One97 Communications, the parent company of fintech major Paytm, announced a significant financial turnaround for the December 2025 quarter, reporting a net profit of ₹225 crore. This marks a sharp reversal from a net loss of ₹208 crore in the same period last year. The company also saw its revenue from operations climb 20% year-on-year to ₹2,194 crore for the third quarter of the 2025-26 financial year (Q3 FY26).
Profitability Driven by Core Business Growth
Paytm's return to profitability was largely due to strong growth across its core business segments. The company highlighted higher payment transaction volumes and values as key contributors. Increased merchant subscriptions for its Soundbox devices also played a crucial role in boosting revenue. Furthermore, the expansion of financial services, including the distribution of personal and merchant loans, significantly supported the positive results.
The net profit of ₹225 crore in the December quarter represents a remarkable improvement from the previous quarter. In the September 2025 quarter, Paytm had reported a net profit of just ₹21 crore. This means the December quarter profit jumped by an impressive 971.43% quarter-on-quarter. The company's revenue from operations also showed sequential growth, rising 6.5% from ₹2,061 crore in the September 2025 quarter. This consistent top-line growth and improved cost efficiency contributed to the strong performance.[thehindu+7]
Expanding Financial Services and Merchant Base
The distribution of financial services emerged as a major growth engine for Paytm. Revenue from this segment grew 34% year-on-year to reach ₹672 crore in the December quarter. This growth was fueled by higher loan disbursals and a wider adoption of these services by customers. The number of customers using financial services on the Paytm platform increased from 5.9 lakh in the previous fiscal year to 7.1 lakh during the reporting quarter.
Paytm has been strategically focusing on expanding its higher-margin financial services, including loan distribution and insurance. This strategy aims to leverage its extensive merchant network, which includes over 38 million partners, particularly within the small and medium-sized business sector. The company also noted improved payment processing margins and the growth of credit cards, including credit cards on UPI, as factors in its financial services performance.[businessworld+1]
Strong Performance in Payment Services
The payment services segment continued its robust performance, with revenue growing 21% year-on-year to ₹1,284 crore. Net payment revenue specifically increased by 25% year-on-year to ₹613 crore. This growth was driven by enhanced payment processing margins and a significant rise in merchant subscriptions.
Paytm reported asubstantial increase in its merchant subscriptions, adding 27 lakh new subscriptions year-on-year to reach a total of 1.44 crore. The company has also maintained its leadership in UPI payments, gaining market share for the third consecutive quarter. Paytm’s consumer UPI Gross Merchandise Value (GMV) grew 35% over the last nine months, significantly outperforming the overall industry's GMV growth of 16%. This indicates strong consumer engagement and adoption of Paytm's UPI services. The company continues to strengthen its position with both small and large, online and offline merchants by deepening the adoption of its full-stack omnichannel payment offerings.[thehindu+6]
Operational Efficiency and Future Outlook
Paytm also achieved operational profitability, with its EBITDA (earnings before interest, tax, depreciation, and amortisation) turning positive at ₹156 crore in the December 2025 quarter. The company reported an EBITDA margin of 7% for the period. This represents a 10.6% increase from the ₹141 crore EBITDA recorded in the preceding September quarter. The improved EBITDA margin, which reached 7.1% in Q3 FY26 from 6.8% in Q2 FY26, reflects better margin management and operational efficiency.[upstox+1]
For the nine-month period ending March 2026, Paytm's revenue climbed 23.7% year-on-year to ₹6,173 crore. During this period, the company also turned profitable, reporting a net profit of ₹369 crore, compared to a loss of ₹119 crore in the prior year. Paytm stated that product innovation and AI-led merchant acquisition are improving unit economics and driving profitability. The company is exploring AI integration to create new revenue streams and enhance operational efficiency.[angelone+3]
Market Reaction and Broader Context
Despite the strong financial results announced on Thursday, January 29, 2026, Paytm's shares experienced a decline. The stock closed 0.44% lower at ₹1,171.80 on the National Stock Exchange (NSE) on the day of the earnings announcement. Shares continued to fall, slipping nearly 5% in intraday trade the following day. This decline occurred amid broader market weakness and profit booking by investors. The stock has fallen approximately 13% so far in calendar year 2026, after reaching a 52-week high of ₹1,381.75 in early December 2025.[upstox+1]
The company's strong December quarter performance, marked by a significant profit turnaround and robust revenue growth, highlights its ongoing efforts to build a sustainable and profitable business model. Paytm's focus on expanding its payment ecosystem, growing its merchant base, and deepening its financial services offerings continues to drive its financial recovery.[fortuneindia]
