Paytm Q1 Loss Up Nearly 70% To INR 645.4 Cr, Operating Revenue Jumps 89%

Paytm’s parent company One97 Communications on Friday (August 5) reported widening of its consolidated loss by 69% to INR 645.4 Cr in the June quarter of the financial year 2022-23 (FY23) from INR 382 Cr reported in the corresponding quarter last year.

On a quarter-on-quarter (QoQ) basis, the fintech platform’s loss declined 15.3% from INR 762.5 Cr, making Q1 FY23 the third consecutive quarter with a sequential decline in loss. 

On EBIDTA level (before ESOP cost), Paytm’s loss narrowed to INR 275 Cr in Q1 FY23 from INR 332 Cr in the corresponding quarter last year, the startup said in a statement. On a QoQ basis, this was over a 25% decrease from INR 368 Cr reported in Q4 FY22.

Paytm’s operating revenue saw an 89% YoY jump to INR 1,680 Cr during the quarter from INR 890.8 Cr reported in the year-ago quarter.

The startup said that the main drivers of its growth were increase in subscription revenues with growing number of payment devices, growth in bill payments due to growing monthly transacting users (MTUs), growth in disbursements of loans by its partners through its platform, and increase in commerce revenues.

The biggest contributor to Paytm’s operating revenue was its payments and financial services business with 74% share. The segment registered a 95% YoY growth to INR 1,246 Cr. Within the segment, payment services to merchants generated the highest income.

On the other hand, the commerce and cloud services segment contributed about 20% to Paytm’s operating revenue at INR 331 Cr, up 64% YoY.

Sequentially, operating revenue grew 9% from INR 1,541 Cr in the preceding March quarter of FY22.

“Earlier this year, we had shared that we would achieve operating profitability (i.e EBITDA before ESOP cost) by September 2023, driven by better monetization as well as moderating growth in costs,” Paytm said. “Q1 FY 2023 results exhibit our strategy is well-in-place, with focused improvement on unit economics, better expense management and increasing mix of higher margin businesses (such as financial services & commerce) steering us on the path to profitability.”

Meanwhile, Paytm’s total direct expenses also increased 48% YoY to INR 954 Cr in Q1 FY23 from INR 646 Cr in the corresponding quarter last year, with payment processing charges up 32% to INR 694 Cr in the quarter.

In indirect expenses, marketing costs surged 127% to INR 175 Cr in Q1 FY23. The startup’s employee costs, excluding ESOPs, also rose 77% to INR 552 Cr in the June quarter.

On the other hand, Paytm’s gross merchandise value (GMV) in the quarter registered a 101% YoY growth to INR 3 Lakh Cr. 

GMV from MDR-bearing instruments such as cards, wallets, net-banking and Paytm postpaid grew 52% QoQ.

“UPI helps us with efficient customer and merchant acquisition and allows us to better monetize our platform by upselling financial services as well as payments devices. We therefore believe, non-UPI GMV (or GMV from MDR-bearing instruments) is not a relevant metric to focus on going forward,” Paytm said in the statement, adding that it is also able to monetise transactions through all its payment instruments.

Paytm’s average MTU in Q1 FY23 stood at 74.8 Mn, growing 49% YoY and 6% QoQ.

“We think expansion of our devices business, which has reached a deployed base of 3.8 Mn in Q1, will continue to drive higher payment volumes, subscription revenues and merchant loan distribution,” Paytm added.

Paytm also claimed to be “well funded” with net cash, cash equivalent and investable balance of INR 9,411 Cr as of June 30, 2022.

The startup’s shares closed 3.2% lower at INR 783.65 Cr on the BSE on Friday.

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