Paytm Q3 losses narrows 43% to ₹222 crore; revenues up 38% to ₹2,850 crore

Posted on by

One97 Communications, which owns the brand Paytm, on Friday, reported a consolidated net loss of ₹ 222 crore for the third quarter ended December 31,2023. This loss was 43 percent lower than the net loss of ₹392 crore in same quarter last fiscal.

In the September 2023 quarter, Paytm had recorded a net loss of ₹ 292 crore. 

For the nine months ended December 31, 2023, consolidated net loss came in at ₹ 872 crore, nearly half the net loss of ₹ 1,609 crore. Consolidated revenues were up 36 per cent to ₹ 7,711 crore (₹ 5,658 crore).

For the quarter under review, consolidated revenues were up 38 per cent at ₹ 2,850 crore (₹2,062 crore). Revenues in the September 2023 quarter was ₹ 2,519 crore.

Contribution profit for the three months ended December 31, 2023, stood at ₹ 1,520 crore, up 45 per cent over ₹ 1,048 crore in the same quarter last fiscal. This growth was led by net payments margin and financial services business, filings made by the company with stock exchanges showed. 

However, on a sequential basis, contribution profits grew 7 per cent from ₹ 1,426 crore achieved in September 2023 quarter.

The contribution margin for the quarter under review improved to 53 per cent from 51 per cent a year ago. However, the contribution margin declined by 3 percentage points due to seasonal factors such as higher promotion during the festival season, a higher mix of events business and slightly lower payment processing margins typically experienced during the festival season. “We expect contribution margins to remain stable in the mid-50s with some variations from quarter to quarter due to seasonality”, Paytm said.

Put simply, contribution margin is the money left over from sales after paying all variable expenses related to producing a product.

PROFITABILITY IMPROVEMENT 

Paytm said it continues to see consistent improvement in profitability due to strong revenue growth, and operating leverage. For the quarter under review, earnings before interest, taxes, depreciation and amortisation (EBITDA) before ESOP was ₹219 crore as compared to ₹ 31 crore in the same quarter last year. 

In the September 2023 quarter, Paytm’s EBITDA before ESOP stood at ₹ 153 crore.

Paytm also said it distributed loans worth ₹ 15,535 crore in Q3, up 56 per cent on a y-o-y basis. “As of December 2023, our lending partners have distributed loans through our platform to 1.25 crore unique Paytm consumers and merchants. Paytm active user and MTU base offers us tremendous upsell and lifecycle benefits across financial services,” the company said.

The number of Paytm merchants paying a subscription for payment devices surged to 1.06 crore, marking a 49 lakh y-o-y increase.

GIFT City 

The Board of Directors on Friday approved the setting up of one or more subsidiaries in GIFT City, Gujarat with an investment of ₹ 100 crore. This investment, which will be made over a period of time, is intended to offer AI-driven cross border remittance, development centre for innovation, the company said in its exchange filing.

“ With GIFT City as an ideal innovation hub for cross-border activity, we will use its proven capability to innovate and build new tech for users across the globe, looking to invest in India. As the pioneer of real-time payments and settlements in India, we will replicate its success to now reduce friction in cross-border remittances with faster and cost-effective solutions, driven by artificial intelligence”, it added.