Paytm’s Q1 FY26 earnings marked a major turnaround, with the company reporting its first core operations profit since Q3 FY25.

Paytm’s

Q1 FY26 earnings marked a major turnaround, with the company reporting its first core operations profit since Q3 FY25. Financial Highlights Net Profit: ₹123 crore vs ₹840 crore loss a year ago Revenue: ₹1,918 crore, up 28% YoY EBITDA: ₹72 crore (≈4% margin) vs EBITDA loss last year What Drove the Turnaround Revenue Growth Payments revenue rose 38% to ₹529 crore; GMV jumped ~27% to ₹5.39 lakh crore Financial services revenue doubled to ₹561 crore, driven by merchant loans and improved collections Cost Discipline Total costs fell by ~₹460 crore: ESOP expenses slashed by ₹217 crore; marketing spend reduced by ₹122 crore Streamlined operations with help from AI and leaner structure Loan-related stability Fewer one-time impairment and ESOP charges compared to previous quarters Key Operational Metrics Merchant subscriptions reached a record 1.30 crore — suggesting strong platform adoption Contribution margin jumped 10 percentage points to ~60%, showing improved unit economics Management Outlook Paytm highlighted disciplined spending, AI-led efficiencies, and continued growth in payments and financial services. What It Means for Investors Path to consistent profits: Core business showing resilience despite regulatory setbacks. High growth runway: Payments, lending, and merchant adoption continuing to scale. Valuation upgrade possible: Profitability combined with positive runway may prompt rerating.