Extramarks losses drop by 85% to Rs 48 Cr in FY24, revenue slips 37%

Edtech platform Extramarks has made a significant turnaround in its bottom line, reducing losses by over 85%—from Rs 330 crore in FY23 to Rs 48 crore in FY24. However, the Reliance-backed firm's operating scale shrank by 37% during the fiscal year ending March 2024.

We will examine the expense pattern that led to the significant reduction in losses in the second half of the story. For now, let's focus on Extramarks' revenue and its streams.

Extramarks’ revenue from operations declined by 36.86% to Rs 233 crore in FY24 from Rs 369 crore in FY23, according to its consolidated financial statements sourced from the Registrar of Companies (RoC).

Founded by Atul Kulshrestha, Extramarks provides learning solutions for schools, students, and teachers. It offers Smart Class Plus, a tool designed to modernize traditional teaching methods in schools.

The company earns revenue from subscription-based services like live classes, test series, school partnerships, and corporate training, which grew 18.54% to Rs 179 crore in FY24. However, its one-time product sales, including learning tablets, test preparation kits, and study materials, declined 75.23% to Rs 54 crore.

The largest cost component, employee benefit expenses, declined 39.75% to Rs 144 crore in FY24. This sharp reduction was driven by a downsized workforce, as the company laid off over 500 employees and reportedly shut down its consumer-facing vertical in September 2023. The cost of materials saw an even sharper decline of 78.57%, settling at Rs 34.5 crore. However, finance costs rose 71.43% to Rs 36 crore. 

The decline in employee benefits seems to be influenced by mass layoffs in FY24. According to a media report, the company laid off 300 employees and discontinued its B2C business.

Overall, total expenses decreased 46.4%, falling to Rs 372 crore in the last fiscal year from Rs 694 crore in FY23.

Effective expense management helped Extramarks significantly cut its losses, with a net loss of Rs 48 crore in FY24, an 85.45% reduction from Rs 330 crore in FY23. The company also improved its ROCE to -24.19% and EBITDA margin to -11.63% in the last fiscal year.

On a unit basis, Extramarks spent Rs 1.60 to earn a rupee of revenue in FY24. The Noida-based company reported current assets worth Rs 190 crore in FY24 including Rs 49 crore of cash and bank balance.

According to startup data intelligence platform TheKredible, Extramarks has raised a total of $44 million in funding from Reliance Industries’ Infotel Group. While Infotel’s current stake in the firm could not be ascertained, it reportedly acquired a 38.5% stake in Extramarks in 2023.