Fintech Giant Paytm Registers INR 930 Cr Profit in Q2 FY24 On the Back of Ticketing Business Sale

Paytm, a significant fintech company, returned to profitability in the September quarter of fiscal year 2024-25.

The Vijay Shekhar Sharma-led company reported a consolidated profit after tax (PAT) of INR 930 crore in the second quarter of FY25, compared to a loss of INR 292 crore the previous year.

In an earnings release, Paytm stated that its PAT comprised a one-time exceptional gain of INR 1,345 crore from the sale of its entertainment ticketing business. Earlier this year, Paytm sold its movie and event ticketing business to foodtech giant Zomato for INR 2,048 crore in an all-cash transaction.

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Revenue from operations declined 34% year on year to INR 1,1660 crore in the reporting quarter, from INR 2,519 crore in the previous year. Sequentially, it increased by more than 10% from INR 1,502 Cr in the June quarter, driven by growth in its core payments and financial services businesses.

Paytm reduced its adjusted EBITDA (excluding ESOP costs) loss by 221% to INR 186 Cr in Q2 FY25, from INR 545 Cr in the same quarter last year. The fintech behemoth reported an adjusted EBITDA profit of INR 153 crore in the June quarter.

In the reported quarter, the company paid INR 218 crore on ESOP expenditures, a 12% decrease from INR 247 crore in the quarter ended June 2024 (Q1 FY25).

Paytm reported that its payment services division contributed INR 981 Cr to its revenue in the quarter under review, up 9% from the previous quarter, driven by an increase in gross merchandise value (GMV), a focus on monetisation, and an increase in merchant subscriptions.

GMV increased by 5% QoQ to INR 4.5 lakh crore in Q2. In addition, Paytm reported a considerable increase in payment processing margin. The company estimates the payment processing margin (including the UPI incentive) to be between 5 and 6 basis points this year.

Merchant memberships stood at 1.12 crore as of the September 2024 quarter, with subscription income growing due to an increase in active subscribers.

The fintech behemoth reported that new subscription-paying device merchant signups topped January 2024 levels. Over the next 2-3 quarters, the company expects to see an increase in active merchant base and income as merchants are reactivated and inactive devices are redeployed to new merchants.

Meanwhile, Paytm’s financial services unit generated INR 376 crore in revenue, up 34% quarter on quarter. This segment’s rise was driven by an increase in merchant loan collection bonuses and a larger share of merchant loans with higher take rates.

The company stated that its equity broking, insurance broking, and mutual fund distribution segments are all performing well. In the second quarter, up to 6 lakh clients used Paytm’s financial services, giving plenty of space for expansion.

Furthermore, Paytm spent INR 218 crore on ESOP fees in Q2 FY25. The company stated it was able to reduce this figure from INR 247 Cr in the previous quarter due to ESOP lapses caused by employee departures during the quarter.

Paytm shares were trading at INR 699.65 per on the BSE at 1 PM, down 3.6% from their previous close.