Clear, formerly known as Cleartax, has reported an impressive financial performance for the fiscal year 2024. The company not only saw a significant 93% increase in its revenue, but it also managed to cut its losses by a considerable margin, reflecting its growing market presence and operational efficiency.
Clear’s total revenue from operations in FY24 skyrocketed to Rs 209.84 crore, up from Rs 108.77 crore in FY23, according to the company’s consolidated financial report filed with the Registrar of Companies (RoC). This jump signals a major shift in the company’s financial trajectory and market footprint.
Strong Revenue Growth Across Multiple Segments
One of the key drivers behind Clear’s revenue surge was the expansion of its software subscription and support services, which made up 91.5% of its total earnings. These services saw a remarkable 84.1% increase, amounting to Rs 191.9 crore in FY24. This surge is a clear indication of the rising demand for Clear’s tax and financial solutions, which include accounting, e-invoicing, and invoice discounting.
The company’s software sales also saw a positive uptick, generating Rs 14.63 crore, marking a shift from the previous year. However, the lion’s share of revenue continued to come from its platform services, technical services, and commissions from its role as a mutual fund distributor. This diversification in revenue sources has played a crucial role in maintaining the company’s growth trajectory.
Clear’s Mutual Fund Push: A New Avenue of Growth
A notable aspect of Clear’s performance was its success in securing a mutual fund distributor license from the Association of Mutual Funds in India (AMFI) in early 2021. This move has clearly paid off, as the company launched its mutual fund distribution app, Black, which has quickly gained traction among investors.
This step into the mutual fund market has provided Clear with an additional stream of revenue. In FY24, the company earned Rs 4.92 crore from non-operating activities, including interest income, which pushed its total revenue to Rs 214.76 crore. With the mutual fund distribution sector continuing to show growth potential, Clear’s strategic expansion into this area looks poised to yield further benefits in the future.
Breakdown of Revenue Sources in FY24:
- Software Subscription & Support Services: Rs 191.9 crore (up 84.1%)
- Software Sales: Rs 14.63 crore
- Non-operating Income (Interest Income, etc.): Rs 4.92 crore
This diversification in revenue sources has allowed Clear to buffer itself against the volatility that can affect any single line of business, particularly in the highly competitive financial technology sector.
Managing Expenses and Reducing Losses
Despite the rapid revenue growth, Clear has been vigilant about managing its costs. Employee benefits, which were the largest expense category for the company, dropped by 19.4% to Rs 202.57 crore in FY24. This includes non-cash costs such as ESOP expenses, which amounted to Rs 11.78 crore.
Additionally, the company made strategic cuts in other areas. Spending on web hosting and software support increased by 17.7%, totaling Rs 39.61 crore. However, the company kept a tight grip on promotional costs, with only Rs 18.83 crore spent on business promotion for the fiscal year ending March 2024.
Despite the increase in certain operational costs, Clear has been able to reduce its losses by 59%, keeping them below Rs 100 crore for the year. This improved loss figure signals not only growing revenue but also a more sustainable cost structure, which will likely help the company turn profitable in the near future.
Strategic Outlook for FY25
Looking ahead, Clear’s future seems bright as it continues to expand its suite of services, tapping into new revenue streams like mutual funds and enhancing its core offerings. The company’s strong performance in FY24 lays a solid foundation for further growth in FY25.
With its focus on broadening its product base and improving operational efficiency, Clear seems well-positioned to make its mark in the competitive landscape of financial technology.
Comments