Paytm Posts First Profit in 15 Months, Revenue Grows 28% YoY

Paytm, an Indian fintech firm, has reported a net profit of ₹1.23 billion ($14.24 million) in the June quarter, its first positive result since September 2024. Revenue rose 28% YoY to ₹19.18 billion, with the financial services segment doubling over the period. Expenses dropped 19% to ₹20.16 billion, and adjusted EBITDA came in at ₹1.02 billion. The company sees room for further improvement in earnings in the coming quarters.

One97 Communications, the company behind the Paytm brand, has reported a significant turnaround in its financial performance during the April-June quarter of financial year 2026 (Q1FY26). The company posted a consolidated profit of Rs 122.5 crore, marking the first positive net income since September 2024. This quarterly result represents a stark contrast to the Rs 838.9 crore net loss recorded in the same period of the previous year [1].

The company's revenue from operations grew by 27.7% to Rs 1,917.5 crore in Q1FY26, compared to Rs 1,501.6 crore in Q1FY25. This increase is particularly notable in the financial services segment, which doubled to Rs 561 crore from Rs 280 crore in the same period last year. The number of registered merchants with Paytm also grew by 11% to 45 million in Q1FY26, indicating a strong merchant base. Additionally, the company reported an all-time high of 13 million merchant subscriptions, including payment acceptance devices, in Q1FY26 [1].

Paytm has been strategic in reducing its expenses, which has been a key factor in its turnaround. Total expenses dropped by 18.6% to Rs 2,016.1 crore in Q1FY26, compared to Rs 2,476.4 crore in Q1FY25. This reduction can be attributed to a 54.9% cut in marketing and promotional costs, which fell from Rs 221.4 crore to Rs 99.8 crore on a year-on-year basis. The company also utilized artificial intelligence (AI) to improve productivity, leading to a 28% decline in non-sales employee costs [1].

The company's cash balance at the end of Q1FY26 stood at Rs 12,872 crore, a significant increase from Rs 8,108 crore at the end of Q1FY25. This increase can be attributed to the sale of its entertainment ticketing business to Zomato for Rs 2,048 crore and its sale of stock acquisition rights in Japan-based PayPay for Rs 2,364 crore [1].

Despite the positive results, Paytm's stock price remains well below its November 2021 IPO price of Rs 2,150 per share. However, the stock hit a 42-month high and closed 3.37% higher at Rs 1,052.60 on the BSE on Tuesday, following the announcement of the Q1 results [1].

Paytm's turnaround in Q1FY26 is a testament to the company's strategic cost-cutting measures and its ability to generate revenue from its financial services segment. The company expects further improvement in earnings in the coming quarters, but investors should remain vigilant about the challenges that lie ahead.

References:
[1] https://www.business-standard.com/companies/quarterly-results/paytm-turns-around-with-rs-122-5-cr-net-profit-28-jump-in-revenue-from-ops-125072201230_1.html