Paytm Q2 Results: Net Profit Reached Rs 930 Cr; Revenue Jumps To Rs 1,660 Cr

On October 22, One97 Communications Ltd., the company behind the well-known financial platform Paytm, announced a net profit of Rs 930 crore for the quarter that ended on September 30, 2024, which included an extraordinary gain of Rs 1,345 Cr from the sale of entertainment tickets. EBITDA before ESOP was Rs 186 Cr, which improved QoQ by Rs 359 Cr, and EBITDA of Rs 404 Cr, which improved QoQ by Rs 388 Cr. The company's operating revenue was Rs 1,660 Cr, up 11% QoQ.

With a net payment margin of Rs 465 Cr, up 21% QoQ, and a GMV of Rs 4.5 Lakh Cr, up 5% QoQ, Paytm's payment services revenue of Rs 981 Cr up 9% QoQ. As of September 24, the number of merchant device subscribers has increased to 1.12 Cr, a 3 Lakh rise on a QoQ basis. 34% QoQ growth in the company's financial services revenue, or Rs 376 Cr.

"In Q2 FY 2025, we achieved 11% QoQ revenue growth, due to 5% QoQ increase in GMV, better realization from devices and 34% QoQ increase in revenues from financial services. Our net payment margin increased 21% QoQ to Rs 465 Cr, largely on account of improvement in payment processing margin, better device realization and growth in GMV. Financial Services revenue was Rs 376 Cr, up 34% QoQ, on account of increase in collection bonus in merchant loans due to better asset quality trends, and higher share of merchant loans. With even greater confidence in our merchant loan distribution business, where we help in both distribution and collection, we have started working with select lenders by giving the Default Loss Guarantee (DLG, explained in subsequent sections) for select portfolios. This in long term will give us opportunity to serve wider merchant base and increase our financial services distribution revenue," One97 Communications said in a stock exchange filing.

"Contribution margin without UPI incentives has expanded to 54%, despite including DLG cost in this quarter. It has improved due to higher payment processing margin and growth in high margin financial services revenue. We expect the same contribution margin trends will continue. Our indirect cost has come down by 17% QoQ to Rs 1,080 Cr due to reduction in employee costs (down 13% QoQ), marketing expenses and absence of certain one-time expenses incurred in Q1 FY 2025. With growth in revenue, improvement in contribution margin and reduction in indirect costs, EBITDA has improved by Rs 388 Cr QoQ to Rs (404) Cr. EBITDA Before ESOP improved by Rs 359 Cr QoQ to Rs (186) Cr and we remain committed to reach EBITDA before ESOP profitability by Q4 FY 2025. With one-time exceptional gain of Rs 1,345 Cr, on account of sale of entertainment ticketing business, we achieved PAT of Rs 930 Cr in Q2 FY 2025," the company further informed stock exchanges.

Compared to 5.9 lakh in Q1 FY 2025, 6.0 lakh key financial services clients (consumer and merchant) used the Paytm platform in Q2 FY 2025. As of the September 2024 quarter, Paytm's cash balance was Rs 9,999 Cr, up from Rs 8,108 Cr in the June 2024 quarter. The customer's money of Rs 449 Cr for June 2024 and Rs 412 Cr for September 2024 from Paytm Money Ltd (PML). When looking at the cash balance on a quarter-over-quarter basis, the rise was mostly due to the Rs 2,014 Cr cash received during the quarter for the sale of the entertainment ticketing company.