Paytm Results: From widening losses to Payments Bank update, 10 key highlights from Q4 earnings

Paytm on Wednesday reported a net loss of ₹550 crore in the quarter ended March 2024, while its revenue from operations in Q4FY24 dipped to ₹2,267.10 crore

“Our Q4 FY 2024 results were impacted by temporary disruption on account of UPI transition etc. and permanent disruption because of the PPBL embargo,” Paytm parent One 97 Communications said in a release.

Following the RBI’s direction to PPBL, Paytm said it has successfully commenced partnerships with other banks and partners.

Read here: Paytm parent reports lower Q4 revenue, loss widens; recovery likely in Q2FY25

“We expect near-term financial impact to our revenue and profitability, due to disruptions faced in our business in Q4. This includes steady state impact due to pausing of PPBL wallet. We had also paused a few other payments and loan products to our customers during the last quarter, and I am happy to share that many such products have been restarted or in the process of starting soon,” said Vijay Shekhar Sharma, Founder & CEO, Paytm.

Here are key highlights from Paytm Q4 results:

1] Paytm’s net loss in Q4FY24 widened to ₹550 crore from ₹168 crore in the year-ago quarter.

2] Revenue from operations declined 2.9% to ₹2,267.10 crore from ₹2,334 crore in the same period last year. On a sequential basis, Paytm Q4 revenue dropped 20%.

3] EBITDA before ESOP was ₹103 crore including UPI incentives and it was negative ₹185 crore excluding UPI incentives. Contribution margin was 57% including UPI incentives, and 51% excluding UPI incentives. 

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4] PPBL products like the Paytm wallet and FASTag were distributed by Paytm. Due to the current embargo on these products, we anticipate the steady state annualised direct impact on EBITDA to be ₹500 crore, as previously disclosed. Most of this impact will be in Q1 as these products were operational during most part of Q4 FY 2024, Paytm said.

5] Temporary disruptions in operating metrics (MTU, merchant base, payment GMV) during February and March. This is expected to have an incremental EBITDA impact of ₹100 – ₹150 crore, in Q1FY25 and should start recovering from Q2 as we are seeing stabilization or growth in consumer and merchant base metrics from April/May, the company added.

6] Paytm sees the full financial impact of these disruptions in Q1FY25 following the RBI’s restrictions in January. It expects Q1FY25 revenue to range between ₹1,500 crore to  ₹1,600 crore. 

7] The company is confident of seeing meaningful improvement starting from the September quarter, based on restarting certain paused products and achieving steady growth in operating metrics. It is also planning to double down its focus on insurance and wealth to improve bottomline.

8] Paytm achieved its first full year EBITDA before ESOP profitability of ₹559 crore, up ₹734 crore, while EBITDA margin was 6%, up 8 percentage points.

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9] Payment Business

Revenue from Payment services in FY24 was up 26% to ₹6,235 crore, while its net payment margin was up 50% to ₹2,955 crore. gross merchandise value (GMV) was up 39% to ₹18.3 lakh crore.

In Q4FY24, payments revenue rose 7% YoY to ₹1,568 crore and GMV grew 30% YoY to ₹4.7 lakh crore.

Merchant paying subscription for devices has reached 1.07 crore as of March 2024, an increase of 39 lakh.

10] Financial Services Business

Revenue from financial services and others in FY24 increased 30% to ₹2,004 crore, while value of loans distributed was up 48% to ₹52,390 crore. In Q4FY24, the segment’s revenue fell 36% YoY to ₹304 crore.

At 10:45 am, Paytm shares were trading 0.88% lower at ₹348.65 apiece on the BSE.

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Published: 22 May 2024, 10:49 AM IST