Paytm Q1 Net Loss Declines 45% YoY To INR 358.4 Cr But Jumps 113% QoQ

Fintech giant Paytm on Friday (July 21) reported a 44.5% year-on-year (YoY) decline in its consolidated net loss at INR 358.4 Cr in the June quarter (Q1) of the financial year 2023-24 (FY24). The company had reported a loss of INR 645.4 Cr in the year-ago quarter. 

However, Paytm’s loss more than doubled during the quarter under review compared to INR 167.5 Cr in the preceding March quarter. 

Helped by the growth in loan distribution and payments business, the Vijay Shekhar Sharma-led fintech player’s operating revenue jumped 39% to INR 2,342 Cr in Q1 FY24 from INR 1,680 Cr reported in Q1 FY23.

On a quarter-on-quarter (QoQ) basis, operating revenue was almost unchanged from INR 2,334 Cr. 

“For Q1 FY 2024, we continued our momentum with 39% YoY revenue growth, led by increase in GMV, merchant subscription revenues, and growth of loans distributed through our platform…,” the fintech major said in a statement.

Revenue from payments services jumped 31% YoY to INR 1,414 Cr in Q1 FY24. The financial services vertical contributed INR 522 Cr to the startup’s top line, up 93% YoY. The company also saw its commerce and cloud services vertical contribute INR 405 Cr to its revenue.

Paytm attributed the growth in the financial services segment to the quantum and value of loans disbursed during the quarter, which stood at 1.28 Cr and INR 14,845 Cr respectively.

Paytm’s EBITDA before ESOP costs improved to INR 84 Cr during the quarter under review compared to a loss of INR 275 Cr in the year-ago quarter. Adjusted EBITDA stood at INR 234 Cr in Q4 FY23.

It must be noted that the company’s adjusted EBITDA of INR 234 Cr in Q4 FY23 also included UPI incentive of INR 182 Cr. Excluding this incentive, EBITDA before ESOP costs rose in Q1 FY24 from INR 52 Cr in the preceding March quarter.

“There are no UPI incentives booked during the quarter as we book UPI incentives after the government issues the gazette notification, which is typically in H2 of the financial year,” the company said. 

Meanwhile, employee stock option (ESOP) costs grew nearly 5% to INR 377 Cr in Q1 FY24 from INR 359 Cr in Q1 FY23. On a QoQ basis, ESOP expenses rose nearly 4% from INR 363 Cr.

ESOP costs continue to be one of the major pain points for Paytm as it strives to turn profitable. Despite that, the company, earlier this week, granted an additional 1.7 Mn ESOPs.

Meanwhile, total expenses rose nearly 16% YoY to INR 2,800.1 Cr during the quarter under review as employee benefit expenses, excluding ESOP costs, surged 32% YoY to INR 730 Cr. 

“Our indirect cost increased expectedly due to marketing costs related to IPL, impact of appraisals, and expansion of sales and technology teams. In the coming quarters, we expect our continued topline growth and operating leverage to drive increase in profitability despite investments,” the company said.

Marketing expenses rose 3% YoY to INR 181 Cr during the quarter under review. However, it surged 43% on a QoQ basis. Payment processing charges accounted for another major chunk of expenditure and stood at INR 766.6 Cr in Q1 FY24, compared to INR 693.8 Cr in Q4 FY23. 

Paytm’s cash balance at the end of Q1 FY24 stood at INR 8,367 Cr, up from INR 8,275 Cr at the end of Q4 FY23, largely on the back of improvement in working capital and income from interest.

Shares of Paytm’s parent company, One97 Communications, ended 0.89% lower at INR 843.55 on the BSE on Friday (July 21). The company declared the results after market hours.