Paytm’s Revenue from Operations Up by 62% Y-o-Y, Contribution Margin Positive up by 85% Y-o-Y for Q1FY22 — Financial Services Play Major Role

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@ Vikash Sharma | Sr Journalist

Paytm’s financial services bet takes off — revenue from operations up by 62% Y-o-Y, contribution margin positive up by 85% Y-o-Y for Q1FY22

India’s leading digital payments and financial services platform Paytm has disclosed its financials for three months ended June 2021, as the company prepares for its mega IPO. Paytm has filed its Red Herring Prospectus today ahead of its mega IPO.

Paytm is headed for a ₹18,300 crore IPO — the largest market debut in India yet. It had hiked its IPO issue size from the earlier ₹16,600 crore as it received increased investor demand.
For the three months ended June 2021, Paytm has seen a huge uptick in its revenues driven by its payments and financial services offerings, as per the company’s RHP. The company’s revenue from operations is up by 62% to ₹8,908 million in Q1FY22, from ₹5,512 million in Q1FY21

The revenue is driven by payment and financial services offerings of the company. For Q1FY22, the company’s payments and financial services revenue alone stood at ₹6,894 million contributing to 77% of its total revenue.

Interestingly, Paytm’s contribution margin also rose significantly to 27.4% in Q1FY22, up from 14.9% in Q1FY21. This indicates that the company is on the path to profitability. Media reports had earlier quoted sources to say that the company is looking to turn profitable in 18-22 months from now.

Paytm’s losses stood at ₹3,819 million for the three months ended June 2021. The marketing and promotional expenses of the company went up to ₹1,377 million for Q1FY22, while the company’s employee benefits expense also grew to ₹3,507 million in Q1FY22 from ₹2,138 million in Q1FY21.

As per the company’s RHP, Paytm’s total user base has increased to 337 million registered consumers and over 21.8 million registered merchants, as of June 30, 2021.

The company’s lending vertical has taken off as the company disbursed 1.4 million loans in Q1FY22 and 2.8 million loans in Q2FY22, as per the RHP.

It also has a stronghold in the offline merchants space through its Paytm devices. The company had 947K devices deployed as of Jun’21 and 1,280K devices deployed as of Sep’21.

Paytm offers digital payment and financial services, commerce and cloud services to Indians. It has built a multi-stack payment architecture through the payment options offered by the company — Paytm Wallet, Paytm UPI, Paytm Postpaid (Buy Now, Pay Later), credit cards/debit cards, Paytm PoS, All-in-One QR code, Soundbox among others.

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