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Fintech giant Paytmon Friday reported a wider loss first-quarter loss on the back of rising expenses, which ate into its strong revenue growth.

The company reported a net loss of Rs 645 crore for the three months ended June 30, compared with a loss of Rs 382 crore a year earlier.

Revenue from operations came in at Rs 1,680 crore in the first quarter, up 89% from the year-ago comparable period.

Paytm’s main business—payments and financial services—continued to show strong momentum, with revenue rising 95% in the June quarter, compared with a year ago.

Its commerce and cloud services business performed well, as did lending, which the company has been focused on growing.

The company said it disbursed 8.5 million loans in the quarter, up 492% from last year, worth Rs 5,554 crore, with growth across Paytm Postpaid, personal loans, and merchant loans.

Paytm has been aggressively trying to grow its lending business and position it as a major revenue generator, especially given that UPI payments have reduced consumers’ dependence on digital wallet apps for online transactions.

As in the previous quarters, Paytm’s solid revenue growth was clipped by its high expenses, especially payment processing charges.

Total direct expenses in the June quarter jumped 48 percent to Rs 954 crore, it said. Employee costs (excluding ESOPs) were higher in the quarter too, leading to an overall increase in the company’s indirect expenses.

The Noida-headquartered company reiterated it was “firmly on path towards achieving operating profitability”.

“We have redoubled our focus on driving profitable payments business, across UPI, wallet, cards, and other instruments,” the company said.

Paytm’s shares dropped 2% earlier today, snapping a four-day winning streak, following a brief outage for many users. Its shares have fallen 63.8% from its IPO price of Rs 2,150, as of Friday’s close at Rs 778.

Axis Bank and Goldman Sachs both have a ‘buy’ rating on Paytm as of this report, on solid financial performance in the quarter.