Paytm reports Rs 1,660 Cr revenue in Q2 FY25 with improved economics

One97 Communications Limited, the parent company of Paytm, reported Rs 1,659.5 crore in revenue from operations during the second quarter of FY25, marking a 10.5% quarter-on-quarter growth compared to Q1 FY25.

Income from payment services accounted for 59% of the total operating revenue, which increased 9% QoQ to Rs 981 crore in Q2 FY25. The remaining income is generated from financial services, the sale of devices, and other allied services.

Paytm spent 38% of its overall expenses on employee benefits, which decreased by 11.2% to Rs 709 crore in Q2 FY25. This includes Rs 225 crore as ESOP expenditure.

Its marketing and payment processing burn stood at Rs 151 crore and Rs 305 crore, respectively, in Q2 FY25. Software, technology, finance, legal, and other overheads took the overall cost to Rs 1,864 crore in Q2 FY25, compared to Rs 2,099 crore in Q1 FY25.

The decent scale and controlled costs in marketing and employee benefits helped Paytm reduce its losses by 47% to Rs 437 crore in Q2 FY25. Significantly, Paytm booked Rs 1,345 crore as non-operating income from the sale of its entertainment ticketing business to Zomato. This one-time transaction has been excluded from the loss calculation as it is non-operational in nature.

In Q2 FY25, Paytm witnessed significant growth in its merchant loan disbursals, which surged to Rs 3,303 crore from Rs 2,508 crore in Q1 FY25. However, its personal loan disbursals saw a slight decline, standing at Rs 1,977 crore due to lenders tightening their risk policies.

Paytm’s EBITDA before ESOP costs improved by Rs 359 crore quarter-on-quarter, though it remained in the negative at Rs 186 crore in Q2 FY25. This improvement in operational efficiency signals Paytm's effort to control costs and improve profitability.

Paytm reported a cash balance of Rs 9,999 crore at the end of Q2 FY25, reflecting a strong liquidity position. Despite these improvements, the company's stock experienced a 7.39% drop in today's trading session, with its share price at Rs 672.3 per piece as of 12:04 PM, bringing its  market capitalization to approximately Rs 42,800 crore ($5 billion).