We reported revenue of ₹1,502 Cr in Q1 FY 2025, and showcased a strong rebounding to January 2024 levels in terms of our merchant operating metrics. Our consumer base remained stable during the June-end quarter, representing sustained loyalty of our users to Paytm’s platform.
The full financial impact of the recent disruptions was seen during this quarter. With green shoots visible across – growth in merchant payment operating metrics, gross merchandise value (GMV), accelerated merchant reactivation, and an expanding merchant base, coupled with our continued focus on cost optimisation – we remain optimistic about our revenue and profitability improvement.
Return towards profitability
During the earnings call, our Founder and CEO Vijay Shekhar Sharma highlighted, “Our quarterly performance has been in line with our expectations, demonstrating the resilience and capability of Paytm’s products and services.”
He added that this quarter reflects the full impact of the challenges we faced, but it marks the beginning of the end of tough times. “As a team, we are committed to navigating through these times with a focus on compliance. My team and I are committed to ensuring we return to profitable quarters,” Sharma emphasised.
We also remain aligned that our profitability will be driven by our ability to sell more financial services to customers. Further, we continue to enable merchants to do more commerce activities which are consolidated under our marketing services.
Revenue from financial services amounted to ₹280 Cr, while revenue from marketing services was ₹321 Cr. Contribution profit for the quarter stood at ₹755 Cr, with a 50% margin.
Final stages on user migration
Earlier this year, we received approval from National Payments Corporation of India (NPCI) to participate in UPI as a Third-Party Application Provider (TPAP) under multi-bank model. Four banks — Axis Bank, HDFC Bank, State Bank of India, YES Bank — will act as PSP (Payment System Provider) banks. This was to ensure that our existing users and merchants continue to do UPI transactions and AutoPay mandates in a seamless and uninterrupted manner.
Discussing technology and consumer migration, Sharma stated, “We are in the process of completing technology and consumer migration. We have successfully migrated our merchants, and we are in the final stages of transitioning our consumer base within a multi-bank ecosystem.”
Focus on cost structures
As we move towards stability on our platform, our goal is to enhance the total addressable market for cross-selling on our platform. “We are fortunate to have a resilient customer base. We need to focus on cross-selling various financial services to our customers, both consumers and merchants. Our Average Revenue Per User (ARPU) remains stable, and we expect it to increase in the coming quarters,” Sharma added.
During our earnings, we have emphasised that we remain committed to managing its overall cost structure, and will focus on business lines that are expected to add to our bottom line.
President and Group CFO Madhur Deora said, “Going forward, I expect marketing costs in the rest of the year to be at a lower trajectory than what we did in this quarter on an average.”
Our strategic focus will be on acquiring new merchants, reactivating inactive ones, and redeploying devices from inactive to new merchants. Emphasising our efforts to activate dormant merchants, Deora also discussed our commitment to providing substantial devices to numerous merchant businesses.
Deora concluded, “In terms of margin, we are on the path back to profitability. In the medium term, we aim to achieve a double-digit EBITDA margin.”
