India’s leading digital payments and financial services company Paytm today noted that its revenue for Q2FY23 grew by 76% to ₹1,914 crore, while its EBITDA before ESOP costs improved by 61% to ₹166 crore. The company also reported a sustained increase in contribution profit, which increased 224% YoY and 16% QoQ to ₹843 crore.
The company said that the strong revenue was driven by growth in lending, expansion in merchant subscriptions driven by accelerated deployments, and momentum in commerce and cloud with growth in advertising, resumption of ticketing volumes, credit cards and PAI cloud.
The company said, “We are expanding our monetization base with growth of users and merchants. Merchant subscriptions are an attractive profit pool for us, driving higher payment volumes, subscription revenues as well as merchant loan distribution.”
Additionally, the company’s indirect costs were ₹1,010 Cr in the quarter, flat vs previous quarter’s ₹1,001 Cr. “We continue to make disciplined investments in areas where we see attractive monetization opportunities, including (a) sales team to increase our merchant base and our merchant subscriptions, (b) investments in our technology teams, (c) targeted marketing for user acquisition and brand,” it said in its earnings release.
The company’s payments business revenue grew 56% YoY and 9% QoQ in Q2FY23. Revenue from payment services to consumers stood at ₹549 crore, up by 55% YoY, while payment services to merchants was ₹624 crore, up by 56% YoY. The company said its net payment margin (calculated as payments revenues plus other operating revenues, less payment processing cost) stood at ₹443 Cr, up 428% YoY.
Paytm reported a revenue of ₹377 crore from its commerce and cloud services. Meanwhile its financial services revenue at ₹349 crore now accounts for 18% of the company’s total revenue, compared to 8% in Q2FY22.
Paytm also shared insights into its loan distribution business. In Q2FY23, Paytm Postpaid disbursements stood at ₹4,050 crore, (449% YoY and 20% QoQ growth), while Personal loans disbursements amounted to ₹2,055 crore (736% YoY and 53% QoQ growth). Meanwhile, merchant loan disbursements stood at ₹1,208 crore (342% YoY and 46% QoQ) due to growth in devices business.