Paytm Q3 Results: Payments, financial services lift revenue; UPI market share expands

One 97 Communications Ltd, which operates the Paytm platform, reported a sharp operational turnaround in the December quarter, driven by strong growth in payments and financial services, improved margins,

and positive EBITDA.

Revenue rose 20% year-on-year to ₹2,194 crore in Q3 FY26, compared with ₹1,828 crore a year earlier. Like-for-like revenue growth was around 25%, with reported growth impacted by the timing of the festive season, lower loan disbursements under default loss guarantee arrangements, and a more conservative revenue recognition policy.

Payments services revenue increased 21% year-on-year to ₹1,284 crore, while net payment revenue grew 25% to ₹613 crore. Revenue from the distribution of financial services climbed 34% year-on-year to ₹672 crore.

Contribution profit stood at ₹1,249 crore, up 30% year-on-year, with contribution margin improving to 57%, aided by higher payment processing margins and a rising share of financial services distribution revenue. EBITDA turned positive at ₹156 crore, translating into an EBITDA margin of 7%, an improvement of ₹379 crore year-on-year, despite higher promotional expenses and the full impact of the new labour code.

The company reported a profit after tax of ₹225 crore for the quarter, compared with a loss of ₹208 crore a year ago. Cash balance remained strong at ₹12,882 crore, providing what the company said was continued capital flexibility.

On the business front, Paytm recorded consistent gains in consumer UPI market share for the third consecutive quarter, with consumer UPI GMV up 35% over the past nine months, compared with industry growth of 16%. Merchant device subscriptions rose to 1.44 crore, with an addition of 27 lakh year-on-year. Customers availing financial services through the platform increased to 7.1 lakh from 5.9 lakh a year earlier.

The company also said it has now received all three key payment licences from the Reserve Bank of India for online, offline and cross-border payments under Paytm Payment Services Limited, and has resumed onboarding of online merchants after receiving the payment aggregator licence last quarter.

Ahead of the earnings announcement, shares of One 97 Communications ended at ₹1,171.80 on NSE, down 0.44%.