Paytm Q4 Results: Loss Narrows to Rs 539.80 Crore Amid Exceptional Rs 522 Crore Costs

One 97 Communications Ltd, known for its flagship fintech platform Paytm, recently unveiled its financial results for the fourth quarter of FY25. The company reported a net loss of Rs 539.80 crore, a slight improvement from the Rs 549.60 crore loss recorded in the same quarter of the previous fiscal year. However, this loss widened compared to the Rs 208.3 crore loss from the preceding quarter, primarily due to a significant one-time expense related to employee stock options (ESOPs).

Financial Highlights: Narrowing Losses and ESOP Impacts

Despite the overall loss, Paytm showcased positive trends in some areas. The company achieved an EBITDA before ESOP expenses of Rs 81 crore, indicating operational efficiency. Additionally, the profit after tax improved, with losses narrowing to Rs 23 crore when excluding the one-time ESOP charge of Rs 522 crore.

Key Exceptional Costs in Q4 FY25

In the latest quarter, Paytm identified exceptional costs amounting to Rs 522 crore due to:

A non-cash acceleration of ESOP expenses totaling Rs 492 crore.
An impairment charge related to investments in certain subsidiaries of Rs 30 crore.

The company noted that the ESOP costs in Q4 FY25 were lower at Rs 169 crore, reflecting lapses associated with employee separations during the quarter.

Leadership Decisions and Future Implications

On April 16, 2025, Vijay Shekhar Sharma, Paytm’s Founder and CEO, voluntarily relinquished his 2.1 crore ESOPs, which the Nomination and Remuneration Committee subsequently canceled. This action led to the aforementioned one-time ESOP expense and is expected to lower future ESOP costs significantly, with estimates for Q1 FY26 projected between Rs 75-100 crore.

The regulatory filing stated, “Due to this decision and in accordance with IND AS 102, the total cost of the ESOP grant of Rs 4,092 crore recorded from FY 2022 to FY 2025 has been credited back to the company’s retained earnings, thereby enhancing its free reserves.”

Capital Expenditure Insights

Paytm’s capital expenditure (capex) for FY25 was Rs 317 crore, a notable decrease compared to Rs 813 crore in FY24. This reduction is attributed to:

Lower device costs.
A focus on refurbishing existing devices rather than new deployments.

Looking ahead, Paytm anticipates an increase in capex to support a faster pace of device deployment, although it will remain below the FY24 levels. The depreciation and amortization (D&A) expenses decreased to Rs 150 crore in Q4 FY25, down 9% quarter-over-quarter and 23% year-over-year, with expectations of Rs 500-600 crore in D&A for FY26.

Cash Position and Revenue Updates

As of March 2025, Paytm’s cash balance was Rs 12,809 crore, slightly down from Rs 12,850 crore in December 2024. This figure excludes customer funds held by Paytm Money Ltd and merchant funds in escrow. Notably, the cash balance rose by Rs 4,498 crore during FY25, primarily due to the monetization of non-core assets, including the entertainment ticketing business and stock acquisition rights in PayPay.

In terms of revenue, Paytm reported Rs 1,911.50 crore from operations in Q4, reflecting a 15.69% decline from Rs 2,267.10 crore in the same quarter of the prior year. However, there was a sequential revenue increase of 5% from Rs 1,828 crore.

This financial update illustrates Paytm’s ongoing journey toward recovery and operational improvement amidst significant challenges and strategic shifts in their business model.