Cashfree’s Performance in the Digital Payments Space for FY25

The digital payments sector encountered challenges in growth during FY25, despite the Reserve Bank of India lifting restrictions on merchant onboarding for major firms. While leading payment companies have not yet disclosed their FY25 statistics, industry analysts indicate that many likely experienced stagnant or decreased growth last fiscal year. Cashfree, backed by the State Bank of India, aligns with this trend, showing flat operational scale in FY25. Cashfree’s operating revenue reached Rs 640 crore in FY25, slightly down from Rs 643 crore in FY24, based on the consolidated financial statements submitted to the Registrar of Companies (RoC).

Founded in 2015 by Akash Sinha and Reeju Datta, Cashfree offers businesses an efficient solution for online payment collection, payout management, conversion enhancement, and identity verification to prevent fraud during KYC and onboarding processes. The company claims it is capable of processing up to 12,000 transactions per second during peak demand periods.

Revenue Breakdown for FY25

The revenue composition for FY25 reveals that payment gateway commissions constituted 75% of the total revenue, equating to Rs 481 crore. Payout commissions contributed an additional Rs 55 crore, while income from various other services accounted for the remainder, amounting to Rs 103 crore. Including approximately Rs 1 crore in other income, the Bengaluru-based firm reported total income of Rs 641 crore for the previous fiscal year.

Expenditure Overview

When examining expenses, the cost linked to payment gateway processing represented 53% of overall expenses, declining by 2% to Rs 419 crore in FY25, down from Rs 427 crore in FY24. Significant other expense categories for the company include employee benefits, marketing, and technological investments.

Remarkably, marketing expenses surged by 150% to Rs 20 crore in FY25. However, the firm’s employee benefit expenditures remained relatively stable at Rs 243 crore in FY25, slightly less than the Rs 245 crore recorded in FY24. Additional costs from depreciation, finance, and related overheads amounted to Rs 80 crore, contributing to the growing overall expenses.

Ultimately, Cashfree’s total expenses escalated by 2% to reach Rs 795 crore, up from Rs 779 crore the previous year. The company’s ongoing management of total expenses stands as a favourable indicator, notwithstanding the stagnant growth in market share.

Net Loss and Future Projections

While the top-line performance remained consistent, Cashfree’s net loss widened by 14% to Rs 154 crore, an increase from Rs 135 crore in the prior fiscal year. The EBITDA loss also intensified to Rs 132 crore, resulting in a reduced EBITDA margin of -20.63%, down from -17.42% in the previous year.

Looking ahead, Cashfree aims to lower marketing expenditures to mitigate losses and bolster its financial standing in FY26. The recent ban on real-money gaming platforms is anticipated to profoundly impact the operations of payment firms, including Cashfree, in this ongoing fiscal period.

Before FY26 commenced, Cashfree successfully secured $53 million in funding led by Krafton, marking its first investment round in nearly four years. To date, the company has accumulated a total of $95 million from various investors, including Y Combinator, Smilegate Investments, and the State Bank of India.