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One97 Communications, the parent company of Paytm, reported a significant turnaround with a net profit of Rs 122.5 crore for the quarter ended June 2025. This marks a substantial shift from the Rs 840 crore loss reported during the same period the previous year.
The rise in Paytm net profit reflects the company’s focus on sustainable growth and operational efficiency. The surprise profit was attributed to cost optimisation, an increase in payment revenue, and improvements in operations driven by developments in artificial intelligence (AI).
Paytm’s operational revenue increased by 27% year-on-year (YoY) to reach Rs. 1,917.5 crore, up from Rs. 1,501.6 crore last year. The results were bolstered by an improvement in payment processing margins and an increase in payment services rendered.
Strategic Paytm cost optimisation initiatives have helped reduce expenses while maintaining service quality. The company reported EBITDA (earnings before interest, taxes, depreciation, and amortisation) of Rs. 72 crore, which is positive, and Profit After Tax (PAT) of Rs. 123 crore.
The company’s core Payment services continue to drive user engagement and transaction volume across India. According to CEO Vijay Shekhar Sharma, Paytm had simplified its financial reporting by removing ESOP (employee stock options) related adjustments, thereby ensuring greater transparency.
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A significant contributor to Paytm's turnaround was its focus on cost reduction. Paytm internally reported a more than 50% reduction in its marketing and promotion spend, from Rs 221.4 crore to Rs 99.8 crore.
As a leading Fintech player, Paytm is setting benchmarks in digital finance and mobile payments. Paytm's costs for non-sales employees decreased by 28% YoY to Rs 346 crore, while costs for Sales employees increased 219% YoY to Rs 266 crore, reflecting the increased sales team.
Paytm witnessed impressive performances in its payment services business, with revenue growing 23% year-over-year (YoY) to Rs 1,110 crore, and net payment revenue increasing 38% YoY to Rs 529 crore.
The gross merchandise value (GMV) rose 27% YoY to Rs 5.39 lakh crore, indicating greater adoption of Paytm's payment approaches. Merchant subscriptions reached a record level of 1.3 crore, growing by 21 lakh YoY, indicating increasing adoption and extension of Paytm's merchant base.
Meanwhile, financial services revenue doubled YoY to Rs 561 crore, as a result of higher merchant loans and improvement in asset quality.
Paytm is expanding its presence in tier-2 and tier-3 cities, with monthly transacting users (MTUs) reaching 7.4 crore in the reported quarter. This reflects growing adoption of its services across India.
Paytm’s Q1 FY25 performance showcases a successful shift from being a loss-making business in FY24 to a profitable business in FY25, mainly as a result of optimising costs, payment services growth, and merchant subscriptions. With its focus on technology and efficiency, Paytm is poised for continued growth in India’s competitive fintech market.
