Paytm posts operating profitability for fourth straight quarter, EBITDA before ESOP nearly doubles to Rs 153 cr

New Delhi : Paytm, India’s leading payments and financial services company, is steadfastly surging ahead on its path of accelerated growth posting revenue of Rs 2,519 crore, 32 per cent growth year-on-year (YoY) in Q2FY24.

This increase in the company’s revenue comes even as the festive earnings got pushed to Q3FY24.

Paytm continued to improve operating profitability with EBITDA before ESOP up Rs 319 crore YoY to Rs 153 crore. 

Led by growth in net payments margin, up 60 per cent YoY to Rs 707 crore, and loan distribution business, Paytm’s contribution profit of Rs 1,426 crore marks a growth of 69 per cent YoY and its contribution margin improved to 57 per cent from 44 per cent a year ago.

Due to an increase in investments in marketing and employees, the company’s Indirect Expenses (excluding ESOP cost) have increased 26 per cent YoY to Rs 1,273 crore while its Indirect expenses (as a per cent of revenues) has declined to 51 per cent from 53 per cent in Q2FY23.

Paytm’s loss reduces 49 per cent YoY with net income of (Rs 292 crore), an improvement of Rs 280 crore YoY.

The fintech giant’s revenue growth was mainly driven by increase in GMV, merchant subscription revenues, and an increase of loans distributed through its platform.

Its revenue from its core payments business was up 28 per cent YoY to Rs 1,524 crore.

Paytm’s Payment Processing Margin is at the higher end of 7-9 bps range due to increase in GMV of non-UPI instruments like Postpaid, EMI and cards, and improvements in payment processing margin on these non-UPI instruments.

The company’s GMV was up 41 per cent YoY to Rs 4.5 lakh crore in Q2FY24. 

The pioneer of mobile payments expanded its merchant base to 3.8 crore and further strengthened its leadership in in-store payments with 92 lakh devices deployed in Q2FY24, an increase of 44 lakh devices YoY and 14 lakh QoQ.

Paytm launched three new devices for merchants –l Paytm Card Soundbox, Paytm Pocket Soundbox and Paytm Music Soundbox.

The company believes that these launches will help in the increase of TAM, merchant engagement, card acceptance and non-UPI GMV.

“We believe that with the launch of new devices, nearly 40-50 per cent of the 10 crore merchants will require some type of payment device,” it said in its stock exchange filing. 

Paytm’s revenue from financial services and others has grown 64 per cent YoY to Rs 571 crore.

Total number of loans distributed increased to 1.32 crore, a growth of 44 per cent YoY while the value of loans distributed surged to Rs 16,211 crore, a jump of 122 per cent YoY in Q2FY24.

The number of unique borrowers who have taken a loan from Paytm platform increased by 51 lakh in the last one year to 1.18 crore.

Paytm distributes loans in partnership with financial institutions.

In Q2FY24, it onboarded Tata Capital, taking its total number of bank and NBFC partners to nine across all its products including credit cards.

The company said, “We continue to work closely with our existing partners, and are on track to add more partners in the remaining financial year.”

Paytm’s Commerce & Cloud revenue grew by 12 per cent YoY to Rs 423 crore. Its Commerce GMV grew 39 per cent YoY to Rs 2,893 crore while revenue increased by 31 per cent YoY to Rs 163 crore.

The company’s Cloud business grew by 3 per cent YoY to Rs 261 crore.

Paytm has activated 8.7 lakh credit cards as of September 2023 as compared to 3 lakh last year. 

As the adoption of mobile payments continues to grow, Paytm app remains a preferred choice for customers with its offering to pay for various use cases through comprehensive payment instruments, such as UPI, Wallet, Postpaid, Cards, etc.

In Q2FY24, the company’s Average Monthly Transacting Users (MTU) grew by 19 per cent YoY to 9.5 crore.

Paytm in its earnings release said, “With 33 per cent YoY growth in Paytm App GMV and 32 per cent YoY growth in Paytm App transaction volume, consumer engagement on the Paytm app continues to remain strong.