Paytm, a leading payments and financial services company, announced on Friday that it has achieved operating profitability, with EBITDA before ESOP costs of Rs 31 crore, far exceeding its guidance for September 2023. Paytm’s revenue from operations increased by 42% year on year and 8% quarter on quarter to Rs 2,062 crore (no UPI incentive recorded this quarter).
According to the company, the growth was driven by increased consumer adoption and subscription services by merchant partners, as well as sustained growth in loan distribution and commerce business.
Paytm’s founder and CEO, Vijay Shekhar Sharma, announced the achievement in a letter to shareholders.
“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,” he said.
Contribution profit was Rs 1,048 crore in the quarter, with margins steadily improving from 31% in December 2021 to 51% in December 2022 due to improved payments business profitability and an increased mix of high margin businesses such as loan distribution.
Net payment margin increased to Rs 459 crore (up 120% year on year) as payments profitability improved. Paytm’s EBITDA before ESOP margin was 2% of revenues, down from 27% a year ago, owing to continued improvement in contribution profit and strong operating leverage. The company stated that revenue momentum across its businesses remained strong.
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