One 97 Communications (Paytm) Q2 FY26 Performance & Strategic Update

One 97 Communications reported a resilient Q2 FY26, demonstrating strong underlying profitability and sustained growth. The company achieved a pre-impairment net profit of ₹211 crore. After accounting for a one-time, non-cash impairment charge of ₹190 crore (related to the First Games Technology JV), the reported Profit After Tax (PAT) stood at ₹21 crore. Operating revenue surged 24% year-on-year (YoY) to ₹2,061 crore, reflecting robust expansion in our core payment and financial services verticals. EBITDA: Significant operating leverage was achieved, with EBITDA reaching ₹142 crore, registering a 7% margin. Contribution Profit: Grew 35% YoY to ₹1,207 crore, with the contribution margin expanding to 59%. This improvement was driven by enhanced net payment revenue and the increasing scale of our high-margin financial services distribution. Balance Sheet: The company maintains a strong liquidity position with a cash balance of ₹13,068 crore, providing significant capital flexibility for strategic investments and growth. 3. Key Business Drivers Payments Vertical: GMV: Gross Merchandise Value (GMV) expanded 27% YoY to ₹5.67 lakh crore. Revenue: Payment services revenue grew 25% YoY to ₹1,223 crore, with net payment revenue up 28% to ₹594 crore. Merchant Base: Leadership in merchant payments was solidified, with paid subscriptions reaching an all-time high of 1.37 crore (a 25 lakh YoY increase). Financial Services Distribution: This segment continues to be a primary growth engine, with revenue scaling 63% YoY to ₹611 crore, propelled by the expansion of merchant loan distribution. 4. Disciplined Cost Management Strategic discipline in capital allocation is evident. Indirect expenses (including ESOPs) declined 18% YoY to ₹1,064 crore. Concurrently, marketing costs for consumer acquisition were reduced by 42% YoY to ₹72 crore, reflecting enhanced monetization efficiency and high customer retention cohorts.