The top line of Paytm increased 42 percent on-year to Rs 2,062 crore during the third quarter that ended 31 December 2022. Sequentially, up by 8%.
The company achieved the numbers on the back of increased consumer and subscription services adoption by merchant partners and sustained growth in loan distribution and commerce business.
Revenue from financial services, which majorly lends loans, contributed 22% of total revenues at Rs 446 crore. Commerce and Cloud business had a turnover of Rs 420 crore, 20 percent of total revenues.
The net losses narrowed almost twice to Rs 392 crore during the reported quarter as the company cut its marketing expenses by 18 percent on-year.
The company had a net loss of Rs 778 crore a year ago and Rs 572 crore in Q2FY23.
Operating Profit:
Paytm founder and CEO Vijay Shekhar Sharma said in a letter to shareholders that the fintech company clocked an operating profitability milestone in the December quarter itself, three quarters ahead of the guidance.
“This has been made possible due to the relentlessly focused execution by our team. The team was asked to focus on growth with quality revenues that contribute to the bottom line. We have achieved this milestone without losing sight of growth opportunities and keeping all compliances as well as risk factors under a strict watch,” he said.
EBITDA factoring out employee stock option (ESOP) costs stood at Rs 31 crore during the quarter. New fintech companies prefer stripping out ESOP cost as it hinders the fair representation of financial performance, profitability, and growth.
ESOP margin came in at 2% of revenues compared to a negative 27% a year ago.
Operational Highlights:
Noida-based fintech recorded a robust improvement in loan distribution business with 10 million loan disbursements worth Rs 9,958 Cr in the quarter, a 357 percent on-year and 36 percent increase.
The company added 1.4 million new unique borrowers during Q3FY23, taking the total to 8.1 mn as of 31 December 2022.
The gross merchandise value (GMV) rose by 38 percent to Rs 3.5 lakh crore.
Direct Expenses:
Promotional cashback and incentives stood at Rs 91 crore in Q3FY23, down 22 percent year-on-year. Payment processing charges dipped 6 percent on-year to Rs 738 crore. Other direct expenses, however, rose 81 percent on-year to Rs 1,818 crore.