The parent company of Paytm, One97 Communications, reported a net profit of 123 crore rupees in October 2025 (Q-1 2025-26). Based on all the key financial parameters, including EBITDA, which amounted to INR 72 crore, this will be the company's first profitable quarter. This improvement is based on operational leverage, growth in high-margin financial services, and direct cost leverage.
Operation revenue grew by 28% year on year to 1918 crore. The increase was due to the rise in membership-based merchants, more profitable payment processing, and subsequent expansion in financial services distribution. The contribution profit stood at 1151 crore, recording an increase of 52% per year. It increased its contribution margin to 60 % compared to 50%, with a 10% point improvement in net payment margins and an increasingly enormous revenue contribution from financial services.
Net payment revenue also increased 38% to 529 crores compared to the corresponding quarter last year. Paytm attributed this growth to increased adoption among device-based subscription merchants and improved monetisation strategies. By June 2025, merchant subscriptions will reach an all-time high of 1.3 crore.
Financial services revenue nearly doubled on a year-on-year basis to $561 crore. This increase was aided by growth in the amounts of merchant loans, improved collection rates and the recurring revenue stemming from the Default Loss Guarantee (DLG) portfolio. Paytm also reported better productivity of its sales teams and reduced device costs, which led to a reduction in the capital expenditure account and growing payment hardware deployments at the same time.
By the end of the quarter, Paytm's cash balance stood at 12,872 crore. The company said this gives it the freedom to invest more in merchant payments and financial services and develop AI-enabled products. Its business plan continues to concentrate on providing merchants with a full-stack and AI-enabled platform that combines software, hardware, and financial services.
The company bets that over 10 crore merchants in India will adopt digital payment by the next few years. It expects 40% to 50% of these merchants to choose subscription services to run their operations and advance their business. Paytm should realise more profitability improvement as it grows in future quarters and achieves operational scaling.