Fintech major Paytm reported a 49% year-on-year (YoY) decline in consolidated net loss to INR 291.7 Cr in the September quarter (Q2) of the financial year 2023-24 (FY24), helped by an increase in merchant subscription revenue, steady GMV growth, and rise in loan disbursements.

The company had reported a net loss of INR 571.5 Cr in the corresponding quarter of the previous fiscal. 

Paytm’s loss also declined 18.6% from INR 358.4 Cr posted in the prior quarter – Q1 FY24.

On the other hand, the Vijay Shekhar Sharma-led company saw an over 31% jump in its operating revenue to INR 2,518.6 Cr in the reported period from INR 1,914 Cr in Q2 FY23.

On a sequential basis, Paytm’s operating revenue increased 7.5% from INR 2,341.6 Cr.

In a statement, the company said it continued to witness strong revenue growth momentum despite some of the revenues getting pushed to Q3 FY24. 

“In this financial year, online sales for the festive season will be captured in Q3, whereas in the previous financial year it was largely in Q2,” Paytm noted.

While the company earned INR 1,524 Cr from its payments business, which grew 28% YoY, its revenue from financial services and others jumped 64% YoY to INR 571 Cr in Q2 FY24.

Paytm said that the number of unique users to take loan through its platform reached 1.18 Cr as loan distribution also continued to scale. Loan disbursements rose 122% YoY to INR 16,211 Cr during the quarter under review. 

Meanwhile, the company’s EBITDA before employee stock option (ESOP) cost improved to INR 153 Cr from INR 84 Cr in Q1 FY24 (excluding UPI incentives). 

The company claimed to have turned EBITDA profitable, minus ESOP costs, for the first time in Q3 FY23. Its adjusted EBITDA loss stood at INR 166 Cr in Q2 FY23.

Paytm’s ESOP costs continued to grow sequentially and stood at INR 384.6 Cr in the September quarter of FY24 as against INR 376.7 Cr in the preceding June quarter. ESOP costs stood at INR 371.1 Cr in the year-ago quarter.

On the other hand, the company’s total expenses jumped to INR 2,936.7 Cr in Q2 FY24 from INR 2,561.4 Cr in the year-ago quarter.

Employee benefit expenses, excluding ESOPs, rose 26% YoY to INR 1,191.5 Cr. 

Meanwhile, the company continued to cut down on its overall marketing and promotional expenses, which declined 22.8% YoY and 31% sequentially to INR 252.8 Cr.

However, Paytm’s indirect expenses (excluding ESOP cost) increased 26% YoY to INR 1,273 Cr in Q2. 

“As we continue (to) see opportunities to garner market share, and our profitability remains on track, we are choosing to invest in growth. We have increased our sales employees (cost of expanding platform), mainly for devices business,” Paytm said. 

Ahead of the release of the financial statements, shares of Paytm hit a fresh 52-week high at INR 998.3 on Friday (October 20) even as the broader market slumped. The stock ended today’s trading session 1.9% higher at INR 987.35 on the BSE.