Paytm’s Net Loss Declines 50% YoY To INR 392.1 Cr, Claims To Be EBITDA Positive

One97 Communications’, the parent company of fintech giant Paytm, net loss declined approximately 50% year-on-year (YoY) to INR 392.1 Cr in the third quarter (Q3) of the financial year 2022-23 (FY23). The company had posted a net loss of INR 778.5 Cr in the same quarter last fiscal. Sequentially, its loss fell more than 31% from INR 571 Cr in Q2 FY23. 

Revenue from operations soared more than 41% YoY to INR 2,062 Cr in Q3 FY23, up from INR 1,456.1 Cr in Q3 FY22. Total income rose nearly 40% to INR 2.140.2 Cr in the period under review against INR 1,533.4 Cr in Q3 FY22. 

The company’s total expenses surged nearly 8% to INR 2,522.3 Cr in the quarter ended December 2022, up from INR 2,317.4 Cr in Q3 FY22. Of these, employee expenses accounted for a big chunk of expenditure at around INR 945.6 Cr, while marketing expenses stood at INR 226 Cr. 

In its regulatory filings, Paytm claimed that it achieved its target of Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) before employee stock options (ESOP) cost profitability in the quarter under review. The fintech major reported an EBITDA, sans ESOP, of INR 31 Cr in Q3 FY23. 

“I am very happy to share that our company has achieved this milestone of EBITDA before ESOP cost profitability in the December 2022 quarter itself. This is three quarters ahead of our guidance. This has been made possible due to the relentlessly focused execution by our team. The team was asked to focus on growth with quality revenues that contribute to the bottom line,” said chief executive officer (CEO) and founder Vijay Shekhar Sharma

Operational Metrics Fuel Growth

The fintech major saw its gross merchandise volume (GMV) zoom 38% YoY to INR 3.5 Lakh Cr in Q3 FY23, while merchant transactions on the fintech platform rose 81% YoY to 628.4 Cr. Meanwhile, total transactions processed on Paytm hovered around 763.4 Cr during the period under review. 

Average monthly transacting users (MTU) during the quarter rose 32% on a yearly basis to 8.49 Cr, while the number of registered merchants at the end of December 2022 stood at 3.14 Cr.

At the end of Q3 FY23, more than 58 Lakh Paytm payments devices were deployed across the country. 

Paytm also disbursed 1.04 Cr loans worth INR 9,958 Cr during the period. In terms of percentage, number of loans and the value of such loans grew 137% and 357%, respectively, on a yearly basis. 

The company claims to have employed 29,569 employees, on average, during Q3 FY23, while it spent INR 178 Cr on its sales personnel, including training, during the period under review. 

The performance is somewhat of a silver lining for the fintech giant, which has been plagued by controversies since listing on the bourses in late 2021. While mounting losses have put a spanner in the works, its loss has narrowed for the first time in Q3 FY23. 

Besides, negative market sentiment has wreaked havoc across the share prices of the startup, which have somewhat stabilised after being on a downward spiral for the most of 2022. What has also helped the company is the recent INR 2,600 Cr scheme announced by the Union government to incentivise digital payments, including UPI-BHIM transactions. Paytm is one of the biggest players in the space and is expected to see some flow of incentives. 

The company has also faced investor ire for its mounting losses and not having a clear path to profitability.

The results came on the same day as Alibaba-backed Ant Group’s senior vice-president Douglas Feagin resigned as the non-independent director of Paytm. The company has so far purchased 1.46 Cr shares as part of its buyback initiative. 

Shares of the fintech giant closed 3.83% down at INR 524.9 on the BSE on Friday (February 3).