Paytm Narrows Q4 Loss to ₹545 Crore Despite Revenue Dip, Posts Positive EBITDA Before ESOP Costs

Paytm's Q4 FY25 revenue stood at ₹1,911 crore, down 16% YoY but up 5% sequentially.
The company posted a positive EBITDA before ESOP costs of ₹81 crore, a ₹121 crore improvement over the previous quarter.

One97 Communications Ltd., parent of fintech giant Paytm, reported a consolidated operating revenue of ₹1,911 crore for Q4 FY25, reflecting a 16% year-on-year decline from ₹2,267 crore. However, the company registered a 5% sequential rise, bolstered by growth in financial services and a ₹70 crore UPI incentive from the government.

While revenue took a dip compared to the previous year, net loss marginally improved to ₹545 crore from ₹550 crore in Q4 FY24. Excluding one-time exceptional costs, net loss was reduced significantly to ₹23 crore.

Shift to Higher-Margin Segments

Paytm's Q4 contribution profit stood at ₹1,071 crore, with a healthy 56% margin, supported by strong performance in its financial services vertical. Revenue from financial services rose 9% quarter-on-quarter to ₹545 crore, driven by lending, insurance, and distribution businesses.

The company posted an EBITDA before employee stock option (ESOP) costs of ₹81 crore, a ₹121 crore improvement from the previous quarter. Including regular ESOP costs, EBITDA stood at a loss of ₹88 crore.

Q4 results were impacted by a ₹522 crore exceptional charge, primarily due to an accelerated ESOP expense. Founder and CEO Vijay Shekhar Sharma voluntarily forgone 2.1 crore ESOPs, resulting in a ₹492 crore non-cash charge. An additional ₹30 crore impairment from an associate investment was also recorded.

Focus on Profitability and Expansion

Cost optimisation led to a 16% YoY decline in indirect expenses and a 36% drop in non-sales employee costs. The company’s cash reserves remain strong at ₹12,809 crore.

Looking ahead, Paytm plans to grow its financial services arm, enhance merchant solutions, and explore long-term international expansion, while continuing to focus on increasing user engagement and maintaining disciplined marketing investments.

Edited by Harshajit Sarmah