Earnings increased yet why did PhonePe sink into losses? The company revealed shocking inside information

Digital payments and fintech sector giant PhonePe has registered a significant growth in its operating revenue during the financial year 2025-26. The integrated operating income of the company has increased by 11.47% directly to Rs 7,920 crore. This latest information has come to light from official documents submitted to the Registrar of Companies (RoC). However, despite such huge earnings, the company has had to drink the bitter sip of loss in this financial year. The company’s total consolidated net loss has been recorded at Rs 2,792 crore, while the net loss on the basis of normal business activities has been Rs 1,377 crore.

The entire mathematics got spoiled due to non-receipt of UPI incentive amount.

Citing the main reason for incurring losses despite increase in earnings, the company has said that the UPI Digital Incentive given by the government for the financial year 2025-26 has not been released yet. This is the reason why the income from this item could not be included in the accounts of the current financial year. However, PhonePe is hopeful that this outstanding amount will be received in the next financial year i.e. 2026-27 and then it will be added to the company’s financial results, due to which next year’s figures may look much better.

One-time expenses and ESOP increased company’s losses

According to the company, this year’s total loss also includes many expenses and financial items which are not part of its regular business. These include huge one-time expenses related to ESOP (Employee Stock Option Plan) distributed to employees, non-cash decline in the value of some assets, profit from selling part of its stake in an associate company and loss from a discontinued business. Due to all these special items and one-time expenses, the total loss of the company appears to be much higher than the normal business loss.

Company’s hold in digital payment market still strong

Market experts believe that this strong double-digit growth in the company’s operating income is a clear proof that PhonePe’s digital payments business continues to be strong and stable. If the pending amount of UPI incentive is received from the government on time, then it will have a very positive impact on the financial results of the company in the coming financial year.

At present, despite increasing earnings, the company’s losses have definitely increased due to various one-time expenses. In the coming time, investors and market experts will keep a close eye on how PhonePe controls its costs and how quickly it moves to return to profitability.