MobiKwik Q1: Loss Zooms Over 6X YoY To INR 42 Cr

Fintech company MobiKwik reported yet another loss-making quarter, with its consolidated net loss surging nearly 535% to INR 41.9 Cr in Q1 FY26 from INR 6.6 Cr in the year-ago quarter. Sequentially, net loss narrowed 25.2% from INR 56 Cr.

Operating revenue declined 20.7% to INR 271.4 Cr during the quarter under review from INR 342.3 Cr in Q1 FY25. On a QoQ basis, revenue rose marginally from INR 267.8 Cr.

The fintech company’s top line cratered primarily on the back of a weak performance by the financial services vertical as loan disbursals and margins plummeted. MobiKwik’s consolidated contribution margin took a hit and declined 26.7% to INR 77.4 Cr in the quarter under review from INR 107 Cr in Q1 FY25.

As a result, it reported an EBITDA loss of INR 31.2 Cr in Q1 FY26 compared to an EBITDA profit of INR 2.2 Cr in the year ago quarter. Sequentially, however, EBITDA loss improved from a loss of INR 45.8 Cr.

On the back of the sequential improvements, the company, in its shareholders letter, said that it is “on path” to achieve EBITDA breakeven. However, it didn’t provide any timeline. It is placing its bet on the growth of payments vertical, recovery of lending business and keeping fixed costs stable to achieve profitability. 

“… Payments demonstrated strong growth and financial services recovered resulting in an improved Q1 EBITDA, which reinforces our path to profitability. We remain focused on driving operating leverage and building for long-term value creation,” said MobiKwik cofounder, CFO and executive director Upasana Taku.

Including other income of INR 10.3 Cr, the company’s total income fell to INR 281.6 Cr in the June quarter from INR 345.83 Cr a year ago.

MobiKwik’s Wobbly Lending Business

The sharp jump in YoY loss came primarily on the back of the low contribution margin and drying up revenues of the lending vertical. The fintech company’s revenue from its financial services segment plummeted 65.8% to INR 58.3 Cr in the quarter under review as against INR 170.7 Cr in the year ago period. 

Sequentially, however, the company saw a marginal 3.8% jump in revenue from the financial services segment from INR 56.2 Cr. With this, it broke the two quarter streak of decline in the top line of this vertical.

MobiKwik is bullish on its lending vertical and said it has hit the “bottom” and anticipates the situation to improve on the back of its focus on the default loss guarantee (DLG) model and “distribution-led scale-up”. 

Under the DLG model, lending service providers guarantee to compensate for some of the losses to a registered entity for loan defaults. The company has been feeling the hit due to the switch to DLG contracts with its lending partners for a few quarters now. This has led to a decline in recognised revenue as well as an increase in costs for the company. 

The fintech company also said that it is focussing on its “longer tenure and larger ticket size” ZIP EMI product to further grow the credit business.

“We have discontinued the smaller-ticket ZIP product due to macroeconomic challenges and a slowdown in that segment. All of this as well as DLG-related accounting changes (that required us to front-load costs and recognise lower revenues in the initial quarters) after disbursal on a smaller base has impacted our margins. However, we are seeing this trend normalise and believe that Ǫ4 FY25 marked the bottoming-out phase. We expect operating performance to return to previous levels, that is ~40% gross margin in lending by H2 FY26,” MobiKwik said. 

Payment Vertical Continues To Grow 

Amid the upheaval in the lending vertical, MobiKwik’s payment services business continued to see broad-based growth during the quarter. The revenue from the online payments vertical jumped 24.2% to INR 213.1 Cr in Q1 FY26 from INR 171.5 Cr in the year-ago quarter.

The June quarter also saw MobiKwik’s payments GMV soar 53% YoY and 16% QoQ to record INR 38,400 Cr on the back of “high engagement and a growing registered user and merchant base”.

Its user and merchant base grew to 18 Cr and 46.4 Lakh, respectively ,at the end of the quarter. MobiKwik also managed to maintain its net payments margin at 15 basis points (up 4 bps YoY), while gross margin for the payments business reached an all-time high of 28%, up 12 percentage points YoY.

The company defines gross payment margin the percentage of operating revenue a company keeps from its payment services after covering the costs of payment gateways and user incentives.

“We experienced broad-based growth across all use cases… Our primary payments metric is net payments margin, this has increased 5 bps YoY as a result of cost optimisations… On the merchant side, we have broadened our footprint by installing more payment devices, such as SoundBox and EDC (electronic data capture) terminals…,” said the company in its shareholder letter.

Going forward, the fintech company sees the proposed introduction of “interchange fees” on Pocket UPI as a potential new revenue stream. In addition, MobiKwik also plans to speed up the deployment of more payment devices via its IPO proceeds to spur merchant engagement and expansion. 

Shares of MobiKwik ended today’s trading session 1.4% lower at INR 245.7 on the BSE.