Paytm Posts Profit in Q3 FY26 as Revenue Rises 20%

Paytm Posts Profit in Q3 FY26 as Revenue Climbs 20% to Rs 2194 Crore

Fintech Giant Turns Profitable Amid Strong Revenue Growth

Indian fintech leader Paytm has reported a remarkable turnaround in Q3 FY26, posting a profit after tax (PAT) of Rs 225 crore, compared with a loss of Rs 208 crore in the year-ago quarter. Revenue from operations surged 20% year-on-year to Rs 2,194 crore, supported by strong growth across payments, lending, and merchant services.

Other income of Rs 212 crore took the total revenue to Rs 2,406 crore. Sequentially, revenue also grew 6% from Rs 2,061 crore in Q2 FY26, indicating steady quarter-on-quarter performance.

Operational Performance and Monetisation Highlights

Payment services revenue rose 21% YoY to Rs 1,284 crore, fueled by:

• Higher payments GMV

• Increased merchant subscriptions

• Growth in credit card and EMI usage

Net payment revenue increased 25% YoY to Rs 613 crore, while financial services distribution revenue grew 34% YoY to Rs 672 crore, mainly due to merchant loan distribution. Marketing services revenue declined 11% YoY to Rs 238 crore, reflecting lower promotional spending.

Other operating revenue jumped 64% YoY to Rs 92 crore, showcasing Paytm’s diversified income streams.

Cost Management and Contribution Margins

Total direct expenses increased modestly 9% YoY to Rs 945 crore, while other direct expenses declined 22% YoY due to lower collection and default guarantee costs. Contribution profit expanded 30% YoY to Rs 1,249 crore, with contribution margin improving from 52.5% to 57%, a significant 447 basis points increase.

Indirect expenses dropped 8% YoY to Rs 1,092 crore, with employee costs falling 5% YoY to Rs 721 crore and marketing expenses declining 26% YoY to Rs 77 crore. Cloud and data centre costs increased 8% YoY to Rs 166 crore, while other indirect costs fell 23% YoY to Rs 128 crore.

EBITDA and Profit Turnaround

Paytm reported EBITDA of Rs 156 crore in Q3 FY26, compared to an EBITDA loss of Rs 223 crore in Q3 FY25, marking a dramatic operational turnaround. EBITDA margin improved to 7% from negative 12%.

For the nine-month period ended December 2025:

• Contribution profit: Rs 3,606 crore, up 38% YoY

• Contribution margin: 58% vs 52% last year

• EBITDA: Rs 370 crore vs a loss of Rs 1,418 crore YoY

Market Share, UPI Growth, and Merchant Expansion

Paytm gained consumer UPI market share for the third consecutive quarter, with consumer UPI GMV rising 35% over the past nine months. Merchant device subscriptions reached 1.44 crore, with net additions of 27 lakh YoY.

Financial services adoption also improved, with customers using Paytm’s financial services increasing from 5.9 lakh to 7.1 lakh YoY.

The company also secured all three key RBI payment licences—online, offline, and cross-border—enabling seamless onboarding of online merchants.

Cash Position and Shareholding Updates

Paytm’s cash balance remained strong at Rs 12,882 crore, including escrow and nodal accounts.

During the quarter, there were notable shareholding changes:

• Elevation Capital sold a 1.86% stake worth Rs 1,556 crore

• BNP Paribas sold 1.05 crore shares for Rs 1,331 crore

• Integrated Core Strategies sold 32.55 lakh shares for Rs 410 crore

CEO Insights and Strategic Outlook

Vijay Shekhar Sharma, CEO of Paytm, emphasized operational efficiency and sustainable growth:

“Our improved revenue and profitability reflect stronger engagement across payments, lending, and merchant services. We are committed to maintaining operational leverage while expanding our ecosystem and delivering value to users and investors.”

Paytm expects indirect costs to grow slower than revenue over the medium term and anticipates depreciation and amortisation for FY26 in the range of Rs 500–600 crore, lower than FY25.

FAQs about Paytm Q3 FY26 Results

1. What was Paytm’s revenue in Q3 FY26?
   Rs 2,194 crore, up 20% YoY.

2. What is Paytm’s profit after tax (PAT) for Q3 FY26?
   Rs 225 crore, compared with a loss of Rs 208 crore last year.

3. What is Paytm’s EBITDA for the quarter?
   Rs 156 crore, turning positive from a negative Rs 223 crore in Q3 FY25.

4. How much did payment services revenue grow?
   21% YoY to Rs 1,284 crore.

5. What is Paytm’s consumer UPI GMV growth?
   35% growth over nine months, outpacing industry growth of 16%.

6. How many merchants are subscribed to Paytm devices?
   1.44 crore, with 27 lakh net additions YoY.

7. How many customers are using financial services on Paytm?
   Increased from 5.9 lakh to 7.1 lakh YoY.

8. What were Paytm’s total indirect expenses in Q3 FY26?
   Rs 1,092 crore, down 8% YoY.

9. What is the company’s cash balance?
   Rs 12,882 crore including escrow and nodal accounts.

10. What strategic focus did Paytm highlight for the future?
    Sustainable revenue growth, operational leverage, and expansion of payments, lending, and merchant services.