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Noida-based edtech company PhysicsWallah’s consolidated revenue nearly tripled to ₹2,015 crore in the fiscal year ended 31 March, but its losses surged on the back of a jump in expenses.
This comes at a time when the company has been chasing aggressive growth over the past two years, entering new business segments and making acquisitions to expand into new markets.
But the company’s revenue growth has come at a cost. The firm, once feted as the only highly-valued and profitable edtech startup in India, widened its losses massively this year. PhysicsWallah reported a net loss of ₹1,130 crore in FY24, a more than 13-fold jump from ₹84 crore in FY23, its financial statement filed with the Registrar of Companies showed.
This came on the back of a surge in expenses that totalled ₹1,948 crore in FY24, up from ₹653 crore in the previous year.
Significant Non-Cash Adjustments
The company said its losses were primarily driven by non-cash adjustments mandated by the Indian Accounting Standards (Ind-AS), which it adopted upon surpassing a revenue threshold of ₹1,000 crore. Key non-cash expenses include liabilities from compulsorily convertible preference shares (CCPS), depreciation and amortization, and employee stock options plan (ESOPs). These adjustments reflect accounting provisions rather than actual cash outflows.
“This CCPS expense is recorded in relation to the buyback clause provided in the CCPS issued, basis conversion of accounting standards from IGAAP to INDAS,” the company clarified in a statement. In FY24, PhysicsWallah’s CCPS increased significantly to ₹ 756 crore from ₹ 67.1 crore in FY23.
The depreciation and amortization expenses also saw a considerable increase, growing to ₹298 crore in FY24 from ₹82.6 crore in FY23. The ESOP expenses, meanwhile, escalated to ₹151 crore in FY24 from ₹38.3 crore in FY23.
PhysicsWallah’s surge in revenue and losses comes even as as the rest of the edtech ecosystem adopts a cautious, conservative approach to growth spending, refocusing on achieving profitability.
In an interview earlier in September, co-founder Prateek Maheshwari told Mint that the company expects to turn profitable next year as its offline business starts generating gains. So far in 2024-25, he had said, the company has already started generating cash in the first and second quarters, from a negative 18% cashflow.
Maheshwari and chief executive Alakh Pandey started PhysicsWallah as a YouTube channel in 2016, making a formal beginning as an edtech startup only in 2020. PhysicsWallah became a unicorn, or a billion-dollar company, with its first funding round two years ago.
In September, India-focused hedge fund Hornbill Capital Advisers and Lightspeed Venture Partners led a $210 million investment in PhysicsWallah at a valuation of $2.8 billion, up from $1.1 billion earlier. Existing investors GSV Ventures and WestBridge Capital also participated in the fundraise. The company’s second fundraising not only more than doubled its valuation but also signaled its IPO ambitions.
Last year, PhysicsWallah acquired Xylem Learning, an AI-based learning platform for entrance exam preparation, and Knowledge Planet that provides test preparation services to non-resident Indian. In 2022, it bought FreeCo, a doubt-solving platform and PhysicsWallah’s first acquisition.
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