One97 Communications, the parent company of fintech giant Paytm, revealed on Monday that its revenue from operations for the second quarter of the financial year 2022-23 (FY23) had jumped by 76% YoY to reach ₹1914 crores. However, this strong growth in revenue – which is a quarterly growth of 14% from the ₹1,679.60 crores it clocked in the previous quarter– comes alongside the increase of its net loss for the quarter that ended September 30, 2022.
For the second quarter of FY23, the company saw its net loss widen to ₹571.5 crores from ₹473.5 crores in the same period last year. However, this is still a drop from the ₹645 crores it clocked as the net loss in the previous quarter of the financial year. With these financials, Paytm exceeded analyst expectations which informed of a 62.4% YoY increase in revenue from operations, though the net loss for the quarter fell short of the estimated ₹596 crores.
According to a regulatory filing by the company on Monday, this growth in its revenue from operations can be attributed to a rise in the growth of loan disbursals, along with an increase in merchant subscription revenues, a rise in bill payments due to growing MTU (monthly transacting users), as well as “momentum in commerce and cloud with growth in advertising, resumption of ticketing volumes, credit cards and PAI cloud.”
The second quarter also witnessed its gross merchandise volume (GMV) grow by 63% YoY to reach ₹3.2 lakh crores, driven by e-commerce festive sales, while the average monthly transacting users (MTU) rose to 79.7 million for the quarter.
The overall financials indicate “heavy traction” for the company’s businesses and carry forward the momentum it had witnessed in the previous quarter, Paytm informed in a blog post. It disbursed a total of 9.2 million loans – a growth of 224% annually – for the quarter, amounting to ₹7313 crores – an annual increase of 482%.
“Our Q2 FY 2023 results show momentum across our operating and financial metrics. We are pleased to show strong growth in revenues and contribution profit, combined with operating leverage, which has allowed us to show a sharp improvement in EBITDA before ESOP costs,” Paytm said. Its contribution profit for the quarter rose by 224% YoY to reach ₹843 crores, while EBITDA before ESOP costs clocked an annual growth of 61% to reach ₹426 crores for the second quarter as Paytm continued to drive focus on “improving monetization capabilities, widening contribution margin as well as significant operating leverage.”
The company’s Financial Services business pocketed ₹349 crores – an annual increase of 293% – and accounted for 18% of the total revenue, driven by sourcing and collection revenues in the loan distribution business. Additionally, the revenue from its Commerce and Cloud arm rose by 55% annually. Merchant transactions for the quarter grew by 114% to reach 5.75 billion for the quarter, while its revenue from payment services to consumers grew by 56% annually to reach ₹549 crores.
