Fintech major Paytm reported yet another profitable quarter in Q3 FY26, posting a consolidated net profit of INR 225 Cr as against a loss of INR 208 Cr in the year-ago quarter. On a QoQ basis, profit surged over 10X from INR 21 Cr. 

Important to highlight that the company incurred an exceptional loss of INR 190 Cr in the previous quarter, barring which it would have reported a profit before tax of INR 211 Cr in Q2.

Meanwhile, operating revenue increased 20% YoY and 7% QoQ to INR 2,194 Cr in the quarter under review. Including other income of INR 212 Cr, total income stood at INR 2,406 Cr during the period under review. 

Meanwhile, total expenses declined 2% to INR 2,175 Cr from INR 2,220 Cr in the previous year’s quarter. 

During the quarter under review, Paytm also incurred an additional expense of INR 12 Cr pertaining to the recently implemented labour codes.

Meanwhile, Paytm reported an EBITDA of INR 156 Cr and a margin of 7%, against an EBITDA loss of INR 223 Cr in the year-ago period.

The company’s average monthly transacting users (MTUs) for the period increased 60 Lakhs YoY to INR 7.6 Cr. 

Besides the company’s financial performance, Paytm board also approved the transfer of its offline merchant business to its wholly owned subsidiary Paytm Payment Services Ltd (PPSL). In order to ensure that our leadership in merchant payments is reinforced, the company’s board also approved founder and CEO Vijay Shekhar Sharma appointment as PPSL’s MD and CEO for five years.

Meanwhile, the company’s cash balance declined slightly to INR 12,882 Cr from INR 13,068 Cr at the end of the previous quarter. The company said that the movements in its cash balance during Q3 were driven by higher working capital requirements following the festive season, regulatory-led pre-funding of escrow accounts and growth in its margin trading facility (MTF) book.

To meet peak merchant settlement needs, it pre-funded INR 700 Cr into an escrow account after transferring its offline merchant business to PPSL, a balance that was negligible earlier but is now being maintained on an ongoing basis. 

During the quarter under review, Paytm reported steady business momentum across both its consumer and merchant segments, driven by higher payments activity, deeper merchant penetration and growing traction in financial services. 

On the consumer side, Paytm claimed to have seen growth in its UPI market share for the three consecutive quarters in FY26. This growth led to a 35% uptick in consumer UPI GMV over the last nine months,  outpacing the industry’s 16% growth. 

The company said this was aided by its AI-first, product-led approach and calibrated promotional spending focused on retention rather than short-term acquisition.

In the merchant segment, Paytm’s merchant device subscriptions reached 1.44 Cr, adding 27 Lakh devices YoY and expanding its base of recurring revenues.

The company also scaled its distribution of financial services, with the number of customers availing loans, wealth and allied products increasing to 7.1 Lakh from 5.9 Lakh a year ago. The company said this growth was despite lower volumes under DLG, which leads to lower revenue and lower ‘other direct costs’. The total customers availing financial services via Paytm increased to 7.1 lakh in the quarter, led by growth in merchant loans and equity broking users. 

Additionally, it must be highlighted that Paytm received all three key RBI payment licences under Paytm Payment Services Limited, enabling it to resume online merchant onboarding and further deepen its full-stack omni-channel payments offering during the quarter.

Meanwhile, its marketing services revenue for Q3 declined 11% to INR 238 Cr from INR 267 Cr in the same period last year. Paytm’s GMV for ticketing, deals and gift vouchers was around INR 2,232 Cr in the quarter under review.

Paytm’s shares ended today trading session 0.73% lower at INR 1,168.7 on the BSE.