Paytm Q3 revenue falls 36%; loss narrows to ₹208 crore

Net loss of One97 Communications, the parent of Paytm, contracted 6% year-on-year to ₹208 crore for the quarter ended December 31, 2024, compared with ₹222 crore in the year-ago quarter. The digital payments firm posted a profit of ₹930 crore in the September quarter owing to a one-time exceptional gain after it sold its entertainment ticketing business to Zomato.

The company's revenue fell 36% year-on-year to ₹1,827 crore for the third quarter, as against ₹2,850 crore in the corresponding period a year ago. On a sequential basis, revenue rose 10% due to an increase in GMV (gross merchandise value), growth in subscription revenues, and an increase in revenues from the distribution of financial services.

Reacting to the earnings announcement, shares of One97 Communications were trading marginally lower compared to half a percent rise in the broader benchmark indices.

“Growth in net payment margin was largely on account of higher subscription revenue. Payment processing margin continues to remain in the guided range,” the digital payments company says.

The Vijay Shekhar Sharma-led payments firm’s cash balance increased by ₹2,851 crore sequentially to ₹12,850 crore, largely on account of PayPay stake sale and improvement in working capital. “During the quarter, our subsidiary, One97 Communications Singapore Private Limited (OCL Singapore) completed the sale of all the Stock Acquisition Rights (SAR) held by it in PayPay Corporation, Japan. The transaction was completed on December 13, 2024, and OCL Singapore received a consideration of $280 million (₹2,372 crore),” it says.

Payment services revenue rose 8% quarter-on-quarter to ₹1,059 crore, led by an increase in GMV, and an increase in merchant subscriptions. Financial services revenue increased sharply to ₹502 crore, up 34% sequentially.

Paytm says its employee costs, excluding ESOP, for the first nine months of FY25 are lower by ₹451 crore year-on-year, and will comfortably surpass its targeted annualised people cost savings of ₹400-500 crore.

India's large base of micro, small and medium enterprises (MSME) presents a significant opportunity for mobile payments and distribution of financial services, the company says, adding that it is seeing significant monetisation potential in managing the merchant lifecycle. “In India, on the merchant acquiring side, we see potential of over 10 crore merchants who will accept mobile payments and we believe that, over a period of time, 40-50% of these merchants will need software, hardware or a combination of product thereof for managing their digital payments,” it says.

“In addition to existing payment products, the UPI network enables new credit products, such as RuPay Credit Card. We are witnessing a growing trend of customers linking RuPay credit cards to payment apps and using them for UPI transactions. This allows merchants to accept credit card payments via UPI QR codes, creating revenue opportunities for both consumer payment apps and merchant acquirers,” says Paytm.