One 97 Communications Limited (Paytm), India's leading digital payments and financial services company, has reported strong financial results for the first quarter, marking a significant turnaround with its first-ever profitable quarter.

Key Financial Highlights

• Revenue Growth: Paytm's operating revenue grew by 28% year-over-year to ₹1,918.00 crore, driven by an increase in merchant subscriptions, higher Gross Merchandise Value (GMV), and growth in financial services distribution.

• Profitability Achievement: The company reported a Profit After Tax (PAT) of ₹123.00 crore, a substantial improvement from the ₹840.00 crore loss in the same quarter last year.

• EBITDA Performance: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) turned positive at ₹72.00 crore, with a margin of 4%.

• Contribution Profit: Contribution profit increased by 52% YoY to ₹1,151.00 crore, with a contribution margin of 60%, up 10 percentage points YoY.

Business Performance

Merchant Subscriptions and GMV

Financial Services

Distribution of financial services revenue doubled YoY to ₹561.00 crore, driven by expansion in merchant loans and improved asset quality.

Strategic Developments

Paytm continues to strengthen its leadership in India's merchant payment ecosystem, focusing on both enterprise and MSME segments. The company is leveraging AI capabilities to enhance product development, risk management, and customer experience.

Vijay Shekhar Sharma, Chairman, Managing Director, and CEO of Paytm, stated, "Our first quarter results demonstrate the strength of our business model and our ability to deliver robust growth while achieving profitability. We remain committed to innovation and expanding our merchant network, particularly in tier-2 and tier-3 cities."

Outlook

Paytm expects to maintain its growth trajectory and further improve profitability. The company anticipates its contribution margin to be in the mid to high 50s percent for the year and projects EBITDA before ESOP cost to continue growing.

Recent Corporate Actions

In a separate announcement, Paytm's Nomination and Remuneration Committee approved the grant of 93,244 stock options to eligible employees under its ESOP 2019 scheme. The exercise price for these options is set at ₹9.00 per stock option.

As Paytm continues to solidify its position in India's digital finance landscape, the company's focus on AI-driven innovations and expanding its merchant ecosystem is expected to drive future growth and profitability.

One 97 Communications Limited (Paytm), India's leading digital payments and financial services company, has reported strong financial results for the quarter, marking a significant turnaround with its first-ever quarterly profit since its November 2021 listing.

Financial Highlights

• Revenue Growth: Paytm's operating revenue surged by 28% year-on-year to ₹1,918.00 crore, driven by an increase in merchant subscriptions, higher Gross Merchandise Value (GMV), and growth in financial services distribution.

• Profitability Achievement: The company reported a Profit After Tax (PAT) of ₹123.00 crore, a remarkable improvement from a loss of ₹840.00 crore in the same quarter last year.

• EBITDA Performance: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) turned positive at ₹72.00 crore, with a margin of 4%. The company targets a 15-20% EBITDA margin over the next two-three years.

• Contribution Profit: Paytm's contribution profit rose by 52% year-on-year to ₹1,151.00 crore, with the contribution margin expanding to 60%, up 10 percentage points from the previous year.

Operational Metrics

• Merchant Base Expansion: Paytm's merchant subscriptions, including devices, reached an all-time high of 1.30 crore, adding 21 lakh subscriptions year-on-year. The company's point of sale devices business crossed 1 million units, gaining market share in the segment.

• GMV Growth: The company's Gross Merchandise Value increased by 27% year-on-year to ₹5.39 lakh crore.

• User Engagement: Monthly Transacting Users (MTU) averaged 7.40 crore for the quarter.

Segment Performance

Payment Services

Revenue from payment services, including other operating revenue, grew by 23% year-on-year to ₹1,110.00 crore. Net payment revenue increased by 38% to ₹529.00 crore. The payment processing margin was 3.7% on a consolidated basis, above the guided three-basis-point margin.

Financial Services

Distribution of financial services revenue doubled year-on-year to ₹561.00 crore, driven by expansion in merchant loans and improved asset quality. The company discontinued its buy now, pay later product due to its unsecured nature, though management expects the consumer credit business has bottomed out.

Commerce and Cloud Services

Marketing services revenue stood at ₹247.00 crore for the quarter.

Management Commentary

Vijay Shekhar Sharma, CEO of Paytm, emphasized that the payments business remains profitable without merchant discount rates and sees a 4-5x growth opportunity in India's payments ecosystem.

Group CFO Madhur Deora expects considerable margin improvement by the current financial year's end.

Outlook

Paytm expects to maintain its growth momentum and profitability in the coming quarters. The company aims to further expand its merchant network, enhance its financial services offerings, and leverage AI to drive operational efficiencies.

With a strong cash balance of ₹12,872.00 crore, Paytm is well-positioned to invest in growth opportunities and continue its market leadership in India's digital payments and financial services landscape.

As Paytm transitions into a profitable entity, it sets a new benchmark in the Indian fintech sector, demonstrating the viability of its business model and the potential for sustained value creation in the digital economy.