Paytm, a pioneer in the Indian startup ecosystem, has made significant strides in its financial performance for the quarter ending September 2023. The company’s net loss has shrunk to Rs 290 crore, a substantial decrease from Rs 357 crore in the previous quarter and Rs 571 crore in the same quarter last year.
The company’s operational revenue for the reported period has seen a remarkable surge of 32% YoY, reaching Rs 2,519 crore. This is a considerable leap from the Rs 1,914 crore reported a year ago.
Paytm’s EBITDA before ESOP cost has also shown significant improvement in the second quarter to Rs 153 crore as against Rs 84 crore in the first quarter. This indicates a healthy traction across all its businesses, continuing the momentum witnessed in the previous quarter.
The company’s sustained revenue growth of 76% YoY led to an expansion in contribution profit, and indirect expenses were flat sequentially. As a result, there was a sharp improvement in EBITDA before ESOP costs by 61% YoY — (Rs 166 Cr) in Q2 FY2023 vs ( Rs 426 crore) in Q2 FY2022.
In Q2 FY 2023, Paytm’s revenue was Rs 1,914 Cr, up by 76% YoY with growth in lending, expansion in merchant subscriptions driven by accelerated device deployments, and momentum in commerce and cloud with growth in advertising, resumption of ticketing volumes, credit cards and PAI cloud.
Paytm’s contribution profit for the quarter stood at Rs 843 Cr, an increase of 224% YoY and 16% QoQ. The company’s contribution margin increased to 44% from 24% in Q2 FY 2022.
The company continues to make disciplined investments in areas where it sees attractive monetization opportunities. For example, its investments in its sales team is currently at Rs 172 Cr per quarter (compared to Rs 94 Cr per quarter a year ago).
Due to an increase in contribution profits and discipline on costs, Paytm is witnessing significant operating leverage (indirect expenses is at 53% of revenues in the quarter, down from 60% in Q1 FY 2023 and 63% in Q2 FY2022).
It continued focus on improving monetization capabilities, widening contribution margin as well as significant operating leverage, Paytm’s EBITDA before ESOP cost stood at (Rs 166) Cr, improving by 61% YoY. Since it shared its operating breakeven guidance in April 2022, Paytm has been able to drive a Rs 201 Cr improvement in EBITDA before ESOP cost and continues to maintain the guidance of turning profitable by September 2023.
Revenue from payment services to consumers stood at Rs 549 crore, an increase of 55% YoY, while payment services to merchants was Rs 624 crore, marking an increase of 56% YoY. Driven by improved monetization and continued focus on reduction in payment processing charges, Paytm’s net payment margin stood at Rs 443 Cr, increasing by15% QoQ and was up by428% YoY.
