Digital payments major PhonePe has reported strong revenue growth in FY25, marking a key milestone ahead of its expected public listing in 2026. The company’s improving financials and shrinking losses are seen as important steps toward a successful IPO, at a time when investors are closely watching the profitability of India’s fintech sector.
According to recent financial disclosures, PhonePe’s FY25 revenue crossed ₹7,100 crore, rising by about 40–45% year-on-year. The company also reported a sharp improvement in profitability metrics, including positive cash flow and higher adjusted profit. This strong performance is being viewed as a major boost to the company’s planned stock market debut, expected around 2026.
FY25 Financial Performance: Key Numbers
PhonePe’s FY25 results show strong top-line growth and improving profitability. The company reported revenue of around ₹7,115 crore, with annual growth of roughly 40–45%. Adjusted profit after tax rose to about ₹630 crore, while adjusted EBITDA stood near ₹1,477 crore. Net losses also reduced compared to the previous year, reflecting improved operational efficiency. The company has also turned free cash flow positive, which is a major milestone for any technology company preparing for an IPO.
Why the FY25 Growth Matters for the IPO
PhonePe is one of India’s largest fintech platforms, with a strong position in the UPI ecosystem. Its financial performance is closely watched because investors now demand profitability, not just growth. Recent tech IPOs have faced scrutiny due to high losses, and market conditions have become more selective. The strong FY25 numbers suggest that PhonePe is moving toward a more sustainable business model, which is critical for public market investors.
IPO Plans: What We Know So Far
PhonePe is expected to go public around 2026, subject to market conditions. The company has already taken regulatory steps toward listing and is preparing for one of the largest fintech IPOs in India. The proposed offer size is estimated at around ₹12,000 crore, largely through an offer for sale by existing shareholders. If the listing proceeds as expected, it could become one of the biggest new-age technology IPOs in the country.
UPI Dominance Remains PhonePe’s Core Strength
PhonePe continues to lead India’s digital payments market. The company holds a large share of UPI transactions and processes billions of transactions every month. UPI has become the backbone of India’s digital payments ecosystem, accounting for a major share of all digital transactions. This massive user base gives PhonePe a strong platform to cross-sell financial services.
Revenue Mix: Payments Still the Main Driver
Despite diversification efforts, most of PhonePe’s revenue still comes from its core payments business. Around 88–90% of total revenue comes from payments, while insurance, lending, and other financial services contribute a smaller share. However, revenue from insurance and lending distribution has grown sharply in the past year, showing that diversification is gaining momentum even though payments remain the main engine.
Shift Toward Profitability
PhonePe’s improving financial metrics suggest a major shift in its business model. Adjusted profit surged significantly in FY25, and EBITDA margins turned positive after earlier losses. Operating cash flow also became positive, reflecting better cost control and stronger revenue streams. This shift from heavy losses to improving profitability is a key factor that could improve investor confidence during the IPO.
Competition and Market Position
PhonePe operates in a highly competitive fintech market, facing strong rivals such as Google Pay, Paytm, and Amazon Pay. Despite this competition, PhonePe continues to lead the UPI market by transaction share. Its scale gives it a major advantage in expanding its merchant network, cross-selling financial products, and building data-driven services.
Challenges Ahead of the IPO
Despite strong growth, the company still faces several challenges. A large share of revenue still comes from the payments business, which raises questions about long-term margins. Digital payments are also heavily regulated, and any policy changes could affect revenue models. At the same time, competition remains intense, with rivals investing heavily in rewards and new features. Public market investors are also more cautious about loss-making technology companies, which means profitability will remain under scrutiny.
Expansion Beyond Payments
PhonePe has been investing in new verticals to build a diversified fintech platform. The company is expanding into insurance distribution, lending marketplaces, stockbroking, wealth management, and other financial services. Revenue from these newer segments is growing faster than the core payments business, although from a smaller base. This diversification is expected to become a major driver of future revenue growth.
Investor Sentiment Around the IPO
The success of the upcoming IPO will depend on several factors, including continued revenue growth, a clear path to profitability, and market conditions at the time of listing. Investors will also compare PhonePe’s performance with other listed fintech firms. The recent improvement in financials has strengthened the company’s case for a stronger valuation.
What Analysts Are Watching Next
Market watchers will closely monitor the growth of non-payments revenue, profitability trends in FY26, and stability in UPI market share. The final IPO size, valuation, and investor demand during the listing will also play a key role in determining the success of the public offering.
Short-Term Outlook for PhonePe
In the near term, PhonePe is expected to continue expanding its financial services, increase monetisation of its user base, strengthen merchant and lending partnerships, and improve margins across segments. The next set of financial results will be crucial in shaping the final IPO pricing.
Bottom Line
PhonePe’s strong FY25 performance has significantly improved its IPO prospects. The company reported revenue of about ₹7,115 crore, with around 40–45% annual growth, along with a sharp improvement in profitability.
With a public listing expected around 2026, PhonePe is moving closer to becoming one of India’s largest fintech IPOs. Investors will now watch whether the company can sustain growth, diversify revenue, and maintain profitability momentum ahead of its market debut.
Last Updated on Friday, February 6, 2026 8:11 pm by Startup Magazine Team
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