 4% growth in quarters to come, and I think April results have been so far relatively encouraging. I'll pass it on to Sudhanshu to talk through the data. In terms of the growth, will be prioritized or adjusted EBITDA, I think we will continue to strive to do both.
We are more excited that some of our new product builds have launched and are scaling up. We may support them by more spending. However, that if so, that would be temporary and the crux of the matter is still going to be growing in a sustainable way. Yeah. Sudhanshu?
Thank you, Hans. To answer this question, I think we definitely don't want to be at where we are today at the 4% growth, and we're expecting growth to increase in the quarters to come. Where we are is we're launching key capabilities, and our capabilities are built in a way in order to not increase spending significantly but find other ways to drive efficiency. The rollout for these capabilities is done zone by zone across Indonesia, where we experiment, and we find new ways of trying to cover those areas better, which means improvements in both technology as well as operations. Mass market for us is a new kind of a business, which helps us deliver growth in very different ways from what we have done earlier.
I can't specifically share yet on how much growth will we get to in the next quarter, but based on the early results, I feel very excited that we will continue to grow much faster than where we are today in the coming quarters.
In terms of the comparison between which one do we pick, what we are trying to grow is adjusted EBITDA, not margins, and continue to deliver higher OCG. That's it from me. Thank you.
Thank you, Sudhanshu. Cath, could you help us with the second question?
Sure. Hi, Norman. Thank you for your question. So addressing your question regarding the driver's commission, you are right that maybe a few months ago or probably even longer than that there has been multiple kind of mentioned regarding our commission or our take rate, right? Maybe if I may step back here a little bit. We are very lucky here that throughout all this period we have been in a very close communication discussion and what do you call that? Really, like, deep talk with our government as well, right? This is to really understand what is the best kind of a structure for the industry to continue to grow while, of course, most importantly, to provide the welfare for our driver partner, as well as the service, affordable service for their customers as well.
I think this is the balance that has always guide our direction, our discussion with relevant government bodies, right? Again, as mentioned, we are very lucky to have this very open communication. As you are probably aware that out of the take rate that the driver has been giving us, right? Because the take rate actually is, like, what the driver sharing to us, the driver partner sharing to us. A lot of this, if you look at our PNL, is actually goes back not just to the driver, but also in the form of the incentive to maintain, to retain the level of demand for the customers as well. We believe that this is a business model, right, that has been proven, that has been tested as well.
If I may be a little bit candid here, actually, in Indonesia, actually not just Indonesia, there are few players that are using a slightly different commission take rate. We are always being mentioned that we are taking 20%. We'll be getting 20%, and there are a few other players, couple actually, that are taking, like, 10%. The reason being that, again, as I say, if I may be candid here, our business model has been proven to be the more superior one, if I may use that word, in maintaining and in growing, more importantly, the industry. This is the reason why, if I may say, the other player who's supposedly charging a lower commission rate compared to us, has not really fully grown their own size.
This is just to share very, very candidly what we are thinking about this. Of course, we're continuously talking how to continue to improve. One thing I would like to highlight here as well, having said all this, we do believe, and we do put a lot of emphasis in continue to improve our drivers' welfare. Again, as mentioned, while maintaining the customer, improving the customer service as well. Very quickly here, two principle in the improving the driver welfare. Number one is as a gig worker concept, right? We always have to remain fair. The fairness and transparency is very important.
The driver partner who are, for example, like, putting in more into the platform, giving a better service level will always be rewarded more compared to those who are less. I think that that's number one principle. Number two is we always have to listen, and listen to our driver partner to understand what really important for them. For example, last December, we launched our BPJS. This is a social security for our performing drivers, right? The drivers with a good service level as well as performance. We are providing subsidy for their social security as well. Yeah, I would think this is will continue become one of our focus.
I think Hans putting a lot of focus on this as well to continue to improve on our driver welfare, while at the same time balancing act with our customer service excellence, as well. Of course, the company financial. Hope that helps, Norman. Thank you.
Yep. Thank you, Catherine. Thank you, Pak Sudhanshu. Thank you, Pak Hans. Thank you so much.
Thanks, Norman.
Thank you, Norman. We'll have one last question. We've got Divya Kothiyal from Morgan Stanley. Divya, please go ahead.
Yeah. Thanks, Joel. Good evening. Two questions from me. The first one would be, could you talk about what has positively surprised you in the first quarter performance? You know, given that the guidance was set in March, clearly the first quarter results you're seeing has been better than expected, and in normal circumstances you would have revised guidance again. What really surprised you in the first quarter, which was maybe less known in March when you set the guidance? The second question would be that, you know, we're seeing very different trends on deliveries versus mobility in this quarter, you know, -4 versus +8. Could you talk about why the deliveries business has not seen the, you know, seasonality or the less working days or the
Ramadan effect. Maybe if you can talk about competition in the food delivery space, specifically, with the likes of ShopeeFood growing there. How have we competed over there, and why is there such a big difference in the growth rates between mobility and food delivery? Thanks.
Hi, Divya. Thank you so much for your questions, yeah. Let me take the first. Your first question was around what has positively surprised us. I think there has been several things that were better than what we had expected. One of them is what we're really seeing is on the fintech and lending side, we are really getting a positive boost from Ramadan, which we had expected. What we also were surprised to see is that the lending performance continues to do well. The risk performance also continues to do well. Perhaps we're still in the early stages of this oil price challenge, but that has been a positive surprise for us.
Secondly, what we have also seen is that the continued demand for the premium products has been quite good. Maybe this was a bit of an inverse re-correlation because of heavy rains, and people didn't want to go out, and the affluent segment had money, they value convenience, et cetera. What we're also seeing is that the affluent segment is not very price sensitive, right? We are continuing to kind of test that and test those boundaries. That has been a pleasant surprise for us as well. Last but not least, some of our cost reduction efforts really coming from the IT side, the tech side, has really started to kick in in full bore.
Also some of these behind the scenes AI-enabled tools that we are putting in place have started to kick in. I personally don't feel like it is near, anywhere near to where the full potential is, but some of this has kind of started to kick in. I think if we take a step back and look across all three, certainly the point about our better lending performance is greatly dependent on the macroeconomics. The other two are more sustainable, right? We will continue to test the boundaries of the price flexibility or elasticity at the affluent segment, as well as we look forward to even an acceleration of some of our cost reduction efforts.
I hope that helps and, maybe Sudhanshu, you can help with the questions on mobility versus delivery.
Sure, Hans. Hi, Divya. Great question. To answer mobility versus deliveries, right? Maybe let me explain the kind of businesses. The seasonalities are generally the opposite of each other. For example, we see this on a weekly basis. Weekends, when people stay or spend more time at home, we see an increased number of food orders and deliveries in general. When people are going to office, we see a higher number in mobility, right? Because a lot of our use cases are targeted towards commuters. Now what happened in Q1 is we saw a high amount of rain, holidays, and work from home. Whenever this happens, we see a much more increased demand for deliveries. In addition, Ramadan meant that we see a very high increase in logistics, which meant that deliveries overall saw very strong growth.
At the same time on mobility, given that we had a lot less full weekdays, full working weekdays, it meant that we lost a fair number of, we saw a fair number amount of reduction in terms of number of orders that we could complete. Generally, when the seasonality comes in, it is always the opposite between mobility and deliveries, which is why you see much higher numbers on delivery versus versus on mobility. Moving on from there, right? If I talk about how do we think of competition and how have we been competing, I think two things come to mind.
First, on food delivery, we constantly get user feedback where we hear that in the affluent market, we are significantly preferred more, which is more and more visible based on the significant growth that we've seen on the 30-minute delivery that we ordered on food. For the affluent user base, we are much more stronger than Shopee or the other competitors. Mass market, we are trying to build up a user base and figure out how do we grow there sustainably. We're building out a lot of new capabilities which help us compete better. Where we are today is a tale of two cities. We have one affluent where we're doing really well, I think we are very strong versus the competition.
We have the other segment of users where we are growing, not fully there, but we really expect to get there in some time. I hope that helped answer your question.
Yes. Thank you very much.
Thank you very much, Divya. Thank you everyone for listening tonight. That brings us to the end of the call, we look forward to interacting with you all in the coming weeks and months. Thank you so much and have a good evening.