One97 Communications, the parent company of Paytm, has announced a remarkable financial turnaround, reporting a net profit of Rs 122.5 crore for the quarter ending June 2025. This result contrasts sharply with the Rs 840 crore loss recorded during the same quarter the previous year, marking a significant shift in the company’s financial trajectory. The positive outcome reflects Paytm’s commitment to sustainable growth and improved operational efficiency.
The profit surge is attributed to several key factors, including effective cost optimization, a notable rise in payment revenue, and enhanced operational capabilities driven by advancements in artificial intelligence (AI). Paytm’s operational revenue climbed by 27% year-on-year to reach Rs 1,917.5 crore, up from Rs 1,501.6 crore in the prior year. This increase was supported by better payment processing margins and a rise in services offered.
Cost Reduction and Operational Improvements
Strategic cost-cutting has played a crucial role in Paytm’s financial improvement. The company reported a substantial reduction of over 50% in marketing and promotional expenditures, decreasing from Rs 221.4 crore to Rs 99.8 crore. Additionally, costs associated with non-sales personnel dropped by 28% year-on-year to Rs 346 crore, while expenses for sales employees surged by 219% year-on-year to Rs 266 crore, reflecting an expanded sales team.
The company also achieved an EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs 72 crore and a Profit After Tax (PAT) of Rs 123 crore. CEO Vijay Shekhar Sharma highlighted that Paytm has simplified its financial reporting by omitting adjustments related to employee stock options, thus enhancing transparency.
Growth in Payment Services and Market Expansion
Paytm’s payment services have shown remarkable growth, with revenue increasing by 23% year-on-year to Rs 1,110 crore and net payment revenue rising 38% year-on-year to Rs 529 crore. The gross merchandise value (GMV) also saw a substantial increase, climbing 27% year-on-year to Rs 5.39 lakh crore. This indicates a higher adoption rate of Paytm’s payment solutions, as merchant subscriptions reached a record 1.3 crore, growing by 21 lakh year-on-year.
Financial services revenue doubled year-on-year to Rs 561 crore, driven by an uptick in merchant loans and improvements in asset quality. The company is actively expanding its reach into tier-2 and tier-3 cities, with monthly transacting users (MTUs) hitting 7.4 crore in the reported quarter, showcasing a growing acceptance of its services across India.
Paytm’s Q1 FY25 results illustrate a successful transition from a challenging fiscal year in FY24 to a profitable outcome in FY25. This achievement is largely due to effective cost management, growth in payment services, and an expanding merchant base. With a focus on technology and operational efficiency, Paytm is well-positioned for continued growth in India’s competitive fintech landscape.
