Paytm's Financial Turnaround

Fintech giant One97 Communications, the parent company of Paytm, has marked a significant milestone by reporting its first-ever consolidated net profit of Rs 122.5 crore for the quarter ending June 2025 (Q1 FY26). This achievement comes after a net loss of Rs 840 crore in the same quarter the previous year, showcasing a remarkable financial turnaround.

Drivers of Profitability

The company attributes this success to cost optimization and a surge in payment revenues. EBITDA and PAT turned profitable at Rs 72 crore and Rs 123 crore, respectively, highlighting the benefits of AI-led operating leverage and a disciplined cost structure.

Cost Reduction Strategies

Paytm significantly reduced its marketing and promotional expenses by more than half to Rs 99.8 crore from Rs 221.4 crore a year ago. Employee benefit expenses also saw a sharp decline, dropping by about Rs 300 crore to Rs 643 crore.

Revenue Growth

Revenue from operations grew by 28% YoY to Rs 1,917.5 crore, supported by an increase in payment processing margins. Payment services revenue, including other operating income, rose 23% YoY to Rs 1,110 crore, with net payment revenue jumping 38% YoY to Rs 529 crore.

Expansion and Future Plans

With a 27% increase in gross merchandise value (GMV) reaching Rs 5.39 lakh crore and merchant subscriptions hitting an all-time high of 1.3 crore, Paytm is investing in expanding its sales network to strengthen its position in tier-1 markets and expand into tier-2 and tier-3 cities.