The Financial Occasions (FT) not too long ago revealed a report detailing the monetary state of Telegram, the messaging app based by Russian-born billionaire Pavel Durov, and cryptocurrency’s important function in its income stream.
In accordance to the FT report by Robert Smith and Hannah Murphy, which was revealed on August 30, Telegram’s 2023 financials, which the publication obtained, reveal that the corporate generated $342.5 million in income whereas incurring a considerable working lack of $108 million. This monetary report, signed by Durov and audited by PwC’s Dubai department, highlights the rising significance of cryptocurrency to Telegram’s enterprise mannequin.
A noteworthy facet of Telegram’s income is its reliance on digital belongings, significantly Toncoins, which had been initially developed by Telegram however are actually maintained by an unbiased open-source group. The FT report emphasizes that over 40 per cent of Telegram’s income comes from two particular enterprise traces: the “built-in pockets” and the “sale of collectables,” each of which contain transactions in Toncoins. These figures underscore the extent to which cryptocurrency transactions have develop into intertwined with Telegram’s monetary efficiency.
The FT additionally sheds mild on the complexities concerned in accounting for these digital belongings. Telegram’s monetary statements reveal that the corporate recorded a modest achieve of $500,000 by means of its revenue and loss (PnL) assertion however a a lot bigger achieve of $86 million by means of different complete revenue, all associated to the revaluation of digital belongings. In accordance to the FT, these positive factors are the results of revaluations of Telegram’s cryptocurrency holdings, reflecting the unstable nature of the digital asset market.
Furthermore, the FT notes that Telegram’s steadiness sheet is closely weighted with digital belongings, that are valued at almost $400 million, far surpassing the corporate’s money and money equivalents. This heavy reliance on cryptocurrency presents each alternatives and dangers for Telegram, significantly in mild of the current arrest of Durov in France for allegedly failing to management felony content material on the platform. The FT means that this arrest has had an instantaneous impression on the worth of Toncoins, as mirrored within the sharp decline of their value following the information.
As well as to cryptocurrency-related income, the FT report reveals that Durov himself performed a big function in Telegram’s monetary actions. Final 12 months, Durov bought $64 million price of Telegram’s convertible bonds and likewise purchased $300,000 price of Telegram Premium subscriptions, utilizing Toncoins as fee. The FT signifies that these transactions spotlight the shut ties between Durov’s private funds and the corporate’s operations.
The FT report additionally touches on the authorized and regulatory challenges going through Telegram, significantly in relation to its dedication to consumer privateness. Telegram’s core worth of defending consumer privateness has made it well-liked amongst customers, but it surely has additionally attracted scrutiny from authorities in varied nations. The FT highlights a warning in Telegram’s monetary statements that the corporate’s operations could possibly be affected by adjustments in authorized and regulatory frameworks, a priority that appears significantly related in mild of Durov’s current arrest.
Lastly, the FT raises questions on Telegram’s valuation, which Durov earlier this 12 months claimed to be “$30bn-plus.” The report means that this valuation may be optimistic, given the corporate’s reliance on cryptocurrency and the substantial working bills it incurs relative to its income. The FT concludes that whereas Telegram has efficiently leveraged cryptocurrency to bolster its income, the corporate faces important challenges in navigating the advanced and quickly evolving regulatory panorama.
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