Earnings Presentation

For quarter ending December 2022

1
Disclaimer
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Presentation includes certain statements that are, or may be We have converted financial amounts from ₹ millions into ₹ Cr
deemed to be, “forward-looking statements” and relate to the We, or any of our affiliates, shareholders, directors, employees, and hence there could be some totaling anomalies in the
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courses of action. express or implied, as to, and do not accept any responsibility or
Forward-looking statements and financial projections are based liability with respect to, the fairness, accuracy, completeness or
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Sustained momentum in Payments & Credit business

Average Monthly Transacting Users Value of loans disbursed through Paytm

(₹ Crore) (Qtr ending)
32% YoY 85 mn
80 mn
75 mn
71 mn 357% YoY
64 mn 9,958

7,313

+ Brand
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 5,554
+ Distribution
Subscription Paying Merchants + Insights 3,553
+ Technology
3.8 Mn Devices 5.8 mn 2,181
4.8 mn
3.8 mn
2.9 mn
2.0 mn Dec-21 Mar-22 Jun-22 Sep-22 Dec-22

# of Loans (Mn)
4.4 6.5 8.5 9.2 10.5
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
Merchants pay subscription for our devices

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 Revenue growth driven by continued platform expansion &
increased monetization across businesses

42% YoY ₹2,062 Cr

Payments revenue2 21% YoY to ₹1,197 Cr
₹1,914 Cr
1. On a like-for-like basis, i.e. including UPI incentive, growth would be 34% YoY
₹1,680 Cr (Detailed explanation on Slide 6)
₹1,541 Cr
₹1,456 Cr 2. Reported revenue growth (YoY & QoQ) impacted by timing of e-commerce festive
1,153 sales (which were mostly in Q3 FY 2022 and Q2 FY 2023) and focus on profitable
1,173 GMV
1,076
1,041 Financial Services revenue 257% YoY to ₹446 Cr
992
1. Driven by loan distribution business
446 2. Now accounts for 22% of revenues (9% in Q3 FY 2022)
349
271
Commerce & Cloud revenue 24% YoY to ₹420 Cr
377 420
339 320 331 1. Continued scale in credit card and commerce revenues
Quarter 2. High volumes in events business driving Commerce take-rate to 8% versus 6%
Ending
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
steady-state
Payment Services Financial Services & Others Commerce & Cloud

Incentives from PIDF & NABARD (other operating revenue)1

Notes:
1 Other Operating Revenue is revenue relating to the Payments business and was ₹44 Cr in Q3 FY 2023, ₹15 Cr in Q2 FY 2023, ₹2 Cr in Q1 FY 2023, ₹12 Cr in Q4 FY2022 and nil in Q3 FY 2022 and Q2 FY 2022
2 Includes Other Operating revenue, as it relates to the Payments business

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 Growth in contribution profit + strong operating leverage =
Improved Profitability
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22

2%

58% 59% 60%

53% 51%

49% (9%)
43% 44%
35%
31% (16%)

+29%
improvement
(24%)
Quarter (27%)
Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
Ending
Contribution Margin Indirect expenses as % of revenues EBITDA before ESOP as % of revenue

1. Consistent improvement in contribution margins: higher payments profitability; 1. Achieved operating EBITDA profitability three quarters ahead of guidance
increase in mix of high-margin loan distribution business 2. Driven by revenue growth across businesses, disciplined cost management
2. Operating leverage as demonstrated by indirect expenses (as % of revenue), and operating leverage
indirect expenses were up 20% YoY, flat for past three quarters

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 Payments business: Revenue growth with improved profitability

21% YoY Payment revenue grew by 21% YoY to ₹1,197 Cr

₹1,188 Cr ₹1,197 Cr
1. On a like-for-like basis, i.e. including UPI incentive, growth would be 34%
₹1,075 Cr YoY
₹1,041 Cr
₹992 Cr
2. No UPI incentive recorded in this quarter (given the timing of the accrual of
513 UPI incentive) whereas ₹68 Cr of incentives was recorded in Q3 FY 2022 (for
549
Q1 - Q3 FY 2022)
469 519
406
3. We estimate that for Q1-Q3 FY 2023, we will receive ₹130 Cr1 of incentives
in Q4 FY 2023

(in ₹ Cr) Dec-21 Dec-22 YoY %

Reported payments revenues 992 1,197 21%
Add: UPI incentive for 3 quarters Included* 130

Like-for-like Payments Revenue 992 1,327 34%

640
586 572 557 624 *Reported revenues for Q3 FY 2022 includes ₹68 Cr of UPI incentives

Quarter
Ending Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 4. Reported revenue growth (YoY & QoQ) impacted by timing of e-commerce
Payment Services to Consumers Payment Services to Merchants festive sales (which were mostly in Q3 FY 2022 and Q2 FY 2023) and focus
Incentives from PIDF & NABARD (other operating revenue)
on profitable GMV

1This is management estimate as per notification received on January 11, 2023. It is based on internal data
and is subject to confirmation from NPCI/acquirer banks.
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Payment business generated ₹459 Cr of Net Payments Margin
Payment Processing Margin Net Payments Margin grew 120% YoY
1. Margin on payment processing in Q3 was within the range of
(in ₹ Cr) Dec-21 Sep-22 Dec-22
7-9bps (of GMV) as indicated in December 2022
Reported payments revenue 992 1,188 1,197
2. This is proforma for Q3 FY 2023 UPI incentive and despite Payment processing charges
inclusion of interchange costs for Paytm Postpaid (783) (746) (660)
(excluding interchange cost for Postpaid)

3. Since UPI is growing faster than other instruments, we expect Net Payments Margin (like-for-like)
209 443 537
(excluding interchange cost for Postpaid)
payment processing margin to stabilize at 5-7 bps
Interchange cost for Postpaid na na (78)
Reported Net Payments Margin 209 443 459
Subscriptions
1. Net Payments Margin is calculated as total payments revenue less payment
1. Merchant subscriptions for payment devices were 5.8 mn,
processing charges
increasing 3.8 mn YoY
2. On a like-for-like basis (i.e., excluding interchange cost for Paytm Postpaid), Net
2. We continue to see good traction and earn more than ₹100
Payments Margin for Q3 FY 2023 would have been ₹537 Cr, increasing 21%
per month per device
QoQ
3. Further, we have received additional incentive on select
installations from partner banks, RBI and NABARD etc, which 3. Starting this quarter, we are now incurring interchange costs which are included
as a part of Payment Processing Charges (detailed explanation in the earnings
could be lumpy in nature
release)

4. Interchange cost for Paytm Postpaid was ₹78 Cr, resulting in reported net
payments margin at ₹459 Cr

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 Acceleration in consumer & merchant credit

Postpaid Loans Personal Loans Merchant Loans

1. Accepted at 17 Mn merchants 1. Cross sell opportunities continue with over 1. Device merchants accounted for more than
2. Penetration at 4.0% of MTU 40% of loans to existing Postpaid users 85% of disbursals; Repeat rate of 45%
2. Penetration at 0.8% of MTU 2. Penetration at 5.2% of devices merchants

285% YoY ₹1,825 Cr

337% YoY ₹5,202 Cr
468% YoY ₹2,931 Cr

₹4,050 Cr
₹1,208 Cr
Value of ₹3,383 Cr ₹2,055 Cr
Loans
₹827 Cr
₹2,183 Cr ₹1,344 Cr
₹565 Cr
₹805 Cr ₹474 Cr
₹1,190 Cr
₹516 Cr

Quarter
Ending Dec-21 Ma r-22 Jun-22 Sep-22 Dec-22 Dec-21 Ma r-22 Jun-22 Sep-22 Dec-22 Dec-21 Ma r-22 Jun-22 Sep-22 Dec-22

# of Loans
(Mn) 4.3 6.4 8.3 8.9 10.1 0.06 0.09 0.13 0.19 0.24 0.03 0.04 0.06 0.08 0.12

Calculation of penetration
Postpaid: Avg monthly number of loans in a quarter as a % of that quarter’s avg MTU; Personal Loans: Number of loans disbursed in last 12 months as a % of avg MTU in Q2 FY 2023; Merchant loans: Number of loans disbursed in last 12 months as % of devices
deployed at end of Q2 FY 2023
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 Better Collection Efficiency = Increased Scale & Revenues
Scale up driven by loan distribution Continued focus on credit quality
257% YoY 446
Indicative portfolio performance for our Personal Merchant
Postpaid
partners Loan Loan
349
• Augmented through advanced
271
machine learning models Bounce 11.5% to 11.0% to
NA(2)
• Helping lending partners scale Rates 12.5% 13.0%
168 with risk-based pricing
125
• Own collection technology
platform aiding digital Bucket 1 89% 84% 81%
collections Resolution to to to
Quarter • Lower operating expenses and % 92% 87% 83%
Ending Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 scaling well
Revenues from Financial Services & Others (₹ Crore) • Capacity enhancement with
Recovery 27% 31% 25%
increase in employees and over
1. Total 8.1 mn unique borrowers who have taken a loan through our Rate to to to
50 tie ups with on ground
Post 90+ 29% 33% 27%
platform, increasing 1.4 mn in the quarter collection partners

2. Revenue drivers of loan distribution business:

• Steady loss rates on static pool Expected 4.5% 5.0%
1.1% to
a) Sourcing: 2.5% - 3.5% of loan value in line with Low and Grow credit loss to to
1.3%
model of scaling (ECL%) 5.0% 5.5%
b) Collection: 0.5% - 1.5% of current disbursement value.
Typically received post portfolio closure

3. Financial Services now accounts for 22% of total revenues versus

9% in Q3 FY 2022
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 Commerce & Cloud: Credit cards and Commerce driving growth

Cloud (including co-branded credit cards)

24% YoY ₹420 Cr 1. Co-branded credit cards continue to scale well
₹377 Cr 2. Total 4.5 Lakh activated cards as of December 2022
₹339 Cr ₹331 Cr
₹320 Cr 3. Revenues grew 15% YoY to ₹235 Cr, with advertising and credit
235 card distribution scaling well

4. Revenues were (7%) QoQ as Q2 FY 2023 was a strong quarter for

252
204 193 PAI cloud
217

Enabling Commerce
185
1. GMV was ₹2,299 Cr, increasing 6% YoY and 11% QoQ
135 139 125
103
2. Revenues were ₹185 Cr, resulting in take-rate of 8%, driven by
Quarter travel demand and high volumes in the events business
Ending Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
Commerce Services Cloud Services Column2 3. We provide a full stack of services for certain events in the
entertainment business, with high take-rates but also higher direct
costs. On a steady state basis, our take rate is 6%, similar to Q2 FY
2023
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Growth Drivers in Our Business

1. India’s digital payments are in early days. Growth in UPI, cards and EMI-led payments are yet to reach the masses
a) Launching UPI Lite, allowing instant, multiple small-value UPI payments, which will lead to increased adoption of digital payments
b) Launching Credit Card on UPI, enabling users to link their credit cards to UPI
2. Potential of 10 Crore merchant and more than 50 Crore payment customers in near term

3. We continue to integrate large NBFCs and Banks to leverage the full potential of small, digital credit through Paytm platform
4. We remain focused on working with the RBI regarding Paytm Payments Bank and Paytm Payments Services Ltd
5. Highest focus accorded on building scale with highest focus on operational risk and compliances

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Annexure

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Revenue breakdown: Overall growth of 42% YoY

Quarter Ended Change

(in ₹ Cr)
Dec-21 Sep-22 Dec-22 YoY QoQ

Payments & Financial Services 1,117 1,522 1,599 43% 5%

Payment Services to Consumers 406 549 513 26% (7%)

Payment Services to Merchants 586 624 640 9% 3%

Financial Services and Others 125 349 446 257% 28%

Commerce & Cloud Services 339 377 420 24% 11%

Commerce 135 125 185 37% 48%

Cloud 204 252 235 15% (7%)

Other Operating Revenue - 15 44 nm 192%

Revenue from Operations 1,456 1,914 2,062 42% 8%

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Contribution Profit up by 131% YoY

Quarter Ended Change

(in ₹ Cr)
Dec-21 Sep-22 Dec-22 YoY QoQ

Revenue from Operations 1,456 1,914 2,062 42% 8%

Payment processing charges 783 746 738 (6%) (1%)

As % of GMV 0.31% 0.23% 0.21% (10 bps) (2 bps)

Promotional cashback & incentives 117 191 91 (22%) (52%)

Other Expenses 103 134 186 81% 38%

Total Direct Expenses 1,002 1,071 1,015 1% (5%)

Contribution Profit 454 843 1,048 131% 24%

Contribution Margin % 31.2% 44.1% 50.8% +20% +7%

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EBITDA before ESOP cost improved by ₹424 Cr YoY

Quarter Ended Change

(in ₹ Cr)
Dec-21 Sep-22 Dec-22 YoY QoQ

Contribution Profit 454 843 1,048 131% 24%

Contribution Margin % 31.2% 44.1% 50.8% +20% +7%

Marketing 167 137 136 (19%) (1%)

Employee cost (excl ESOPs) 442 573 584 32% 2%

Software, cloud and data center 130 173 171 31% (1%)

Other indirect expenses 108 127 126 17% (1%)

Total indirect expenses 847 1,010 1,016 20% 1%

EBITDA before ESOP cost (393) (166) 31 (108%) (119%)

EBITDA before ESOP cost Margin % (27.0%) (8.7%) 1.5% +29% +10%

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Reconciliation of Non-GAAP Measures
EBITDA before ESOP cost

Quarter Ended
(in ₹ Cr)
Dec-21 Sep-22 Dec-22
(Unaudited) (Unaudited) (Unaudited)

EBITDA before ESOP cost (A) (393) (166) 31

ESOP cost (B) (390) (371) (362)

Initial Public Offer expenses (C) (6) 0 0

Finance costs (D) (13) (5) (5)

Depreciation and amortization expense (E) (61) (104) (124)

Other income (F) 77 100 78

Share of profit / (loss) of associates / joint ventures (G) 11 (9) 5

Exceptional items (H) 0 0 0

Income Tax expense (I) (6) (15) (15)

Loss for the period (J=Sum of A to I) (779) (571) (392)

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Operational KPIs
Quarter Ended Change
(in ₹ Cr) Units
Dec-21 Sep-22 Dec-22 YoY QoQ

GMV ₹ Lakh Cr 2.5 3.2 3.5 38% 9%

Merchant Transactions million 3,477 5,752 6,284 81% 9%

Total Transactions million 4,266 6,885 7,634 79% 11%

MTU (avg over the period) million 64.4 79.7 84.9 32% 7%

Registered Merchants (end of period) million 24.9 29.5 31.4 na na

Number of Loans Disbursed ‘000 4,414 9,192 10,473 137% 14%

Value of Loans ₹ Cr 2,181 7,313 9,958 357% 36%

Payment Devices (cumulative; end of period) million 2.0 4.8 5.8 na na

Average number of Sales Employees # 18,691 24,703 29,569 na na

Cost of sales employees (including training) ₹ Cr 128 172 178 39% 3%

Number of sales employees includes on-roll and off-rolls employees. Cost relates to on-roll employees only

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Definitions for Metrics & Key Performance Indicators

Metric Definition

GMV is the rupee value of total payments made to merchants through transactions on our app, through Paytm Payment
GMV 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) Unique users with at least one successful transaction in a particular calendar month

Contribution profit is a non-GAAP financial measure. We define Contribution profit as revenue from operations less payment
Contribution Profit 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 is a Non-GAAP financial measure. We define EBITDA before ESOP cost as our loss for the
period, before depreciation & amortization expense, income tax expense, share based payment expense, finance costs,
EBITDA before ESOP cost
other income, loss for the period from discontinued operations, exceptional items, IPO expenses & share of profit/(loss) of
associates/joint ventures.

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