# Paytm (One 97 Communications Limited) — Q1 FY2027 Earnings Release
**Quarter Ended:** 30 June 2026 | **Release Date:** 20 July 2026
**NSE/BSE:** PAYTM / 543396
**Earnings Call:** 21 July 2026, 3:30 PM – 4:15 PM IST (Zoom Webinar, pre-registration via ir.paytm.com)

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## 1. Headline Summary

**Theme:** Strong Growth. Sustained Momentum. Accelerating Monetisation. Powered by AI.

| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,448 Cr | ▲28% | ▲8% |
| EBITDA | ₹203 Cr (highest ever quarterly EBITDA) | ▲182% | ▲54% |

> Note: Performance on a YoY **comparable** basis was even better than reported, since PIDF incentive was received until Dec'25 (see Section 9 — Summary P&L Reported vs Comparable).

### Four Growth Engines
1. **Expansion of merchant payments business** — Accelerating market share gains driving GMV growth, led by continued strength in offline business and tailwinds in online business.
2. **Growth in high-margin merchant loan distribution business** — Compounding on a growing merchant base; AI-led capabilities improving engagement, retention, risk insights, and collection efficiency.
3. **Consumer payments business growing >2x industry growth** — Product innovation and AI-optimised acquisition driving market share gains for five consecutive quarters.
4. **Tailwinds in consumer monetisation** — Postpaid, personal loans, and wealth products distribution becoming a powerful revenue engine.

**Operating leverage thesis:** AI applications across the business are accelerating in-built operating leverage — revenue growth is significantly outpacing indirect expense growth, supporting further EBITDA margin expansion.

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## 2. Merchant Payments

**Narrative:** Merchant scale enables compounding growth — accelerating GMV growth, structural payment margin expansion, and steady device subscription growth.

| Metric | Value | YoY |
|---|---|---|
| Merchant GMV | ₹7.1 Lakh Cr | ▲31% |
| Payment Processing Margin | >4 bps (comfortably above) | structural improvement |
| Merchant Subscriptions (cumulative) | 1.57 Cr | ▲27 Lakh |
| Net Payment Revenue (excl. PIDF) | ₹601 Cr | ▲25% comparable / ▲13% reported |

**Key drivers:**
- GMV growth accelerated to 31% YoY in Q1 FY27, up from 27% YoY in Q4 FY26 and 24% YoY in Q3 FY26 — attributed to investment in product, distribution, and device merchant servicing. Early momentum visible in online merchant business following receipt of online PA license last year.
- Payment Processing Margin structurally improved to comfortably above 4 bps, driven by: higher mix of profitable MDR-bearing instruments (credit cards on UPI, credit line on UPI/Postpaid), market share gains, and pricing discipline. Company expects this to continue mid-to-long term.
- Soundbox deployed at 1.57 Cr storefronts; 27 lakh net devices added YoY. High merchant retention plus improving payment processing and loan distribution revenue is improving overall merchant monetisation and payback periods.

**Device/product portfolio referenced:** Paytm Solar Soundbox, Paytm Card Soundbox, Paytm Payment Gateway, Paytm Card Machine, Paytm Music Soundbox, Paytm AI Soundbox.

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## 3. Consumer Payments & Monetisation Engines

**Narrative:** India's fastest-growing profitable consumer payments business — more consumers, more engagement, more monetisation per consumer.

| Metric | Value | YoY |
|---|---|---|
| Customer UPI GTV | ₹5.9 Lakh Cr | ▲45% |
| Monthly Transacting Users (MTU) | 8.0 Cr | ▲60 Lakh |
| Paytm growth vs Industry UPI growth | 2.2x (45% vs 20% industry) | — |

**Key drivers:**
- MTU expanded 60 lakh YoY to 8 Cr; growing base while deepening engagement per user simultaneously.
- Consumer payments GMV and revenue growth accelerated, led by market share gains.
- AI-led improvements (alongside fraud/risk models) improving acquisition costs and retention, supporting long-term monetisation.

**Consumer Monetisation Engines:**
- **Paytm Postpaid** (credit line on UPI): expected to compound over coming quarters; meaningful revenue and EBITDA contribution expected from **FY2028 onwards**.
- **Equity broking, MTF, wealth products**: AI-led personalisation driving higher engagement and revenue per active customer.
- Tailwinds observed in postpaid, personal loans, and wealth products.

Product surface referenced: Paytm Postpaid, Consumer Loans, Paytm Money, Paytm Ads.

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## 4. Distribution of Financial Services

**Narrative:** Turning payment acquisition into high-quality financial services revenue — high growth, high-margin, low penetration, repeat behaviour.

| Metric | Value | YoY |
|---|---|---|
| Revenue | ₹814 Cr | ▲45% |
| Key Financial Services Customers | 7.6 Lakh | ▲2 Lakh (▲34%) |
| Repeat Borrower Mix (merchant loans) | >50% of disbursements | — |

**By sub-segment:**
- **Merchant Loans:** Anchored on deeply engaged, growing merchant base; improving penetration, expanding lending partners, AI-led lifecycle management (risk insights, collections). More than half of disbursements to repeat borrowers. Credit quality for partners described as robust "even during recent geopolitical uncertainty."
- **Consumer Loans:** Paytm Postpaid scaling on sign-ups and disbursements, with healthy collection performance reported by lending partner; serves as funnel for additional consumer credit products. Personal Loans seeing tailwinds as lending partners scale disbursements in line with industry trends.
- **Equity Broking & Wealth:** Improved monetisation across equity broking, MTF, and wealth products (incl. Paytm Gold); AI-powered offerings expected to drive further growth.

**Indicative loan-distribution performance metrics (June 2026 quarter, Merchant Loans — underwritten/booked by lending partners; Paytm acts as collection outsourcing partner):**

| Metric | Range |
|---|---|
| Bounce Rates | NA |
| Bucket 1 Resolution % | 83% – 90% |
| Recovery Rate Post 90+ | 30% – 35% |
| ECL % | 4.5% – 5.0% |

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## 5. Indirect Expenses — AI-Led Operating Leverage

**Narrative:** AI is scaling revenue faster than expenses ("AI as a Multiplier").

| Quarter ending, ₹ Cr | Jun-25 | Jun-26 | YoY |
|---|---|---|---|
| **Cost of Expanding Platform** | **330** | **418** | **27%** |
| — Marketing | 62 | 79 | 27% |
| — Sales and service employees cost | 266 | 339 | 27% |
| **Cost of Building Platform** | **749** | **729** | **(3)%** |
| — Non-sales employee costs | 375 | 403 | 7% |
| — Software & cloud expenses | 168 | 159 | (5)% |
| — Other indirect expenses | 207 | 167 | (19)% |
| **Total Indirect Expenses** | **1,079** | **1,147** | **6%** |
| As % of Revenue | 56% | 47% | (9 p.p.) |

**Efficiency — Building Platform (▼3% YoY):**
- Non-sales employee cost: AI-led productivity gains absorbed annual appraisal increment costs, producing a marginal YoY decline.
- Software/cloud/data-center expenses down YoY on improved commercials and efficiencies, despite continued AI investment.
- Other indirect expenses declined due to lower PDD (Provision for Doubtful Debts), reflecting a more conservative revenue recognition policy.

**Investment — Expanding Platform (▲27% YoY):**
- Marketing + promotional expense up YoY, framed as already paying back via improved retention and market share gains.
- Sales & service employee costs up on continued tier-2/tier-3 city expansion and servicing effort supporting the highest-margin financial services distribution revenue.

---

## 6. AI Across the Organisation

Function-specific models/agents built by fine-tuning open-source models, deployed across three areas:

| Area | Framing | Detail |
|---|---|---|
| **Engineering** | AI agents accelerate delivery, sharpen cost discipline | Agentic assistance across coding, review, testing, deployment producing faster delivery cycles and lower cost of building software; end-to-end SDLC being made agentic. |
| **Merchants** | AI agent-powered sales and service | Started with merchant onboarding, servicing, business insights via Paytm AI Soundbox; now building agents for merchant marketing, multi-channel customer engagement, servicing. |
| **Consumers** | AI-led acquisition and retention | AI-led acquisition selects better customers efficiently; AI-led personalisation raises revenue per engagement; AI deepens risk insights; LTV compounds with each additional product pillar adopted. |

Cross-cutting use cases: Merchant Onboarding, Fraud Prevention, Customer Delight, Improved Marketing Stack, Enhanced Cross-Sell, Improved Collection Performance.

---

## 7. Balance Sheet & International Expansion

| Metric | Value | Notes |
|---|---|---|
| Cash Balance | ₹13,529 Cr | Up ₹657 Cr YoY. Excludes PML customer funds and Escrow/Nodal balances; includes prefunded PPSL escrow balance (post offline business transfer) supporting peak working capital. |
| Other Income | ₹182 Cr | Declined YoY due to last year's 125 bps repo rate cuts reducing reinvestment yields. Expected to remain broadly steady through FY2027. |
| D&A | ₹131 Cr | Down 21% YoY, largely on reduced device cost. FY2027 guidance: ₹550–600 Cr. |

**International business updates:**
- **2 July 2026:** Wholly-owned step-down subsidiary **Paytm Europe Payments S.A.** granted a **Payment Institution License** by Luxembourg's CSSF, covering: (a) execution of payment transactions, (b) execution of payment transactions funded by a credit line for payment service users, (c) acquiring of payment transactions.
- **Indonesia partnership:** In line with the partner-operated international expansion framework (detailed in the 4 November 2025 earnings release), Paytm has partnered with **Flip** (Indonesian fintech) and its subsidiary **DTK**. Paytm and subsidiaries will supply device hardware/technology; Flip leads local market execution. DTK holds a **PJP1 licence** enabling merchant acquiring in Indonesia.

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## 8. Governance & Compliance Posture

- Board strengthened with **four new directors appointed in the last one year**, bringing expertise across financial services, technology, and AI.
- Conservative revenue recognition policy on merchant subscription revenue, in place since last year.
- Business calibrated to sustain profitable growth **without government subsidies** (UPI incentive, PIDF).
- Proactive conservative compliance limited revenue impact from stoppage of rent payments via credit cards and from the Real Money Gaming Act.
- **Discontinued use of adjusted metrics** — all financial disclosures now GAAP-basis or per standard definitions.
- Conservative policy for impairing investments.

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## 9. Summary P&L — Reported vs. Comparable (excl. PIDF)

| Quarter ending, ₹ Cr | Jun-25 | Jun-26 | YoY |
|---|---|---|---|
| Operating Revenue (Reported) (A) | 1,918 | 2,448 | 28% |
| Less: PIDF Incentive (B) | 54 | 8 | (86)% |
| **Operating Revenue (Comparable) (A-B)** | **1,864** | **2,440** | **31%** |
| Contribution Profit (Reported) (C) | 1,151 | 1,350 | 17% |
| Contribution Margin % (Reported) | 60% | 55% | (5 p.p.) |
| **Contribution Profit (Comparable) (C-B)** | **1,097** | **1,342** | **22%** |
| **Contribution Margin % (Comparable)** | **59%** | **55%** | **(4 p.p.)** |
| EBITDA (Reported) (D) | 72 | 203 | 182% |
| EBITDA Margin % (Reported) | 4% | 8% | 5 p.p. |
| **EBITDA (Comparable) (D-B)** | **18** | **195** | **983%** |
| **EBITDA Margin % (Comparable)** | **1%** | **8%** | **7 p.p.** |
| PAT (Reported) (E) | 123 | 220 | 79% |
| **PAT (Comparable) (E-B)** | **69** | **212** | **207%** |

*p.p. = percentage points*

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## 10. Summary of Consolidated Financial Performance

| Particulars, ₹ Cr | Jun-26 (Unaudited) | Jun-25 (Unaudited) | YoY | Mar-26 (Audited) | QoQ |
|---|---|---|---|---|---|
| Payment Services | 1,384 | 1,044 | 33% | 1,265 | 9% |
| Distribution of Financial Services | 814 | 561 | 45% | 750 | 9% |
| Marketing Services | 239 | 247 | (3)% | 239 | 0% |
| Other Operating Revenue | 11 | 67 | (84)% | 10 | 10% |
| **Revenue from Operations** | **2,448** | **1,918** | **28%** | **2,264** | **8%** |
| Payment processing charges | 794 | 581 | 37% | 692 | 15% |
| — As % of GMV | 0.11% | 0.11% | 0 bps | 0.11% | 0 bps |
| Promotional cashback & incentives | 90 | 37 | 143% | 104 | (13)% |
| Other direct expenses | 214 | 148 | 45% | 214 | 0% |
| **Total Direct Expenses** | **1,098** | **767** | **43%** | **1,010** | **9%** |
| **Contribution Profit** | **1,350** | **1,151** | **17%** | **1,254** | **8%** |
| Contribution Margin % | 55% | 60% | (486) bps | 55% | (24) bps |
| **Indirect Expenses** | **1,147** | **1,079** | **6%** | **1,122** | **2%** |
| — Marketing | 79 | 62 | 27% | 65 | 22% |
| — Employee cost (incl. ESOP) | 742 | 643 | 15% | 739 | 0% |
| — Software, cloud & data centre | 159 | 168 | (5)% | 175 | (9)% |
| — Other indirect expenses | 167 | 207 | (19)% | 143 | 17% |
| **EBITDA** | **203** | **72** | **182%** | **132** | **54%** |
| Margin % | 8% | 4% | 454 bps | 6% | 246 bps |

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## 11. EBITDA → Profit Reconciliation

| Particulars, ₹ Cr | Jun-26 (Unaudited) | Jun-25 (Unaudited) | YoY | Mar-26 (Audited) | QoQ |
|---|---|---|---|---|---|
| EBITDA (A) | 203 | 72 | 182% | 132 | 54% |
| Finance costs (B) | (7) | (4) | 75% | (5) | 40% |
| Depreciation & amortization (C) | (131) | (166) | (21)% | (132) | (1)% |
| Other income (D) | 182 | 241 | (24)% | 178 | 2% |
| Share of profit/(loss) of associates/JVs (E) | 0 | 0 | nm | 0 | nm |
| Income Tax expense (F) | (27) | (4) | 575% | (11) | 145% |
| **Profit before Exceptional Items (G = A:F)** | **220** | **139** | **58%** | **162** | **36%** |
| Exceptional items (H) | – | (17) | nm | 21 | nm |
| **Profit / (Loss) for the period (I = G+H)** | **220** | **123** | **79%** | **183** | **20%** |

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## 12. Key Operational Metrics

| Operational KPI | Unit | Jun-26 (Unaudited) | Jun-25 (Unaudited) | YoY | Mar-26 (Audited) | QoQ |
|---|---|---|---|---|---|---|
| Registered Merchants (EoP) | Cr | 5.0 | 4.5 | 12% | 4.9 | 3% |
| Subscription Merchants incl. devices (cumulative, EoP) | Cr | 1.57 | 1.30 | 21% | 1.51 | 4% |
| GMV | ₹ Lakh Cr | 7.1 | 5.4 | 31% | 6.5 | 9% |
| Merchant Transactions | Cr | 1,669 | 1,303 | 28% | 1,530 | 9% |
| Total Transactions | Cr | 1,989 | 1,464 | 36% | 1,822 | 9% |
| Average Number of Sales Employees | # | 43,715 | 38,945 | 12% | 40,512 | 8% |
| Sales & service employee costs | ₹ Cr | 339 | 266 | 26% | 317 | 7% |
| MTU (average over period) | Cr | 8.0 | 7.4 | 8% | 7.7 | 4% |
| Key Financial Services Customers | Lakh | 7.6 | 5.6 | 34% | 7.5 | 1% |

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## 13. ESOP Pool Schedule (As of 20 July 2026, Cr)

| Item | Value |
|---|---|
| Basic shares outstanding | 64.0 |
| ESOPs vested and unexercised | 0.3 |
| ESOPs granted and unvested | 1.0 |
| ESOPs available for distribution | 2.7 |
| **Estimated fully diluted shares** | **67.9** |

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## 14. Cash Balance Detail (Quarter Ending, ₹ Cr)

| Particulars | Jun-25 | Sep-25 | Dec-25 | Mar-26 | Jun-26 |
|---|---|---|---|---|---|
| Cash and Bank Balances | 4,561 | 4,861 | 5,468 | 7,252 | 7,581 |
| Deposits with banks | 6,478 | 6,267 | 6,115 | 5,788 | 5,688 |
| Investments (MF/T-Bills/CP/G-Sec/NCD/NBFC FDs) | 5,086 | 5,545 | 4,747 | 4,417 | 5,067 |
| **Total Balances (A)** | **16,124** | **16,674** | **16,329** | **17,457** | **18,336** |
| Paytm Money Ltd (PML) customer funds (B) | 420 | 351 | 415 | 383 | 389 |
| Balances in Escrow / Nodal Accounts (C) | 2,832 | 3,254 | 3,732 | 4,459 | 5,119 |
| **Total Balances excl. PML & Escrow (A-B-C)** | **12,872** | **13,068** | **12,182** | **12,615** | **12,829** |
| Prefunded PPSL escrow balance (post offline transfer) (D) | – | Negligible | 700 | 700 | 700 |
| **Total Cash Balance (A-B-C+D)** | **12,872** | **13,068** | **12,882** | **13,315** | **13,529** |

*Note: Excludes money lent by PML to customers for Margin Trading Funding (MTF); reported under 'Other Financial Assets.'*

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## 15. Investor Q&A ("A Few Additional Insights")

**Q1 — EBITDA margin outlook (2–3 yrs); is 15–20% achievable?**
Management stated improved visibility on achieving these margins given accelerating top-line growth and AI-driven operating leverage, and indicated higher long-term margin targets are being set.

**Q2 — Key Financial Services Customers nearly flat QoQ — why?**
Metric includes equity broking customers; industry-wide QoQ decline in active equity broking customers mirrored at Paytm, with negligible impact on Distribution of Financial Services revenue. All other segments grew meaningfully.

**Q3 — Net Payment Revenue (excl. PIDF) declined from 8.8bps to 8.4bps of GMV YoY — why?**
NPM = Payment Processing Margin (PPM) + Merchant Subscription Revenue. PPM tracks with GMV and has structurally improved to comfortably above 4bps (vs. 3bps earlier). On subscription revenue, merchants are assessed on lifetime value across payments/financial services/upsell; with capex reduced substantially, targeted pricing benefits are being offered to select high-engagement merchants, improving retention/overall monetisation even as standalone subscription revenue per device saw a modest YoY decline.

**Q4 — Contribution Margin in line with mid-50s guidance but down from 60% in Q1 FY26 — why, and any outlook change?**
Q1 FY26's 60% CM was temporary (boosted by PIDF incentive and a dip in loan distribution under DLG that quarter). Mid-50s is the guided, more normalised baseline. Adjusted for PIDF, CM declined 4% YoY even as EBITDA margin rose 7% YoY. Increasing share of card processing in merchant payments accelerates revenue but carries lower CM while remaining EBITDA-positive. Management's view: CM alone is not a strong indicator of EBITDA/PAT margins.

**Q5 — Cash balance ~₹13,529 Cr and growing — deployment plans?**
Company intends to remain well-capitalised; evaluating organic and inorganic opportunities with early signs via MTF etc. for partial high-RoI capital deployment. Reiterated: capital will not be deployed simply because it exists — optionality itself has value, alongside capital discipline.

**Q6 — When does wallet return?**
Wholly-owned subsidiary Paytm Payments Services Limited (PPSL) has applied for a wallet license; management reiterated belief that consumers benefit from a range of payment options and wallet would add to completeness of the consumer offering.

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## 16. Metric Definitions

| Metric | Definition |
|---|---|
| **GMV** | Rupee value of total payments made to merchants through app/in-store solutions and Paytm payment gateway processing, over a period. Excludes consumer-to-consumer transfers. |
| **Monthly Transacting Users (MTU)** | Unique users in a calendar month who completed a transaction on the Paytm App or Paytm for Business App. |
| **Net Payment Revenue** | Payment revenues (incl. other operating revenue) less payment processing charges. |
| **Contribution Profit** (non-GAAP) | Revenue from operations less payment processing charges, promotional cashback & incentives, connectivity & content fees, contest/ticketing expenses & logistics, and deployment & collection costs. |
| **Key Financial Services Customers** | Unique consumers/merchants who availed Paytm/group financial services (equity broking, insurance, credit products incl. merchant/consumer loans). Excludes mutual fund distribution, Postpaid loans, gold savings, and attachment insurance customers (negligible revenue/profitability contribution). |

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## 17. Disclaimer Notes (abbreviated)

- Prepared by One 97 Communications Limited for information purposes only; not an offer, solicitation, or recommendation regarding securities, and not a basis for investment decisions.
- Contains forward-looking statements/financial projections subject to risks and uncertainties (political/economic conditions, government policy, applicable law, domestic/international events, etc.); no assurance is given that objectives will be achieved.
- Operating metrics are based on internal company data/estimates and methodologies subject to judgment, technical error, and revision; may differ from third-party estimates due to methodology differences.
- Non-GAAP measures (e.g., Contribution Profit) are supplemental only and not a substitute for Ind AS measures; reconciliations to Ind AS are provided.
- Amounts converted from ₹ millions to ₹ Cr; minor totalling anomalies may exist due to rounding.
- Document not reviewed/approved by any Indian regulatory authority or stock exchange.

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*Source: Paytm Q1 FY2027 Earnings Release, 20 July 2026 (quarter ended 30 June 2026). Companion document structured for internal IR use / AI research-agent consumption — figures should be cross-checked against the primary PDF, PPTX deck, and financial model before external distribution.*