Paytm in fast lane in Q2 with strong numbers, records revenue of Rs 2,519 cr, EBITDA before ESOP nearly doubles

Paytm, India's leading payments and financial services company and the pioneer of QR, Soundbox and mobile payments, has on Friday announced its Q2FY24 results. The company has yet again registered strong numbers, where it has reported 32% YoY revenue growth to Rs 2,519 crore. This was despite the fact that the revenue from the festive season is expected to be captured in Q3, whereas in the previous financial year it was largely in Q2. 

Revenue growth was led by increase in GMV, merchant subscription revenues, and growth of loans distributed through its platform. There are no UPI incentives booked during the quarter. Paytm profitability is growing stronger every quarter. Major brokerage firms such as Goldman Sachs, Jefferies among others have predicted its revenue growth to remain in the fast lane, which was witnessed in the Q2FY24 results. 

The fintech giant's EBITDA before ESOP has improved and nearly doubled to Rs 153 crore as compared with Rs 84 crore in Q1FY24 (excluding UPI incentives). On a yearly basis, Paytm posted improved EBITDA before ESOP of Rs 319 crore. Its EBITDA before ESOP margin stood at 6% on the account of increase in contribution margin and operating leverage. The company has managed to increase EBITDA while investing for growth. The loss for the quarter reduced 49% YoY to Rs 292 crore from Rs 571 crore.

The platform remained a preferred choice for customers, with its offering to pay for various use cases through comprehensive payment instruments, such as UPI, Wallet, Postpaid, Debit & Credit Cards, etc. Its Average Monthly Transacting Users (MTU) for Q2FY24 grew by 19% YoY to 9.5 crore as adoption of mobile payments for consumers in India continues. The fintech innovator has been focused on high quality users, and increasing engagement. 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. Its Gross Merchandise Value (GMV) increased by 41% YoY to Rs 4.5 lakh crore.

Paytm's payments revenue increased 28% YoY to Rs 1,523 crore, while its payments profitability improved with net payment margin expanding 60% YoY to Rs 707 crore. Due to increase in GMV of non-UPI instruments like Paytm Postpaid, EMI and cards, and improvements in payment processing margin on various non-UPI instruments over the last few quarters, its net payment processing margin has further improved and is now at the top end of 7-9 bps range. 

With its innovative and pioneering devices like Paytm Soundbox and Paytm Card Machines, the company has recorded a robust growth in subscriber base for payment devices that has more than doubled in the last one year while its merchant base has grown to 3.8 crore. Its leadership in payment monetisation continues with 92 lakh devices (91% growth YoY) and 14 Lakh QoQ, both Soundbox and Paytm Card Machines deployed. The champion of mobile payments has added 44 lakh merchant subscription in the past one year through expansion of distribution and service networks. 

Strengthening its leadership further in in-store payments and leading the technology for small shops, it recently launched three new Soundbox devices for merchants - Paytm Pocket Soundbox, Paytm Music Soundbox, and Paytm Card Soundbox. Its Made-in-India, All-in-One Pocket Soundbox is the first-of-its-kind device for merchants, who are always on the move. Another 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.

The company's revenue for financial services and others grew 64% YoY to Rs 571 crore in Q2FY24. Total number of unique borrowers, who have taken a loan through its platform, has increased by 51 Lakh over the last one year to 1.18 crore. "This growing loan distribution base offers us tremendous upsell and lifecycle benefits," Paytm has mentioned in its filing. The number of loans distributed through its platform grew to 1.32 crore, an increase of 44% YoY, while the value of loans distributed surged to Rs 16,211 crore, up by 122% YoY. With the onboarding of Tata Capital, we now have 9 NBFCs and banks for our credit card and loan distribution business. 

By helping enable digital loan collection on app, Paytm is ready to make waves by creating a small revolution for financial inclusion, where a loan of as small as a few hundred rupees can be disbursed and collected at very miniscule cost.