Paytm's Parent Firm Witnesses Strong Revenue Momentum With 42 Percent YoY Growth

One97 Communications, which owns the payments and financial services platform Paytm, continue to witness strong revenue momentum across its business verticals.

The fintech firm on Friday reported its revenue from operations increased to Rs. 2,062 crore, a growth of 42 percent on a yearly basis and 8 percent on a quarterly basis.

The company's EBITDA before ESOP cost stood at Rs. 31 crore with EBITDA before ESOP margin at 2 percent of revenues as compared to (27 percent) a year ago, it said.

The performance, it said, is driven by increased adoption by consumers and subscription services by merchant partners along with sustained growth seen in loan distribution and commerce business.

Coming to revenue from financial services, which majorly is loan distribution, now accounts for 22 percent of its total revenues, up from 9 percent what it was in the same quarter last quarter.

"This has been made possible due to the relentlessly focused execution by our team. The team was asked to focus on growth with quality revenues that contribute to the bottom line," said Paytm founder and CEO Vijay Shekhar Sharma.

"We have achieved this milestone without losing sight on growth opportunities and keeping all compliances as well as risk factors under a strict watch," Sharma added.

Sharma further told shareholders that the next key milestone for Paytm is free cash flow generation.

"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."

Analysts say Paytm is expected to be adjusted EBITDA positive in March 2023, two quarters ahead of the estimates and the company's guidance of September 2023.

The company today said that it will maintain discipline on costs, as it continues to invest in areas where it sees potential for future growth, such as marketing (for user acquisition) or sales team (to increase merchant base and subscription services). Paytm said it will continue to focus on building a sustainable and long-term cash-generating business.

Notably, the Paytm Super App continued to see growing consumer engagement with the average Monthly Transacting User for the quarter that ended December 2022 at 85 million, registering a growth of 32 percent on a yearly basis.

The total merchant Gross Merchandise Value processed through the Paytm platform for the quarter that ended December 2022 aggregated to Rs. 3.46 lakh crore, marking a year-on-year growth of 38 percent.

The digital payments and financial services company Paytm's number of loans grew 117 percent yearly to 3.7 million for the month of December, and 137 percent to 10.5 million cumulative loans for the three months ended December 2022.

Total disbursements for the October-December quarter were 357 percent higher on year at Rs 9,958 crore.