Paytm Q4: Net loss Widens To INR 550 Cr

Fintech major Paytm’s net loss has widened over 3X on an year-on-year basis to INR 550.5 Cr in the March quarter (Q4) of the financial year 2023-24 (FY24) from INR 167.5 Cr reported in the year-ago period.

The revenue from operations decreased by 2.9% YoY to INR 2,267.10 Cr, compared to INR 2,334 Cr in the same period last year. This figure also represents a 20% decline from the previous quarter.

“Our Q4 FY 2024 results were impacted by temporary disruption on account of UPI transition etc. and permanent disruption because of PPBL embargo,” the company said in its earnings release.

It is to be noted that this was the first quarterly result of Paytm after the Reserve Bank of India (RBI) barred Paytm Payments Bank from onboarding new users and from offering various services including UPI payments and deposits. RBI cited that the Paytm Payments Bank failed to comply with RBI’s regulations.

Paytm’s Troubled Q4

Paytm’s payments business revenue grew by 7% t Y-o-Y to INR 1,568 Cr in the fourth quarter. However, on a quarter-on-quarter basis, there was a 9% decline.

Paytm’s adjusted EBITDA, or EBITDA before ESOP costs, declined by 56% year-on-year to INR 103 Cr in the quarter under review. Its contribution margin was 57% including UPI incentives, and 51% excluding UPI incentives.

While the company faced financial impact in Q4 due to the regulatory restrictions, the full financial impact will be seen in Q1 FY 2025, Paytm said.

It expects Q1 FY 2025 revenue at INR 1,500 – INR 1,600 Cr and EBITDA before ESOP costs of INR 500 Cr – INR 600 Cr.

“We are confident of seeing meaningful improvement starting from Q2 FY 2025, based on restarting certain paused products and achieving steady growth in operating metrics,” it added.

Paytm’s monthly transacting users fell to 24% in April, as compared to January, due to the pause in new user sign-ups for the TPAP app and voluntary user attrition resulting from RBI action on PPBL.

However, the company claimed it is seeing stabilisation in transacting user count on a month-on-month basis. “We have now restarted user campaigns and marketing, which have
resulted in improvements in both retention and reactivation. We plan to drive further marketing
campaigns once we start onboarding new users, which should lead to a rise in MTUs,” the troubled fintech major stated.

In addition, Merchant subscription revenue in Q4 was at INR 90 per device per month. On the merchant side, the active device base has declined by 10 Lakh due to higher attrition in February and March. Hence, subscription revenue was also impacted due to lower new merchant addition.

In the quarter, merchant subscriptions were at INR 1.07 Cr, as compared to INR 68 lakh in the year-ago period. However, on a quarter-on-quarter basis the revenue remained flat as compared to INR 1.06 Cr in Q3.

Subscription revenue in this quarter was impacted due to Lower new merchant deployment translated into lower revenue from incentive for deployment and set-up fees, and lower active merchants during the quarter.

Paytm’s Spending In The Quarter

The fintech major’s total expenses increased marginally 2.3% year-on-year to INR 2691.4 Cr in Q4 FY24 from INR 2630.5 Cr a year ago. Sequentially, the company’s total spending saw a 16.3% decline from INR 3,216.3 Cr.

Paytm’s employee costs which includes ESOPs jumped 13% YoY during the quarter under review to INR 1104.4 Cr.

Paytm also slashed its marketing cost by 37% to INR 128.7 Cr in Q4 FY24 from INR 204.5 Cr in the same quarter a year ago.

At 11:04 AM on May 22, Paytm shares were trading at INR 351.60 apiece.