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Edtech firm upGrad's revenue jumps 96% for FY23, Ebitda loss shrinks

Company says its learner base has crossed 10 million and paid learners have grown 54%

upGrad

Peerzada Abrar Bengaluru

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Edtech firm upGrad recorded a revenue of Rs 1,194 crore in Financial Year 2022-23 (FY23), a 96 per cent jump to Rs 608 crore in FY22. The Ronnie Screwvala-led company moved to the widely accepted IndAS accounting standard in FY23 in line with its listing plans.

On an annual recurring revenue (ARR) basis, the company said the revenue would have been higher but some mergers and acquisitions (M&As) did not consolidate in FY23. Due to the realignment of revenues, upGrad carried forward a further deferred collected revenue of Rs 443 crore to FY24. Adjusted Ebitda loss (operating cash loss) was Rs 558 crore, compared to Rs 572 crore in FY22.

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“We are in a very strong place as we build upGrad for the world, out of India,” said Mayank Kumar, co-founder and managing director, upGrad. “While we respect profitable growth, we aim to strike the right balance as we continue to be in investment mode with a strong eye on the long term as this space of skilling, careers and job placements, formal learning, and workforce development will see massive growth and disruption for the next two decades.”

The non-cash expenses in FY23 included an accelerated goodwill write-down of Rs 410 crore and depreciation and amortisation costs of Rs 140 crore. The finance cost was Rs 34 crore, totalling other non-cash costs of Rs 584 crore. The firm said Ebitda, non-cash expenses, and finance costs took the loss to Rs 1,142 crore, up from Rs 648 crore in FY22.

“Our gross margins are close to 80 per cent; we have zero net debt; and have one of the best return on capital employed (ROCE) ratios for a new-age company, having raised a tight $265 million since inception,” said Kumar. “We are tracking H2 of FY24 and onward to be operationally profitable on an ongoing basis and we will continue to look for organic, linear, and non-linear opportunities for growth both in Asia and around the world.”

Notable changes in the large cost items showed a sharp reduction in marketing costs to 19 per cent (Rs 371 crore) of total costs versus the previous year's 33 per cent (Rs 403 crore). Employee costs remained the highest contributor at 36 per cent, amounting to Rs 707 crore, which also included some non-cash costs for Employee Stock Ownership Plan (ESOP) accounting as per the Black Scholes method. Direct costs have soared 1.8 times to Rs 382 crore from Rs 211 crore in the previous year as upGrad continues to invest in content development expenses, content delivery costs, and university fees, commensurate with the revenue growth.

upGrad said it did not have material layoffs in the last 12-18 months – rare for a new economy company. The overall learner base of upGrad has crossed 10 million, while the paid learners have grown 54 per cent compared to the previous year. upGrad now has a strong enterprise play, having serviced 1,110 clients in FY23 and expecting to retain at least 75 per cent of these clients in FY24. The enterprise arm expanded its global footprint and is projecting a higher share of international revenue of 21 per cent in FY24 compared to 10 per cent in FY23. Delivering outcomes and placements remain the core focus while servicing consumers and enterprise clients.

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First Published: Nov 30 2023 | 5:16 PM IST

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