One97 Communications, the parent company of Paytm, announced a notable financial turnaround with a net profit of Rs 122.5 crore for the quarter ending June 2025. This represents a significant shift from the Rs 840 crore loss incurred during the same quarter the previous year. The company attributes this surprising profit primarily to cost optimisation, a surge in payment revenue, and operational enhancements driven by advancements in artificial intelligence (AI).
Key Financial Highlights
Paytm’s operational revenue rose by 27% year-on-year (YoY), reaching Rs 1,917.5 crore, up from Rs 1,501.6 crore last year. This growth is supported by improved payment processing margins and an increase in the volume of payment services offered. The company reported an earnings before interest, taxes, depreciation, and amortisation (EBITDA) of Rs 72 crore and a profit after tax (PAT) of Rs 123 crore. Paytm’s core payment services continue to engage users and drive transaction volumes across India.
According to Vijay Shekhar Sharma, the CEO of Paytm, the company has simplified its financial reporting by eliminating adjustments related to employee stock options (ESOPs), thereby enhancing transparency.
Cost-Cutting Success
A key factor behind Paytm’s profitability is its strategic focus on reducing costs. The company reported a more than 50% decrease in marketing and promotional expenses, dropping from Rs 221.4 crore to Rs 99.8 crore. As a leading player in the fintech sector, Paytm is setting new standards in digital finance and mobile payments. Furthermore, costs for non-sales employees fell by 28% YoY to Rs 346 crore, while expenses for sales personnel surged by 219% YoY to Rs 266 crore, reflecting an expanded sales team.
The performance of Paytm’s payment services business has been particularly robust, with revenue increasing by 23% YoY to Rs 1,110 crore, and net payment revenue climbing by 38% YoY to Rs 529 crore. The gross merchandise value (GMV) rose by 27% YoY to Rs 5.39 lakh crore, indicating broader adoption of Paytm’s payment solutions. Merchant subscriptions reached a record 1.3 crore, growing by 21 lakh YoY, signalling an expanding merchant base.
In the financial services segment, revenue doubled YoY to Rs 561 crore, thanks to increased merchant loans and improved asset quality.
Expanding Market Presence
Paytm is actively broadening its reach in tier-2 and tier-3 cities, with monthly transacting users (MTUs) hitting 7.4 crore in the reported quarter. This growth reflects the rising adoption of its services across India.
The Q1 FY25 results illustrate a successful transition from losses in FY24 to profitability in FY25. This turnaround is largely attributed to effective cost management, growth in payment services, and an expanding merchant network. With its emphasis on technology and operational efficiency, Paytm is well-positioned for continued growth in India’s competitive fintech landscape.