MobiKwik Reports Over 6x YoY Increase in Q1 Losses, Hits INR 42 Crore

MobiKwik, a fintech company, has reported another quarter of losses, with its consolidated net loss skyrocketing by almost 535% to INR 41.9 Cr in Q1 FY26, compared to INR 6.6 Cr in the same quarter last year.  In sequence, the net loss reduced by 25.2% from INR 56 Cr.

During the quarter in question, operating revenue fell by 20.7%, reaching INR 271.4 Cr compared to INR 342.3 Cr in Q1 FY25.  On a quarter-on-quarter basis, revenue increased slightly from INR 267.8 Cr.

The primary reason for the significant decline in the fintech company’s revenues was the poor performance of its financial services sector, where loan disbursements and profit margins fell sharply.  In the quarter being examined, MobiKwik’s consolidated contribution margin suffered a blow, dropping to INR 77.4 Cr from INR 107 Cr in Q1 FY25—representing a decline of 26.7%.

Consequently, it recorded an EBITDA loss of INR 31.2 Cr in Q1 FY26, in contrast to the EBITDA profit of INR 2.2 Cr from the same quarter last year.  On a sequential basis, however, the EBITDA loss showed improvement from an INR 45.8 Cr. loss.

In its letter to shareholders, the company stated that it is “on path” to achieve EBITDA breakeven, thanks to the ongoing improvements.  It did not offer any timeline, however.  To achieve profitability, it is betting on the expansion of the payments sector, the revival of the lending business, and the maintenance of fixed costs.

The company’s total income, which includes other income of INR 10.3 Cr, decreased to INR 281.6 Cr in the June quarter from INR 345.83 Cr a year earlier.

The lending vertical’s dwindling revenues and low contribution margin were the main factors behind the YoY loss’s significant increase.  During the quarter being examined, the fintech company’s revenue from its financial services segment fell to INR 58.3 Cr, marking a 65.8% decrease compared to INR 170.7 Cr in the same quarter last year.

In a sequential comparison, the revenue from the financial services segment increased slightly by 3.8%, rising from INR 56.2 Cr.  This ended the two-quarter streak of declines in the top line of this vertical.

MobiKwik expressed confidence in its lending vertical, stating it has reached the “bottom” and expects the situation to improve due to its emphasis on the default loss guarantee (DLG) model and “distribution-led scale-up”.

Lending service providers, under the DLG model, guarantee compensation for a portion of the losses incurred by a registered entity due to loan defaults.  For the past few quarters, the company has been experiencing the impact of transitioning to DLG contracts with its lending partners.  This has resulted in a decrease in recognised revenue and an increase in costs for the company.

The fintech company stated that it is concentrating on its “longer tenure and larger ticket size” ZIP EMI product to further develop the credit business.

“Due to macroeconomic challenges and a slowdown in that segment, we have decided to discontinue the smaller-ticket ZIP product.  These factors, alongside DLG-related accounting adjustments (which necessitated that we front-load costs and acknowledge reduced revenues in the early quarters), have affected our margins after disbursal on a smaller base.  Nonetheless, we are witnessing the normalization of this trend and think that Ǫ4 FY25 represented the phase of reaching the lowest point.  MobiKwik stated, “We anticipate that operational performance will revert to earlier levels, specifically a gross lending margin of approximately 40%, by the second half of FY26.”

Despite the turmoil in the lending sector, MobiKwik’s payment services business experienced widespread growth throughout the quarter.  In Q1 FY26, revenue from the online payments vertical rose by 24.2%, reaching INR 213.1 Cr compared to INR 171.5 Cr in the same quarter of the previous year.

During the June quarter, MobiKwik’s payments GMV experienced a 53% year-on-year and a 16% quarter-on-quarter increase, reaching a record INR 38,400 Cr, driven by “high engagement and a growing registered user and merchant base.”

At the end of the quarter, its user base reached 18 crore and its merchant base reached 46.4 lakh.  MobiKwik succeeded in keeping its net payments margin at 15 basis points (an increase of 4 bps YoY), and the gross margin for the payments business hit a record high of 28%, reflecting a YoY rise of 12 percentage points.

The company defines gross payment margin as the percentage of operating revenue retained from its payment services after accounting for the costs of payment gateways and user incentives.

“We observed widespread growth across all use cases…  Our main payments metric is net payments margin, which has risen by 5 bps YoY due to cost optimisations…  In its shareholder letter, the company stated, “We have expanded our presence on the merchant side by installing additional payment devices, including SoundBox and EDC (electronic data capture) terminals….”

In the future, the fintech company views the suggested implementation of “interchange fees” on Pocket UPI as a possible new source of income.  MobiKwik also intends to utilize its IPO proceeds to accelerate the rollout of additional payment devices, aiming to enhance merchant engagement and expansion.

On the BSE, MobiKwik shares closed the trading day down 1.4%, finishing at INR 245.7.