Byju’s FY21 losses widen to Rs. 4,588 crores after change in revenue recognition
Byju’s losses sharply widened to Rs.4,588.75 crore for the year to March 2021 from Rs.231.69 crore in 2021.
Byju’s losses sharply widened to Rs.4,588.75 crore for the year to March 2021 from Rs.231.69 crore in 2021.
Byju’s, India’s largest educational technology company, losses sharply widened to Rs.4,588.75 crore for the year to March 2021 from Rs.231.69 crore in 2021.
Think and Learn Pvt. Ltd, the parent of edtech major Byju’s, reported that the delayed recognition of revenues was because the company changed its accounting standards, and this caused its loss to increase to 4,588.75 crores from 231.69 crores in 2021.
In a statement, the Founder and CEO of Byju’s, Byju Raveendran, in a statement, said that if this did not break them, nothing would.
The founder further held the changes in accounting rules that determine how and when the company books revenue responsible for the company’s losses. However, the company’s chief executive mentioned that the following year’s results would show more robust growth.
Raveendran added that there was business growth in FY21 over FY20. However, almost 40% of the revenue was deferred to the following years since this is the first year that the new revenue recognition started. The new revenue recognition started because of a COVID-related business model change, the chief executive said.
Byju’s has readjusted its revenue from operations, which is 40% lower than what the management had predicted, i.e., Rs 2,280 crores for FY21.
The firm was expecting a downward revision of its FY21 revenue.
Byju’s was expecting a downward revision of its FY21 revenue.
It may be mentioned here that on August 4, Mint reported that the firm was expecting a downward revision of its FY21 revenue. This was because of a change in its revenue recognition protocol.
Accounts of the company are audited by Deloitte Haskins & Sells, one of the global big four tax consulting firm.
After a delay of more than 18 months, the company’s revealed its audited financial results for the fiscal year that concluded on March 31st, 2021. At that time, it was last valued at $22.6 billion.
The audit report is unqualified, and the auditor raised two concerns about the company’s revenue recognition procedures and double-checked the 2020 financial year’s data (FY20).
The way revenues are recorded has undergone two significant adjustments. The first was that Byju’s streaming service revenues, which were previously fully recognised at the beginning of a contract, are now rateably realised throughout the course of the term.
The second change made was that interest paid to lenders on behalf of customers is to be calculated net of revenue
Instead of classifying it as a finance cost.
An anonymous person said in a report that the retrospectively readjusted numbers for Financial Year 2020 (FY20) and Financial Year 2019 (FY19) do not materially impact the revenues.
The revenue for FY20 was reduced from the reported FY20 revenue of Rs 2380.76 crore to Rs 191.77 crore. This occurred due to changes in accounting. Its net losses for FY19 widened by Rs 80.04 crore and for FY20 widened by Rs 43.37 crore.
An adverse opinion on the business’ internal controls over revenue recognition and customer collections also surfaced.
Raveendran said that Byju’s will be appointing a global chief executive shortly and has started the process of adding to its finance team, which will improve controls.
Byju’s, which has been on an acquisition spree, logged Rs 10,000 crores in gross revenues in FY22.
Byju’s, which has been on an acquisition spree, logged Rs 10,000 crores in gross revenues in FY22.
On the other hand, Mint on July 5 reported that the firm, which has been on an acquisition spree, logged Rs 10,000 crores in gross revenues in FY22.
The company did, in fact, disclose a significant increase in goodwill for FY21.
The statement stated that between April and July this year, the firm logged a revenue of Rs. 4,530 crores. It has acquired companies like Aakash Educational Services Ltd. (AESL), Tynker, Epic, Gradup, Scholr, Toppr, Great Learning, and Osmo.
Byju’s is in the process of raising a fresh funding round of more than $500 million. This new funding includes investors like Chan-Zuckerberg Initiative, CPPIB, Naspers, General Atlantic, Tencent, Sofina, Sequoia Capital, IFC, Aarin Capital, TimesInternet, Verlinvest, Lightspeed Ventures, Owl Ventures, Qatar Investment Authority, and Tiger Global Management.
Since the beginning of 2022, Byju’s has experienced complications. Byju’s has laid off nearly 2,500 workers in an effort to reduce costs. Also, despite announcements of several investment rounds since September 2021, Byju’s has not received $250 million from those rounds.
In addition, Byju’s is said to be an initial public offering (IPO). It was reportedly looking to list this year.
Byju’s was founded in 2011 by Byju Raveendran, Riju Raveendran, and Divya Gokulnath. It is one of the largest educational companies in India. There are over 200 active centers across the country at present. Byju further aims to scale it up to 500 centers by the end of 2022, the company said.
edited and proofread by nikita sharma
