paytm q3 earnings: Paytm Q3 Results: Net loss narrows to Rs 392 cr, co turns profitable at EBITDA level
The reported operating profit improved by Rs 424 crore from the year-ago period, and margin improved to 2% of revenue from -27% year ago, due to sustained improvement in contribution profit and strong operating leverage.
“I am very happy to share that our company has achieved this milestone of EBITDA before ESOP cost profitability in the December 2022 quarter itself. This is three quarters ahead of our guidance,” said Chief Executive Officer Vijay Shekhar Sharma.
The good numbers may help the stock rebound in trade on Monday. The stock ended nearly 4% lower at Rs 524.95 on the NSE on Friday.
Paytm parent’s consolidated revenue from operations increased 42% year-on-year (YoY) to 2,062 crore, driven by an increase in merchant subscription revenues, growth in loan distribution and momentum in commerce business.
“With our focus on growth and keeping a tight vigil on operational risk and compliances, I am very confident that we will soon achieve our next milestone of becoming a free cash flow generating company,” Sharma said.
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Merchant subscriptions stood at 5.8 million compared to 3.8 million a year ago. With a focus on creating additional payment monetization, the company remains focused on subscription revenues. The number of merchants paying subscriptions increased by 1 million sequentially.
The average monthly transacting users (MTU) continued to grow and were 85 million for the quarter, increasing 32% YoY. This was driven by customer acquisition through UPI and multiple use cases on the Paytm platform.
The number of loans disbursed through Paytm was 10.5 million, up 137% YoY. As of December, 8.1 million borrowers have taken a loan on the platform, adding 1.4 million new borrowers in the last quarter.
Growing borrower base offers tremendous upsell and lifecycle benefits, the company said.
The payments business generated Rs 459 crore of net payments margin, which comprises payment processing margin and subscription charges.
The gross merchandise value grew 38% YoY to Rs 3.5 lakh crore. The payment processing margin in the last quarter was within the range of 7-9 basis points.
Since UPI is growing faster than other instruments, the company expects payment processing margin to stabilise at 5-7 bps over the long term.
As of December, merchant subscriptions were 5.8 million, which was nearly three times higher than the last year.
“We see sustained traction and earn more than Rs 100 per month per device,” the company said.
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