Paytm Q3 Results: Revenue up 89% on year despite the losses

Loss widens: Paytm, a digital payments company, reported a net loss of Rs 778.5 crore in Q3FY22. Paytm reported a net loss of Rs 535.5 crore in the year-ago period. Sequentially, the revenue widened from Rs 473.5 crore.

Revenue increase: Even though the losses widened in Q3, the revenue increased by 89% to Rs 1,456.1 crore in Q3FY22 from Rs 772 crore in the year-ago period. Sequentially, the revenue increased by 34%.

Revenue from different segments: The revenue from payments services to consumers increased by 60% YoY to Rs 406 crore. The growth was led by an increase in transaction volumes of Paytm payment instruments and the introduction of new use-cases.

Revenue from payment services to merchants stood at Rs 586 crore, a growth of 117% YoY. The growth was driven by MDR-bearing instrument GMV growth, new large partnerships in payment gateway services, and growth in device subscription.

Revenue from financial services and others stood at Rs 125 crore in Q3FY22, a growth of 201% YoY.

EBITDA: At the EBITDA level, the loss narrowed to Rs 393 crore in Q3FY22 compared to a loss of Rs 488 crore in the year-ago quarter and a loss of Rs 426 crore in the September quarter. 

Expenses rise: Operating expenses increased sharply to Rs 2,317.40 crore, up by 71.86% compared to Rs 1,348.40 crore in the year-ago period. Marketing and promotional expenses at ₹283 cr. Most of the rise was driven by a 51% year-on-year increase in payments processing charges, which stood at Rs 783.1 crore.

Increase in user base: Company's average monthly transacting users (MTU) stood at 64.4 million, a growth of 37% YoY. The number signifies unique users with at least one successful payment transaction in a month.

Gross merchandise value (GMV): It is the amount processed on the platform when a customer is making a payment to a merchant using any instrument. The GMV for Q3FY22 reported by the company was Rs 2.5 lakh crore, a jump of 123% YoY. Its GMV from processing payments through MDR (merchant discount rate) bearing instruments grew 77% YoY.

Payments Bank: In the UPI ecosystem, Paytm Payments Bank Ltd (PPBL) is the biggest beneficiary bank for UPI transactions, with a record 926 million transactions in December 2021, as per NPCI data, and is also one of the leading remitter banks for UPI transactions. PPBL also holds the majority market share in UPI Autopay mandate registration for recurring bill payments.

Paytm Q3 Results Review:

The company reported a growth in the top line but the bottom-line still remains a concern for investors. The stock has proven painful for early backers of Paytm, as its market cap has dropped to Rs 61,800. Investors will scrutinize the latest quarterly results for signs that Paytm can move toward profitability, the likelihood of which looks a little distant for now. 

Shares of Paytm closed at Rs 952.90, up by 0.89% on the BSE on Friday.