PhysicsWallah revenue jumps 2.6X to Rs 2,015 Cr in FY24, slips into losses

Edtech unicorn Physics Wallah (PW) has managed 2.6X growth in operating revenue in the fiscal year ending March 2024 but the firm’s losses widened 4.4X due to a sharp rise in expenses.

Physics Wallah’s revenue from operations surged to Rs 1,940.4 crore in FY24 in comparison to Rs 744.3 crore in FY23, the company’s consolidated financial statements with the Registrar of Companies show.

The company generated over 90% of its revenue from educational services while the remaining came from the sale of products. It also made Rs 74.64 crore via interest and gains on financial assets which took the overall revenue to Rs 2,015 crore in FY24.

Founded in 2020 by Alakh  Pandey and Prateek Maheshwari, Physics Wallah provides both online and offline courses and study materials for JEE, NEET, other engineering entrance exams, and state board exams. The company also has divisions focused on skill development, higher education, and study abroad opportunities.

Physics Wallah claims to offer free education to over 4.6 crore (46 million) students through its 112 YouTube channels in five vernacular languages, alongside serving 5.5 million paid students.

To check complete Revenue Breakdown visit thekredible.comView full data

Moving over to the spending by the company, it incurred 35.3% of the total expenditure on employee benefits amounting to Rs 1,159 crore. This cost spiked 180.9% from Rs 412.6 crore booked in FY23.

Cost of materials and legal cum professional expenses were other costs which went up significantly during the year. Importantly, the company cut down its advertisement & promotional expenses by 70.8% to Rs 19.56 crore during FY24.

The total cost of the company outpaced revenue growth by a decent margin, increasing 280.4% to Rs 3,279 crore in FY24.

It is worth noting that the company reported Rs 1,452.7 crore under miscellaneous expenses. Out of which, Rs 756 crore has been booked under fair value loss of CCPS (non-cash expense), a spokesperson of the company clarified.

To check complete  Expense Breakdown visit thekredible.comView full data

For more information, visit TheKredible.

Followed by the rising expenditure, Physics Wallah’s losses deepened over 13X to Rs 1,131 crore in FY24 against Rs 84 crore reported in FY23.

The losses of the company also include Rs 756 crore allocated towards the fair value loss of CCPS, excluding this non-cash item, the company’s losses stand at around Rs 375 crore.

As per the company, the adjusted EBITDA stands at around (positive) Rs 67 crore. This EBITDA excludes ESOP costs of Rs 151 crore and other non-cash elements such as depreciation, amortization and impairment.

It’s worth highlighting that the company reported Rs 779.28 crore in revenue from operations and Rs 8.87 crore in profits in FY23. However, the restated number disclosed by the company this year shows its operating revenue of Rs 744.3 crore and a net loss of Rs 84 crore in FY23.

The operating cash flows of the company remain positive at Rs 211.85 crore during the period. Coming to ratios, the EBITDA margin and ROCE worsened to -44.70% and -85.84%, respectively. On a unit level, Physics Wallah spent Rs 1.69 to earn a rupee of operating revenue.

Physics Wallah raised $210 million in the largest equity round for an edtech startup in the past couple of years, bringing its total funding to $310 million and valuing the company at $2.8 billion. According to TheKredible, its co-founders control more than 85% stake in the company.

While there is zero doubt about Physics Wallah’s credibility with its biggest stakeholders, its students, one has to wonder if the loyalty and admiration it attracts there is not beginning to fog decision-making among investors. The sheer scale of the funds raised and the valuations put the onus of building something that matches the perception on the founders. It is something they have gamely been trying to do, and another two years of strong growth will reassure a lot of investors we guess. But it seems a fair guess that the last word on the disruption that edtech’s like Physics Wallah sought to deliver has not been heard yet. Will it actually be Physics Wallah that shows the way? There is no doubt that it is better placed than most to do it.