Telegram has more than 900 million of monthly active users and it is one of the most popular instant messaging applications in the world. However, this rival to alternatives such as WhatsApp or WeChat has been trying to achieve profitability for years. Financial Times notes that the finances of the company led by Pavel Durov improved dramatically in the first half of 2024, although they may have experienced a setback after the businessman’s arrest in France.
Since we are talking about a private equity entity, its balance sheets are not publicly available, but they are accessible to some investors. The aforementioned American newspaper has obtained one of them and has found extremely interesting information. Telegram recorded revenues of $525 million between January and June of this year, which translates into spectacular growth of 190% compared to the same period of the previous year.
Telegram revenue soared in the first half of 2024
Everything pointed to 2024 being a good year for Telegram. The company’s efforts to monetize were beginning to bear fruit. Almost half of its revenue for the first six months of the year, about $225 million, came from a system where the messaging service exclusively adopted the Toncoin cryptocurrency as an exclusive payment method for small businesses to acquire advertising services. This agreement, however, expired on October 1.
The name Toncoin is probably familiar to you. It is the main cryptocurrency of The Open Network (TON), a blockchain that emerged within Telegram with the mission of decentralizing the service (and making money), but which ended up separating in 2020 after facing regulatory problems in the United States. Joined. Since then, Toncoin has continued its development independently.
But revenue tells us nothing about the company’s profitability. We have already seen how many technology companies earn enormous amounts of money, but spend more money than they have. At this point, Telegram made a profit of $335 million in the first half of 2024. The profit for the aforementioned period has been almost as high as the entire income registered for the year 2023, which stood at 342 million dollars and recorded losses of 173 million dollars.
Now, when it comes to profitability, it is not enough to obtain profits for a short period of time. Ideally, a company can maintain positive cash flow over time. Telegram appears on track to reach its first annual profit in 2024, but we will have to wait to find out if this will be a reality. The second semester comes with several challenges. One of them is the arrest of Durov in France. Although the businessman has been released, he remains on bail in the European country.
Another challenge is the absence of the huge amount of money that the company received from its agreement with the Toncoin cryptocurrency. We should soon know whether monetization efforts through ads and subscriptions will be enough to keep Telegram profitable over time. For now, the company has raised more than 2 billion dollars in financing through debt that will mature in 2024. Going public is also a possible option for its future.
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