Paytm July-September Profit hit by Gaming JV Impairment; Revenue Up 24% On Year

One 97 Communications Ltd., the parent company of Paytm, reported a sharp fall in its September quarter profit after taking an impairment charge related to its gaming joint venture, First Games Technology Pvt. Ltd., following the government’s ban on online money games.

Net profit for the quarter dropped 83% on quarter to ₹210 million, even as revenue from operations rose 24% on year to ₹20.61 billion. Sequentially, revenue grew 7.5%. Excluding the impairment loss of ₹1.90 billion, Paytm’s profit would have been ₹2.11 billion.

An on-year comparison of profit is not meaningful as the company’s July–September 2024 profit was inflated by a one-time gain of ₹13.45 billion from the sale of its ticketing business.

The fintech firm continued its positive operating momentum, reporting its second straight quarter of positive EBITDA since its listing in 2021. EBITDA nearly doubled to ₹1.42 billion from ₹720 million in the June quarter. The company ended the quarter with a cash balance of ₹130.68 billion, up 31% on year.

Paytm’s core businesses — payments and financial services distribution — drove growth in the September quarter. Revenue from payment services rose 21% on year and 10% on quarter to ₹11.46 billion, while financial services income nearly doubled to ₹6.11 billion. Marketing services revenue declined to ₹2.28 billion from ₹2.47 billion in the preceding quarter and ₹3.02 billion a year earlier.

The company’s contribution margin improved to 59% from 54% a year ago due to higher net payment revenue, a stronger mix of financial services income, and lower direct expenses. However, it was slightly below the 60% recorded in the June quarter. Paytm expects its contribution margin to remain in the 55–60% range for the full year.

Merchant subscriber additions remained strong, with 700,000 new merchants onboarded during July–September, taking the total to 13.70 million as of September 30.

After receiving the Reserve Bank of India’s in-principle approval for an online payment aggregator licence for its subsidiary Paytm Payments Services Ltd., the company announced plans to invest ₹22.50 billion into the unit through a rights issue.
For the first half of 2025-26, Paytm’s net profit rose 62% on year to ₹1.44 billion, while revenue grew 26% to ₹39.79 billion. The results were released after market hours on Tuesday.