Paytm, a prominent player in the payments and financial services sector, announced on Friday that it has attained operating profitability, surpassing its September 2023 guidance. The company reported EBITDA before ESOP cost of Rs 31 crore, marking a significant milestone in its financial journey.
In the latest quarter, Paytm recorded revenue from operations amounting to Rs 2,062 crore, reflecting a robust growth of 42% year-over-year and 8% quarter-over-quarter. Notably, this growth excludes any UPI incentive recorded during the quarter.
The company attributed this growth to increased adoption by consumers, expanded subscription services by merchant partners, and sustained growth in loan distribution and commerce business segments.
Vijay Shekhar Sharma, the founder and CEO of Paytm, expressed his gratitude to shareholders in a letter, highlighting the achievement as a result of the team’s relentless execution and focus on quality revenue growth while maintaining compliance and risk management standards.
Contribution profit for the quarter reached Rs 1,048 crore, with margins showing consistent improvement from 31% in December 2021 to 51% in December 2022. This improvement was driven by enhanced profitability in the payments business and a higher mix of high-margin segments such as loan distribution.
The net payment margin surged to Rs 459 crore, marking a remarkable 120% year-over-year increase, driven by improved profitability in the payments segment.
Paytm’s EBITDA before ESOP margin stood at 2% of revenues, a significant improvement compared to the negative margin of 27% reported a year ago. This improvement can be attributed to sustained enhancement in contribution profit and robust operating leverage.
The company remains optimistic about its revenue momentum across various business verticals, emphasizing its commitment to sustainable growth and profitability. With operating profitability achieved, Paytm now sets its sights on generating free cash flow, further solidifying its position in the competitive fintech landscape.
