Highlights
PhonePe Revenue Growth in FY25
PhonePe’s financial health has shown significant improvement, with a revenue increase of 40% and a 13% reduction in net losses for FY25. The Walmart-owned entity’s financial statements also revealed additional insights identified by Startup Superb during an analysis of its annual report. Before diving into those details, it is essential to explore the company’s revenue streams.
Revenue Streams Overview
In FY25, PhonePe reported an operational revenue surge to Rs 7,115 crore, up from Rs 5,064 crore in FY24, as per the Bengaluru-based firm’s consolidated filings with the Registrar of Companies (RoC). The income derived from payment services, which encompasses transaction processing fees including bill payments, digital gold, travel booking, platform fees for application use, subscription fees for payment devices, and advertisement fees, constituted 88.55% of its total operating revenue. This revenue stream grew by 31.6% year-on-year, reaching Rs 6,300 crore in FY25.
Additional Income Sources
Income from insurance and lending, along with incentives from the RBI, contributed to the total operating revenue of Rs 7,115 crore in FY25. Furthermore, the firm recorded gains on financial assets amounting to Rs 516 crore, elevating its overall income to Rs 7,631 crore in FY25, a rise from Rs 5,722 crore in FY24.
Expenditure Analysis
On the expenditure front, employee benefits represented the largest cost, amounting to Rs 4,097 crore in FY25, with Rs 2,358 crore specifically linked to ESOP costs. Startup Superb deliberately excluded ESOP-based compensation when evaluating the underlying financial health of the company. Payment processing charges emerged as another significant expense, totalling Rs 1,688 crore in FY25. Advertising and sales promotion costs saw a decrease of 21.6%, falling to Rs 542 crore. Combined, other costs, which included IT, licensing fees, customer support, legal expenses, logistics, and overheads, resulted in total expenditures climbing to Rs 9,394 crore in FY25, up from Rs 7,754 crore in FY24.
Net Losses and Adjusted EBITDA
Consequently, PhonePe reported a net loss of Rs 1,727 crore in FY25, a decline from Rs 1,996 crore in FY24. Factoring out ESOP costs, the company would have realised a profit of Rs 630 crore. After excluding other non-cash expenses such as finance and depreciation costs, the adjusted EBITDA excluding ESOPs amounted to Rs 1,477 crore in FY25. Additionally, Startup Superb noted that PhonePe’s cumulative net losses reached Rs 14,860 crore by the close of FY25.
According to data from NPCI, PhonePe held a dominant position in the digital payments market, capturing 45.74% by volume and 48.26% by value as of August. The company has also announced intentions to launch a $1.5 billion IPO, aiming for a valuation of $15 billion.
