Byju’s consolidated revenue grew 82% in FY20 while losses jump 30X

Edtech giant Byju’s has established itself as the highest valued startup in India, worth around $16.5 billion after raising more than $1.5 billion during the first half of 2021. It is also dubbed as the most valued edtech startup across the globe while its nearest Indian competitor Unacademy is worth only $3.5 billion(i.e only 21.2% of the Byju Raveendran led firm).

The company has finally filed its annual statements for the fiscal year ending in March 2020. Many would argue that this was a crucial year for the firm, just before Covid, and the base for subsequent growth, and its sky-high valuations, was set in this time. Let's take a look at how the company scaled up its operations during FY19-20.

The Bengaluru-based firm managed to grow its revenue from operations by 82.31% to Rs 2,381 crore in FY20 from Rs 1,306 crore in FY19. Of this, Byju's collected 75.4% from India and 24.6% from the rest of the world. During FY20, its domestic collections have grown by 59% to Rs 1,795 crore while international earnings swelled up by 232.2% to Rs 586 crore.

In FY19, Byju’s had been trying to get a foothold in the international edtech space and made some of its earliest strategic acquisitions to achieve the same. It acquired Tangible Inc in Feb 2019 which boosted its international earning in FY20 and has recently acquired California-based reading platform Epic in a $500 million deal.

Byju’s 70% revenue came via sales of tablets and SD cards

Dissecting the collections from its revenue verticals, we observe sales of tablets and SD cards loaded with its courses remains the top earner for Byjus. Sales of these products amounted to Rs 1,675.7 crore, accounting for 70.4% of revenue during FY20. 

At Rs 560.6 crore, the sale of reference books accounted for 23.5% and the rest Rs144.7 crore of the revenue was generated via the collection of tuition and service fees. It should be safe to say that almost all of these tablet sales happened in India, making them an over 90% contributor to India sales.

Further, the company saw its financial income scale 5.3X to Rs 322.8 crore, pushing its total earnings during FY20 past Rs 2,703.5 crore. 

Byju’s spent Rs 1,176 Cr on ad & promotion

Even with the massive scale of its operations, Byju’s has managed to stay cash flow positive during the last couple of fiscals. While remaining the top grosser amongst edtech startups in India, it still maintains a healthy positive net cash flow from its operations which grew by 66% to Rs 126.6 crore during FY20.

Advertising promotional expenses is the single largest cost centre for the company, accounting for 39% of the annual costs. These expenses grew by 157% to Rs 1175.6 crore during FY20 from Rs 457.6 crore spent in FY19. The company became the official sponsor for the Indian Cricket team in September 2019 and spent Rs 162 crore in total on sponsorships during FY20.

With the growing number of students on its e-learning platform across its courses, the company has increased its spending on the production and procurement of educational content. Byju’s spent 15.2% of its annual costs on the production of streaming content and study material. These costs grew by 81.3% to Rs 458 crore during FY20.

Byju's paid out Rs 420.3 crore as employee benefit expenses, which made up around 14% of its aggregate expenditure during FY20. These payments grew by 53.6% from Rs 273.7 crore paid during FY19.

During the fiscal ended in March 2020 right before the COVID-19 pandemic had set in India, Byju's expense on travelling and conveyance had swelled up by 202.7% to Rs 266.4 crore with Rs 58.5 crore spent on rent and utilities.

Its finance costs amounted to Rs 162.1 crore in FY20, while its depreciation bookings jumped by 238.7% to Rs 232 crore during the same period. 

In total, the Bengaluru-based company saw its annual expenses jump by 119.50% to around Rs 3,022 crore during the fiscal ended in March 2020. Byju’s spent Rs 1.27 to earn a single rupee of operating revenue on a consolidated basis.  

The story of EAT vs EBITDA

While registering healthy growth in revenues, Byju’s consolidated losses jumped 29.7X from only Rs 8.82 crore in FY19 to a little over Rs 262 crore in FY20. Byju’s generated a positive EBITDA of Rs 75.8 crore in FY20 whereas its EBITDA margins worsened to 2.8%  from 12.1%  in FY19.

Those ultra-aggressive sales personnel don’t come cheap, it seems. The edtech giant pushed sales with record-high customer acquisition costs to ward off competitors which include Unacademy and Vedantu who earned Rs 65.1 crore and Rs 35.8 crore respectively during FY20. Byju’s invested nearly Rs 1,130 crore on infrastructure in FY20 and remains miles ahead of its competitors in the Indian edtech space both in terms of revenue and cash reserves.

Keep in mind that these are effectively 18-month-old numbers we are talking about today. It should be fascinating to see the progress the firm made in FY21, as and when it files those numbers. Needless to say, this was the year that truly marked the firm out, when it hit decacorn status and stringed together a series of acquisitions.