Paytm swings into black, makes ₹122.5 crore net profit in Q1 FY26

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One97 Communications (OCL), the company that operates the Paytm brand, reported a turnaround with a consolidated profit of ₹122.5 crore in the first quarter (April-June) of 2025-26 (Q1FY26), against a net loss of ₹838.9 crore in Q1FY25. Paytm had posted a net loss of ₹539.8 crore in Q4FY25. 

In Q2FY25, Paytm had reported a profit but it was due to the sale of its ticketing business to Zomato. Now, Q1FY26 marks the first-ever profit after tax (PAT)-positive quarter for the company led by  normal business operations. The Noida-based financial technology (fintech) firm’s revenue from operations grew 27.7 per cent to ₹1,917.5 crore in Q1FY26 from ₹1,501.6 crore in Q1FY25. Sequentially, revenue from operations remained stagnant compared to ₹1,911.5 crore in Q4FY25. 

 The company reported total expenses at ₹2,016.1 crore in Q1FY26, an 18.6 per cent reduction from ₹2,476.4 crore it recorded in Q1FY25. Total expenses were down 6.4 per cent from ₹2,154.9 crore in Q4FY25. 

Meanwhile, Madhur Deora, executive director, president, and group CFO, will step down from the board following the upcoming AGM. However, he will continue his full-time operational role as the president and group CFO of the company. 

Segmental revenue from ops 

Paytm’s revenue from payments services grew 18 per cent to ₹1,044 crore in Q1FY26 from ₹884 crore in Q1FY25, though it was a tad lower than ₹1,046 crore in Q4FY25. 

The number of registered merchants with Paytm grew 11 per cent on a Y-o-Y basis to 45 million in Q1FY26 from 41 million in Q1FY25. Sequentially, this count grew 3 per cent from 44 million in Q4FY25. 

The company reported an all-time high of 13 million merchant subscriptions, including payment acceptance devices, in Q1FY26. This number has grown from 10.9 million in Q1FY25 and 12.4 million in Q4FY25.   

Revenue from distribution of financial services doubled to ₹561 crore in Q1FY26 from ₹280 crore in Q1FY25. This marginally grew by 3 per cent from ₹545 crore in Q4FY25. The company said a majority of its merchant loans were disbursed under a non-default loss guarantee (DLG ) model, with more than 50 per cent of the same given to repeat customers. 

The company’s cash balance at the end of Q1FY26 stood at ₹12,872 crore as compared to ₹8,108 crore at the end of Q1FY25, and ₹12,809 crore at the end of Q4FY25. The bump in cash balance can be attributed to the sale of the company’s entertainment ticketing business in August 2024 to Zomato for ₹2,048 crore, and sale of its stock acquisition rights in Japan-based PayPay in December 2024 for ₹2,364 crore. 

Employee costs 

Paytm’s indirect expenses stood at ₹1,079 crore in Q1FY26, down 30 per cent from ₹1,548 crore in Q1FY25. Sales employee costs grew 19 per cent to ₹266 crore in Q1FY26 from ₹224 crore in Q1FY25. The company said it is expanding to Tier-II and -III regions to increase monetisation. 

However, its non-sales employee costs declined 28 per cent to ₹346 crore in Q1FY26 from ₹482 crore in Q1FY25.

 

The decline comes on the back of the firm deploying artificial intelligence (AI) to improve productivity. 

The Paytm stock hit a 42-month high and closed 3.37 per cent higher at ₹1,052.60 on the BSE on Tuesday, ahead of the Q1 results that were announced after market hours. The stock, however, is still well below its November 2021 initial public offering (IPO) price of ₹2,150 per share.