We have announced our financial results for the quarter ending December 2025 (Q3 FY26), reporting our third consecutive profitable quarter, driven by strong monetisation, higher payments GMV, merchant subscriptions, and distribution of financial services revenue.
You can read the Q3FY26 Results here:
We reported a Profit After Tax (PAT) of Rs 225 crore, an improvement of Rs 433 crore YoY. Our PAT continued to strengthen, marking the third consecutive quarter of positive growth. We recorded a PAT of Rs 123 crore in Q1 FY26 and Rs 21 crore in Q2 FY26. EBITDA surged to Rs 156 crore with 7% EBITDA margin, an improvement of Rs 379 crore YoY. This was despite higher promotional expenses for consumer growth and full impact of the new labour code. Contribution profit stood at ₹1,249 crore, up 30% YoY with a contribution margin of 57%, due to higher payment processing margins and increased share of distribution of financial services revenue.
Payments Business Performance
In the December quarter, our operating revenue rose 20% YoY to Rs 2,194 crore, reflecting industry-leading customer monetization. Revenue growth was led by payments GMV, merchant subscriptions, and distribution of financial services revenue. On a like-for-like basis, revenue growth was ~25%, while reported growth was affected by festive timing, lower disbursements under default loss guarantee (DLG), and a more conservative revenue recognition policy.
Payment Services revenue (including other operating revenue) was up 21% YoY at ₹1,284 crore. Net payment revenue was up 25% YoY at ₹613 crore due to improved payment processing margin and increase in merchant subscriptions. In Q3 FY 2026, our average MTU reached 7.6 crore, an increase of 60 lakh YoY. Our AI-first, product-led growth strategy has driven improved engagement among higher-quality users and enhanced customer retention.
Expanding Merchant Acquisition
We continue to strengthen our leadership across small and large, online and offline merchants by deepening adoption of our full-stack payment offerings. Product innovation and AI-led merchant acquisition improving unit economics and driving profitability. Merchant device subscriptions reached 1.44 crore, an increase of 27 Lakh YoY, expanding our recurring revenue base. We are further enhancing merchant retention and engagement through AI-led targeting and an expanded merchant sales and service team.
Driving Gain in Consumer Market
Our AI-first, product led strategy has led to consistent gain in UPI consumer market share for 3 consecutive quarters. Our consumer UPI GMV grew 35% in the last nine months versus industry GMV growth of 16%. Building on this momentum, we have prudently invested in promotional expenses to boost consumer retention and market share gain. We are also focused on maximising customer lifetime value through additional monetisation levers such as Wealth products, Paytm Travel, Consumer Loans and Advertising.
Financial Services Distribution Growth
In Q3 FY 2026, distribution of financial services revenue grew 34% YoY to Rs 672 crore, driven by continued growth in distribution of merchant loans and wealth products. This was despite lower volumes under Default Loss Guarantee (DLG), which leads to lower revenue and lower other direct costs. Our customers availing financial services through our platform increased from 5.9 lakh to 7.1 lakh YoY, led by growth in merchant loans and equity broking users.
Indirect expenses declined 8% YoY to ₹1,092 crore, driven by lower employee costs (including ESOP costs) and lower Provisions for Doubtful Debt (PDD). Cash balance stood at ₹12,882 crore as of the quarter ending December 2025, providing continued capital flexibility to expand business. Cash balance stood at ₹12,882 crore as of the quarter ending December 2025, providing continued capital flexibility to expand business.
During the quarter, the offline merchant business was transferred to Payments Services Limited, a wholly owned subsidiary of the company, in line with regulatory guidelines. Payments Services Limited received final approval from the Reserve Bank of India (RBI) to operate as an Online Payment Aggregator. Further, the RBI authorised PPSL to operate as a Payment Aggregator for physical (offline) payments and cross-border transactions.
Author
