One97 Communication Private Limited, the parent company of Paytm, on Wednesday released its financial results for the fourth quarter of the fiscal year ending March 2024 (Q4 FY24). Despite the termination of PPBL services, the fintech firm managed to arrest any significant decline in its revenue during the Q4 FY24.
Paytm’s revenue from operations decreased a mere 3% to Rs 2,267 crore in Q4 FY24 from Rs 2,334 crore in Q4 FY23, as per the firm’s earning release published on the Bombay Stock Exchange (BSE).
In January, RBI had imposed restrictions on Paytm due to concerns regarding compliance with regulatory norms. However, RBI later granted brief relaxation to the company which also received permission from NPCI to participate in UPI through the third-party application provider (TPAP) under the multibank model.
On a year-on-year basis, the company’s overall operating revenue in FY24 grew 25% to Rs 9,978 crore from Rs 7,990 crore in FY23.
Income from payment services grew 7% YoY to Rs 1,568 crore in Q4 FY24 from Rs 1,467 crore in Q4 FY23 but it was down by 9% QoQ due to a disruption in PPBL services, as per the release. Revenue from merchant subscriptions, financial services, and marketing were other revenue drivers for Paytm.
Paytm’s contribution margin stood at 57% including UPI incentives in the fourth quarter of FY24 while the EBITDA before ESOP was recorded at Rs 103 crore during the same period.
The slight decrease in revenue, loss in impairment of associates (share loss of Rs 227 crore on PPBL), and non-cash cost of Rs 326 crore attributed to ESOPs led Paytm to a 2.24X increase in its net losses to Rs 550 crore in Q4 FY24.
With the order of not permitted or top-ups in customer accounts, prepaid instruments, wallets, and FASTags from January this year, the firm anticipated a loss of Rs 1,500 crore in revenue and Rs 500 crore in the bottom line in the ongoing fiscal year (FY25).
Due to the temporary disruptions in operating metrics (MTU, merchant base, payment GMV) during February and March, the firm expects to have an incremental EBITDA impact of Rs 100- Rs 150 crore in Q1 FY25. As per the company, it should start recovering from Q2 as it is seeing stabilization or growth in consumer and merchant base metrics from April/May.
Meanwhile, Paytm is in discussions with NPCI for confirmation of signing up new UPI consumers for its TPAP App.
In Q4 FY24, Paytm had lowered marketing spends as it paused most of the user growth spends in the months of February and March. The Noida-based company also added that it expects to reinvest in these areas in the coming financial year.
Paytm claimed to optimize its cost structure by leveraging AI capabilities and reducing employee and marketing costs which will help to save around Rs 400-500 crore annually for the company.
On the merchant side, its device merchant base has increased marginally but the active device base has declined by ~10 lakh due to higher attrition in February and March. Its subscription revenue was also impacted due to lower new merchant addition, lower active device merchants and temporary rental waiver for ring fencing certain cohorts of merchants.
