(This July 22 story has been corrected to remove an incorrect reference to the Paytm app’s ranking in paragraph 2)
BENGALURU (Reuters) – Indian digital payments firm Paytm reported a 39% rise in quarterly revenue, helped by soaring demand for loans.
Paytm parent One 97 Communications Ltd reported late on Friday that revenue rose 39% to 23.42 billion Indian rupees ($286 million) in the three months ending June 30 compared with the same period last year.
It reported an operating profit for a third straight quarter, despite a rise in employee-related expenses and a lack of government incentives.
Operating profit came in at 840 million rupees, compared with an operating loss of 2.75 billion rupees, while the net loss narrowed to 3.57 billion rupees.
That was lower than the previous quarter’s 2.34 billion rupees worth operating profit, which included a government incentive to promote payments via the Unified Payments Interface (UPI) digital payments system.
Paytm defines operating profit as core profit before cost of employee stock-owning plans. It first reported an operating profit for the final three months of 2022 – nine months ahead of schedule.
Quarterly expenses were up 15.9% at 28 billion rupees, with appraisals during the period driving up employee costs 21%.
Paytm, which also rents out devices that confirm payments to merchants, said revenue at its core payments business rose 31%, while financial services revenue, which includes that of the buy now pay later loans, rose 93%.
The company’s fast-growing financial services business formed 22.3% of the total revenue.
Its contribution margin — a measure of revenue less cashbacks and charges such as payment processing — rose to 56%, from 43% a year earlier.
($1 = 81.9800 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru and Siddhi Nayak in Mumbai; Editing by Pooja Desai and Mike Harrison)
