Paytm’s ad revenue slips to Rs 228 crore as UPI GMV rises 35%

One 97 Communications, the parent company of Indian fintech group Paytm, reported an 11 per cent year-on-year decline in marketing services revenue in the December quarter, even as the company pointed to improving returns for advertisers driven by artificial intelligence-led targeting and a broader push to rein in costs.

Marketing services revenue fell to Rs 228 crore in the third quarter of FY26 from Rs 267 crore a year earlier. The company attributed the decline to changes in how promotional content is served on its consumer app, saying it had simplified and narrowed upsell offerings to focus on more targeted customer cohorts.

Paytm said the optimisation of its app properties had begun to show results during the quarter, with advertisers seeing stronger returns on investment through personalised campaigns. Growth in the segment is expected to be driven by an increase in monthly transacting users and a more efficient upsell funnel, the company added.

The softer performance in marketing was partly offset by strength in Paytm’s travel business, which recorded strong sequential growth during the quarter, aided by festive demand despite temporary disruptions across the travel industry. Gross merchandise value for ticketing, deals and gift vouchers stood at Rs 2,232 crore.

The fintech group posted a consolidated profit of Rs 225 crore in the December quarter, up sharply from Rs 21 crore in the previous quarter, marking a 971% quarter-on-quarter increase. Revenue from operations rose 20 per cent year on year to Rs 2,194 crore, while total income increased to Rs 2,406 crore.

Profit growth was largely driven by tighter cost controls. Total expenses declined 2% year on year to Rs 2,175 crore, compared with Rs 2,220 crore in the same period last year. Employee benefit expenses fell 4.6% to Rs 721 crore, forming the biggest component of the reduction. Payment processing charges and marketing and promotion expenses rose marginally to Rs 671 crore and Rs 146 crore, respectively.

Merchant subscriptions climbed to 1.44 crore as of December 2025, an increase of 27 lakh year on year, reflecting continued onboarding of small businesses onto Paytm’s platform.

On the consumer side, Paytm said UPI gross merchandise value rose 35 per cent over the past nine months, significantly outpacing industry growth of 16 per cent, underscoring the company’s efforts to deepen engagement even as it prioritises profitability.