PhysicsWallah FY23 revenue up 3.4x, profitable for third consecutive year

Edtech unicorn PhysicsWallah (PW) announced on Friday that it has remained profitable in the financial year 2022-23 (FY23) for the third consecutive year. The firm's total revenue increased 3.4-fold to Rs 798 crore during the year.

PW’s revenue from operations rose to Rs 771.76 crore during the fiscal year ended March 2023, compared to Rs 232.47 crore in the previous fiscal year and Rs 24.6 crore in FY21. The company attributed this growth primarily to increased penetration within the offline category.

The firm reported an adjusted earnings before income, tax, depreciation and amortisation (Ebitda) of Rs 127 crore in FY23 (adjusted for ESOP costs, LER, and one-time inventory provisioning), up from Rs 134 crore in FY22.

This comes at a time when the Indian edtech sector is facing challenges amid the ongoing funding winter, with several cash-burning firms struggling to improve their margins.

PW’s total expenses escalated to Rs 777 crore in FY23 (including non-cash expenses like ESOPs, LER, and inventory provisions) from Rs 103 crore a year earlier. The employee costs increased from Rs 42 crore in FY22 to Rs 406 crore, including ESOP benefits, which were nil during the previous year. However, the marketing costs “remained as a single-digit percentage of revenue,” the company noted.

The edtech major’s co-founder, Prateek Maheshwari, emphasised that PW grew significantly in both online and offline categories. The company’s online categories grew 2.5-fold in terms of student headcount from 900,000 in FY22 to 2.35 million in FY23, while its offline student headcount increased 5.5-fold, reaching 60,000 enrolments in FY23.

“We also continued to cement our position in the NEET/JEE space while establishing ourselves as the topmost player in other categories like UPSC, Commerce, Gate, government one-day exam, and skills,” Maheshwari said.

The company achieved its unicorn status in June last year, raising $100 million in Series A funding from WestBridge Capital and GSV Ventures, leading to a valuation of $1.1 billion.

Around 40 per cent of this funding, approximately $40 million, was earmarked specifically for acquisitions. Subsequently, PW completed eight acquisitions in FY23, which it claims “are all profitable in themselves.” These are expected to contribute as much as Rs 500 crore to the company's FY24 financials.

Maheshwari added that the company, currently in a “hyper-growth” phase, will continue to invest in more categories like study abroad, PG test prep, and skills, among others.

“We are in no hurry to compromise growth for achieving a steady-state margin profile,” he stated.

The company plans to expand to more than 120 centres through its Vidyapeeth (offline) and Pathshala (hybrid) centres in the coming year, up from the current 58 operational centres. It also aims to teach 250,000 students by the 2024-25 academic year, up from 140,000 in the 2023-24 academic year.