Fintech major Paytm's revenue jumps to Rs 2,061 crore in Q2 FY26; posts Rs 21 crore profit

Fintech major One97 Communications Ltd (Paytm) reported a 24% year-on-year rise in operating revenue to Rs 2,061 crore for the quarter ended September 2025 (Q2 FY26), led by higher subscription merchant growth, an increase in payments gross merchandise value (GMV), and continued traction in its financial-services distribution business.

The company’s contribution profit rose 35% YoY to Rs 1,207 crore, translating to a contribution margin of 59%, up five percentage points from a year earlier. EBITDA stood at Rs 142 crore, or 7% of revenue, supported by operating leverage and disciplined cost control.

Before exceptional items, profit after tax (PAT) stood at Rs 211 crore. However, after a one-time impairment charge of Rs 190 crore on a loan to its joint venture First Games Technology Pvt Ltd, reported PAT came to Rs 21 crore.

The company said the charge was taken following the government’s Promotion and Regulation of Online Gaming Act, 2025, which effectively halted the segment’s operations.

At the end of September 2025, Paytm held cash and equivalents of Rs 13,068 crore. The balance excludes customer and merchant escrow funds, which together amounted to about Rs 3,605 crore.

Payments and financial services drive growth

Paytm’s payment services revenue, including other operating income, increased 25% YoY to Rs 1,223 crore. Net payment revenue rose 28% to Rs 594 crore, aided by improved processing margins, higher credit-card-on-UPI transactions, and growth in its subscription device base. The platform’s GMV climbed 27% YoY to Rs 5.67 lakh crore, with processing margins staying above the guided three basis points.

The company said it had 1.37 crore merchant device subscriptions as of September 2025, up 25 lakh from a year earlier, after refurbishing and redeploying inactive devices to new merchants, reducing capital expenditure. 

Revenue from the distribution of financial services grew 63% YoY to Rs 611 crore, driven by merchant-loan disbursements and improved collection performance. Merchant-loan customers rose from 6 lakh in Q2 FY25 to 6.5 lakh in Q2 FY26, with more than half of loans issued to repeat borrowers. The company credited its AI-driven predictive models for improving asset quality and helping lending partners reduce delinquencies.

Paytm also relaunched its Paytm Postpaid product, a “Spend Now, Pay Next Month” UPI overdraft facility offered through a partner bank, targeting select consumers initially before a wider rollout.

In personal loans, lending partners continued to take a measured approach to maintain portfolio quality, though Paytm expects disbursements to scale as market conditions improve.

Efficiency gains and cost discipline

Indirect expenses, including ESOP costs, fell 18% YoY to Rs 1,064 crore, reflecting operational efficiencies and lower stock-based compensation after the founder voluntarily surrendered ESOPs in FY25. Marketing costs dropped 42% YoY to Rs 72 crore as retention and monetisation improved, while sales-employee costs rose 38% to Rs 297 crore as the company expanded deeper into Tier-2 and Tier-3 markets.

Software, cloud, and data-centre costs declined 16% YoY to Rs 133 crore, while depreciation and amortisation fell 23% to Rs 137 crore due to the refurbished-device strategy.

Marketing-services revenue came in at Rs 228 crore, down 15% YoY on a like-for-like basis after adjusting for the sale of the entertainment-ticketing business.

Paytm said that while app-based ad revenue softened, AI-led personalisation and app optimisation are improving user experience and retention, which should strengthen long-term monetisation.