Paytm is expanding its use of artificial intelligence across marketing and business operations as the fintech company reported stronger profitability alongside a sharp reduction in promotional spending. The latest quarterly results indicate that AI is playing an increasingly significant role in improving operational efficiency, customer engagement and long-term cost management.
For the quarter ended June 2026, Paytm posted a consolidated net profit of Rs 220 crore, up 79% year on year, while revenue from operations rose 28% to Rs 2,448 crore. The company also recorded its highest-ever quarterly EBITDA of Rs 203 crore, reflecting continued margin expansion driven by revenue growth and operating leverage.
The company's leadership said artificial intelligence has become a key contributor to productivity gains across engineering, customer support, sales, merchant operations and internal workflows. AI is also being used to automate repetitive tasks, improve customer experience and develop new capabilities for merchants and consumers. According to Paytm, these initiatives have helped revenue grow faster than indirect costs while supporting sustained profitability.
A significant part of Paytm's AI strategy is focused on marketing. Founder and CEO Vijay Shekhar Sharma said during the earnings discussion that the company is building AI-led marketing services that could become a new growth engine alongside its payments and financial services businesses. The company is also working on commercialising its internally developed AI tools by offering them to merchants and enterprises within the next year, creating what could become its first major software-as-a-service revenue stream outside its core fintech operations.
The company has developed its own lightweight AI models and automation systems to reduce dependence on external AI infrastructure. According to management, these tools are already helping lower customer support costs, improve merchant onboarding and streamline internal processes while enabling faster product development. Paytm said it is embedding AI into every customer-facing product as well as internal business functions to create what it describes as an AI-first organisation.
The stronger financial performance has coincided with tighter control over expenses. Marketing and promotional costs have declined significantly over the past year as the company has shifted towards more targeted, data-driven customer acquisition strategies supported by AI. Rather than relying heavily on broad-based campaigns, Paytm is increasingly using intelligent audience segmentation, automation and personalised engagement to improve marketing efficiency while maintaining customer growth.
Beyond marketing, AI is being deployed across fraud detection, underwriting, merchant onboarding and payment processing. The company believes these capabilities are strengthening its competitive position while improving operational scalability. During the quarter, Paytm also reported continued growth in its merchant payments business, with subscription merchants reaching 1.57 crore and consumer UPI transaction value increasing faster than the broader industry.
The company ended the quarter with a cash balance of Rs 13,529 crore, providing additional flexibility to invest in new products, AI initiatives and business expansion. Management indicated that future investments will continue to prioritise merchant payments, financial services distribution, consumer engagement and AI-led innovation.
Paytm's strategy reflects a broader shift across the technology and financial services sectors, where companies are increasingly using artificial intelligence not only to automate internal operations but also to improve marketing effectiveness and create new revenue opportunities. As competition intensifies across digital payments and financial services, AI is emerging as a central pillar of both customer acquisition and long-term profitability.