Pine Labs inches into profit in 9M FY25 ahead of IPO, steadies base for global push

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After years of losses and rising costs, Pine Labs has posted a modest net profit of Rs 26.1 crore in the first nine months of FY25. The turnaround, while small, signals a period of financial stability for the fintech firm that operates across merchant payments, EMI-based checkout, and prepaid cards.

Its revenue rose 23 percent during the period to Rs 1,208 crore, compared to Rs 982 crore in the same window a year earlier. “Our revenue growth was primarily attributable to a growth in transaction processing revenue and revenue from our Device-as-a-Service rental offerings, and increased revenue from value-added services,” Pine Labs said in its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India for its upcoming initial public offer (IPO).

The company plans to raise up to Rs 2,600 crore ($304 million) through a fresh issue of shares, while existing investors, including PayPal, Mastercard, Peak XV Partners, and Macritchie Investments will offload up to 14.78 crore shares.

The profit figure in the DRHP comes from the company’s restated consolidated financials, which reflect the actual state of the business. This is in contrast to the pro forma view that adjusts for internal restructuring, under which Pine Labs still shows a loss of Rs 116.6 crore for the nine-month period.

The key reason for the shift to profitability was the absence of ESOP-related expenses that dragged down FY24 earnings. That year, Pine Labs had booked a loss of Rs 187 crore, significantly impacted by Rs 234 crore in share-based payment expenses.
Management noted the company would have been profitable earlier if not for ESOP and finance costs.

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How it makes money

Pine Labs makes money through two business segments. Its main line of business is what it calls the "Digital Infrastructure and Transaction Platform", which serves merchants with tools for accepting payments, offering EMI checkouts, managing loyalty programs, and running analytics.

This business earned Rs 1,149 crore in the first nine months of FY25, almost 76 percent of the company’s total revenue.

Pine Labs operates over 9.2 lakh active merchant points and processed 3.97 billion transactions worth Rs 2.85 lakh crore in the nine-month period, the DRHP notes.

It offers merchants PoS devices on a subscription model and earns through transaction fees, credit-based checkout tools (like BNPL via tie-ups with banks and NBFCs), and software services such as billing and analytics.

The second engine of the company is its "Issuing and Acquiring Platform", which is used by large businesses to issue prepaid cards, loyalty programs, and gift vouchers. This includes its Qwikcilver unit, which has been integrated into the broader Pine Labs stack.

In 9M FY25, this business brought in Rs 428 crore, up 27 percent from the year before. The company issued over 474 million prepaid cards during the period, through more than 1.73 million digital commerce points.

India still dominates

India continues to be Pine Labs’ strongest market, contributing Rs 1,005 crore (over 83 percent of total revenue) in the first nine months of FY25. However, the company has clearly set its sights abroad. According to its pro forma financials, revenue from outside India rose from 9.6 percent to 14.15 percent of the total year-on-year.

Pine Labs operates in markets such as Singapore, Malaysia, UAE, and Saudi Arabia.

As part of its IPO plans, the company will invest Rs 60 crore into growing its international operations, specifically through its subsidiaries Qwikcilver Singapore, Pine Payment Solutions in Malaysia, and Pine Labs UAE, it disclosed in the DRHP.

It plans to offer both its merchant platform and prepaid issuing tech to clients in these regions.

Alongside the profit, Pine Labs reported an adjusted EBITDA of Rs 272.6 crore for the nine months, translating into a healthy margin of 16.3 percent. Its contribution margin, which is the portion of revenue left after paying direct costs, stood at 76.6 percent.

The firm has stated that it sees long-term opportunity in expanding its affordability infrastructure, which allows merchants to offer EMI options at checkout and enables banks to acquire customers directly at the point of sale. It also sees potential in offering loyalty programs to mid-size and large merchants and growing its Device-as-a-Service model.

Pine Labs reports Rs 310 crore GST exposure in DRHP, appeals pending

The risks and competitive landscape

Despite its recent progress, Pine Labs notes several risks. Its past includes years of negative cash flows from operations. It used Rs 35.5 crore in operating cash in FY24. “There can be no assurance that we will not continue to generate negative cash flows in the future,” the company noted.

It also faces strong competition. In India’s payments landscape, it competes with large fintech like Paytm, Razorpay, PayU, Innoviti, and Mswipe. While Paytm has a deep reach in mobile payments and UPI, Razorpay dominates the online payments gateway space and has also entered offline payments with Ezetap. PhonePe and BharatPe too are in the space building value adds for merchants. PayU operates across issuing and acquiring as well and has a strong digital commerce footprint.

India had 10.7 million PoS terminals deployed at the end of February 2025, up 22 percent from a year earlier and compared with 5.8 million units in February 2022, per RBI data. Furthermore, the RBI is planning to regulate the PoS terminal business under the payment aggregator-offline rules. The final rules are awaited.

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Globally, Pine Labs lists players like Adyen, Block, and Marqeta as comparable fintech platforms.

Another challenge is staying relevant in a fast-moving market where UPI is becoming dominant, especially in small-ticket offline payments. Pine Labs’ current model is still anchored to PoS hardware and EMI, which works well in retail but may see pressure in other categories.