One97 Communications Limited (OCL) that owns the brand Paytm, India’s leading payments and financial services company and the pioneer of QR, Soundbox and mobile payments, today announced its Q2FY24 results. Paytm’s revenue from operations has seen a growth of 32% YoY to ₹2,519 Cr and its EBITDA before ESOP cost has improved to ₹153 Cr as compared to ₹84 Cr in Q1FY24 (excluding UPI incentives). Paytm’s loss reduces 49% YoY with net income of (₹292 Cr), an improvement of ₹280 Cr YoY.
The company 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. Driven by an increase in merchant subscription revenue, jump in GMV, and growth in loan disbursements, Paytm’s strong growth momentum continues. The company’s EBITDA before ESOP margin stood at 6% on the account of consistent improvement in profitability due to strong revenue growth, increasing contribution margin and operating leverage. In the stock exchange filing, Paytm said that it has managed to increase EBITDA while investing for growth.
Paytm’s payments revenue increased 28% YoY to ₹1,524 Cr while the payments profitability improved with net payment margin expanding 60% YoY to ₹707 Cr. Due to increase in GMV of non-UPI instruments like Postpaid, EMI and cards, and improvements in payment processing margin on various non-UPI instruments, Paytm’s net payment processing margin has further improved and is now at the top end of 7-9 bps range. In Q2FY24, the company’s merchant payments volume (GMV) grew 41% YoY to ₹4.5 Lakh Cr.
Revenue for financial services and others grew 64% YoY to ₹571 Cr in Q2FY24. Total number of unique borrowers who have taken a loan through its platform has increased by 51 Lakh in the last year to 1.18 Cr. The number of loans distributed through Paytm platform grew to 1.32 Cr, an increase of 44% YoY while the value of loans distributed grew to ₹16,211 Cr, surging 122% YoY.
Paytm disburses loans in partnership with marquee lenders. The number of Postpaid Loans distributed grew 44% YoY, Personal Loans disbursal increased 27% YoY, while Merchant Loans distributed jumped 130% YoY in Q2 FY2024. “With onboarding of Tata Capital, we now have 9 bank and NBFC partners across all our lending products (including credit cards). We continue to work closely with our existing partners, and are on track to add more partners in the remaining financial year,” it said in a stock filing.
The company continues to monetize Paytm app traffic in its Commerce and Cloud segment by providing marketing services to its merchants. In Q2FY24, its Commerce & Cloud revenue grew by 12% YoY to ₹423 Cr. Paytm’s contribution profit of ₹1,426 Cr represents a growth of 69% YoY driven by increase in net payments margin and loan distribution revenues while the contribution margin improved to 57% from 44% a year ago.
Due to increase in investments in marketing and employees, the company’s indirect costs (excluding ESOP cost) have increased 26% YoY to ₹1,273 Cr. Indirect expenses (as a % of revenues), has declined to 51%, from 53% in Q2FY23. Paytm’s loss reduced 49% YoY to ₹292 Cr in Q2FY24 from ₹571 Cr, in the corresponding period of the previous fiscal.
As adoption of mobile payments for consumers and merchants in India continues, user engagement on the platform continues to grow with average Monthly Transacting Users (MTU) of 9.5 Cr, a jump of nearly 19% YoY. 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. Paytm’s merchant base has grown to 3.8 Cr. The company’s leadership in payment monetisation continues with 92 Lakh devices, both Soundbox and Paytm Card Machines deployed, increasing 44 Lakh YoY (91% growth YoY) and 14 Lakh QoQ.
Strengthening its leadership in in-store payments, Paytm recently launched three new Soundbox devices for merchants — Pocket Soundbox, Music Soundbox, and Card Soundbox, leading the technology for small shops. Made in India, Paytm All-in-One Pocket Soundbox is the first-of-its-kind device for merchants who are always on the move. Another ingenious indigenous device, Paytm Music Soundbox combines business with entertainment. While Paytm Card Soundbox empowers merchants to accept both mobile and card payments across all RuPay, Visa, Mastercard, and Amex networks through its iconic Soundbox with ‘tap and pay' feature.