Paytm on Friday (July 19) said its operating revenue for the June quarter fell again as it continues to deal with regulatory challenges.
Indian fintech companies reported operating revenue of about 15 billion rupees in the current quarter, down from 19.8 billion rupees in the previous quarter and 23.4 billion rupees in the same period last year, according to earnings reports on Friday.
“The financial impact of the recent disruptions was fully realized during the quarter,” Paytm said in a key takeaways post on its website. “Positive signs across the board including merchant payment operational metrics, gross merchandise volume (GMV) growth, accelerated merchant reactivation and growing merchant base, coupled with continued focus on cost optimization, make us optimistic about improving revenue and profitability.”
Paytm has been in hot water since January, when India’s banking regulator suspended operations with Paytm Payments Bank, which processed many of Paytm’s payments, after an audit found “ongoing non-compliance and ongoing significant supervisory concerns.”
The move by the Reserve Bank of India (RBI) follows two years of warnings about Paytm and its questionable ties with the banking sector.
Paytm said in a press release on Friday that its latest quarterly financial results were in line with the guidance the company provided last quarter and showed a recovery in key metrics.
Paytm reported that new merchant registrations have returned to January 2024 levels and average daily gross merchandise volume (GMV) has improved during the quarter to approach January 2024 levels, with overall GMV increasing month-on-month.
The company also said its monthly transacting users (MTU) count will stabilize by the end of June and it expects the MTU base to expand further once new Unified Payments Interface (UPI) consumers are allowed on board.
“Our merchant operating metrics and stability in our consumer base are showing signs of improvement, pointing to a path to recovery,” a Paytm spokesperson said in a statement. “This also demonstrates the continued confidence of our merchant partners and consumers in our platform and we appreciate the trust of our stakeholders. The first quarter has demonstrated the full impact of recent disruptions and we remain confident in our trajectory for sustained growth going forward.”
