Paytm Narrows Net Loss To INR 208.5 Cr In Q3

SUMMARY

Paytm narrowed its consolidated net loss by 6% to INR 208.5 Cr in Q3 FY25 from INR 221.7 Cr in the same quarter last year

Operating revenue declined 36% year-on-year to INR 1,827.8 Cr in Q3 FY25; sequentially, it rose 10% from INR 1,659.5 Cr on the back of growth in payments and financial services businesses

Adjusted EBITDA loss (excluding ESOP cost) declined 78% quarter-on-quarter to INR 41 Cr in Q3 FY25

Fintech major Paytm narrowed its consolidated net loss by 6% to INR 208.5 Cr in the December quarter of the financial year 2024-25 (Q3 FY25) from INR 221.7 Cr in the same quarter last year on the back of recovery in its digital payments business.

It must be noted that the Vijay Shekhar Sharma-led company had posted a net profit of INR 930 Cr in the quarter ended September 30, 2024 on account of the sale of its movie and events ticketing business to foodtech major Zomato.

Revenue from operations declined 36% to INR 1,827.8 Cr during the quarter under review from INR 2,850.5 Cr in the year-ago period. However, it rose 10% from INR 1,659.5 Cr on a quarter-on-quarter basis, driven by growth in its payments and financial services businesses.

Including other income of INR 188.7 Cr, total revenue stood at INR 2,016.5 Cr in the quarter ended December 31, 2024, as compared to INR 2,999.1 Cr in the same quarter last year.

Paytm managed to trim its adjusted EBITDA loss (excluding ESOP cost) by 78% to INR 41 Cr in Q3 FY25 from a loss of INR 186 Cr in the September quarter.

Segment Revenue

Revenue from the payment services business surged 9% to INR 1,059 Cr in Q3 FY25 from INR 981 Cr in the quarter ended September 30, 2024, on the back of an increase in gross merchandise value (GMV) and merchant subscriptions.

GMV surged 13% to INR 5 Lakh Cr during the quarter under review from 4.5 Lakh Cr in Q2 FY25, partly boosted by the festive season. Paytm reported a 10% YoY and 5% QoQ rise in merchant subscriptions (including devices) to INR 1.17 Cr for the quarter ended December 31, 2024.

“New subscription paying device merchant sign ups continue to see strong growth with gross device additions in Q3 FY 2025 comfortably surpassing January 2024 run-rate,” said Paytm in its earnings statement.

Paytm also earns revenue from its financial services such as loans, stock broking and insurance. Revenue from this segment surged 34% to INR 502 Cr during the quarter under review from INR 376 Cr in Q2 FY25, led by a higher share of merchant loans, higher trail revenue from the default loss guarantee portfolio and improvement in collections.

Another source of revenue for Paytm is its marketing services business, which primarily includes advertising, travel ticketing, credit card distribution and deals & gift vouchers. Revenue from this segment stood at INR 267 Cr in Q3 FY25 as against INR 268 Cr (excluding the entertainment ticketing business) in Q2 FY25.

One of the key drivers for growth in marketing services revenue, Paytm said, was the increase in monthly transacting users (MTU), which rose to 7.2 Cr in December 2024 from a low of 6.8 Cr in September 2024 as the company began onboarding new UPI customers following approval from NPCI.

Where Did Paytm Spend In Q3?

The listed fintech major managed to bring down its overall expenses by 31% to INR 2,219.8 Cr in Q3 FY25 from INR 3,216.3 Cr in the corresponding quarter last year.

Employee Benefits Expense: Employee cost (excluding ESOP) declined 6% QoQ and 29% YoY to INR 575 Cr in Q3 FY25 as Paytm continued to leverage artificial intelligence to improve productivity across businesses.

Additionally, the company spent INR 182 Cr in ESOP costs in the reported quarter, down 16.5% from INR 218 Cr in Q2 FY25.

Payment Processing Charges: The spending under this expense head fell 42% to INR 570.4 Cr in Q3 FY25 from INR 982.2 Cr in Q3 FY24. Sequentially, it rose 10% from INR 516.8 Cr.

Marketing And Promotional Expenses: Paytm spent INR 140.9 Cr towards marketing initiatives in Q3 FY25, a 49% decrease from INR 275.2 Cr in the corresponding quarter last year.

Paytm is selling its entire 100% stake in its wholly owned subsidiary Xceed IT Solutions for INR 60,728 in an all-cash deal.

Incorporated in 2005, Xceed IT Solutions is a wholly owned subsidiary of Mobiquest Mobile Technologies Private Limited, which operates in the field of information technology, specifically engaged in computer programming, consultancy, and related activities.

Shares of Paytm were trading 0.82% lower at INR 907 apiece on the BSE at 2:06 PM.