PhonePe, the Walmart-backed fintech powerhouse dominating India’s UPI ecosystem, continues its march toward profitability despite posting a consolidated net loss of ₹1,727 crore in FY25. This marks a 13.5% improvement from the ₹1,996 crore loss in FY24, fueled by a robust 40% surge in operating revenue to ₹7,115 crore. For investors and fintech watchers searching PhonePe FY25 results, UPI revenue growth India, or fintech IPO prospects 2025, these figures underscore PhonePe’s strategic expansions into insurance, lending, and wealth management, even as it gears up for a high-profile IPO later this year.
Processing over 360 million daily transactions with an annualized TPV exceeding ₹150 lakh crore, PhonePe’s resilience shines amid regulatory wins and cost optimizations. Let’s dissect the financials, key drivers, and future outlook.
FY25 Financial Snapshot: Revenue Boom Offsets Persistent Losses
PhonePe’s FY25 performance reflects a maturing business model, with payments still the core engine but diversified streams gaining traction. The company transitioned to a public limited entity in May 2025, setting the stage for its anticipated $1.5 billion IPO valuing it at $15 billion.
Key highlights:
- Operating Revenue: Climbed 40.5% YoY to ₹7,114.8 crore from ₹5,064.1 crore in FY24, crossing the ₹7,000 crore milestone for the first time.
- Net Loss: Narrowed 13.5% to ₹1,727.4 crore, aided by margin improvements despite rising expenditures.
- Total Expenditure: Rose 21.2% to ₹9,394 crore, driven by investments in tech and expansion, but ad spends dropped 21.6% to ₹541.6 crore for efficiency.
Payments remain the revenue king, contributing 85% (₹6,299.7 crore), while insurance/lending added 8% (₹557.6 crore) and other services like stockbroking chipped in ₹57.2 crore.
| Metric | FY24 | FY25 | YoY Change |
|---|---|---|---|
| Operating Revenue | ₹5,064.1 Cr | ₹7,114.8 Cr | +40.5% |
| Net Loss | ₹1,996.1 Cr | ₹1,727.4 Cr | -13.5% |
| Total Expenditure | ₹7,754.2 Cr | ₹9,394 Cr | +21.2% |
| Payments Revenue | – | ₹6,299.7 Cr | 85% of total |
| Insurance/Lending Revenue | – | ₹557.6 Cr | 8% of total |
Growth Drivers: UPI Dominance and Diversification Push
PhonePe’s FY25 gains stem from its ironclad grip on UPI—India’s real-time payments rail—bolstered by strategic bets:
- Core Payments Surge: Revenue from payment services jumped, processing 770+ crore monthly transactions worth ₹10.5 lakh crore annualized TPV.
- Financial Services Expansion: Insurance broking, wealth management, stock broking, and hyperlocal commerce via Pincode drove non-payments growth, with lending distribution via EDI for merchants enhancing cross-sell.
- Regulatory Tailwinds: On September 19, 2025, RBI granted final payment aggregator approval (after two years of in-principle nod), enabling deeper penetration into online merchants, especially SMEs.
- Efficiency Gains: Cut ad/promotional spends by 21.6% while boosting automation—customer service agents down 60% over five years, with 90%+ AI resolution.
Adjusted EBIT turned positive at ₹117 crore (excluding ESOPs), signaling core profitability. With 53 crore registered users and 20 crore MAUs, PhonePe’s platform reliability and cross-selling have solidified its market leadership.
Challenges: Rising Costs and Competitive Pressures
Despite progress, hurdles persist:
- Expense Pressures: Depreciation/amortization up to ₹1,360.3 crore and other operating costs (IT, legal) at ₹2,989.2 crore reflect heavy capex in cloud and infrastructure.
- Regulatory Fines: RBI levied ₹21 lakh in September 2025 for PPI non-compliance, a minor blip but a reminder of scrutiny.
- Competition: Rivals like Paytm and Google Pay intensify battles, though PhonePe’s UPI share (47%+) provides a moat.
Finance costs remained low at ₹38.3 crore, but ESOP-related expenses continue weighing on reported losses.
IPO on the Horizon: Valuation Jump and Road Ahead
PhonePe’s domicile shift to India in 2022 paved the way for listing, with bankers Kotak, JPMorgan, Citi, and Morgan Stanley on board. The $1.5B (₹13,000 crore) IPO could value it at $15B, up from $12B in 2023, rewarding early backers like Walmart.
Analysts eye FY26 for full profitability, driven by aggregator license synergies and AI-led efficiencies. As India’s digital economy swells—UPI transactions hit 15 billion monthly—PhonePe is poised for 25-30% CAGR.
Conclusion: Steady Progress Toward Fintech Dominance
PhonePe’s ₹1,727 crore FY25 loss is a footnote to its explosive revenue trajectory and narrowing red ink, painting a picture of a fintech giant in ascent. With RBI nods unlocking new avenues and an IPO beckoning, the company is betting big on diversified growth beyond payments. For those tracking PhonePe IPO 2025 or India fintech trends, this report is bullish fuel—will it flip to black ink by FY26? Q2 updates could spill more beans.
