Mobikwik Reports Steep Losses in Q1 FY26 Amid Falling Revenue

Mobikwik started the financial year 2025-26 with a challenging quarter. The digital payments and fintech company saw its losses surge sharply while revenue dipped during the first quarter ended June 30, 2025 (Q1 FY26). The company’s financial results reflect the pressure from a competitive payments market, regulatory changes, and moderated consumer spending across digital payment platforms.

Losses Surge Over Sixfold

Mobikwik posted a net loss of ₹41.92 crore in Q1 FY26. This marks a more than sixfold jump from the ₹6.61 crore loss it reported in the same period last year (Q1 FY25). The increase in losses indicates that the company struggled to offset revenue declines despite moderating some of its operational expenses.

The steep rise in losses highlights growing profitability challenges for fintechs like Mobikwik, which continue to spend on technology upgrades, user acquisition, and compliance while facing pressure on revenue streams.

Revenue and Total Income Decline

Mobikwik’s revenue from operations dropped 20.7% year-on-year, falling to ₹271.36 crore from ₹342.26 crore in Q1 FY25. The decline reflects lower transaction volumes and reduced income from payment services.

The company also reported a fall in total income, which includes other revenue streams, to ₹281.61 crore in Q1 FY26 from ₹345.82 crore in the year-ago quarter, marking an 18.6% decline.

This slowdown suggests that Mobikwik faced challenges in sustaining growth across both consumer-facing services like wallet payments and BNPL (Buy Now Pay Later) as well as merchant services such as payment gateway solutions.

Expenses Show Moderation but Fail to Offset Losses

Mobikwik’s expenses moderated slightly in Q1 FY26, reflecting some cost-control measures. However, the reduction in spending could not compensate for the revenue dip, leading to a significant net loss.

Key expense components for Mobikwik include:

1. Employee Costs – Salaries, hiring in tech and compliance teams, and retention efforts in a competitive fintech talent market.
2. Marketing and Promotion – Cashback offers, merchant incentives, and advertising campaigns to retain market share against Paytm, PhonePe, and Google Pay.
3. Technology and Infrastructure – Continuous investment in payment security, UPI integrations, BNPL platforms, and fraud prevention systems.
4. Finance Costs – Interest expenses related to borrowings and credit facilities to fund BNPL operations.

Even as the company trimmed some discretionary spending, its revenue decline outpaced cost savings, resulting in a wider net loss.

Market Challenges for Mobikwik

Mobikwik’s Q1 FY26 performance reflects structural challenges in the Indian digital payments ecosystem:

1. Intense Competition in UPI Payments
   UPI continues to dominate digital transactions in India, with PhonePe and Google Pay controlling a large market share. Mobikwik’s wallet services face lower usage, and its UPI adoption lags top competitors, reducing transaction revenue.
2. Regulatory Pressure on BNPL Services
   The Reserve Bank of India (RBI) has tightened norms for BNPL and prepaid payment instruments. Mobikwik, which relies on BNPL offerings like ZIP, must comply with stricter KYC and credit norms, which affect customer onboarding and credit disbursals.
3. Consumer Spending Trends
   The post-pandemic spending boost that fueled fintech growth has now stabilized. Consumers increasingly prefer UPI and credit cards, while wallet usage declines, impacting Mobikwik’s core business.
4. Profitability vs. Growth Dilemma
   Like many fintechs, Mobikwik faces the trade-off between market expansion and cost control. Aggressive marketing to retain users adds expenses, but scaling back risks losing market share to rivals.

Year-on-Year Performance Comparison

A comparison of Q1 FY26 and Q1 FY25 numbers underscores the company’s financial stress:

• Net Loss: ₹41.92 crore vs. ₹6.61 crore (↑ over six times)
• Revenue from Operations: ₹271.36 crore vs. ₹342.26 crore (↓ 20.7%)
• Total Income: ₹281.61 crore vs. ₹345.82 crore (↓ 18.6%)

These figures clearly signal revenue pressure and highlight the need for operational efficiency to stem losses.

Strategic Focus for the Coming Quarters

Mobikwik needs a multi-pronged approach to navigate FY26 successfully:

1. Strengthen BNPL Offerings
   Mobikwik must leverage its ZIP BNPL product to attract users who seek flexible payment options. Partnering with more merchants and offering low-risk credit lines could revive revenue.
2. Expand Merchant Acquiring Business
   The company can increase merchant adoption of its payment gateway and POS solutions to diversify revenue. Merchant-focused services usually yield higher margins compared to consumer wallets.
3. Optimize Costs Without Stalling Growth
   Expense moderation helped in Q1, but cost discipline needs consistency. Balancing user acquisition with reduced cash burn will be key to moving towards profitability.
4. Enhance UPI Market Share
   With UPI transactions continuing to rise, strengthening UPI offerings and adding value-added services like rewards or instant credit can bring users back to Mobikwik’s ecosystem.
5. Tap into Rural and Tier-2/3 Markets
   Mobikwik has an opportunity to expand its presence in semi-urban and rural markets, where digital adoption is accelerating but competition is less intense than in metro cities.

Industry Context

The Indian fintech sector remains vibrant but profitability remains elusive for many players. Even listed fintech companies like Paytm have faced similar challenges, reporting losses while working towards operational efficiency.

The consolidation in digital payments suggests that only companies with diverse revenue streams, regulatory compliance, and innovative credit products will thrive long-term. Mobikwik’s Q1 performance underscores the urgency of adapting to this reality.

Outlook for FY26

While Q1 FY26 paints a difficult picture, Mobikwik still retains potential in BNPL and merchant services. Achieving profitability will depend on:

• Scaling revenue without proportionally increasing expenses.
• Innovating credit offerings within regulatory limits.
• Building user loyalty amid intense UPI competition.

If the company executes its strategic priorities effectively, the remaining quarters of FY26 could show signs of stabilization and reduced losses. However, any delay in revenue recovery or further regulatory tightening could prolong the path to profitability.

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