One 97 Communications Ltd (Paytm) on Monday reported a narrowing of losses at Rs 208 crore for the December quarter compared with Rs 222 crore in the corresponding quarter last year. Revenue for the quarter fell 36 per cent YoY to Rs 1,828 crore compared with Rs 2,850 crore in the same quarter last year. This was in line with Street expectations.
During the quarter, One97 Communications Singapore Private Limited, a subsidiary, completed the sale of all the Stock Acquisition Rights (SAR) held by it in PayPay Corporation, Japan. The transaction was completed on December 13, 2024 and OCL Singapore received a consideration of $ 280 million (Rs 2,372 crore). The carrying value of SARs as of September 30 was Rs 1,984 crore. The gains were reported in the statement of Profit and Loss under the "other comprehensive income”, Paytm said.
In a filing to stock exchanges, Paytm said it achieved 10 per cent sequential 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 continued 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 and better collection efficiencies, Paytm said.
Paytm said contribution profit came in at Rs 959 crore, up 7 per cent QoQ. Contribution margin (without UPI incentives) was marginally down QoQ, at 52 per cent, due to an increase in DLG cost in the quarter as the amount disbursed under the DLG program more than doubled QoQ.
"We expect contribution margin excluding UPI incentive to remain in 50-55% range and including UPI incentive to be in 55-60% range. We have been able to reduce our indirect cost by 7% QoQ and 23% YoY to ₹1,000 Cr. Going forward, we expect calibrated growth in marketing costs and sales employee expenses as we invest in customer and merchant acquisition," Paytm said.
Paytm said its employee costs (excluding ESOP) for the nine months ended December 31, 2024 was Rs 451 crore lower YoY, and will comfortably surpass its targeted annualised people cost savings of Rs 400-500 crore.
"With growth in revenue, increase in contribution profit and reduction in indirect costs, EBITDA Before ESOP has improved by Rs 145 crore QoQ to Rs (41) crore. Ebitda improved by Rs 181 Cr QoQ to Rs (223) Cr. PAT improved by ₹208 Cr QoQ (after excluding exceptional gains of ₹1,345 Cr in Q2 FY 2025) to ₹(208) Cr," it said.