One 97 Communications Limited, the parent company of Paytm, has reported another profitable quarter, marking its fifth straight quarter in profit. The fintech company posted strong financial results for the first quarter of FY27, helped by growth in its payments business, financial services, and better operational efficiency through artificial intelligence (AI).
For the quarter ended June 2026, Paytm’s revenue from operations increased 28% year-on-year to Rs 2,448 crore, compared to Rs 1,918 crore in the same quarter last year. Revenue also rose by over 8% from Rs 2,264 crore reported in the previous quarter.
The company’s total income stood at Rs 2,630 crore, including Rs 182 crore from other income.
Paytm’s net profit rose 79% to Rs 220 crore in Q1 FY27, up from Rs 123 crore in the same quarter last year. Compared to the previous quarter, profit also increased by around 20%, showing steady improvement in the company’s overall performance.
Payments and Financial Services Continue to Drive Growth
The payments business remained Paytm’s biggest source of revenue during the quarter. It earned Rs 1,384 crore from payment services, up 32% from a year ago. Revenue from financial services distribution grew 45% to Rs 814 crore, while marketing services contributed Rs 239 crore.
The company also reported its highest-ever quarterly EBITDA of Rs 203 crore, which was 182% higher than the same period last year. Its EBITDA margin improved to 8.3%, compared to 5.8% in the previous quarter. Paytm said it is still on track to achieve its medium-term EBITDA margin target of 15-20%.
As business grew, the company’s expenses also increased. Total expenses rose to Rs 2,383 crore from Rs 2,016 crore a year ago. Payment processing charges remained the biggest cost at Rs 794 crore, while employee benefit expenses increased to Rs 742 crore. Marketing and promotional expenses also went up to Rs 169 crore as the company continued to invest in customer and merchant growth. However, software, cloud and data centre costs fell compared to last year, helping improve overall efficiency.
Paytm also continued to expand its payments network. Consumer UPI Gross Transaction Value (GTV) increased 45% year-on-year to Rs 5.9 lakh crore, while merchant Gross Merchandise Value (GMV) grew 31% to Rs 7.1 lakh crore. The company added around 60 lakh monthly transacting users over the past year, taking its total monthly active users to 8 crore. Its network of merchants using Soundbox and POS devices reached 1.57 crore.
Paytm is currently the third-largest UPI app in India with a market share of 6.66% by transaction volume and 7.91% by transaction value.
Paytm Focuses on Long-Term Growth
Along with its quarterly results, Paytm’s board announced several important business decisions.
The company decided not to move ahead with its proposed bonus share issue. Instead, it said it wants to keep its cash for future business expansion and investment opportunities.
Paytm currently has a cash balance of Rs 13,529 crore, which it plans to use for both organic growth and possible strategic investments.
The board also approved an investment of up to Rs 100 crore in its wholly-owned subsidiary, Paytm Money. The money will be used for technology upgrades, meeting regulatory requirements and expanding its wealth management business.
The company is also seeking shareholder approval to extend the deadline for using its remaining IPO funds until March 2029. This will give Paytm more flexibility to use the funds for customer acquisition, merchant expansion and other growth plans.
On the leadership front, former Google executive Amit Singhal has joined the board as an independent director. Independent director Ashit Ranjit Lilani stepped down due to other professional commitments. The company also announced fresh employee stock options covering nearly 15.42 lakh equity shares under its ESOP scheme.
AI Helps Improve Efficiency and Strengthens Financial Services
Artificial intelligence is becoming an important part of Paytm’s business strategy. The company said AI has helped automate many routine tasks, improve productivity and reduce employee-related costs by around 10-15%.
Paytm has introduced several AI-powered features for users, including monthly spending summaries, payment reminders, hidden payment options and built-in calculators. These features have improved the customer experience while helping the company control costs.
Although AI has reduced the need for employees in some departments, Paytm plans to hire around 15,000 people for its core payments business over the next year as it continues to grow its merchant network.
The company’s financial services business also continued to perform well. More than half of merchant loans were given to existing borrowers, while the number of customers using financial products increased 36% to 7.5 lakh. Paytm expects products like Paytm Postpaid to make a bigger contribution to its earnings from FY28.
To support its lending business, the board approved Default Loss Guarantees (DLGs) of up to Rs 90 crore each for lending partners Muthoot Fincorp and Kisetsu Saison Finance.
Meanwhile, Paytm is continuing to deal with regulatory changes after the cancellation of Paytm Payments Bank’s banking licence earlier this year. The company said the voluntary closure of the payments bank will not have any major financial impact on its core payments business.
Paytm is also expanding its presence outside India. It has set up subsidiaries in the UAE and Saudi Arabia with investments of Rs 20 crore each. The company has also partnered with local firms in Indonesia to provide payment technology and hardware solutions as it looks to grow its international business.