PhonePe reports 77% jump in consolidated revenue in FY23

Boasting a UPI market share of 50.54% (in terms of total payments value) as of March, PhonePe's payment business recorded an operating loss of Rs 1,755 crore in FY23.

PhonePe reports 77% jump in consolidated revenue in FY23

Wednesday October 18, 2023,

3 min Read

Fintech decacorn PhonePe has reported a 77% jump in its consolidated revenue to Rs 2,914 crore in FY23, compared to Rs 1,646 crore earned in FY22.

Boasting a UPI market share of 50.54% (in terms of total payments value) as of March, PhonePe India Pvt Ltd, which houses its payments business, recorded an operating loss of Rs 1,755 crore in FY23 compared to Rs 1,612 crore the previous year.

However, the payment subsidiary turned EBITDA positive on an adjusted basis (excluding the ESOP cost), a metric used by new-age firms. The Walmart-backed firm's adjusted earnings (EBITDA) stood at Rs 159 crore in FY23, up from an operating loss of Rs 455 crore in FY22. 

Substantial ESOPs were granted in FY23 towards the corporate restructuring and as one-time rewards for setting up and incentivising new business,” the company said in a statement. 

A recent valuation report prepared by auditing firm KPMG and filed by PhonePe said the fintech firm will have an EBITDA profit of Rs 1,797 crore in the calendar year 2025, with an EBITDA margin of 19.7%. The company's management expects revenue of Rs 9,139 crore in 2025.

Rival Paytm, on the other hand, had reported an overall positive adjusted EBITDA at Rs 31 crore in the third quarter of FY23, up from a loss of Rs 393 crore in the year-ago period. It had reported a 61% jump in consolidated revenue YoY at Rs 7,990 crore in FY23. On a consolidated level, both fintech firms continue to be loss-making.

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Almost 99% of PhonPe’s operating income comes from processing payment transactions, including revenue from use cases like money transfers, mobile recharges, and bill payments. 

It processed five billion transactions in a month for the first time in the May-July quarter, while logging an annualised Total Payments Volume (TPV) of $1.15 trillion, it informed during an earnings call in August.

PhonePe credited its growth numbers to diversified revenue coming from non-payment businesses and new products, including smart speakers, rent payments, and insurance distribution. As of August 2023, the company deployed 4.1 million smart speakers. 

“We completed our full spin-off from Flipkart Group. Secondly, we moved our domicile to India from Singapore. Thirdly, we concluded an equity fundraising of Rs 7,021 crore at a $12 billion pre-money valuation. These actions enable us to invest in India for the long term and create a sustainable ecosystem and shareholder value in India. The fundraise equips us with the required capital to invest behind new businesses, which, in turn, will simultaneously grow and diversify our revenue and profit pools,” the company said in a statement. 

Moving forward, PhonePe is looking to scale up its multiple new businesses for “a well-diversified revenue portfolio and group-level profitability in the ensuing years."

In recent months, the company launched a series of new businesses, including its entry into ecommerce and stock broking with Pincode and Share Market app, an online payment gateway, loan service for merchants in partnership with NBFCs and banks, a Point of Sale (PoS) device, besides account aggregator services.

(This article is updated with additional information.)

Edited by Suman Singh