Paytm, India’s leading payments and mobile services company, has announced its Q2FY24 results posting revenue of ₹2,519 Cr, 32% growth YoY. The fintech giant complemented its strong growth momentum in revenue with an improvement in operating profitability for the fourth straight quarter with EBITDA before ESOP of ₹153 Cr as compared to ₹84 Cr in Q1FY24 (excluding UPI incentives). In the stock exchange filing, Paytm said that it has managed to increase EBITDA while investing for growth.
The fintech giant expects the robust revenue growth to continue in Q3FY24 as it highlights that online sales for the 2023 festive season will be captured in the next quarter. Led by growth in net payments margin, up 60% YoY to ₹707 Cr, and loan distribution business, Paytm’s contribution profit of ₹1,426 Cr marks a growth of 69% YoY and its contribution margin improved to 57% from 44% a year ago. Due to an increase in investments in marketing and employees, the company’s Indirect Expenses (excluding ESOP cost) have increased 26% YoY to ₹1,273 Cr while its Indirect expenses (as a % of revenues) has declined to 51% from 53% in Q2FY23.
Paytm’s revenue growth was mainly driven by increase in GMV, merchant subscription revenues, and an increase of loans distributed through its platform. Its revenue from its core payments business was up 28% YoY to ₹1,524 Cr. Paytm’s Payment Processing Margin is at the higher end of 7-9 bps range due to a) increase in GMV of non-UPI instruments like Postpaid, EMI and cards, and b) improvements in payment processing margin on these non-UPI instruments. The company’s GMV was up 41% YoY to ₹4.5 Lakh Cr in Q2FY24.
As the adoption of mobile payments continues to grow, Paytm app remains a preferred choice for customers with its offering to pay for various use cases through comprehensive payment instruments, such as UPI, Wallet, Postpaid, Cards, etc. In Q2FY24, the company’s Average Monthly Transacting Users (MTU) grew by 19% YoY to 9.5 Cr and its GMV grew 41% YoY to ₹4.5 Lakh Cr in Q2FY24. Paytm in its earnings release said, “With 33% YoY growth in Paytm App GMV and 32% YoY growth in Paytm App transaction volume, consumer engagement on the Paytm app continues to remain strong.”
The pioneer of mobile payments expanded its merchant base to 3.8 Cr and further strengthened its leadership in in-store payments with 92 Lakh devices deployed in Q2FY24, an increase of 44 Lakh devices YoY and 14 Lakh QoQ. Paytm launched three new devices for merchants – Paytm Card Soundbox, Paytm Pocket Soundbox and Paytm Music Soundbox. The company believes that these launches will help in the increase of TAM, merchant engagement and card acceptance.
Paytm’s revenue from financial services and others has grown 64% YoY to ₹571 Cr, reflecting a strong adoption for digital credit. Total number of loans distributed grew to 1.32 Cr, an increase of 44% YoY while the value of loans distributed surged to ₹16,211 Cr, up 122% YoY. The number of unique borrowers who have taken a loan from Paytm platform increased by 51 Lakh in the last one year to 1.18 Cr. Paytm distributes loans in partnership with marquee financial institutions and after onboarding Tata Capital, its total number of bank and NBFC partners has grown to nine across all products including credit cards.
Led by growth in net payments margin and loan distribution business, the company’s contribution profit increased 69% YoY to ₹1,426 and its contribution margin improved to 57% from 44% a year ago. Due to an increase in investments in marketing and employees, the company’s Indirect Expenses (excluding ESOP cost) have increased 26% YoY to ₹1,273 Cr while its Indirect expenses (as a % of revenues) has declined to 51% from 53% in Q2FY23.
Paytm’s Commerce & Cloud revenue grew by 12% YoY to ₹423 Cr. The company’s Commerce GMV grew 39% YoY to ₹2,893 Cr. while its revenue increased by 31% YoY to ₹163 Cr. Paytm’s Cloud business grew by 3% YoY to ₹261 Cr. Paytm has activated 8.7 Lakh credit cards as of September 2023 as compared to 3 Lakh last year.