Fintech firm MobiKwik reported a consolidated net loss of Rs 41.9 crore in the first quarter of FY26, much higher than the Rs 6.6 crore loss recorded in the same period last year. However, the loss narrowed compared to the Rs 56 crore loss posted in the previous quarter (Q4FY25).
The wider year-on-year loss was mainly due to a drop in financial services revenue and a steep increase in financial guarantee expenses. These costs jumped to Rs 21.4 crore in Q1FY26, up from just Rs 2.5 crore a year ago.
MobiKwik’s total income for the quarter stood at Rs 281.6 crore, down 18.6 percent from Rs 345.8 crore in Q1FY25, but slightly higher than Rs 278.5 crore in the previous quarter.
Revenue from operations fell to Rs 271.4 crore, marking a 20.7 percent year-on-year decline. Still, this was marginally higher than the Rs 267.8 crore recorded in Q4FY25.
Financial service revenue plummets
The company’s financial services revenue fell sharply to Rs 58.3 crore in Q1FY26 from Rs 170.7 crore in the year-ago period, a drop of nearly 66 percent. This decline coincided with a continued pause on the original short-tenure ZIP credit product due to muted lender appetite, which the company first flagged in earlier quarters.
Digital credit disbursals through its ZIP EMI loans stood at Rs 693.1 crore, up from Rs 527.2 crore in Q4FY25, but down from Rs 876.5 crore a year ago. The company is now focused on longer-tenure credit products underwritten with new guarantee contracts, where revenue is recognized over the loan duration while guarantee-related expenses are incurred upfront.
"We are concentrating on the longer tenure and larger ticket size ZIP EMI product under both the DLG model and the risk-free distribution. 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 recognize lower revenues in the initial quarters) after disbursal on a smaller base has impacted our margins," the firm said.
"However, we are seeing this trend normalize 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."
Under the DLG (Default Loss Guarantee) model, fintechs like MobiKwik, which source loans for lenders, agree to cover part of the losses if borrowers default. This makes lenders more willing to offer credit but means MobiKwik has to book the guarantee costs upfront, while the loan revenue comes in slowly over time. As a result, margins shrink and losses rise, especially when loan growth is weak.
Financial guarantee expenses rose to Rs 21.4 crore in Q1FY26, from just Rs 2.5 crore in Q1FY25. Lending-related operational expenses dropped to Rs 29.2 crore from Rs 92.4 crore a year ago, aligned with the pause in short-tenure ZIP loans.
Payments business improves margin
The payments business remained the company’s primary revenue driver, contributing 76 percent of total income in Q1FY26, up from 50 percent in Q1FY25. Payments revenue rose to Rs 213.1 crore, compared to Rs 171.5 crore a year ago and Rs 211.6 crore in Q4FY25.
Gross margin from payments improved to 27.9 percent, up from 16.1 percent in Q1FY25 and 23.9 percent in the previous quarter. The company attributed this to a combination of improved cost efficiencies such as reduced gateway charges and user incentives, and higher throughput.
Payments GMV (gross merchandise value) reached Rs 38,388 crore, growing 53 percent year-on-year. MobiKwik added over 48,800 merchants during the quarter, taking its total to 4.64 million (46.4 lakh).
The number of registered users rose to 180.2 million (18 crore).
Ebitda loss
Total expenses rose to Rs 312.8 crore in Q1FY26 from Rs 343.6 crore in Q1FY25, but declined from Rs 324.3 crore in the previous quarter. Guarantee-related expenses rose nearly 8x year-on-year to Rs 21.4 crore from Rs 2.5 crore, while payment gateway charges increased to Rs 142.8 crore from Rs 127.6 crore. Employee benefit expenses also rose to Rs 41.9 crore from Rs 39.2 crore last year.
The firm reported a EBITDA loss of Rs 31.2 crore in Q1FY26 from EBITDA profit of Rs 2.2 crore in the year ago quarter. However, this improved sequentially from Rs 45.8 crore loss.
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 Upasana Taku, Executive Director, Co-founder and CFO, MobiKwik.
During the quarter, MobiKwik also received regulatory approval from SEBI to operate as a stockbroker and clearing member via its wholly owned subsidiary, MobiKwik Securities Broking Private Limited (MSBPL).
It also launched a new FD-backed RuPay credit card product and said it is piloting a PIN-less prepaid UPI product called “Pocket UPI” aimed at underbanked users in Tier-2 and Tier-3 cities.
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