India’s leading digital payments and financial services company Paytm on Monday posted a 76 per cent year-on-year growth in revenue to Rs 1,914 crore in the quarter ended September 2022, while earnings before interest, taxes, depreciation and amortisation (Ebitda) before Esop cost improved 61 per cent y-o-y by Rs 259 crore.
On a quarterly basis, Paytm’s net losses have reduced by 11 per cent. The company said robust traction across all its businesses helped it achieve stronger revenue growth, with improvement in Ebitda before Esop cost (improvement of Rs201 crore in last two quarters). This was also led by a sustained increase in contribution profit, which increased 224 per cent y-o-y and 16 per cent quarter-on-quarter (QoQ) to Rs 843 crore.
The company’s payments business revenue grew 56 per cent y-o-y and 9 per cent QoQ in Q2FY23 with continued platform expansion, higher user engagement, growing merchant base and devices-led leadership in offline payments.
Revenue from payment services to consumers stood at Rs 549 crore, up by 55 per cent, while payment services to merchants was Rs 624 crore, up by 56 per cent y-o-y. This was achieved without any UPI incentive. The company said its net payment margin (calculated as payments revenues plus other operating revenues, less payment processing cost) stood at Rs 443 crore, up 428 per cent y-o-y.
Its commerce and cloud services reported a revenue of Rs377 crore — a 55 per cent growth over last year’s.
Paytm’s rapid expansion in loan distribution has become the main catalyst for its financial services revenue, which now accounts for 18 per cent of the company’s total revenue, compared to 8 per cent in the September quarter. Total revenue from financial services business stood at Rs 349 crore, up 293 per cent y-o-y and 29 per cent on a quarterly basis.
The company further said that it sees “a long growth runway ahead,” in the loan distribution business (Paytm Postpaid, Personal Loans, Merchant loans). In Q2FY23, Paytm Postpaid disbursements stood at Rs 4,050 crore, (449 per cent y-o-y and 20 per cent QoQ growth), while personal loans disbursements amounted to Rs 2,055 crore (736 per cent y-o-y and 53 per cent QoQ growth). Meanwhile, merchant loan disbursements stood at Rs 1,208 crore (342 per cent y-o-y and 46% QoQ) due to growth in devices business.
With robust growth across all its key businesses and offerings, the company reiterated that it’s on track to achieve Ebitda before employee stock ownership plan (ESOP) cost profitability by the quarter ending September 2023.