Paytm Q3 results: Revenue increases by 42% and net loss narrows to Rs 392 crore
- ByStartupStory | February 4, 2023
Comparing the December quarter (Q3) to the same quarter last year, Paytm’s revenue increased by 41% to Rs 2,062 crore, while its net loss shrank to Rs 392 crore.
In comparison to the September quarter, the digital payments and financial services company’s loss was Rs 572 crore as opposed to Rs 778 crore in the similar time last year, according to a report with the stock market by Paytm.
Paytm founder and CEO Vijay Shekhar Sharma stated in a letter to shareholders that the business has reached operating profitability in Q3, which was three quarters earlier than the projection, which was for the September quarter.
“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.
A proxy indicator used by new-age businesses to describe operating profitability, EBITDA before deducting employee stock option (ESOP) expense, according to Paytm, was Rs 31 crore in Q3.
The company’s growth was fueled by an increase in loan disbursals and merchant subscriptions to payment devices, although profitability increased as a consequence of falling marketing expenses.
In Q3, the platform disbursed 10.5 million more loans, increasing its total volume by 137% to 10.5 million, while its total value increased by 357% to Rs 9,958 crore.
In a first, the corporation also revealed that it receives commissions on disbursements of 2.5 percent to 3.5 percent of loan value upfront and on collections of 0.5 percent to 1.5 percent.
Gross merchandise value (GMV) for the platform increased by 38% to Rs 3.5 lakh crore. According to information from December 2022, the payment processing margin for this quarter was between 7-9 basis points (bps) of GMV. Since UPI is expanding more quickly than other instruments, it anticipates that the payment processing margin will eventually stabilise around 5-7 bps.
Compared to Rs 191 crore in Q2, promotional cashbacks and incentives were Rs 91 crore in Q3.
“As per earlier arrangements with lenders, we were incurring incentives related to Paytm Postpaid as a part of this cost. From Q3 onwards, we have new agreements with lenders (where we are incurring interchange costs) which is included in Payment Processing charges. As a result, costs were down significantly,” the company said.
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