Paytm Reports Strong Q2 Profitability and Revenue Growth

Paytm, the brand owner and a prominent Indian fintech company, announced its financial results for the second quarter ended September 2025. The company showcased robust growth, with operating revenue increasing by 24% year-on-year to ₹2,061 crore. This growth was primarily fueled by its payments and financial services segments.

Paytm reported a profit after tax (PAT) of ₹21 crore. This figure includes a one-time charge of ₹190 crore for the full impairment of a loan to its joint venture, First Games Technology Pvt Ltd. Before this charge, the PAT was ₹211 crore. This marks a considerable improvement in profitability, indicating a move towards sustainable earnings. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose to ₹142 crore, achieving a 7% margin, benefiting from revenue expansion and operating efficiency.

Contribution profit grew by 35% year-on-year to ₹1,207 crore, with a healthy 59% margin, attributed to better net payment margins and a larger contribution from financial services. Payment services revenue climbed 25% YoY to ₹1,223 crore, with net payment revenue up 28% to ₹594 crore. Gross Merchandise Value (GMV) saw a substantial surge of 27% YoY to ₹5.67 lakh crore, supported by enhanced processing margins from increased credit card usage on UPI and affordability solutions like Equated Monthly Installments (EMI).

The company's merchant ecosystem continued its expansion, with subscriptions reaching an all-time high of 1.37 crore, a year-on-year increase of 25 lakh. Revenue from financial services distribution surged 63% YoY to ₹611 crore, driven by strong merchant loan disbursements and effective collection performance for lending partners. Over 6.5 lakh consumers utilized Paytm's financial services during the quarter.

Indirect expenses decreased by 18% year-on-year and 1% quarter-on-quarter, totaling ₹1,064 crore. Marketing costs for customer acquisition were reduced by 42% year-on-year, reflecting improved customer retention and monetization strategies. Paytm plans to continue strategic investments for market share growth while maintaining disciplined spending.

Impact This news is highly positive for Paytm and the Indian fintech sector. The strong revenue growth, coupled with significant improvements in profitability metrics like PAT and EBITDA, signals financial health and operational efficiency. For investors, this indicates a potentially well-managed company on a path to sustained profitability, which could boost investor confidence and potentially impact its stock price positively. The continued expansion of its merchant ecosystem and financial services distribution reinforces its market leadership. Rating: 8/10

Difficult Terms: Profit After Tax (PAT): This is the profit remaining after all expenses, taxes, and interest have been deducted from the total revenue. It represents the net profit available to shareholders. EBITDA: Stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance before accounting for financing and accounting decisions. Contribution Profit: The revenue generated from sales minus the variable costs associated with producing and selling those goods or services. It indicates how much each sale contributes towards covering fixed costs and generating profit. Gross Merchandise Value (GMV): The total value of merchandise sold over a given period of time, through a marketplace or e-commerce platform. UPI: Unified Payments Interface, a real-time payment system developed by the National Payments Corporation of India (NPCI). EMI: Equated Monthly Installment, a fixed amount paid by a borrower to a lender at a specified date each calendar month. MSMEs: Micro, Small, and Medium Enterprises, businesses that are small to medium in size.