One97 Communications (PAYTM) Q2 25/26 earnings summary

Executive summary

• AI integration is central to product and service innovation, driving efficiency, cost optimization, and new revenue streams for merchants and consumers.

• Merchant ecosystem expansion and aggressive hiring continue to fuel growth, with onboarding of both offline and online merchants.

• Postpaid (BNPL) product relaunch is showing early traction, with scalable growth targeted through bank partnerships.

• International expansion is planned via partner-operated and self-operated models, leveraging technology in emerging and developed markets.

• Approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2025, and appointed a new independent director.

Financial highlights

• Revenue grew 24% YoY to $232 million (INR 2,061 crores consolidated for Q2 FY26), with EBITDA improving to $16 million (7% margin) and a second consecutive quarter of profit after tax.

• Contribution profit rose 35% YoY to $136 million, with a margin of 59%.

• Merchant lending, wealth (gold, mutual funds, stock trading), and device segments are showing strong growth, with gold products exceeding internal targets.

• Marketing services revenue declined 25% YoY due to product optimization and the sale of the entertainment ticketing business.

• Net cash outflow from operating activities for H1 FY26 was INR 468 crores (consolidated), compared to an inflow of INR 78 crores in H1 FY25.

Outlook and guidance

• Continued margin improvement and market share gains are expected, especially in merchant payments and credit card on UPI.

• AI investments will drive efficiency and new revenue, with a focus on monetizing AI-led products for merchants of all sizes.

• Postpaid product ramp-up will be gradual and sustainable, focusing on credit quality and learnings from previous cycles.

• International expansion is expected to be low-capital, with meaningful revenue contribution in 2–3 years.

• Additional investment in PPSL aims to fund working capital, acquisition of offline merchant payment business, and maintain leadership in merchant payments.