Byju’s-owned Great Learning nears Rs 400 Cr revenue in FY23, losses decline

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Great Learning posted nearly 25% growth with a better control on losses during the financial year ending in March 2023. The company was acquired by Byju’s in July 2021. The last fiscal marked the first full financial year for Great Learning under Byju’s ownership.

Great Learning’s revenue from operations grew by 24.9% to Rs 391 crore in FY23 from Rs 313 crore in FY22, according to its annual financial statements filed with the Registrar of Companies.

313

633

Amount in ₹ Cr

The company offers programs in the fields of data science, analytics, AI, machine learning, cloud computing, cybersecurity, digital business, management, digital marketing, and others.

Income from digital content formed 48% of the total revenue which increased 6.3% to Rs 187 crore in FY23. The rest of the income came from teaching & program support and business support services. See TheKredible for a detailed revenue breakdown.

Similar to other edtech companies, employee benefits formed 53% of the overall expenditure. This cost declined 4.9% to Rs 328 crore in FY23 from Rs 345 crore in FY22. It also includes Rs 26 crore as ESOP cost (non-cash).

Its advertising cost, legal and professional fees, information technology cost, collection charges, and other operating overheads pushed the total cost to Rs 614 crore in FY23, slightly down from Rs 633 crore in FY22. The company roped in cricket icon Virat Kohli as its brand ambassador in September 2020 and he continued to promote the company during FY23. Head to TheKredible for a detailed expenses breakup.

Cost of procurement
Employee benefits
Advertisement and promotion expenses
Warranty expenses
Legal and professional expenses
Others

The 25% increase in scale and controlled expenditure helped the company reduce its losses by 27.7% to Rs 222 crore in FY23 from Rs 307 core in FY22. Its EBITDA margin improved to -51% during FY23.

On a unit level, it spent Rs 1.57 to earn a rupee of operating revenue.

Caveat: We have excluded exceptional items worth Rs 121 crore while calculating the bottom line of Great Learning as they have no material impact.

Great Learning was one of the hottest acquisition deals in this space for which Byju’s spent $600 million. However, Byju’s reportedly put Great Learning along with US-based Epic on sale to clear its debt. Just like it did with Great Learning, the Byju Raveendran-led company shelled out $500 million to acquire US-based Epic.

After much delay, Byju’s disclosed its revenue from core business in FY22 which saw a 2.3x growth to reach a total income of Rs 3,569 crore from Rs 1,552 crore in FY21. According to the company, it has also managed to reduce its EBITDA loss from Rs 2,406 crore in FY21 to Rs 2,253 crore in FY22. However, the firm is yet to file its audited financial statements for FY22 and FY23.

EBITDA Margin	-97%	-51%
Expense/₹ of Op Revenue	₹2.02	₹1.57
ROCE	-246%	NA

While the mistakes at Byju’s are too many to count, one thing on which no one should fault the parent firm of Great Learning is its focus on communicating size, and by default, survivability to its intended market. While it achieved this with its massive fund raises and valuations, they certainly helped it gain traction and earn trust faster. The education sector values this, as noone wants to do a course, however good if the institute that taught is not around to vindicate your choice in a few years. This is a factor that will come home to roost for many ‘students’ at edtechs that shone for a while before shutting down. For Great Learning, this could be a factor that will matter a great deal, very soon.

While any numbers coming from the Byju stable will be taken with a sniff and a pinch of salt by many now, Great Learning is clearly not out of the woods yet. The business model remains a work in progress, susceptible to multiple disruptions, not least of which is the issues at its promoter entity. The programs haven’t quite earned the ringing endorsement of users as one would look for at a cursory check, and multiple options continue to emerge for prospective students. At less than $50 million, Great Learning hasn’t quite acquired the size that would ensure a long rope for it going ahead, if it doesn’t staunch those losses quickly. Enough reasons to believe that its moment of reckoning will come well before 2025.

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