MobiKwik revenue drops 20% YoY in Q1FY26, loss surge over 6X at Rs 41.9 crore

Digital payments major MobiKwik has reported a significant financial setback in the first quarter of FY26, with a 20% decline in revenue year-on-year and a more than six-fold spike in net losses. The Gurugram-based fintech firm disclosed that its total revenue fell to ₹271.4 crore in Q1FY26, compared to ₹345.8 crore in the same quarter last year. Even more striking was the ballooning of net loss to ₹41.9 crore, from ₹6.6 crore reported in Q1FY25, reflecting mounting operational and regulatory costs.

Despite an improvement on a sequential basis when compared to Q4FY25, where MobiKwik had reported a net loss of ₹56 crore, the YoY numbers underline the pressures of compliance, slowing lending activity, and structural shifts under the Reserve Bank of India’s digital lending guidelines (DLG).

Financial Snapshot: Q1FY26 vs Q1FY25

The sharp downturn in revenue is attributed largely to a decline in financial services income and rising costs associated with compliance and digital lending safeguards. Guarantee costs have surged, a direct outcome of upfront accounting norms introduced under DLG that compel fintechs to record loan default protection costs at origination.

Performance Breakdown by Business Segment

Payments Business: Resilient Growth Amid Cost Pressures

Despite the overall revenue slump, MobiKwik’s payments segment showed robust YoY growth. Gross Merchandise Value (GMV) processed through its payment gateway rose by 53.1% YoY to ₹38,380 crore in Q1FY26. The revenue from this segment rose 24.2% YoY to ₹213.1 crore.

Notably, the company also managed to improve its gross margin in this segment from 16.1% in Q1FY25 to 27.9% in Q1FY26. Cost optimization efforts played a pivotal role in margin enhancement — payment gateway processing fees dropped from 51 basis points (bps) to 37 bps, while incentive costs fell from 6 bps to 3 bps.

Lending Business: Impacted by Digital Lending Guidelines

The financial services segment, particularly ZIP (Buy Now, Pay Later) loans and longer-tenure personal loans, suffered a sharp YoY revenue decline of over 66%, clocking ₹58.3 crore in Q1FY26. The company attributed this drop to a temporary pause in ZIP loan issuance in FY25 and an evolving loan mix geared toward longer-tenure products.

While disbursals improved sequentially — growing 31.4% QoQ to ₹693.1 crore — the upfront financial guarantee costs under DLG hit profitability. Guarantee expenses surged to ₹21.4 crore from ₹2.5 crore a year ago. Despite this, the margin in the financial services segment improved to 13.3% from 4% YoY, indicating early gains from the structural shift in lending approach.

Comparative Quarterly Performance (Q1FY26 vs Q4FY25)

While the yearly performance paints a bleak picture, the company has demonstrated sequential improvement on several fronts including revenue growth, reduced losses, and better margins.

Cost Structure Analysis

MobiKwik’s total expenses for Q1FY26 stood at ₹312.8 crore, slightly lower than the ₹316.5 crore in Q4FY25 but still reflective of high operational costs. Key expense heads included:

• Payment gateway charges: ₹142.8 crore
• Employee benefit expenses: ₹41.9 crore
• Financial guarantee expense: ₹21.4 crore
• Advertising and promotional costs: ₹28.3 crore

Cost control initiatives in processing and marketing are beginning to show results, especially in the payments segment.

User and Merchant Ecosystem

MobiKwik’s ecosystem saw continued expansion. As of June 2025:

• Registered Users: 180.2 million
• Merchants Onboarded: 4.64 million

This growth in user and merchant base underscores MobiKwik’s ability to scale even amid tightening regulations and volatile macro conditions. The company believes this scale will be instrumental in achieving break-even in the latter half of FY26.

Strategic Highlights and New Launches

1. Product Innovations
   • Pocket UPI: Introduced a PIN-less UPI feature for microtransactions, enhancing ease of use.
   • Stock Broking: Received SEBI approval to offer retail equity broking services, marking a diversification beyond payments and credit.
2. Compliance-Driven Lending Transformation
   • The firm has pivoted from short-tenure ZIP loans to longer-duration loans that align with RBI’s DLG. This will cause delayed revenue recognition but is expected to build long-term sustainability.
3. Profitability Roadmap
   • Management has guided toward achieving profitability by Q3 or Q4 FY26. Focus will remain on unit economics, digital lending stability, and merchant monetization.

Risks and Challenges

• Regulatory Pressure: RBI’s tightening grip on fintech lending practices continues to impact the cost structure.
• Rising Competition: The Indian digital payments and credit space is extremely competitive with players like PhonePe, Google Pay, Paytm, and others vying for share.
• Profitability Delays: Continued upfront cost recognition under DLG could defer profits further despite operational improvements.
• Investor Sentiment: Stock price volatility and funding challenges could emerge if profitability targets are delayed again.

Expert View

Market analysts suggest that MobiKwik’s operational discipline and focus on high-margin payment services are promising signs, but high customer acquisition costs and slow lending revenue pose structural risks. The company’s shift in loan products may offer stability in the long term, but short-term pressure on profitability will remain until revenue recognition catches up with disbursal momentum.

Outlook for FY26

MobiKwik enters Q2 with optimism, buoyed by the strong performance in payments and growing traction in longer-tenure loans. If current trends in margin expansion and cost control continue, the company could meet its goal of profitability by the end of FY26. However, it must navigate regulatory risks, deepen merchant monetization, and innovate rapidly in an ecosystem where scale and compliance determine survival.

Disclaimer: This article is intended for informational purposes only. All financial figures and performance commentary are based on company filings, investor updates, and industry analysis as of Q1FY26. Readers are advised to refer to audited financial statements for precise data and consult financial professionals before making investment decisions.