Paytm Posts Profit for Q1 FY26; First Quarterly Profit Since September 2024
Paytm’s parent company, One97 Communications, reported a significant financial turnaround by posting a net profit of ₹122 crore for the first quarter (Q1) of fiscal year 2026. This marks the company’s first profitable quarter since September 2024, reversing a steep net loss of ₹840 crore during the same period last year.
Robust Revenue Growth and Cost Control
Revenue from operations rose sharply by 28% year-on-year to ₹1,918 crore, up from ₹1,502 crore in Q1 FY25, fueled by increasing merchant subscriptions, higher gross merchant value (GMV) processed on the platform, and strong growth in financial services distribution. Sequentially, revenue remained largely stable, edging up by 0.3% from the previous quarter.
The company demonstrated disciplined cost management, with overall expenditure falling from ₹2,476 crore to ₹2,016 crore year-on-year. Key cost reductions include a 55% drop in marketing expenses and a 33% decline in employee-related costs.
Profitability Metrics
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) reached ₹71 crore, turning positive compared to an EBITDA loss in the prior year.
EBITDA margin stood at 3.7% for the quarter.
Contribution profit expanded 52% year-on-year to ₹1,151 crore. Contribution margin improved by 10 percentage points to 60%.
Operational Highlights
Merchant subscriptions hit an all-time high of 1.3 crore, a year-on-year increase of 21 lakh.
Gross merchant value rose by 27% year-on-year to ₹5.39 lakh crore.
The firm’s payment processing margin remained strong above the guided three basis points.
Other income and lower employee stock ownership costs further supported the profit turnaround.
Paytm ended the quarter with a solid cash balance of ₹12,872 crore, providing financial flexibility for strategic investments, including AI-driven innovations and payment ecosystem expansion.
Market Response
Following the results announcement on July 22, 2025, Paytm’s shares rose approximately 3.5% to settle above ₹1,050/share, reflecting investor confidence in the company’s improving fundamentals.
Frequently Asked Questions ?
When did Paytm last report a profitable quarter before Q1 FY26?
Paytm’s last profitable quarter was before its March 2024 quarter, marking this Q1 FY26 as the first profit since September 2024.
What drove Paytm’s profit turnaround in Q1 FY26?
Strong revenue growth, disciplined reduction in marketing and employee costs, higher contribution margins, and other income gains helped the company swing to profit.
How much did Paytm’s revenue grow year-on-year?
Revenue grew by 28%, reaching ₹1,918 crore in Q1 FY26 from ₹1,502 crore a year ago.
What is Paytm’s current EBITDA position?
EBITDA turned positive at ₹71 crore with a margin of 3.7%, compared to losses last year.
What are Paytm’s key growth areas highlighted in this quarter?
Growth was driven by merchant subscriptions, gross merchant value processed, and financial services distribution revenue.
Published on: July 22, 2025
Published by: PAVAN
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