Paytm marketing services revenue dips 11% YoY to Rs 238 crore; marketing spends down 26%

New Delhi: In Q3 FY 2026, One 97 Communications (Paytm) reported marketing services revenue of Rs 238 crore, down 11% year-on-year from Rs 267 crore in the December 2025 quarter. The metric was up 4% quarter-on-quarter from Rs 228 crore in the September 2025 quarter.

The company’s marketing expenses reduced by 26% YoY from Rs 104 crore to Rs 77 crore. However, on a QoQ basis, the expenses were up by Rs 5 crore. 

Paytm said that the marketing costs for consumer acquisition declined YoY, while increasing QoQ in a disciplined manner, supported by improving retention cohorts and market share gains.

One 97 Communications (Paytm) continued its profitability momentum in the December quarter (Q3 FY26), reporting a profit after tax of Rs 225 crore to mark its third consecutive profitable quarter.

The performance was backed by industry-leading customer monetisation and UPI transaction growth that outpaced industry averages.

The company recorded a 20% year-on-year increase in operating revenue to Rs 2,194 crore, driven by higher payments GMV, growth in merchant subscriptions and expansion in financial services distribution.

The travel business saw strong sequential growth driven by festive demand, even though there were temporary industry disruptions during the quarter.

Paytm said its AI-first, product-led strategy has driven consistent gains in consumer UPI market share, with Paytm's UPI GMV growing 35% over the last nine months, significantly ahead of industry growth of 16%.

The results were supported by sustained growth across core payments and financial services businesses, improved operating leverage, and disciplined cost management.

EBITDA improved to Rs156 crore, translating into an EBITDA margin of 7%, an improvement of Rs379 crore year-on-year. Indirect costs declined 8% YoY at Rs 1,092 crore, driven by lower employee costs and lower provision for doubtful debt (PDD).

A part of Paytm's payments revenue during the quarter included incentives under the RBI's Payments Infrastructure Development Fund (PIDF) scheme, which was applicable until December 2025.

The company earned a total of Rs 216 crore in incentives for the nine months ended December 2025. In the absence of PIDF incentives going forward, Paytm said it expects its contribution margin to remain in the mid-50% range.

Paytm's payment services revenue increased 21% YoY to Rs 1,284 crore, while net payment revenue grew 25% YoY to Rs 613 crore, led by higher payment processing margins and growth in merchant subscriptions.

The company's Gross Merchandise Value (GMV) rose 24% YoY to Rs6.2 lakh crore, reflecting continued gains in both merchant and consumer payments.

Merchant subscriptions reached 1.44 crore, with an addition of 27 lakh devices year-on-year, expanding its recurring revenue base.

Revenue from the distribution of financial services increased 34% YoY to Rs 672 crore, driven by continued growth in the distribution of merchant loans and wealth products.

Contribution profit for the quarter stood at Rs1,249 crore, up 30% YoY, with a contribution margin of 57% due to higher payment processing margins and increased share of distribution of financial services revenue.

Paytm ended the quarter with a cash balance of Rs 12,882 crore, providing significant flexibility to expand business.

The company said it continues to strengthen its leadership across small and large merchants, both online and offline, by deepening adoption of its full-stack payment offerings.

It added that ongoing product innovation and AI-led merchant acquisition are improving unit economics and supporting sustained profitability.