One 97 Communications Limited (Paytm) has released its financial results for the second quarter of fiscal year 2026, showcasing robust growth and improved profitability. The company reported a 24% year-over-year increase in revenue and achieved EBITDA profitability, marking a significant milestone in its financial performance.

Key Financial Highlights

• Revenue Growth: Paytm's operating revenue grew by 24% year-over-year to ₹2,061.00 crore in Q2 FY 2026. Excluding revenue from the entertainment business in the previous period, the growth was even stronger at 27% YoY.

• EBITDA Profitability: The company achieved an EBITDA of ₹142.00 crore with a margin of 7%, compared to an EBITDA loss of ₹404.00 crore in the same quarter last year.

• Contribution Profit: Contribution profit increased by 35% YoY to ₹1,207.00 crore, with a contribution margin of 59%, up 5 percentage points YoY.

• Net Profit: Paytm reported a profit after tax (PAT) of ₹21.00 crore for Q2 FY 2026, a significant improvement from a loss of ₹415.00 crore in Q2 FY 2025.

Segment Performance

Payment Services

• Net payment revenue grew by 28% YoY to ₹594.00 crore.
• Gross Merchandise Value (GMV) increased by 27% YoY to ₹5.67 lakh crore.
• Merchant subscriptions reached 1.37 crore, adding 25 lakh subscriptions YoY.

Financial Services Distribution

• Revenue from distribution of financial services surged by 63% YoY to ₹611.00 crore.
• The number of loans distributed grew, with merchant loan distribution showing robust momentum.

User Engagement

• Monthly Transacting Users (MTU) reached 7.5 crore, up by 36 lakh YoY.

Strategic Developments

Paytm continues to focus on expanding its leadership in merchant payments, growing its financial services distribution, and enhancing its UPI payment consumer acquisition. The company is also exploring international expansion as a long-term growth driver.

Management Commentary

Vijay Shekhar Sharma, Chairman, Managing Director, and CEO of Paytm, stated, "Our Q2 results demonstrate the strength of our business model and our focus on profitability. We are seeing encouraging signs of user growth and retention, resulting in consistent market share gains."

Outlook

With a cash balance of ₹13,068.00 crore, Paytm is well-positioned to capitalize on growth opportunities. The company's focus on AI-led innovations and operational efficiencies is expected to drive further improvements in profitability and market share.

Note: All figures are in Indian Rupees (INR) and comparisons are made on a year-over-year basis unless otherwise stated.

One 97 Communications Ltd , the parent company of Paytm, has reported a consolidated net profit of 21.00 crore rupees for the quarter ended September 30, marking a 98% decline from 928.00 crore rupees in the same period last year. The company's revenue from operations grew by 24% year-over-year to 2,061.00 crore rupees, driven by increased subscription merchants, higher payments GMV, and growth in financial services distribution.

Financial Highlights

Contribution Profit margin stood at 59%.

Key Business Metrics

Business Performance

One 97 Communications' growth was primarily driven by its payments and financial services segments. The company reported a 28% YoY increase in net payment revenue, while the financial services segment saw a 63% YoY growth, led by merchant loan distribution and enhanced collection performance.

Exceptional Items

The significant decline in profit was attributed to a one-time charge of 190.00 crore rupees for full impairment of a loan to joint venture First Games Technology. Without this charge, the profit would have been 211.00 crore rupees.

Corporate Updates

• The company appointed Ms. Manisha Raj Raisinghani as Non-Executive Independent Director for a five-year term, subject to shareholder approval.
• The board approved additional investment of up to INR 2,250 crores in wholly owned subsidiary Paytm Payments Services Limited (PPSL) through a rights issue. This investment aims to strengthen PPSL's net worth, fund acquisition of offline merchant payment business, support working capital needs, and maintain leadership in merchant payments business.
• Paytm granted 5,50,000 stock options under ESOP 2019 scheme.
• The company received a show cause notice from the Directorate of Enforcement regarding alleged FEMA contraventions worth approximately INR 611 crores, with some matters already resolved by RBI.

Future Outlook

One 97 Communications outlined four focus areas for future growth:

1. Expanding merchant leadership
2. Growing financial services distribution
3. Driving AI-first innovation
4. Evaluating new international markets as a long-term growth driver, expected to contribute meaningfully after 2-3 years

As the company continues to navigate challenges and pursue growth opportunities, investors and analysts will be watching closely to see if One 97 Communications can improve its profitability while maintaining revenue growth in the coming quarters.