Q1FY23 Results: Paytm’s Revenue Jumps to Rs 1,680 crore; EBITDA (Before ESOP Cost) Losses Reduce to Rs 275 Cr, Improves by Rs 93 Cr Q-o-Q

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We have announced our financial results for the quarter ending June 2022, marking an excellent start to the new fiscal year. Our revenue jumped 89% Y-o-Y (9% Q-o-Q) to Rs 1,680 Cr, driven by strong monetization in payments, device subscriptions and high-margin businesses such as loan distribution. As a result, our Contribution Profit also grew 197% Y-o-Y to Rs 726 Cr, leading to increase in contribution margin to 43% of revenues in comparison to 35% in Q4FY2022 and 27% in Q1FY2022.

We have significantly reduced losses during the quarter as our EBITDA (Before ESOP cost) came down to Rs 275 Cr, marking an Y-o-Y improvement of Rs 57 Cr or 17%. In fact, EBITDA (Before ESOP costs) saw a strong Q-o-Q improvement of Rs 93 Cr or 25% in comparison to Q4FY2022.

We are confident that with continued revenue growth, increasing mix of higher margin business such as loan distribution, and better operating leverage, we will reach operating profitability (EBITDA before ESOP cost) by September 2023.

Our Monetization Strategy is Gaining Momentum

The massive jump in revenue was led by our monetization strategy and driven by an increase in consumer and merchant payments, rapid adoption of our devices at stores across the country and solid growth in the partner-based loan distribution business.

Our two-sided ecosystem of consumers and merchants continues to be the driving force behind strong monetization in our key businesses. The average Monthly transacting users (MTU) jumped 49% Y-o-Y (6% Q-o-Q) to 74.8 million during the quarter, while the merchant base expanded to 28.3 million. Building on this increased engagement, we have further scaled our monetization strategy, supported by an increasing mix of higher margin businesses such as loan distribution.

Strong Growth in Payments Services Driving Revenue Growth

As pioneers of India’s QR and mobile payments revolution, payment services continue to be at the forefront of our strong growth. Our revenue from payment services grew 69% Y-o-Y (3% Q-o-Q), reflecting strong growth in consumer and merchant payment services. This sustained increase in our user engagement and merchant base led to a 101% Y-o-Y jump in Gross Merchandise Value (GMV), which stood at Rs 3 lakh Cr during the quarter.

On the consumer payments side, revenue grew 73% Y-o-Y (11% Q-o-Q) to Rs 519 Cr as more users joined our platform for a wide range of payment services and flexibility offered through Paytm Payment Instruments such as Paytm UPI, Paytm Postpaid (Buy now, pay later), Paytm Wallet and more.

Meanwhile, our revenue from payment services to merchants grew 67% Y-o-Y to Rs 557 Cr, driven by strong growth of MDR-bearing instruments GMV, Payment Gateway services and subscription revenues from devices.

We continue to be the leader in offline payments with 3.8 million device deployments, of which 2.8 million were added in the past 12 months and 0.9 million during the quarter. With stronger adoption of offline payment devices like the Soundbox, our subscription as a service (SAAS) model is growing rapidly, while paving the way for upselling high-margin services like loans to merchants.

High-margin Loan Distribution Business Sees Rapid Scale-up

One of the highlights of this quarter has been the rapid scale-up of financial services, led by our loan distribution business, in partnership with financial institutions. We offer Paytm Postpaid, personal loans and merchant loans. In June 2022, we reached an annualised run rate of approximately Rs 24,000 Cr of loan disbursements through our platform.

During the quarter, the number of loans distributed through our platform grew to 8.5 million, representing a growth of 492% Y-o-Y and 30% Q-o-Q. The value of the loans disbursed stood at Rs 5,554 Cr, marking a growth 779% Y-o-Y or 56% Q-o-Q.

We are happy to share that the demand for Paytm Postpaid (Buy-Now-Pay-Later) continues to grow rapidly, with the signed up user base now over 5.3 million. This growth is reflected by 486% Y-o-Y (29% Q-o-Q) increase in volume and 656% Y-o-Y (55% Q-o-Q) jump in value of such loans to Rs 3,383 Cr. Paytm Postpaid is now accepted by more than 11 million online and offline merchants in the country. The growth of Postpaid continues to play a significant role in cross-selling higher margin personal loans, with over 50% of personal loan disbursements being to existing Paytm Postpaid users.

Personal Loans disbursed through our lending partners grew 887% Y-o-Y (44% Q-o-Q) in Q1 FY2023, with 1,106% Y-o-Y (67% Q-o-Q) rise in value to Rs 1,344 Cr. The average ticket size grew 16% Q-o-Q and is roughly Rs 1,00,000 with an average tenure of 12 months.

Merchant loans distributed through our platform jumped 907% Y-o-Y (56% Q-o-Q), while the value of these loans jumped 1,031% Y-o-Y (46% Q-o-Q) to Rs 827 Cr . The average ticket size of merchant loans continues to be roughly Rs 1,40,000 with an average tenure of 12 months. This increase has been driven by growth in our devices business, as 75% of loans disbursed in the quarter were to merchants with devices. We have also observed that repeat loans continue to increase, with more than 45% merchants having availed a loan more than once.

We remain grateful for your continuous support, and remain committed to our mission to to building a profitable company and create shareholder value, while driving digitization and inclusive financial access

You can read the full Q1FY23 financial results report here

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