Paytm Q1 Result: Firm turns profitable; net profit comes in at ₹123 crore, revenue up 28% YoY

The fintech firm’s contribution profit at ₹1,151 crore (up 52% YoY), with a contribution margin of 60%, was driven by improved net payment revenue, a higher share of distribution of financial services revenue, and a reduction in direct expenses, Paytm said.

The Noida-based firm’s revenue from operations stood at ₹1,918 crore during the quarter as against ₹1,502 crore in Q1 FY25, marking a growth of 27.7% year-on-year (YoY).

The revenue grew on the back of a rising number of subscription merchants, higher GMV, and growth in revenues from the distribution of financial services.

The operating profit, or earnings before interest, taxes, depreciation, and amortisation (EBITDA), for Q1 FY26 stood at ₹71 crore while margin was seen at 3.7% at the end of the quarter.

EBITDA and PAT turned profitable, demonstrating AI-led operating leverage, disciplined cost structure, and higher other income, the company said.

In Q1 FY26, gross merchandise value (GMV) grew by 27% YoY to ₹5.39 lakh crore, while the payment processing margin was comfortably above the guided 3 basis points (bps) margin.

During the reporting quarter, Paytm’s net payment revenue was up 38% YoY to ₹529 crore, led by growth in high-quality subscription merchants and an increase in payment processing margins.

“Undisputed leadership in merchant payments continues with 1.30 crore merchant device subscriptions across MSMEs and enterprise payment merchants,” the firm said in a statement.

As of June 2025, Paytm’s merchant subscriptions were at an all-time high of 1.30 crore, an increase of 21 lakh YoY, on the back of high-quality devices and a superior service network.

“To further strengthen tier-1 market position and expand in tier-2 and tier-3 cities, we are investing in expanding our sales network (salespeople costs are up 19% YoY). At the same time, we continue to enhance operational efficiencies by lowering device costs, ramping up the refurbishment of old devices, and increasing sales team productivity, and the same is reflected in lower capex despite significant device growth over the last few years,” the company said.

In Q1 FY 2026, Vijay Shekhar Sharma-led fintech’s average Monthly Transacting Users (MTU) has reached 7.4 crore. The company’s distribution of financial services revenue also grew 100% YoY to ₹561 crore, driven by continued expansion in merchant loans, trail revenue from the Default Loss Guarantee (DLG) portfolio, and improved asset quality our partners are experiencing.