Edtech unicorn LEAD Group narrows losses, stabilises core business in FY25

WestBridge-backed edtech unicorn LEAD Group turned a corner in FY25, reporting a positive operating EBITDA of Rs 4.03 crore before ESOP expenses, a reversal from its Rs 105.75 crore loss in FY24.

For the financial year ending March 2025, the Mumbai-based company narrowed its net loss by 69.5%, to Rs 42.76 crore from Rs 140.22 crore a year earlier. Its revenue from operations in FY25 edged up slightly to Rs 351.85 crore, while total revenue declined to Rs 367.41 crore.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) is a measure of core operating profitability, excluding non-cash charges and financing costs.

Speaking about the key cost levers, LEAD Group Co-founder and CEO Sumeet Mehta cited three main factors: improved outcomes and retention led to better collections and reduced provisioning; AI and technology helped lower R&D costs while increasing execution speed; and stronger word of mouth brought down customer acquisition costs for new schools.

Cost discipline was a major driver, with core operating expenses reduced by 23.6%, to Rs 363.38 crore in FY25 from Rs 475.71 crore in FY24. This enabled the company to turn last year’s operating loss into a positive EBITDA (pre-ESOP). Its expenses dipped to Rs 350 crore, down 24% YoY.

Looking ahead, Mehta expects revenue to grow by 30% in the current financial year (FY26), with EBITDA margins projected in the high single digits. “We expect to achieve PAT breakeven in FY27,” he added.

LEAD Group has also clocked an Annual Recurring Revenue (ARR) of Rs 415 crore for Academic Year (AY) 2025–26, a 30% increase over the previous year.

According to Mehta, this growth is being driven by 100% net revenue retention among partner schools and continued sign-ups from new institutions. “Our primary focus will be to continue to drive great student learning outcomes in schools,” he said.

Mehta also explained that ARR leads actual revenue by one financial year. The Rs 415 crore ARR was generated during FY25 and will be recognised as revenue in FY26.

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ARR refers to predictable, contracted recurring revenue, typically from long-term partnerships or subscriptions. For a company like LEAD, ARR serves as a strong indicator of revenue stability, customer retention, and scalable growth.

LEAD’s 100% net revenue retention is fuelled by both high renewal rates and consistent upselling. According to Mehta, strong student outcomes and high usage of the LEAD Learning System have encouraged schools to renew their partnerships. Additionally, the company has grown student enrolments within existing schools, expanded to more grades, and introduced new offerings such as Coding, AI, and IIT-JEE/NEET foundation programmes.

In late 2024, the B2B edtech company took a step toward personalised learning with the launch of TECHBOOKS, physical textbooks integrated with digital features that deliver a tailored learning experience for each student.

Over 25,000 students across more than 145 LEAD partner schools are already using TECHBOOKS. “We are seeing early results on improvement in reading fluency and engagement with augmented reality,” Mehta remarked.

Founded in 2012 by Mehta and Smita Deorah, LEAD provides a comprehensive learning system that includes software, hardware, curriculum, books, school kits, and teacher training. Today, it serves over 8,500 schools, 60,000 teachers, and reaches nearly 40 lakh students across 400 towns and cities in India.

According to Tracxn, LEAD has raised over $171 million to date. In January 2023, it secured $20 million in debt financing, following a $4.2 million round from Alteria Capital in December 2022. Earlier in 2022, the company raised $100 million in a Series E round led by WestBridge Capital and GSV Ventures, at a valuation of $1.1 billion.