Graphic: Rahul Awasthi
Think & Learn Pvt Ltd, which runs the edtech firm Byju’s, said its revenue from operations for the financial year ending March 2021 has been readjusted to Rs 2,280 crore even as the company incurred massive losses of Rs 4,588 crore, up from just Rs 262 crore in the previous fiscal.This is a significant drop of around 40% from what was earlier projected (roughly Rs 4,400 crore by the company). ET first reported about the difference in the unaudited revenue and what has finally been signed off by the startup’s auditor Deloitte in its September 12 edition.We said that over the past week Raveendran had been briefing the company’s shareholders about the discrepancies attributing those to business model changes due to the Covid-19 pandemic.Byju Raveendran, founder & CEO, Byju’s, told ET in an interview on Wednesday that there was a significant growth in revenue compared to FY20 but because of revenue recognition changes, it’s getting pushed to next financial year. “There is no revenue loss which is being called out in the audit report,” he insisted. “On account of that, there will be more growth in FY22,” he claimed.
Illustration: Rahul Awasthi
Deloitte said that Byju’s revenues from streaming services ( the online courses it sells), which was previously recognised fully on commencement of contract, has been adjusted to be recognized rateably over the period of the contract. Along with that, the interest paid to loan partners on behalf of customers in respect of loans granted directly to customers have been reclassified from finance cost and adjusted against revenues, since these payments are in the nature of payments to customers.These two changes have had a huge knock on the online tutoring platform’s revenue also resulting in the big losses registered by the company. Raveendran said the Rs 4,588 crore losses suffered by the firm were equally divided between Byju’s and Whitehat Jr, which it acquired in 2020.He said the past few months have been “challenging” as the company faced questions as it kept deferring the filing of its audited accounts. Last month, the Indian government’s ministry of corporate affairs (MCA) sent a communication to Byju’s asking for it to explain why the financial accounts for FY21 were not submitted till now.
Illustration: Rahul Awasthi
“While the audit delay was there – the narrative of fraud was wrong.. there was no misreporting as you suggest… I have been on calls with many investors and nobody is concerned as they do not care about FY 21 numbers but are looking at FY22 and FY23 numbers.”The edtech company said in a press statement that for FY22 it has clocked Rs 10,000 crore in gross revenue. To be sure these are unaudited results. Byju’s said it has received an unqualified report for FY21 from its auditor, Deloitte Haskins & Sells which basically means the auditor has not raised discrepancies in its financial statements.So why the readjustments in revenue?Raveendran said the changes effected in FY21 financials were as per what the auditor deemed right. Also, some of the revenue recognition fixes are based on business model changes, he added.“We were not pushing for aggressive revenue reporting, we have followed a similar pattern all this while and that is why you are seeing this delta.” Raveendran said the percentage of credit sales ( financed via NBFCs and lending partners) was much higher during Covid when online learning was in-demand.This prompted the revenue recognition to be altered for FY21, he said when asked about the reasons why Deloitte insisted on changes to be made. “It’s not that we were resisting this revenue recognition change. If you ask me, I will at any point of time let revenue move from previous year to next year. That’s how the valuation grows,” Raveendran told ET.As for the company’s cash position, Raveendran said they have enough money in the bank even after the payouts which need to be executed to private equity fund Blackstone on account of the Aakash Educational Services Ltd (AESL) acquisition made in April 2021.
Byju’s had delayed payments to Blackstone and extended the payment timeline to September end, people familiar with the matter said. The edtech firm has to cough up another $250 million to Balckstone, these people said.
Keyword: Byju’s readjusts revenue for FY21 to Rs 2,280 crore, losses swell to Rs 4,588 crore>