Paytm showcases strong growth in revenue, delivers profit of Rs 930 crore in Q2

Paytm has reported an impressive performance in Q2 FY25, achieving significant growth across multiple metrics. The company delivered a Profit After Tax (PAT) of Rs 930 crore, marking a milestone on its path to sustained profitability.
The quarter also witnessed a steady rise in revenue and contribution profit, reflecting the success of Paytm’s strategy of scaling payments and expanding its financial services offerings. “Going forward, we remain committed to delivering PAT profitability,” said Paytm in its earnings release for Q2FY25.
Revenue grew by 11% quarter-over-quarter (QoQ), fueled by a 5% increase in Gross Merchandise Value (GMV) and improved device monetisation. The financial services segment emerged as a key contributor, with revenues increasing by 34% QoQ, driven by the distribution of merchant loans and improved collection efficiency.
Paytm’s net payment margin also saw a 21% rise to Rs 465 crore, highlighting the company’s focus on enhancing payment processing efficiency and better device realisation.
The company’s contribution margin surged to 54% without UPI incentives, up 356bps QoQ. This achievement underscores Paytm’s ability to optimise operational margins while maintaining its growth trajectory. Paytm also achieved a significant reduction in indirect costs, which fell by 17% to Rs 1,080 crore. The drop was primarily due to a 13% reduction in employee expenses, streamlined marketing efforts, and the absence of certain costs incurred in the previous quarter.
Paytm’s merchant subscriber base for devices has reached 1.12 Cr as of September 2024, an increase of 3 Lakh QoQ. The company’s subscription revenue growth was driven by a higher active subscriber base. To sustain growth, Paytm has adopted a strategy of retrieving and redeploying inactive devices to new merchants, reducing capital expenditure while expanding its active device base. This approach has helped the company boost subscription revenue and improve operating efficiency.
The company is also starting with DLG on merchant loans. “There is increased interest and comfort from existing as well as new lenders to expand the partnership due to better asset quality trends and higher demand from our merchants. Following the regulatory framework, and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the Default Loss Guarantee (DLG) model. DLG model will help to increase disbursements with the existing partners and expand partnership with new lenders for the loan distribution,” said the company in its earnings release.
With these robust financial and operational results, Paytm remains confident about achieving positive EBITDA before ESOP costs by Q4 FY25, even after accounting for DLG expenses. The company’s consistent growth, disciplined cost management, and expansion in financial services reaffirm its position as a leader in the digital payments and financial ecosystem in India. As Paytm continues to innovate and leverage opportunities across verticals, it is well-positioned to sustain its momentum and deliver long-term value.