EdTech Giant UpGrad: A Closer Look at FY23’s Impressive Revenue Surge

UpGrad, one of Asia’s largest integrated learning, skilling, and workforce development companies, has shown a remarkable performance in the fiscal year ending March 2023.

  1. Revenue Growth: UpGrad’s revenue surged by 96% to Rs 1,194 crore in FY23, up from Rs 608 crore in FY22. This significant growth is attributed to the company’s diverse online programs and commissions from universities, which are the primary sources of its revenue​​.
  2. Learner Base Expansion: The company has crossed a 10 million learner base, with its paid learner base growing by 54% year-over-year. UpGrad serviced 1,110 enterprise clients and expects to retain 75% of them in the current fiscal year​​​​.
  3. Expenditure and Cost Management: Employee benefits accounted for around 40% of UpGrad’s overall expenditure, increasing to Rs 707 crore in FY23 from Rs 394 crore in FY22. Interestingly, the company managed to decrease its advertising and promotion costs by 8.2% to Rs 371 crore. Other significant expenses included a 69% increase in university fees to Rs 132 crore, and costs for content, IT, legal-professional fees, and overheads, leading to a total expenditure of Rs 1,752 crore in FY23​​.
  4. Bottom Line and Profitability: UpGrad’s bottom line remained flat at Rs 558 crore in FY23, similar to Rs 572 crore in FY22. The company’s gross margins are close to 80%, with zero net debt. It has raised $265 million since inception and is tracking to be operationally profitable in the second half of FY24​​​​.
  5. Accounting Standards and Adjusted Figures: Moving to the IndAS accounting standard in line with its listing plans, UpGrad’s gross revenue was Rs 1,530 crore. Adjusted for IndAS, the revenue stood at Rs 1,194 crore for FY23. The adjusted EBITDA loss was Rs 558 crore, compared to Rs 572 crore in the previous year​​.
  6. Non-cash Expenses and Total Loss: Non-cash expenses in FY23 included an accelerated goodwill write-down of Rs 410 crore and depreciation and amortisation costs of Rs 140 crore, with a finance cost of Rs 34 crore. These led to a total Profit After Tax (PAT) loss of Rs 1,142 crore, up from Rs 648 crore in the previous financial year​​.
  7. Cost Reduction and Investment in Content: Marketing costs were sharply reduced to 19% (Rs 371 Crore) of total costs, down from 33% (Rs 403 crore) in the previous year. Employee costs remained high at 36% (Rs 707 crore), including non-cash costs for ESOP accounting. Direct costs increased to Rs 382 crore from Rs 211 crore in the previous year, reflecting investments in content development and delivery​​.
  8. Future Prospects: UpGrad, which did not announce material layoffs in the last 12-18 months, is now focusing on its enterprise arm and international revenue. It aims for a higher share of international revenue of 21% in FY24 compared to 10% in FY23. The company has also assisted over 55,000 job transitions in the last financial year​​.

Overall, UpGrad’s financial performance in FY23 highlights robust revenue growth, significant learner base expansion, and effective cost management, with a focus on scaling its enterprise and international operations in the upcoming fiscal year.



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