PhysicsWallah (PW), an edtech unicorn, reported impressive growth in revenue for the fiscal year ending March 2024, achieving a 2.6X increase. However, the company’s losses also widened significantly, driven by a surge in operational costs.
The company’s revenue from operations soared to Rs 1,940.4 crore in FY24, a substantial rise from Rs 744.3 crore in the previous fiscal year, as per the firm’s financial statements filed with the Registrar of Companies. This growth was largely attributed to PhysicsWallah’s core educational services, which contributed over 90% of the revenue. The remaining income stemmed from product sales. Additionally, the company earned Rs 74.64 crore from interest and gains on financial assets, bringing the total revenue to Rs 2,015 crore.
Founded in 2020 by Alakh Pandey and Prateek Maheshwari, PhysicsWallah offers a mix of online and offline courses, alongside study materials, catering to students preparing for competitive exams like JEE, NEET, and other engineering entrance tests. The firm also provides services in skill development, higher education, and study abroad programs.
The company prides itself on offering free education to over 46 million students via 112 YouTube channels across five languages, alongside serving 5.5 million paid users. On the expenditure front, employee benefits took up 35.3% of the total spending, amounting to Rs 1,159 crore—a sharp rise of 180.9% from Rs 412.6 crore in FY23.
A significant portion of the costs was attributed to miscellaneous expenses, which totaled Rs 1,452.7 crore. Costs related to materials and professional services also spiked, contributing to the company’s higher outgo. Despite a marked reduction in advertisement and promotional spend by 70.8%, which fell to Rs 19.56 crore, the total expenditure climbed 280.4%, reaching Rs 3,279 crore. This figure also included Rs 906 crore in non-cash charges related to the fair value loss of compulsorily convertible preference shares (CCPS).
The steep rise in costs pushed PhysicsWallah’s losses to Rs 1,131 crore in FY24, a significant increase from the Rs 84 crore loss in FY23. Excluding non-cash expenses, such as CCPS losses and ESOP costs, the company’s operational loss stood at Rs 251 crore.
Interestingly, while the company posted a loss, its operating cash flow remained positive at Rs 211.85 crore. The firm also experienced a decline in key financial ratios, with EBITDA margin and return on capital employed (ROCE) dropping to -44.7% and -85.84%, respectively. In essence, for every rupee in operating revenue, PhysicsWallah spent Rs 1.69.
In terms of funding, PhysicsWallah recently raised $210 million in its largest equity round to date, pushing its total funding to $310 million. The company is now valued at $2.8 billion, with its co-founders maintaining control of over 85% of the business.