Paytm Q1 FY 2025 reports operating revenue of Rs 1,502 Cr; Merchant Payment Metrics Rebound, Consumer Metrics Stable

Revenue and profitability to improve, driven by growth in operating metrics including GMV, an expanding merchant base, recovery in loan distribution business and continued focus on cost optimization Accelerating merchant reactivation and new sign-ups resulting in increase in merchant subscriber base to 1.09 Cr, with new merchant sign-ups and daily GMV rebounding to January levels Customer base has stabilized to 7.8 Cr; GMV per customer increasing Driving monetization by distribution of loans, wealth products and insurance

One 97 Communications Limited (OCL) that owns the brand Paytm, India’s leading payments and financial services distribution company and the pioneer of QR, Soundbox and mobile payments, has announced its financial results for the first quarter of FY25 (Q1 FY2025), registering a rebound in key metrics.  

The financial results of the company in line with guidance provided during the previous quarter.

The company has reported an operating revenue of ₹1,502 Cr, with Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA) loss standing at ₹792 Cr. EBITDA before ESOP stood at loss of ₹545 Cr, as stated previously.  

For the company, the full financial impact of the recent disruptions is visible in Q1 FY2025. The company also stated that revenue and profitability will improve, with growth in merchant payment operating metrics including GMV, accelerated merchant reactivation and growing merchant base, along with continued focus on cost optimisation.

Revenue from financial services amounted to ₹280 Cr, while revenue from marketing services was ₹321 Cr. During the quarter, contribution profit was at ₹755 Cr, with a 50% margin.

Paytm spokesperson said, “We are seeing a rebound in our merchant operating metrics and stability in our consumer base, demonstrating our path to recovery. This also indicates the continued confidence of our merchant partners and consumers on our platform, and we are grateful for the trust of our stakeholders. With Q1 illustrating the full impact of recent disruptions, we are confident in our trajectory towards sustained growth going forward."

The company continues to have a strong balance sheet with ₹8,108 Cr of cash on books. It also holds stock acquisition rights in PayPay Corporation (5.4% stake, once exercised). 

Q1 FY 2025 Financial Highlights:

1. Merchant Payment Operating Metrics Rebound to January 2024 levels

The company said that new merchant signups on its platform reached January 2024 levels. Further, accelerated efforts towards redeploying devices from inactive to new merchants have resulted in an increase in merchant subscriber (or device merchant) base to 1.09 Cr. The Noida-headquartered payments major said that it expects net device merchant additions to reach previous run rates by Q3 FY 2025.

Daily average GMV (excluding disrupted products) has shown consistent improvement during the quarter and will remain positive as it nears January 2024 levels. Overall gross merchandise value (GMV) has been growing month-on-month (MoM) and is Rs 4.3 lakh crore for the June quarter.

2. GMV per consumer increasing, stablising metrics  

The company highlighted that its total monthly transacting user base has stabilised at ~7.8 crore by the end of June, highlighting strong user affinity for Paytm’s platform and retention. Paytm further added that it is awaiting permissions to onboard new UPI consumers, which will result in further growth of its MTU base. 

3. Cost optimisation continues to be focus

As part of its earnings release, the company emphasised that it remains committed to managing its overall cost structure. The company has achieved 9% reduction quarter on quarter in employee costs, as part of its goal to save ₹400-500 Cr annually.

4. Driving monetisation through loans, wealth, insurance distribution

Paytm has been keenly focused on distributing tailored offerings to its consumers across categories of loans, wealth products and insurance.

The company stated that it has seen a strong product-market fit for distribution of its shop insurance offerings by leveraging merchant insights. On the consumer side, it has seen good traction with embedded and DIY insurance products such as motor insurance. On the health insurance front, it is offering differentiated products that combine Health Insurance, Health-care, and OPD benefits and has also launched protection plans for merchant partners. It will also look to enhance credit distribution by diversifying lending products and partners and expand secured lending products.

5. Disclosures regarding PayPay

The company also said that it holds stock acquisition rights in PayPay Corporation (5.4% stake, once exercised).

6. Focus areas

The company also said that it will focus on leading the market with merchant payment innovations, including introducing new devices and aggregation of various merchant discount rate (MDR)-bearing payment instruments. The company will allocate more resources to Insurance distribution and Mutual Fund distribution, which offer large monetisation opportunities.