Due in part to an increase in loan demand, Indian digital payments company Paytm announced a 39% increase in quarterly revenue.
The parent company of India’s second-ranked digital payments app by market share, One 97 Communications Ltd (PAYT.NS), announced late Friday that sales increased 39% year over year to 23.42 billion Indian rupees ($285.68 million) in the three months ending June 30 from 16.80 billion rupees in the year prior.
In spite of an increase in employee-related costs and a lack of government incentives, Paytm reported an operational profit for the third consecutive quarter.
The operating profit was 840 million rupees as opposed to a 2.75 billion rupee operating loss, while the net loss was reduced to 3.57 billion rupees.
That was less than the 2.34 billion rupee operating profit from the previous quarter, which also reflected a government incentive to encourage the use of the Unified Payments Interface (UPI) digital payment system.
Operating profit is what Paytm refers to as core earnings before employee stock ownership plan costs. Nine months ahead of expectations, it first announced an operating profit over the last three months of 2022.
Expenses for the quarter increased by 15.9% to 28 billion rupees, and staff costs increased by 21% as a result of the period’s assessments.
Paytm, which also rents out devices to merchants to authenticate payments, reported a 31% increase in income from its main financial services division, which includes the buy now pay later loans.
Financial services, which are rapidly expanding for Paytm, accounted for 22.3% of total revenue of the company.
Its contribution margin, which measures revenue less cashbacks and expenses like payment processing, increased from 43% to 56% over the previous year.
