Clear’s revenue spikes 93% to Rs 210 Cr in FY24, cuts losses

Clear aka Cleartax, a taxation and financial solutions provider for businesses and consumers, reported notable financial performance during the last fiscal year. The company’s operating scale grew by 93% year-on-year in FY24, while it reduced its losses by 59%, bringing them below Rs 100 crore for the said period.

Clear’s revenue from operations soared to Rs 209.84 crore in the last fiscal year (FY24) from Rs 108.77 crore in FY23, according to its consolidated financial report sourced from the Registrar of Companies (RoC).

Clear (formerly Cleartax) provides taxation and financial solutions for both businesses and consumers. Its business offerings include accounts payable, e-invoicing, and invoice discounting, organized under three main categories: Finance Cloud, Compliance Cloud, and Supply Chain Cloud. For individuals, the platform simplifies tax filing and related services.

Clear earns via taxation-related and corporate secretarial services. It derived 91.5% of its revenue from software subscription and support services which surged 84.1% during FY24 to Rs 191.9 crore. Unlike FY23, the company sold software worth Rs 14.63 crore during the year, while the remaining collection was collected from platform, technical services, and commission for acting as a distributor for the purchase and sale of mutual funds.

The Archit Gupta-led company obtained a mutual fund distributor license from the Association of Mutual Funds in India (AMFI) and launched its mutual fund distribution app, Black, in January 2021.

The firm also cornered Rs 4.92 crore via non-operating activities, including interest income, pushing its total revenue to Rs 214.76 crore in FY24.

Employee benefits were the largest expense category but declined by 19.4% to Rs 202.57 crore in FY24, including non-cash ESOP costs of Rs 11.78 crore. Expenses on web hosting and software support increased by 17.7% to Rs 39.61 crore, while spending on business promotion amounted to Rs 18.83 crore for the fiscal year ending March 2024.

Clear also spent Rs 6.43 crore on system integration charges and Rs 3.58 crore on the sales commission during FY24. Despite almost 2X growth in operating scale, the company cut down its total expenses by 9.8% to Rs 310 crore in FY24. 

Clear reduced its losses by 58.8% to Rs 96.24 crore, due to tight control on spending and solid growth. Operating cash outflows also improved, decreasing by nearly 60% to Rs 73.61 crore in the last fiscal.

Its EBITDA margin improved significantly but remained negative at -40.26% due to high operational costs, outlining the need for continued focus on expense management. On a unit level, Clear spent Rs 1.48 to earn a rupee of operating revenue in FY24.

As of March 31, 2024, Clear has cash and bank balances of Rs 53.39 crore, while its current assets stood at Rs 112.59 crore. The company’s outstanding losses climbed to Rs 865.63 crore during the period.

According to TheKredible, Clear has raised $140 million to date, with Kora and Composite Capital Management as its lead investors.

In a business that thrives on the fear of heavy-handed repercussions of a mistake in paperwork, it is interesting that none of the online offerings promise freedom from the dreaded ‘query’. Or a promise to resolve issues should they turn up, as long as they are not due to customer end omissions of course. By focusing instead on financial distribution to shore up bottom lines is a clear sign of investor pressure rather than long-term vision.