Paytm, India’s leading payments and financial services company and the pioneer of QR and mobile payments, has announced Q3FY23 results reporting that it has achieved its operating profitability with EBITDA before ESOP cost at ₹31 Crore, much ahead of its September 2023 timeline. The company’s revenue from operations increased to ₹2,062 crore (no UPI incentive recorded this quarter), a growth of 42% YoY.


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Paytm’s founder and CEO Vijay Shekhar Sharma wrote a letter to shareholders announcing the achievement.


“This has been made possible due to the relentlessly focused execution by our team. The team was asked to focus on growth with quality revenues that contribute to the bottom line. We have achieved this milestone without losing sight on growth opportunities and keeping all compliances as well as risk factors under a strict watch,” said Vijay Shekhar Sharma.


Sharma added that the next key milestone for Paytm is free cash flow generation. “With our focus on growth and keeping a tight vigil on operational risk and compliances, I am very confident that we will soon achieve our next milestone of becoming a free cash flow generating company,” he added. Paytm’s EBITDA before ESOP margin stood at 2% of revenues as compared to (27%) a year ago.



The company continued to witness strong revenue momentum across its businesses. Paytm’s revenue from operations increased to ₹2,062 crore (no UPI incentive recorded this quarter), a growth of 42% YoY and 8% QoQ, driven by increased adoption by consumers and subscription services by merchant partners along with sustained growth seen in loan distribution and commerce business. Revenue from financial services, which is majorly loan distribution, now accounts for 22% of total revenues, up from 9% in Q3 FY2022.


Contribution profit was ₹1,048 Cr in the quarter, with margins consistently improving from 31% in Dec-21 to 51% in Dec-22 on account of improved profitability of payments business and increased mix of high margin businesses such as loan distribution. Net payment margin grew to ₹459 Cr (up 120% YoY) on back of improved profitability in the payments business.


The company’s loan distribution business saw further scale with 10.5 million loans amounting to ₹9,958 Cr disbursed in the quarter (in partnership with its lending partners). Total number of unique borrowers who have taken a loan through the Paytm  platform has increased by 1.4mn in the quarter  to 8.1 mn as of December 2022. The company believes that the scale up in the number of users who have taken a loan through Paytm platform provides it tremendous upsell and lifecycle benefits.


The company’s operating leverage is demonstrated by reduction in indirect expenses (as a % of revenues), down to 49% in Dec-22 from 58% in Dec-21. Paytm’s net income stands at (₹392) crore, an improvement of 50% from (₹779) crore a year ago.


The company said that it will maintain discipline on costs, as it continues to invest in areas where it sees potential for future growth, such as marketing (for user acquisition) or sales team (to increase merchant base and subscription services). Paytm will continue to focus on building a sustainable and long-term cash generating business.