Employee Engagement Platform Advantage Club Experiences Rapid Growth

Advantage Club, a leading employee engagement platform, maintained its impressive growth trajectory in FY23, with operating revenue experiencing a significant surge of 93.4%. Notably, the company also demonstrated progress towards profitability by successfully reducing losses in the fiscal year ending March 2023, and is now on track to turn a profit in FY24.

Financial Performance Highlights

As per Advantage Club’s annual financial statements filed with the Registrar of Companies, operating revenue climbed to Rs 323 crore in FY23, showcasing a substantial increase from Rs 167 crore in FY22.

The company specializes in providing comprehensive employee engagement and experience solutions, encompassing rewards and recognition programs, flexible benefits options, wellness initiatives, onboarding processes, and more. Advantage Club boasts an impressive client base of 1,000 companies across 100 countries and has successfully doubled its user base to reach 4 million within a period of less than 15 months.

Revenue Breakdown

Voucher sales emerged as the primary source of revenue for Advantage Club, contributing a substantial 91.5% to the total operating income. This segment witnessed a significant rise of 92% to reach Rs 297 crore in FY23. The remaining income was generated through service sales, discount income excluding product margins, and brand partnership collaborations.

Cost Analysis

Unsurprisingly, voucher procurement constituted the largest expense category for Advantage Club, accounting for a sizeable 92% of the company’s overall expenditure. Mirroring the revenue growth, these costs also increased by 92.3% to reach Rs 299 crore in FY23.

The company’s remaining expenses encompassed employee benefits, advertising and promotional activities, information technology infrastructure, legal fees, and other administrative overheads. As a result, the total expenditure for FY23 reached Rs 324 crore, compared to Rs 171 crore in FY22.

Path to Profitability

While the impressive revenue growth is noteworthy, the high cost of voucher procurement has overshadowed it to some extent, hindering the company’s path to achieving profitability in the last fiscal year. As a consequence, Advantage Club has hovered around the breakeven point for the past three fiscal years. This is reflected in the company’s ROCE (Return on Capital Employed) and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins, which remain negative at -20% and -0.3%, respectively. In simpler terms, the company spent roughly Re 1 to earn Re 1 in FY23.