Slides
Page 1
Earnings Presentation For the quarter ending December 2024 (USD)
Page 2
$(64) Mn $(22) Mn $(5) Mn Jun-24 Sep-24 Dec-24 Revenue jumps to $214 Mn on Growth in Payments and Financial Services; EBITDA Before ESOP and PAT improved by $17 Mn and $24 Mn QoQ*, respectively Revenue grew by 10% QoQ Contribution Profit up 7% QoQ Contribution Margin at 52% EBITDA Before ESOP has improved by $17 Mn QoQ * after excluding exceptional gains on sale of entertainment business, of $157 Mn in Q2 FY 2025 (Qtr ending) 2 (Qtr ending) (Qtr ending) Jun-24 Sep-24 Dec-24 $214 Mn $194 Mn $175 Mn $38 Mn Improvement $88 Mn $104 Mn $112 Mn 50% 54% 52% Jun-24 Sep-24 Dec-24 $24 Mn Improvement $59 Mn Improvement
Page 3
Payment Services: Festive season accelerates GMV; Gross device addition remains strong • Payment processing margin was above 3bps guidance and is expected to be 5-6 bps (including UPI incentives) for FY 2025 • New device sign ups comfortably above January 2024 run-rate • Continuing strategy of picking up inactive devices and redeploying them after refurbishment for next 1-2 quarters • Refurbishment costs are much lower than capex for new device Net Payment Margin without UPI incentive =+ No. of Subscription Paying Merchants Subscription Revenue = Charges merchant pays for various monthly services, including devices Gross Merchandise Volume - Continued business Payment Processing Margin = Gross fees charged to the merchant – Payment processing charges 3 (Qtr ending) (Qtr ending)(Qtr ending) $51 Bn $50 Bn $50 Bn $52 Bn $59 Bn Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 10.6 Mn 10.7 Mn 10.9 Mn 11.2 Mn 11.7 Mn Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 $45 Mn $54 Mn $57 Mn Jun-24 Sep-24 Dec-24
Page 4
Financial Services: Low penetration offers significant opportunity Revenue growth led by higher share of merchant loans, trail revenue from DLG portfolio, and better collection efficiencies • Continue to increase number of partners as we see strong interest from various financial institutions Loan Distribution: • Strong interest of lenders in DLG model, which will help to increase disbursements with existing and new partners • DLG portfolio outstanding AUM of $496 Mn versus $193 Mn in last quarter Merchant Loan: • Continue to see better collection efficiencies • Distributed of $448 Mn, versus $386 Mn in Q2 FY 2025 with a significant portion under DLG Model Personal Loan: • Reduction in disbursements ($204 Mn versus $231 Mn in Q2 FY 2025) on account of tightening risk policies by lenders • Distribution and collection model restarted to a very tight cohort of customers Other financial services • Continue to build equity broking, insurance and mutual fund distribution business $33 Mn $44 Mn $59 Mn Jun-24 Sep-24 Dec-24 Revenue from Financial Services Number of key financial services customers 4 (Qtr ending) (Qtr ending) 0.81 Mn 0.79 Mn 0.59 Mn 0.60 Mn 0.59 Mn Dec-23 Mar-24 Jun-24 Sep-24 Dec-24
Page 5
Marketing Services: Additional monetization from merchants Includes advertising, travel ticketing, credit card distribution, and deals & gift vouchers Marketing Services revenue was flat at $31 Mn in Q3 FY2025 (excluding entertainment ticketing business); Increase in MTU is key drivers for revenue growth • GMV for ticketing, deals & gift vouchers, etc., was $266 Mn, higher QoQ after excluding entertainment ticketing business • Credit card distribution is slow due to cautious stance of issuers; 1.39 Mn activated credit cards, compared to 1.01 Mn last year ‸‸ Advertising & Loyalty Services Ticket Booking Credit Cards 5
Page 6
$(48) Mn $17 Mn $4 Mn $2 Mn $2 Mn $(24) Mn Q2 FY2025* PAT EBITDA Before ESOP ESOP D&A Other Income/costs** Q3 FY2025 PAT 0 (10) (20) (30) (40) (50) (60) Chart TitleQ2 FY2025* PAT Q3 FY2025 PAT Multiple factors aiding PAT Improvement QoQ PAT improvement walk * after excluding exceptional gains on sale of entertainment business, of $157 Mn in Q2 FY 2025 ** Other income/ costs include Other income, Finance costs, Share of profit / (loss) of associates / joint ventures, Income Tax expense 6 EBITDA Before ESOP Operating leverage to drive profitability ESOP Cost Continue to trend lower Other Incomes/costs** Higher cash balance to further increase interest income D&A Expenses To keep coming down as 9M FY 2025 Capex was $21 Mn versus $79 Mn in 9M FY 2024
Page 7
Key Focus Areas Leverage AI to improve efficiency: Continued automation of various operations to improve efficiency Insurance EquityLoans Compliance First: Stringent focus on a compliance-first approach across our businesses Merchant payment innovations Continue to be a market leader with merchant payment innovations, including new devices & aggregation of various MDR-bearing payment instruments Financial Services Distribution Increase high margin financial services revenue by increasing penetration of financial services distribution Customer acquisition Drive growth in consumer base by innovative products, & disciplined marketing investments Monthly Transacting Users 7 69 Mn 69 Mn 72 Mn Oct-24 Nov-24 Dec-24 NPCI Approval for UPI onboarding (For the month)
Page 8
Annexure
Page 9
Expected ESOP charges based on currently issued ESOPs Note: • The above table illustrates expected ESOP cost for all unvested ESOPs granted so far, as of January 17, 2025. • The cost assumes all granted ESOPs will vest and no new ESOPs will be granted. For any lapses of unvested ESOPs, normally on attrition, the cost of unvested ESOP recorded so far is reversed in that quarter. Actual charges might be different based on incremental issuances as well as lapses. • For new ESOP grants, the total estimated charge would be the number of options granted times the fair value per Option, which is based on the share price on the day of the grant, among other factors. • Movements of share price after the date of the grant do not affect the ESOP charge for already granted ESOPs. • The charge is front-ended with approximately 38% in Year 1, 28% in Year 2, 18% in Year 3, 11% in Year 4 and 5% in Year 5. As of January 17, 2025 (in Mn) Basic shares outstanding 637 ESOPs vested and unexercised 2 ESOPs granted and unvested 33 ESOPs available for distribution 7 Estimated fully diluted shares 679 Expected ESOP Cost ($ Mn) Q1 Q2 Q3 Q4 FY 2025 29* 25* 21* 24 FY 2026 21 20 12 11 FY 2027 11 10 3 3 * Actual ESOP costs for the quarter 9
Page 10
Operating Revenue (in $ Mn) Quarter Ended Change Nine Month Ended Dec-24 (Unaudited) Sep-24 (Unaudited) Dec-23 (Unaudited) YoY QoQ Dec-24 (Unaudited) Dec-23 (Unaudited) YoY Payments & Financial Services 176 154 267 (34)% 14% 466 733 (36)% Payment Services 117 110 196 (40)% 6% 331 534 (38)% Financial Services and Others 59 44 71 (17)% 34% 135 199 (32)% Marketing Services 31 35 60 (48)% (12)% 104 157 (34)% Other Operating Revenue 7 4 6 10% 56% 13 11 15% Revenue from Operations 214 194 333 (36)% 10% 583 901 (35)% 10
Page 11
Contribution Profit and Contribution Margin (in $ Mn) Quarter Ended Change Nine Month Ended Dec-24 (Unaudited) Sep-24 (Unaudited) Dec-23 (Unaudited) YoY QoQ Dec-24 (Unaudited) Dec-23 (Unaudited) YoY Revenue from Operations 214 194 333 (36)% 10% 583 901 (35)% Payment processing charges 67 60 115 (42)% 10% 187 300 (37)% As % of GMV 0.11% 0.12% 0.19% (8) bps 0 bps 0.18% 0.19% (1) bps Promotional cashback & incentives 4 3 12 (65)% 28% 13 31 (58)% Other Expenses 31 26 28 8% 19% 78 74 6% Total Direct Expenses 102 89 155 (35)% 13% 278 404 (31)% Contribution Profit 112 104 178 (37)% 7% 305 496 (39)% Contribution Margin % 52% 54% 53% (85) bps (140) bps 52% 55% (272) bps 11
Page 12
EBITDA before ESOP (in $ Mn) Quarter Ended Change Nine Month Ended Dec-24 (Unaudited) Sep-24 (Unaudited) Dec-23 (Unaudited) YoY QoQ Dec-24 (Unaudited) Dec-23 (Unaudited) YoY Contribution Profit 112 104 178 (37)% 7% 305 496 (39)% Contribution Margin % 52% 54% 53% (85) bps (140) bps 52% 55% (272) bps Marketing cost 117 126 152 (38)% (17)% 395 443 (23)% Employee cost (excl ESOPs) 12 15 20 (29)% (6)% 47 62 (19)% Software, cloud and data center 67 72 94 (9)% (3)% 221 274 3% Other indirect expenses 18 18 20 9% (9)% 58 56 33% Total indirect expenses 20 21 18 (23)% (7)% 68 51 (11)% EBITDA before ESOP cost (5) (22) 26 (119)% (78)% (90) 53 (269)% EBITDA before ESOP cost Margin % (2)% (11)% 8% (992) bps 897 bps (15)% 6% (2,139) bps 12
Page 13
Reconciliation of Non-GAAP Measures EBITDA before ESOP cost (in $ Mn) Quarter Ended Nine Month Ended Dec-24 (Unaudited) Sep-24 (Unaudited) Dec-23 (Unaudited) Dec-24 (Unaudited) Dec-23 (Unaudited) EBITDA before share based payment expenses (A) (5) (22) 26 (90) 53 Share based payment expenses (B) 21 25 44 76 133 Finance costs (C) 0 0 1 1 2 Depreciation and amortization expense (D) 19 21 23 61 63 Other income (E) (22) (20) (17) (59) (48) Share of profit / (loss) of associates /joint ventures (F) 0 (1) 0 (0) 2 Exceptional items (G) 0 (157) 0 (157) 1 Income Tax expense (H) 1 1 0 2 2 Profit / (Loss) for the period/year (J=sum of A to H) (24) 109 (26) (14) (102) 13
Page 14
Operational KPIs Units Quarter Ended Change Dec-24 (Unaudited) Sep-24 (Unaudited) Dec-23 (Unaudited) QoQ YoY Registered Merchants (end of period) Mn 43 42 39 2% 10% Payment Devices (cumulative; end of period) Mn 11.7 11.2 10.6 4% 10% GMV $Bn 58.9 52.2 59.6 13% (1)% GMV (Continued Business)* $Bn 58.9 52.2 51.4 13% 14% Merchant Transactions Bn 11.1 9.9 10.0 12% 11% Total Transactions Bn 12.3 11.1 11.9 11% 4% Average Number of Sales Employees # 32,019 30,104 40,028 6% (20)% Cost of Sales Employees (including training) $Mn 27 27 31 ()% (15)% MTU (average over the period) Mn 70 71 100 (1)% (30)% Key financial services customers Mn 0.6 0.6 0.8 (2)% (27)% Value of personal and merchant loans distributed** $Mn 652 617 939 6% (31)% *Continued business excludes disrupted products such as Wallet, Postpaid etc. **As communicated in Q2 FY 2025 earnings release, key financial services customers will be the relevant metrics for tracking financial services and accordingly disclosure on value of loans disbursed will be discontinued after Q4 FY 2025 14
Page 15
Breakup of available Cash and investable balance (Net Cash Balances) Particulars (in $ Mn) Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Cash and Bank Balances in Current Accounts (Net of Borrowings) 219 464 272 263 233 Deposits with banks 519 272 407 423 817 Current Investments (Mutual Funds and Commercial Papers) 302 274 289 530 484 Total Balances 1,040 1,011 1,000 1,216 1,535 Paytm Money Ltd (PML) customer funds 54 40 52 48 34 Total Balances (excluding PML funds) 986 971 947 1,168 1,501 15
Page 16
Definitions for Metrics & Key Performance Indicators Metric Definition GMV GMV is the rupee value of total payments made to merchants through transactions on our app, through Paytm Payment Instruments or through our payment solutions, over a period. It excludes any consumer-to-consumer payment service such as money transfers. Monthly Transacting User (MTU) Number of unique users in a particular calendar month who have successfully completed a transaction on the Paytm App or have used the Paytm for Business App Contribution Profit Contribution profit is a non-GAAP financial measure. We define Contribution profit as revenue from operations less payment processing charges, promotional cashback & incentives expenses, connectivity & content fees, contest, ticketing & FASTag expenses & logistic, deployment & collection cost of our businesses. Net Payments Margin Payments revenues (including other operating revenue) less payments processing charges EBITDA before ESOP cost EBITDA before ESOP cost is a Non-GAAP financial measure. We define EBITDA before ESOP cost as our profit for the period, before depreciation & amortization expense, income tax expense, share based payment expense, finance costs, other income, loss for the period from discontinued operations, exceptional items, IPO expenses & share of profit/(loss) of associates/joint ventures. 16
Page 18
Disclaimer By attending the presentation or by reading the presentation slides you agree to be bound as follows: This Presentation is prepared by One 97 Communications Limited (“Company”) and is for information purposes only without regards to specific objectives, financial situations or needs of any -particular person and is not and nothing in it shall be construed as an invitation, offer, solicitation, recommendation or advertisement in respect of the purchase or sale of any securities of the Company or any affiliates in any jurisdiction or as an inducement to enter into investment activity and no part of it shall form the basis of or be relied upon in connection with any contract or commitment or investment decision whatsoever. This Presentation does not forward-looking, nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. Before acting on any information you should consider the appropriateness of the information having regard to these matters, and in particular, you should seek independent financial advice. This Presentation and its contents are confidential and proprietary to the Company and/or its affiliates and no part of it or its subject matter be used, reproduced, copied, distributed, shared, retransmitted, summarised or disseminated, directly or indirectly, to any other person or published in whole or in part for any purpose, in any manner whatsoever. The information contained in this Presentation is a general background information of the Company and there is no representation that all information relating to the context has been taken care of in the Presentation. We do not assume responsibility to publicly amend, modify or revise any information contained in this Presentation on the basis of any subsequent development, information or events, or otherwise. This Presentation includes certain statements that are, or may be deemed to be, “forward- looking statements” and relate to the Company and its financial position, business strategy, events and courses of action. Forward-looking statements and financial projections are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward- looking statements and financial projections. Representative examples of factors that could affect the accuracy of forward looking statements include (without limitation) the condition of and changes in India’s political and economic status, government policies, applicable laws, international and domestic events having a bearing on Company’s business, and such other factors beyond our control. Forward-looking statements and financial projections include, among other things, statements about: our expectations regarding our transaction volumes, expenses, sales and operations; our future merchant and consumer concentration; our anticipated cash needs, our estimates regarding our capital requirements, our need for additional financing; our ability to anticipate the future needs of our merchants and consumers; our plans for future products and enhancements of existing products; our future growth strategy and growth rate; our future intellectual property; and our anticipated trends and challenges in the markets in which we operate. Forward- looking statements are not guarantees of future performance including those relating to general business plans and strategy, future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. These forward-looking statements represent only the Company’s current intentions, beliefs or expectations, and no representation, warranty or undertaking, express or implied, is made or assurance given that such statements, views, projections or forecasts in the Presentation, if any, are correct or that any objectives specified herein will be achieved. We, or any of our affiliates, shareholders, directors, employees, or advisors, as such, make no representations or warranties, express or implied, as to, and do not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein and accept no liability whatsoever for any loss, howsoever, arising from any use or reliance on this Presentation or its contents or otherwise arising in connection therewith. The information contained herein is subject to change without any obligation to notify any person of such revisions or change and past performance is not indicative of future results. This document has not been and will not be reviewed or approved by a regulatory authority in India or by any stock exchange in India. No rights or obligations of any nature are created or shall be deemed to be created by the contents of this Presentation. Use of Operating Metrics The operating metrics reported in this Presentation are calculated using internal Company data based on the activity of our merchants, consumers and other participants in our ecosystem. While these numbers are based on what we believe to be reasonable estimates of engagement, for the applicable period of measurement, there are inherent challenges in measuring usage across our large online, offline, in-store and mobile presence. The methodologies used to measure these metrics require significant judgment and are also susceptible to algorithm or other technical errors. We regularly review our processes for calculating these metrics, and from time to time we may discover inaccuracies in our metrics or may make adjustments to improve their accuracy, which can result in adjustments to previously disclosed metrics. In addition, our metrics will differ from estimates published by third parties due to differences in methodology. We have converted financial amounts from ₹ Cr into $ Mn and hence there could be some totaling anomalies in the numbers. Numbers shown in USD are purely for illustrative and convenience purposes and calculated using an exchange rate of $1 = INR 85.6 (as of Dec'24 end) 18