PhonePe’s FY25 Report Card: Revenue Surge, Narrower Losses, and IPO Dreams – TechStory

In the fast-paced world of Indian fintech, PhonePe has emerged as one of the most formidable players. Backed by Walmart, the company’s latest financial results for FY25 paint a picture of strong revenue growth, improving efficiency, and strategic readiness for the next big milestone—its much-anticipated IPO. In this article, we will look into how PhonePe performed across revenue, profitability, expenses, and its expanding business segments.

A Strong Revenue Push

PhonePe’s operating revenue jumped 40.4% year-on-year to ₹7,114.8 crore in FY25, compared to ₹5,064.1 crore in FY24. This growth comes largely from its core payments business, which continues to dominate the topline even as the company experiments with newer verticals like lending, insurance, and stockbroking.

This steady rise underscores the maturity of PhonePe’s payments ecosystem. With over 650 million registered users and a merchant base of 45 million outlets, the company has cemented its leadership in India’s digital payment landscape.

Losses Narrow Despite Rising Costs

One of the highlights of FY25 was PhonePe’s ability to reduce its consolidated net loss by 13.4% to ₹1,727.4 crore, down from ₹1,996.1 crore a year earlier. While total expenses increased 21.1% to ₹9,394 crore, efficient scaling and improved monetisation helped soften the impact.

• Payment processing charges shot up 44.7% to ₹1,688.1 crore, reflecting the rise in transaction volumes.

• Employee benefit expenses also grew by 13.6%, in line with the company’s expansion and tech-heavy operations.

Despite these increases, the narrowing of losses signals better cost management and a step closer to profitability.

Turning Free Cash Flow Positive

For the first time, PhonePe turned free cash flow positive, generating ₹1,202 crore in cash flow from operations. This milestone is crucial for investors as it reflects the company’s ability to generate sustainable liquidity even while scaling aggressively.

In addition, Adjusted EBITDA (excluding ESOP costs) more than doubled to ₹1,477 crore, up from ₹652 crore in FY24. Adjusted Profit After Tax (PAT) surged 220% to ₹630 crore, while Adjusted EBIT entered the positive territory at ₹117 crore—another first for PhonePe.

Payments Still the Core Engine

Despite its diversification efforts, payments remain the cornerstone of PhonePe’s revenue model. Out of its total ₹7,114.8 crore topline:

• Payments services contributed ₹6,299.7 crore (~85%)

• Insurance and lending distribution added ₹557.6 crore (~8%)

• Other services like broking, mutual fund distribution, and marketplace contributed ₹57.2 crore

This heavy dependence on payments also shows how critical RBI’s payment aggregator license—secured recently—will be for PhonePe’s merchant business, especially among small and mid-sized online retailers.

The Scale Factor: 360 Million Transactions Daily

Numbers tell the story of PhonePe’s dominance. The platform now processes over 360 million transactions per day, translating into an annualised Total Payment Value (TPV) of more than ₹150 lakh crore. With such massive volumes, PhonePe not only leads the UPI ecosystem but also sets the stage for monetisation opportunities across adjacent financial services.

IPO in Sight

The performance of FY25 couldn’t have come at a better time. PhonePe is preparing to file its Draft Red Herring Prospectus (DRHP) later this year for a much-awaited IPO on Indian stock exchanges. CEO Sameer Nigam, in an earlier conversation with CNBC-TV18, expressed confidence in PhonePe’s maturity and readiness:

“We should hopefully remain stable and be profitable in years to come. The business and the sector are in a good place. We knew that we eventually want to list and moved to India with the intent to list.”

The listing will not only test investor confidence in PhonePe’s long-term profitability but also set a benchmark for India’s fintech ecosystem at large.

Credits: CNBC TV18

Final Word

PhonePe’s FY25 results show a company firing on multiple cylinders—soaring revenue, narrowing losses, positive cash flow, and ambitious expansion. While payments remain its bread and butter, the growing contributions from lending, insurance, and broking point toward a diversified future. With an IPO on the horizon, PhonePe is positioning itself as not just India’s payments leader but a full-fledged fintech powerhouse ready to scale new heights.