One 97 Communications Ltd. · NSE:PAYTM
One 97 Communications — Q1 FY2023 Earnings Presentation
23 slides from One 97 Communications's earnings presentation, August 2022
Slide 1: Earnings Presentation for quarter ending June 2022
Earnings Presentation for quarter ending June 2022 1
Slide 2: Disclaimer
Disclaimer By attending the presentation or by reading the presentation on the opinions and estimates of management at the date the correctness of any information or opinions contained herein and slides you agree to be bound as follows: statements are made and are subject to a variety of risks and a
Slide 3: Our Core Business is to Acquire Payment Customers and Distribute Loans
Our Core Business is to Acquire Payment Customers and Distribute Loans Payments Services Loan Distribution & Collection Business + Brand • Paytm Postpaid + Distribution + Insights • Personal Loan Payments + Technology Business • Merchant Loan Monthly Merchants Transacting Users 28 Mn • Co-branded Cr
Slide 4: Revenue Model for Payments Business
Revenue Model for Payments Business Merchants use our app to collect Payment services to payments consumers Merchants use our app 1. Merchants pay us MDR $66 mn 73% to collect payments & Enable commerce 2. Select Customers pay platform fee Online / omni-channel merchants use our Online Payment servi
Slide 5: Revenue Model for Loan Distribution and Collection Business
Revenue Model for Loan Distribution and Collection Business Personal Merchant Paytm Lender’s Scope Paytm Scope In Q1 FY23 Loans Loans PostPaid • Customer’s 1 Loan KYC, bureau Amount ~$1,270 ~$1,780 ~$50 reporting and & Tenure for ~14 months for ~12 months Monthly billing underwriting Loan Sourcing •
Slide 6: Strong improvement in revenues and profitability in Q1
Strong improvement in revenues and profitability in Q1 Financial Highlights Operational Highlights Revenue from Contribution EBITDA Value of Loans Payment Operations Profit (before ESOP cost) Disbursed Devices $213 mn $92 mn $(35) mn $706 mn 3.8 mn 43% of revenue (16%) of revenue 89% 197% $7 mn 779%
Slide 7: Sustained Momentum in Payments Key Operating Metrics
Sustained Momentum in Payments Key Operating Metrics Average Monthly Transacting Users GMV (in $ Billion) Payment Devices Deployed (in Million) (in Million) 49% YoY 101% YoY 2.8 Mn Devices 74.8 38 3.8 70.9 64.4 33 32 57.4 2.9 50.4 25 19 2.0 1.3 0.9 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Jun-21 Sep-21 De
Slide 8: Payments Service Revenue Grew 69% YoY; Net Payments Margin Doubled
Payments Service Revenue Grew 69% YoY; Net Payments Margin Doubled YoY to 35% from 17% 160 69% YoY 1 Payment Services to Consumers: 73% to $66 mn 140 $137 mn $132 mn 1 Revenue for merchant payments collected on Paytm App. $126 mn eg. Bill payments and top-ups 120 1 a. GMV growth driven by MTU growth
Slide 9: Net Payments Margin has Expanded with Focus on Profitable Growth
Net Payments Margin has Expanded with Focus on Profitable Growth and Cost Rationalisation Net Payments Margin ($ mn) 48 growing rapidly Drivers of margin improvement a. Higher MTU growth driving revenue from Payment 34 Services to Consumers b. Subscription revenue for payment devices continues to 26
Slide 10: 4x YoY growth in Financial Services Revenue, Loans Distribution
4x YoY growth in Financial Services Revenue, Loans Distribution at Annualized Run-rate of ~$3 billion Revenue from Financial Services & Others Value of Loans disbursed 4x YoY 8x YoY $34 mn $706 mn $21 mn $451 mn $16 mn $277 mn $11 mn $7 mn $160 mn $80 mn Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Jun-21 Sep
Slide 11: Strong Growth across Loan Distribution: Upside from Increasing Penetration
Strong Growth across Loan Distribution: Significant Upside Potential from Increasing Penetration Value of Postpaid Loans Value of Personal Loans Value of Merchant Loans (in $ mn) (in $ mn) (in $ mn) 7x YoY 430 11x YoY 171 10x YoY 105 72 277 102 60 151 66 35 94 31 57 14 9 Jun-21 Sep-21 Dec-21 Mar-22
Slide 12: Our Collections Business Continues to Trend Better
Our Collections Business Continues to Trend Better: Meaningful Performances Bonuses Starting to Come Through Indicative portfolio performance for our partners (1) Personal Loan Merchant Loan Postpaid All 3 products augmented through Paytm data and advanced machine learning models Bounce 11.5% to 12.
Slide 13: Commerce and Cloud Services Revenue Grew 64% YoY
Commerce and Cloud Services Revenue Grew 64% YoY 64% YoY Commerce Services: 168% to $18 mn $43 mn a. Travel merchants sold more tickets QoQ $42 mn $41 mn driven by resurgent demand b. Entertainment merchants had a seasonally strong quarter driven by big movie releases, $31 mn with significant growth
Slide 14: Focused on Profitable Revenue Growth: Contribution Profit up by 197% YoY
Focused on Profitable Revenue Growth: Contribution Profit up by 197% YoY 197% YoY Drivers of contribution margin improvement $92 mn a. Significant improvement in net payments margin (as explained above) $68 mn b. Improvement in margins across businesses as well as change in mix of higher margin busi
Slide 15: EBITDA (before ESOP cost) Improved by $12 mn QoQ
EBITDA (before ESOP cost) Improved by $12 mn QoQ; Focus on Cost Rationalisation while Investing for Growth Quarter Ended Change (in $ mn) Jun-21 Mar-22 Jun-22 YoY QoQ A Increase in Marketing costs almost entirely due to Contribution Profit 31 68 92 197% 35% seasonal sponsorship spend Contribution Ma
Slide 16: Key Trends in Our Business
Key Trends in Our Business 1. Continued strong growth in users and merchants 2. Government incentives have now made UPI P2M GMV profitable; we believe Non-UPI GMV is not a relevant metric to focus on going forward 3. Loan disbursals through our platform have scaled to an annualized run rate of $3 bi
Slide 17: Annexure
Annexure 17
Slide 18: Reconciliation of Non GAAP Measures
Reconciliation of Non GAAP Measures EBITDA (before ESOP cost) Quarter Ended (in $ mn) Jun-21 Mar-22 Jun-22 (Audited) (Audited) (Unaudited) EBITDA before ESOP cost (A) (42) (47) (35) ESOP cost (B) (5) (46) (46) Initial Public Offer expenses (C) 0 0 0 Finance costs (D) (1) (1) (1) Depreciation and amo
Slide 19: Revenue Breakdown
Revenue Breakdown Quarter Ended Change (in $ mn) Jun-21 Mar-22 Jun-22 YoY QoQ Payments & Financial Services 88 154 171 95% 11% Payment Services to Consumers 38 60 66 73% 11% Payment Services to Merchants 42 73 71 67% (3%) Financial Services and Others 7 21 34 393% 61% Commerce & Cloud Services 26 41
Slide 20: Operational KPIs
Operational KPIs Quarter Ended Change (in $ mn) Units Jun-21 Mar-22 Jun-22 YoY QoQ GMV $ billion 19 33 38 101% 14% Merchant Transactions million 2,287 4,142 5,124 124% 24% Total Transactions million 2,785 5,029 6,126 120% 22% MTU (avg over the period) million 50.4 70.9 74.8 49% 6% Registered Merchan
Slide 21: Focused on profitable revenue growth: Contribution Profit up by 197% YoY
Focused on profitable revenue growth: Contribution Profit up by 197% YoY Quarter Ended Change (in $ mn) Jun-21 Mar-22 Jun-22 YoY QoQ Revenue from Operations 113 196 213 89% 9% Payment processing charges 67 98 88 32% (10%) As % of GMV 0.36% 0.30% 0.23% (12 bps) (6 bps) Promotional cashback & incentiv
Slide 22: Definitions for Metrics & Key Performance Indicators
Definitions for Metrics & Key Performance Indicators Metric Definition GMV is the rupee value of total payments made to merchants through transactions on our app, GMV through Paytm Payment Instruments or through our payment solutions, over a period. It excludes any consumer-to-consumer payment servi
Slide 23: TITLE SPONSor ¥ TPN,
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One 97 Communications Ltd. (Paytm) — Q1 FY2023 Earnings Presentation on 6ix