Paytm Q1 Loss Rises on Higher Expenses
The online payment service Paytm reported a Q1 loss of Rs 275 crore as its expenses rose by 58 per cent to reach a new high. The company saw its EBITDA before ESOP fall by 25 per cent to Rs 275 crore, however, QoQ it improved by Rs 93 crore. Contribution profit improved 197% year-over-year to Rs 726 crore, with a contribution margin of 43%. The company said it is now on the path to operating profitability due to better cost leverage.
In July, the company processed 2.96 lakh crore worth of gross merchandise value, up from a loss of Rs 382 crore a year ago. The company attributed the growth in net revenue to strong monetization of the payments business, device subscriptions, and accelerated adoption of high-margin businesses. However, it remains to be seen if Paytm can sustain this growth.
The payments services segment grew by 69% YoY. In addition, Paytm’s total number of devices deployed increased to 3.8 million. In addition to offering bill payments, consumers can also use Paytm to top up their smartphones. The company also charges a platform fee to merchants, which is based on transaction volumes. The company’s net cash balance stood at Rs 9,411 crore on June 22.
The financial services business has also grown. The company disbursed 8.5 million loans during the quarter, up 492% YoY. The company said that the size of its personal loan business has increased. The number of loans disbursed has reached Rs 24,000 crore on an annualised basis. This growth in the financial services sector has been an important part of the company’s business strategy.
The company’s marketing costs increased by 33% YoY. The company said that marketing expenses accounted for 10% of revenues. Employee costs increased by 33% YoY to Rs 552 crore. This increase in expenses reflects the company’s continued investments in sales channels and its technology and product teams. The company is attempting to grow its customer base and revenue base at a faster pace than its competitors.
The company’s revenue from operations grew by 89 per cent. It also reported an adjusted EBITDA loss of INR 320 Cr. The company also said that it would continue to improve its margins and be profitable by the end of FY24. It added that it was committed to generating shareholder value, driving digitisation and ensuring that financial access is available to everyone.