Crypto Quill

Telegram’s financial performance in 2024 has been bolstered by a surge in the value of its cryptocurrency holdings, particularly Toncoin, even as the company’s founder, Pavel Durov, faces legal challenges in France.

Financial Success Amid Legal Turmoil

Telegram’s revenue reached $525 million in the first half of 2024, a dramatic 190% increase from the same period in 2023. This growth was fueled, in part, by a one-time deal in which Telegram allowed Toncoin to be the exclusive method for small businesses to purchase advertising on its platform. However, the exclusivity agreement ended in October, with Telegram receiving $225 million from this arrangement.

Despite Durov’s detention in August by French authorities over allegations tied to criminal content on Telegram’s platform, the company maintains that the issue has had no significant impact on operations. Telegram’s disclosures noted that while the charges target Durov personally, the company’s business activities have not been affected. Telegram also emphasized that it is continuing to enhance its content moderation practices in response to increasing scrutiny.

Crypto Gains Play a Key Role

Telegram’s crypto holdings, particularly Toncoin, have been a critical financial buffer. The value of its digital assets surged to $1.3 billion by mid-2024, up from nearly $400 million at the end of the previous year. This rise, coupled with proceeds from selling Toncoins, has provided the company with a financial cushion during this turbulent period. Telegram made $353 million from digital asset sales in the first half of the year, with $348 million of that from Toncoin sales alone.

The company remains heavily invested in Toncoin, despite the cryptocurrency’s price volatility. Since Durov’s arrest, Toncoin has decreased by about 10%, reflecting the uncertain market conditions surrounding the company’s legal troubles.

Strong Profits and Advertising Growth

Telegram also posted a post-tax profit of $335 million for the first half of 2024, signaling strong financial health as it moves towards profitability. This marks a significant improvement from 2023, when Telegram reported $342 million in revenue but posted a loss of $173 million. The company’s advertising revenue doubled to $120 million, while premium subscriptions brought in $119 million, compared to just $32 million in the same period last year.

Telegram’s aggressive monetization strategy has enabled it to capitalize on favorable market conditions, including cryptocurrency gains. Despite this, sources suggest that Telegram sees its future financial growth more firmly anchored in advertising and premium subscriptions rather than its digital assets, which have provided a temporary boost.

Challenges Ahead

Telegram faces ongoing challenges, especially with its reputation linked to illegal content on its platform. Experts have expressed concerns that the company’s future advertising revenue could be impacted by these associations, particularly as it remains connected to allegations involving child sexual abuse material and terrorist content. In response, Telegram has committed to expanding its content moderation team and improving its cooperation with judicial authorities.

Durov, who controls Telegram, has also seen the value of his cryptocurrency investments impacted by his legal battles. However, Telegram remains determined to continue its monetization efforts and is expected to explore further financing options, including bond buybacks and possibly an IPO in 2026.