Paytm Net Loss Reduces Sequentially by 11%, While Revenue Surges

Paytm, India’s leading digital payments and financial services company, continues to strengthen all its businesses with strong revenue growth. The company has reported a 76% year-on-year (YoY) growth in revenue to Rs 1,914 crore and sharp improvement of 61% YoY in EBITDA before ESOP cost by Rs 259 crore. Also, it has registered an 11% QoQ reduction in its net loss for Q2FY23.

The company identified its revenue drivers to be growth in loan disbursements, continued growth in the merchant subscription base leading to increase in subscription and MDR revenues, and increase in payment gateway revenue driven by higher GMV in online business, primarily ecommerce. This was achieved without any UPI incentive during the quarter. On a QoQ basis, revenues grew 14%.

The payments business witnessed revenue growth of 56% YoY and 9% QoQ in the quarter on account of continued platform expansion, with average monthly transacting users (MTU) growing 39% YoY to 79.7 million, while merchant base has increased to 29.5 million. The company further strengthened its leadership in offline payments with 1.1 million devices deployed in the quarter, taking the total to 4.8 million. With this, Gross Merchandise Value (GMV) stood at Rs 3.2 lakh crore. Revenue from payment services to consumers stood at Rs 549 crore, an increase of 55% YoY, while payment services to merchants was Rs 624 crore, marking an increase of 56% YoY.

Driven by improved monetization and continued focus on reduction in payment processing charges, Paytm’s net payment margin (calculated as payments revenues plus other operating revenues, less payment processing cost) stood at Rs 443 Cr, increasing 15% QoQ and was up 428% YoY.

The company’s fast-growing lending vertical saw revenue from the financial services business was Rs 349 crore, up 293% YoY and 29% QoQ. It now accounts for 18% of total revenue, compared to 8% in Q2FY22, driven by sourcing and collection revenues. In Q2FY23, Paytm disbursed 9.2 million loans, up 224% YoY and 8% QoQ, amounting to Rs 7,313 crore, marking an increase of 482% YoY and 32% QoQ. With a long growth runway ahead, the company saw a high demand in the loan distribution business for all its products – Paytm Postpaid, Personal Loans, Merchant loans.

The company also reported 55% YoY and 14% QoQ growth in Commerce and Cloud revenues to Rs 377 crore, with Commerce revenue increasing 49% YoY due to higher ticketing sales, while Cloud revenues were up 58% YoY

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