One97 Communications, the parent company of Paytm, has now released its financial results for the third quarter of fiscal year 2024-25. For the three months ended December 2024, the firm noted a net loss of ₹208.3 crore, marking an improvement from the ₹219.8 crore loss recorded in the same quarter the previous year. Alongside this, the firm’s revenue clocked a quarterly growth of 10% to amount to ₹1,828 crore. However, it also marks an annual decrease in revenue – the firm had clocked ₹2,850 crore in revenue in Q3 FY24.
“In Q3 FY 2025, we achieved 10% QoQ revenue growth, due to increase in GMV, healthy growth in subscription revenues and increase in revenues from distribution of financial services. Growth in net payment margin was largely on account of higher subscription revenue. Payment processing margin continues to remain in the guided range. Higher Financial Services revenue was on account of higher share of merchant loans, higher trail revenue from Default Loss Guarantee (DLG) portfolio,” Paytm announced in its official release.
Paytm’s digital payments business continued to be one of the primary drivers behind the firm’s performance – the segment has long been the cornerstone of Paytm’s operations and has shown signs of recovery after a challenging period. Revenue from the payments business increased by 8% compared to the previous quarter, reaching ₹1,059 crore. This growth was largely driven by a higher number of merchant subscriptions and a rise in the gross merchandise value (GMV) processed through Paytm’s platform (the GMV grew by 13% from the previous quarter to amount to ₹5 lakh crore).
Paytm’s financial services business also saw impressive growth in Q3 FY25. Revenue from this segment grew by 34% on a sequential basis, totaling ₹502 crore. This surge was attributed to several factors, including the increase in merchant loans, improvements in collection efficiencies, and higher income from its Default Loss Guarantee (DLG) portfolio. In addition to this, Paytm disbursed ₹3,831 crore in merchant loans during the quarter.
Coming to its other financials, the firm’s EBITDA for the same period (before ESOP), amounted to ₹41 crore, while the net payment margin grew by 5% on a quarterly basis to amount to ₹489 crore. Its total expenses for the quarter amounted to ₹2,219 crore as well, primarily driven by lower employee benefit costs and marketing expenditures. Paytm also sold its stake in PayPay Corporation, a Japanese payments firm, for $280 million (₹2,372 crore) – a development that bolstered its cash reserves, which grew to ₹12,850 crore by the end of December 2024.
“India’s large base of micro, small and medium enterprises (MSME) present a significant opportunity for mobile payments and distribution of financial services. As the leading player in India’s merchant acquiring network, we are uniquely positioned to capitalize on the vast and growing market. To further strengthen our market leadership, we are committed to launching innovative, first-of-its-kind payment devices and solutions tailored to diverse merchant needs. Our extensive distribution and service network positions us well to capitalize on this growing market. We believe that tier-2 and tier-3 cities offer significant penetration opportunities and we will further expand our distribution network to onboard more merchants from these markets,” Paytm noted in its earnings release.