Paytm Q1 FY25: Net Loss Widens To INR 840.1 Cr, Operating Revenue Declines 36% YoY

Listed fintech major Paytm’s consolidated net loss widened 134% year-on-year to INR 840.1 Cr in the June quarter (Q1) of the financial year 2024-25 (FY25) as compared to INR 358.4 Cr in the year ago-period.

Revenue from operations declined 36% in Q1 FY25 to INR 1,502 Cr from INR 2,342 Cr in the corresponding quarter last year.

Sequentially, Paytm’s consolidated net loss surged 52.6% while revenue from operations plummeted 33.7%.

Paytm’s payment business revenue stood at INR 900 Cr during the quarter under review, which took a hit due to disruption of Paytm Payments Bank Limited products, the conservative approach taken for certain businesses, and temporary disruptions in operating metrics, the company said in its earnings release.

In Q1 FY25, Paytm reported a negative adjusted EBITDA, or EBITDA before ESOP of INR 545 Cr. 

“Going forward, we expect revenue and profitability to improve, driven by growth in operating parameters such as GMV, an expanding merchant base, recovery in loan distribution business and continued focus on cost optimisation,” Paytm said.

The net payment margin was INR 383 Cr, with payment processing margin up 3 basis points during the quarter under review.

In Q1 FY25, Paytm’s revenue from financial services  stood at INR 280 Cr while revenue from marketing services amounted to INR 321 Cr. The contribution profit stood at INR 755 Cr, with a 50% margin.

In a statement, Paytm said that its merchant subscriber base rose to 1.09 Cr in Q1 FY25 with merchant sign-ups and daily gross merchandise value (GMV) rebounding to January levels.

The fintech major expects net device merchant additions to reach previous run rates by Q3 FY25.

Overall gross merchandise value grew month-on-month to INR 4.3 Lakh Cr for the quarter ended June 30, 2024.

Paytm further said that its total monthly transacting user base stood at 7.8 Cr in Q1 FY25. The company added that it is awaiting regulatory approval to onboard new UPI customers, which will drive its MTU base further.

Where Did Paytm Spend In Q1

Paytm cut its overall spending by 11.5% YoY to INR 2,476.4 Cr in Q1 FY25 from INR 2800 Cr in the year-ago quarter.

Employee Benefits Expenses: Even as Paytm managed to reduce its employee costs 13.7% sequentially, employee expenses still remained the biggest cost for the company in Q1 FY25 at INR 952.5 Cr as against INR 1106.1 Cr in Q1 FY24.

Paytm Processing Charges: The company splurged INR 517.1 Cr in payment processing charges in Q1 FY25, down 32.5% from INR 766.6 Cr in the corresponding quarter last year.

Marketing And Promotional Expenses: Paytm spent INR 221.4 Cr on marketing and promotion during the quarter under review, 16.5% less than the INR 265.3 Cr it spent in Q1 FY24.

Software, Cloud And Data Centres Expenses: Paytm’s IT expenses jumped more than 17% to INR 182.4 Cr in Q1 FY25 from INR 155 Cr in the year-ago quarter.

Depreciation And Amortisation Expense: The cost incurred for the purchase of tangible and intangible assets rose 12% to INR 178.4 Cr in Q1 FY25 versus INR 159.1 Cr in Q1 FY24.

Finance Costs: Paytm’s financial expenses declined over 37% to 4.2 Cr in Q1 from 6.7 Cr in the year-ago quarter.

Other Expenses: The company spent INR 420.4 Cr in other expenses in Q1 FY25, 23% higher than INR 341.3 Cr in Q1 FY24.

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