Paytm Q4 Results: Loss widens to Rs 550 crore; revenue drops 3% YoY
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Synopsis
Paytm Q4 Results: The fintech major's March quarter results were impacted by temporary disruptions on account of the UPI transition and permanent disruption because of the payments bank embargo. The company said Payment Bank's products like Paytm wallet and FASTag were distributed but due to the current embargo, it anticipates a steady state of an annualised direct impact on EBITDA to be around Rs 500 crore.
The company's fourth-quarter results were impacted by temporary disruptions on account of the UPI transition and permanent disruption because of the Paytm Payments Bank embargo.
EBITDA before ESOPs fell to Rs 103 crore in the March quarter against Rs 234 crore in the previous year's quarter. Excluding UPI incentives, the EBITDA before ESOP came in at Rs 185 crore.
In the fourth quarter, payments business revenue grew 7% year-on-year (YoY) to Rs 1,568 crore, but was down by 9% quarter-on-quarter (QoQ) due to disruption of PPBL products, temporary impact on account of conservative approach taken for certain businesses and disruptions in operating metrics.
Paytm flagged that while it experienced some hit in Q4 due to disruptions, the full financial impact will be seen in Q1FY25.
Paytm said Payment Bank's products like the Paytm wallet and FASTag were distributed by the company. Due to the current embargo on these products, it anticipates a steady state an annualised direct impact on EBITDA to be around Rs 500 crore.
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Operationally, GMV (gross merchandise value) for the fourth quarter jumped 30% YoY to Rs 4.7 lakh crore. The Q4 contribution profit came in at Rs 1,288 crore and remained flat year-on-year.
Contribution margins improved to 57% from 55% a year ago, while excluding UPI incentives, the contribution margin was at 51%, which was flat YoY.
As of March 2024, merchant subscriptions were 1.07 crore, showing a growth of 39 lakh YoY. Subscription revenue in Q4 was impacted due to lower new merchant deployment and lower active merchants.
Merchant subscription revenue in the fourth quarter stood at Rs 90 per device per month and the company expects it to bottom out at Rs 80 in Q1FY25, post which it should increase towards Rs 100 by Q4FY25.
The company had lower marketing spending during January-March 2024 as it paused most of the user growth spending in February and March. Paytm is expected to reinvest in these areas in the coming financial year.
Non-lending revenue increased YoY but was down marginally QoQ due to business disruption.
The value of merchant loans distributed fell 28% year-on-year to Rs 1,671 crore and the value of personal loans dropped marginally 1% year-on-year to Rs 3,408 crore.
Average ticket size has increased to Rs 1.4 lakh from Rs 1.3 lakh a year ago, with the average tenure increasing to 16 months compared to 15 months a year ago.
The revenue from the marketing services business, which primarily includes ticketing, advertising, credit card marketing, and deals and gift vouchers, rose 1% YoY to Rs 395 crore. The GMV for ticketing, deals, and gift vouchers jumped 28% YoY to Rs 2,804 crore.
Paytm had a cash balance is Rs 8,650 crore, as of the quarter ending March 2024, marginally down from Rs 8,901 crore, as of December 2023.
The company expects revenue for Q1FY25 to be around of Rs 1,500-1,600 crore. "We are confident of seeing meaningful improvement starting from Q2 FY 2025, based on restarting certain paused products and achieving steady growth in operating metrics," Paytm said in a statement.
For FY24, the company reported a 25% increase in revenue, due to GMV growth, device additions, and growth in the financial services distribution business.
Net payment margin has gone up 50% to Rs 2,955 crore due to the increase in payment processing margin and an increase in merchant subscription revenues.
For the first time since the IPO, Paytm posted full-year EBITDA before ESOP profitability for FY24 at Rs 559 crore.
In early trade on Wednesday, Paytm shares are trading 1.3% lower at Rs 347 on NSE.
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