Telegram’s Revenue Surges to $525 Million Amid Founder’s Legal Troubles

In the first half of 2024, Telegram reported a significant revenue increase, soaring to $525 million. This financial boost came despite the arrest of its founder, Pavel Durov, on charges related to criminal activity on the platform.

Financial Performance and Cryptocurrency Holdings

According to financial reports, Telegram’s digital assets rose to $1.3 billion in the first half of 2024, a substantial increase from nearly $400 million at the end of 2023. This growth was largely fueled by the sale of Toncoin, a cryptocurrency linked to the platform.

Despite the founder’s legal issues, Telegram assured investors that Durov’s detention by French police had not had a “material impact” on the app’s performance. The company maintained its strong financial position, reporting a profit after taxes of $335 million from $353 million in cryptocurrency transactions.

Revenue Sources and Strategic Deals

Telegram’s revenue of $525 million for the first half of 2024 marked a 190% increase compared to the same period in the previous year. A significant portion of this revenue, $225 million, came from a one-time deal with an unnamed partner. This agreement granted Toncoin exclusive status for small businesses to purchase advertising on the app.

“Under the terms of the deal, Telegram received remuneration in exchange for allowing the cryptocurrency Toncoin to be the exclusive method for small businesses to buy advertising on the app.”

Advertising and premium subscriptions also contributed to Telegram’s revenue. In the first half of 2024, advertising revenue reached a record $120 million, and premium subscriptions brought in $119 million.

Challenges and Future Prospects

Experts warn that Telegram may face future challenges in advertising revenue due to its links to controversial content, including sexual violence and terrorist activities. The company acknowledges the need to enhance its content moderation system and maintain strict control over the platform’s content.

Despite these issues, Telegram has raised approximately $2.4 billion in debt financing, which must be repaid by 2026. In September, the company repurchased $124.5 million in bonds, showcasing its financial management capabilities.

Plans for Expansion and IPO

Telegram’s future plans include expanding its advertising platform and offering content creators 50% of the revenue from ads on their channels. The company also intends to introduce business accounts and a new feature allowing users to meet people nearby.

“Generally speaking, we see value in [an IPO] as a means to democratize access to Telegram’s value.”

Although the company has not confirmed the timing or platform for an initial public offering (IPO), bondholders could convert their bonds into shares at a discount if the placement is completed before March 2026.

Durov’s Legal Troubles

Pavel Durov was detained on August 24, 2024, at the Paris airport. He faces charges related to Telegram’s insufficient moderation and refusal to cooperate with authorities, making him a suspect in distributing child pornography, fraud, and other crimes. Durov was released on bail of €5 million and is required to report to the police station twice weekly.

Telegram has stated that it adheres to strict content moderation practices and cooperates with judicial authorities in compliance with French law. The company is also improving its content verification methodology and expanding its moderation team.

Belgium has been investigating Telegram since 2020 and is now collaborating with French authorities to exchange investigation results and undertake joint actions.

#Cryptocurrency #DigitalAssets #CryptoAssets

Post Views: 3