BYJU’s FY22 losses balloon to ₹8,245 cr; warns about future

Byju Raveendran-led Think & Learn Pvt Ltd, the parent company of BYJU's, in the latest filing of its audited FY22 financials with the Finance Ministry's Registrar of Companies (RoC), has reported a manifold increase in losses worth ₹8,245 crore for the said fiscal year, primarily driven by mounting losses in its two units -- White Hat Jr and OSMO. In FY2021, BYJU's consolidated losses stood at ₹4,564 crore crore, compared to a net profit of ₹50.76 crore during FY20.

BYJU's revenue for FY22 stood at ₹5,298.43 crore against ₹2,428.39 crore in FY21, up around 2.2 times, the company says. The EBITDA loss for the fiscal year swelled to ₹6,679 crore against ₹4,143 crore in the year-ago period. The ed-tech major's EBITDA% improved from (171)% to (126%), says BYJU's.

BYJU's says its underperforming assets in FY22 primarily were White Hat Jr and OSMO (Tangible Play), which amounted to 45% or ₹3,800 crore worth of losses to the company.

WhiteHat Junior's total income fell 0.9% to ₹295.11 crore in FY22 from ₹326.67 crore in FY21. Its EBITDA loss for the fiscal year swelled to ₹2,358.31 crore against ₹1,498.33 crore in FY21.

BYJU's says if WhiteHat Junior and Osmo are excluded, the company reported 3x growth in its total income in FY22 against FY 21.

Its other units Aakash and Great Learning grew 40% and 77%, respectively, in FY22. Before the acquisition, Akash's FY21 revenue was ₹1,065 crore, which surged to ₹1,491 crore in FY22. Great Learning's FY22 revenue rose 1.8x to ₹628 crore from the pre-acquisition revenue of ₹354 crore in FY21, says BYJU's.

Nitin Golani, chief financial officer, BYJU's, says the company’s subscriber base has grown 125% in FY22 from FY21. “While we are happy that our total income has grown 2.2X, we are also aware of our underperforming businesses like Whitehat Jr and OSMO which contribute to 45% of the losses.”

Golani says various measures have been taken to improve operating financial conditions. “These businesses were scaled down significantly to cut losses in the subsequent years while other businesses continue to see growth."

Warning over future?

The ed-tech major, once dubbed as the poster boy of the Indian startup ecosystem, has warned now about its ability to "continue as a going concern" in the wake of mounting losses. "Due to, continuing net losses from operations and accumulated losses, in addition to, the uncertainty related to the outcome of the litigation and its financial impact thereon, in respect of the USD 1.2 billion Term Loan B facility (“TLB Loan”) availed by Byju’s Alpha Inc., a step-down subsidiary, where Think and Learn has issued a guarantee. These events and conditions, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern," says BYJU’s.

Auditor's opinion

In the past two years, the homegrown ed-tech company has been battling a huge crash crunch and a string of controversies including violations of FEMA (Foreign Exchange Management Act) rules.

Sharing the auditor's comments on FY22 financials, BYJU's says in the auditor's opinion, "the consolidated financial statements comply with the Companies Act, 2013, and present a true and fair view”.

Sharing the auditor’s comments on its financial results, BYJU’s cites: “The management has undertaken measures to improve its operating financial condition, is also in the process of securing necessary funding arrangements and exploring a sale of assets as needed, and hence is confident regarding the future viability of the Company. Further, basis a legal opinion, the management is of the view that it is unlikely that the TLB loan will be required to be paid in the foreseeable future. Accordingly, these financial statements for the year ended March 31, 2022, have been prepared on a going concern basis.”

Dwindling valuation

Notably, in a huge setback to BYJU's, U.S.-based global asset manager BlackRock this month had cut the value of its stake in India's foremost ed-tech major to $1 billion from $8.4 billion in May 2023. The current drop in the valuation is a staggering 95% for a company that was valued at $22 billion in early 2022.

Blackrock, which manages over $10 trillion in assets globally, had first entered BYJU’s roster of marquee investors at a $12-billion valuation in CY20. In November 2023, Prosus also slashed BYJU's valuation to less than $3 billion, 86% lower than the $22 billion valuation in the previous year.