Earnings before interest, taxes, depreciation and amortization (EBITDA) now matters more than metrics such as contribution margin or gross merchandise value (GMV), according to the United States-based investment bank JP Morgan.

Analysts were expecting firms to break down their path to profitability in a step-by-step way, JP Morgan head of Indonesia research and strategy Henry Wibowo said at a media roundtable in Jakarta on Wednesday.

As a case in point, he noted e-commerce firms now had to explain how they were achieving growth in commissions and advertising revenue. Meanwhile, ride-hailing service providers were expected to show they were being more targeted in offering user discounts.

"After EBITDA [becomes positive], analysts want to know when those tech companies hit a positive net profit," Henry explained.

Contribution margin, in a nutshell, measures revenue after the deduction of variable costs, which includes cost of revenue and marketing expenses related to promotional activity.

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However, the number does not take into account fixed costs, such as rent and lease payments, utility bills and salaries.

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