MobiKwik's Q3 losses balloon 15X over previous quarter as lending expenses grow

Digital payments and lending platform One MobiKwik Systems reported a sharp widening of losses in the third quarter of the current fiscal year, driven by volatile revenue trends, surging expenses, and one-off adjustments tied to agreements with lending partners.

The Gurugram-based fintech’s net loss ballooned to Rs 55.28 crore in Q3 FY25, a 15.3X jump from the previous quarter’s Rs 3.59 crore and a swing from a profit of Rs 5.27 crore in the same period last year.

Revenue from operations fell 7.28% quarter-on-quarter (QoQ) to Rs 269.47 crore, though it rose 17.7% year-on-year (YoY). Expenses, however, spiked 10.55% QoQ and 43.79% YoY to Rs 317.14 crore, outpacing revenue growth and squeezing margins.

A key driver was a 2.7X surge in financial guarantee expenses to Rs 17.24 crore, alongside a 40.87% QoQ rise in lending operational expenses to Rs 24.78 crore.

Payments GMV (Gross Merchandise Value) surged 206% YoY to Rs 2.94 lakh crore while payments revenue climbed 166% YoY to Rs 196.5 crore, a gross margin of 19%.

MobiKwik's Q3 earnings reflect the impact of sectoral headwinds in unsecured lending, which has weighed on its credit distribution business. The company's digital credit GMV saw a sharp decline, with Zip loans dropping from Rs 1,000 crore in Q2 to Rs 300 crore in Q3, while Zip EMI fell from Rs 700 crore to Rs 400 crore.

This decline is attributed to a reduced appetite from lending partners for small-ticket credit products, prompting MobiKwik to scale down its Zip offering and shift focus toward longer-tenure Zip EMI products targeted at high-quality customers.

Consequently, financial services revenue was impacted, alongside a significant rise in lending-related expenses, which increased from 4.1% of lending GMV in Q2 to 9.3% in Q3.

The rise in costs was driven by lower disbursements and a transition to new Default Loss Guarantee (DLG) contracts, where expenses are front-loaded while revenue realization is delayed.