No More Adjusted EBITDA: Paytm CEO Signals Shift to Transparent Reporting

In a significant move towards financial transparency, One 97 Communications Ltd’s (NSE: PAYTM) CEO, Vijay Shekhar Sharma, announced during the Q1 FY26 earnings that the company will discontinue the use of adjusted EBITDA and start including ESOP costs in its official employee expenses. This reflects a stronger adherence to GAAP standards as the company turns financially positive.

Paytm Embraces GAAP EBITDA Amid Positive Q1 FY26 Results

For Q1 FY26, Paytm reported its first-ever breakeven EBITDA under GAAP, marking a milestone moment. Sharma declared that starting next quarter, the company would no longer report metrics such as "EBITDA before ESOP" or "adjusted EBITDA". Instead, all employee stock option expenses will be integrated directly into employee cost, aligning the company’s books with standardised accounting principles and indicating maturity in its financial disclosures.

Contribution Margin Climbs to 60% Despite Drop in FLDG Business

Paytm’s contribution margin rose to 60% in Q1 FY26, up from 56% in the prior quarter and 50% in Q1 FY25. Notably, this improvement came even after the company reduced its exposure to the high-margin First Loss Default Guarantee (FLDG) lending model. The Assets Under Management in the FLDG model dropped by over 40% quarter-on-quarter, reflecting growing lender confidence in Paytm’s loan book without guarantees.

Read More: Paytm Incorporates New Subsidiary in Saudi Arabia!

POS Devices Surpass 1 Million Units 

Paytm’s card-accepting POS devices crossed the 1 million milestone, with smart soundboxes now offering chip and PIN functionality. The company’s pricing strategy also proved effective, with fees increasing from ₹100 to ₹129 per month without causing customer churn. This showcased strong demand elasticity and market reception for its differentiated products.

UPI Payments Business Turns Profitable

Despite regulatory zero-rated Merchant Discount Rate (MDR) on UPI, Paytm’s payments business is now profitable. This marks a key transition, proving the scalability and operational effectiveness of its core segment, with Sharma reaffirming it as a major growth driver going forward.

Paytm Share Price Performance

On July 23, 2025, Paytm share price opened at ₹1,081.40 on NSE, above the previous close of ₹1,051.05. During the day, it surged to ₹1,089.00 and dipped to ₹1,025.75. The stock is trading at ₹1,031.70 as of 9:42 AM. The stock registered a moderate decline of 1.84%.

Over the past week, it has moved up by 3.23%, over the past month, it has moved up by 15.31%, and over the past 3 months, it has moved up by 16.69%.

Conclusion

Paytm’s clear departure from adjusted EBITDA metrics and move toward GAAP standards underline its financial maturity. With improved contribution margins, a scalable tech-driven POS ecosystem, and growing confidence among lending partners, the company is positioning itself strongly for sustained profitability.

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