Paytm Reports 34% Sequential Drop in Revenue with Elevated Ebitda Losses

Paytm’s revenue fell by 34% sequentially, with significant Ebitda losses. The company focuses on cost optimization and expanding its merchant base to boost profitability.

Key Points

Paytm’s revenue from business fell by 34% sequentially, totaling Rs 1,502 crore, with payments services contributing Rs 900 crore and financial services Rs 321 crore.
The company faced a significant Ebitda loss of Rs 792 crore, up from Rs 223 crore in the previous quarter, with an Ebitda loss before ESOP of Rs 545 crore.
Paytm reported a net payment margin of Rs 383 crore and did not book any UPI incentives this quarter.
The company’s merchant subscriber base grew to 1.09 crore, and it aims to reach a normalized run-rate for subscriber additions by Q3FY25.
Paytm is focusing on cost optimization, achieving a 9% reduction in employee costs and planning further savings of Rs 400-500 crore.

Paytm has reported a significant 34% drop in its sequential revenue, amounting to Rs 1,502 crore for the quarter. The decline was driven primarily by a reduction in payments services revenue, which stood at Rs 900 crore, and financial services revenue of Rs 321 crore. The company’s net payment margin remained at Rs 383 crore, though it did not record any UPI incentives this quarter.

The company’s financial performance was marked by a substantial Ebitda loss of Rs 792 crore, a sharp increase from Rs 223 crore in the previous quarter. Before accounting for employee stock option plans (ESOP), the Ebitda loss for the quarter ended June was Rs 545 crore.

In response to these challenges, Paytm is intensifying its focus on cost optimization. The company reported a 9% reduction in employee costs sequentially and plans to achieve further savings of Rs 400-500 crore. This move is part of a broader strategy to streamline expenses and improve profitability.

Despite the revenue decline, Paytm’s merchant subscriber base grew to 1.09 crore, up from 1.07 crore in the previous quarter. The company is not only focused on attracting new merchants but is also ramping up efforts to reactivate existing ones. Paytm has set a goal to normalize its merchant subscriber base additions by Q3FY25.

In terms of operational key performance indicators, the value of merchant and personal loans distributed remained flat quarter-on-quarter at Rs 5,008 crore, with merchant loans at Rs 2,508 crore and personal loans at Rs 2,500 crore. The company is expanding its loan services and bringing in additional lending partners, including new offerings like loans against property.

Paytm also hinted at future updates on its popular Paytm wallet but did not provide specific details in the earnings release.