Advantage Club, an employee engagement platform, has sustained its growth momentum in FY23, witnessing a staggering 93.4% increase in operating revenue. Concurrently, the company also managed to curtail its losses for the fiscal year ending March 2023 and is poised to achieve profitability in FY24.
Financial records filed with the Registrar of Companies reveal that Advantage Club’s revenue from operations surged to Rs 323 crore in FY23 from Rs 167 crore in FY22.
The company specializes in providing employee engagement and experience solutions, encompassing rewards, recognition, flexible benefits, wellness programs, onboarding assistance, and more. It boasts a client base of 1,000 companies across 100 countries and has doubled its user count to 4 million within a span of less than 15 months.
The sale of vouchers constituted the primary revenue source for Advantage Club, representing 91.5% of its total operating earnings, which soared by 92% to Rs 297 crore in FY23. The remaining income was derived from service sales, discount income (excluding product margin), and brand breakage.
However, the procurement of vouchers emerged as the largest cost component for the company, accounting for 92% of its total expenditure. This cost surged by 92.3% to Rs 299 crore in FY23, attributed to the company’s scaling operations.
Advantage Club’s overall expenses, including employee benefits, advertising and promotional expenses, information technology costs, legal fees, and other overheads, escalated to Rs 324 crore in FY23 from Rs 171 crore in FY22.
Despite substantial revenue growth, the high procurement costs for vouchers overshadowed profitability, leading the company to hover around breakeven for the past three fiscal years. Its Return on Capital Employed (ROCE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin were recorded at -20% and -0.3%, respectively. At a unit level, the company spent Re 1 to earn a rupee in FY23.
