PhysicsWallah’s FY24 revenue nearly triples; losses widen, expenses rise

Noida-headquartered edtech company PhysicsWallah’s consolidated revenue nearly triples $2,015 crore in the year ended March 31, but losses surged as expenses surged.

This comes as the company has been pursuing aggressive growth over the past two years, entering new business areas and making acquisitions to expand into new markets.

But the company’s revenue growth comes at a cost. The company was once hailed as India’s only highly valued and profitable edtech startup, but its losses have widened significantly this year. PhysicsWallah reports net loss $Reaching 11.3 billion rupees in fiscal year 2024, an increase of more than 13 times over the previous year $Its financial statements filed with the Registrar of Companies showed revenue of Rs 84 crore in FY23.

This comes against a backdrop of a surge in total expenses $1,948 crore in FY24, higher than $653 crore in the previous year.

Significant non-cash adjustments

The company said its losses were mainly caused by non-cash adjustments under Indian Accounting Standards (Ind-AS), which is imposed when revenue exceeds $10 billion rupees. Major non-cash charges include compulsory convertible preferred shares (CCPS), depreciation and amortization and liabilities arising from the employee stock option plan (ESOP). These adjustments reflect accounting provisions rather than actual cash outflows.

The company clarified in a statement: “This CCPS charge was recorded in accordance with the buyback provisions set forth in the issued CCPS, the basis for the conversion of accounting standards from IGAAP to INDAS.” In fiscal 2024, PhysicsWallah’s CCPS increased significantly increase to $ 756 Crores Rs. $ 671 million in FY23.

Depreciation and amortization expenses also increased significantly, growing to $2.98 billion in FY24 $826 million in FY23. At the same time, employee stock ownership plan (ESOP) fees rose to $151 crore in FY24 $383 million in FY23.

While the rest of the edtech ecosystem has taken a cautious, conservative approach to growth spending and refocused on achieving profitability, PhysicsWallah’s revenue and losses have grown significantly.

In an interview in early September, co-founder Prateek Maheshwari said Mint The company expects to become profitable next year as its offline business starts generating revenue. He said that as of 2024-25, the company has started generating cash in the first and second quarters with negative cash flow of 18%.

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Maheshwari and CEO Alakh Pandey founded PhysicsWallah in 2016 as a YouTube channel and didn’t officially become an edtech startup until 2020. PhysicsWallah became a unicorn, or a company worth $1 billion, after completing its first round of funding two years ago.

In September, India-focused hedge funds Hornbill Capital Advisers and Lightspeed Venture Partners led a $210 million investment in PhysicsWallah, valuing it at $2.8 billion, up from the previous $1.1 billion. Existing investors GSV Ventures and WestBridge Capital also participated in the financing. The company’s second financing not only more than doubled its valuation, but also signaled its IPO ambitions.

Last year, PhysicsWallah acquired Xylem Learning, an AI-based entrance exam preparation learning platform, and Knowledge Planet, which provides test preparation services to non-resident Indians. In 2022, it acquired doubt-solving platform FreeCo, which was PhysicsWallah’s first acquisition.