India’s fintech giant Paytm is inching closer to its profitability target. The company today posted its September-ending quarterly earnings, where it saw its revenue grow by 76% to ₹1,914 crore. Interestingly, the company’s EBITDA before ESOP costs stood at ₹166 crores, improving 61% (YoY).
The company said, “We are expanding our monetization base with the growth of users and merchants. Merchant subscriptions are an attractive profit pool for us, driving higher payment volumes, subscription revenues as well as merchant loan distribution.”
Driven by continued platform expansion, higher user engagement, growing merchant base, and devices-led leadership in offline payments, the company payments business revenue grew 56% (YoY) and 9% (QoQ) in Q2FY23.
Revenue from payment services to consumers stood at ₹549 crores, up by 55% (YoY), while payment services to merchants were ₹624 crores, up by 56% (YoY). The company said its net payment margin (calculated as payments revenues plus other operating revenues, less payment processing cost) stood at ₹443 cr, up 428% (YoY).
The company also reported a sustained increase in contribution profit, which increased 224% (YoY) and 16% (QoQ) to ₹843 crores.
Paytm reported revenue of ₹377 crores from its commerce and cloud services.
Its rapidly growing lending business saw financial services revenue take up a bigger chunk of the total revenue — which at ₹349 crore now accounts for 18% of the company’s total revenue, compared to 8% in Q2FY22.
Mentioning a long growth runway ahead for lending, Paytm shared insights into its loan distribution business. In Q2FY23, Paytm Postpaid disbursements stood at ₹4,050 crores, (449% YoY and 20% QoQ growth), while Personal loans disbursements amounted to ₹2,055 crores (736% YoY and 53% QoQ growth). Meanwhile, merchant loan disbursements stood at ₹1,208 crore (342% YoY and 46% QoQ) due to growth in the devices business.
“We continue to seek growth & upsell opportunities as low penetration supports future growth potential while working with our lending partners to maintain healthy credit quality,” said the company in its release.
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