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Telegram has instructed traders that the detainment of chief govt Pavel Durov by French police has had no “materials influence” on the messaging app’s operations, as monetary disclosures confirmed that the surging worth of its crypto holdings is more and more underpinning its enterprise.
In response to unaudited monetary statements seen by the Monetary Occasions, which haven’t been beforehand reported, Telegram reported enormous features within the worth of its digital belongings within the first half of 2024, which rose to $1.3bn in contrast with almost $400mn on the finish of final yr.
The filings counsel that this rise, along with proceeds it booked from promoting Toncoins — a cryptocurrency with which it has shut ties — and an additional Toncoin-related deal have all helped create a monetary buffer for the Dubai-based firm after it was shaken by Durov’s authorized troubles.
Telegram was rocked in August when its founder was detained by French authorities in Paris. He faces various preliminary charges over Telegram’s alleged failure to handle alleged criminality on the platform. One of many expenses is punishable by as much as 10 years in jail and Durov stays on bail within the nation.
The corporate wrote within the disclosures to traders, that are dated October 22, that the matter “didn’t have a fabric influence on Telegram operations and the group’s enterprise actions”, noting that the allegations had been focusing on its founder somewhat than the corporate itself.
Telegram declined to touch upon the disclosures.
In response to its monetary statements, Telegram made $525mn in income within the six months to the top of June, up 190 per cent from the identical interval in 2023.
Almost half of the income — or $225mn — got here from a one-time take care of an unnamed occasion, in keeping with the paperwork. Below the phrases of the deal, Telegram “obtained remuneration” in change for permitting the cryptocurrency Toncoin to be the unique technique for small companies to purchase promoting on the app. The exclusivity settlement was terminated on October 1, the paperwork stated.
Toncoin was initially developed in-house at Telegram. Nevertheless, it’s now developed by an open-source neighborhood after the mission bumped into regulatory troubles with the US Securities and Alternate Fee in 2020.
An ecosystem of teams now construct on the Ton blockchain or put money into Ton-related ventures, a few of which have shut ties to Telegram and Durov.
Telegram stated within the disclosures that it “holds a major amount of Toncoins and is uncovered to modifications in Toncoin market worth”, acknowledging that right here had been volatility within the worth since Durov’s detainment. Toncoin is buying and selling about 10 per cent decrease since Durov was detained.
The corporate made $353mn in proceeds from the sale of digital belongings within the first half of the yr to June, and has offered $348mn in Toncoin since then.
It additionally posted a post-tax revenue of $335mn within the first half of this yr. The figures dwarf the $342mn in revenues that it booked for the complete yr of 2023 on losses of $173mn, in an indication that Telegram was on the trail to its first annual revenue previous to Durov’s detainment.
Consultants have warned that Telegram, which is integrated within the British Virgin Islands, might wrestle to usher in future promoting revenues given it’s now linked to alleged baby sexual abuse materials and terrorist content material.
The corporate stated within the disclosures that it “stands behind its practices in content material moderation and co-operation with judicial authorities in strict compliance with the relevant French legal guidelines”, but in addition stated it was upgrading its content material evaluate practices and increasing its moderation crew.
Telegram is absolutely owned by Durov, who sits on a multibillion-dollar cryptocurrency fortune, however the firm has raised about $2.4bn in debt financing set to mature in 2026. In response to the paperwork, in September 2024 Telegram used part of its total proceeds to purchase again a few of its personal bonds for $124.5mn.
Whereas Telegrams bonds are nonetheless buying and selling beneath face worth, they’ve recovered from their preliminary sell-of following Durov’s detainment, quoted at 95 cents on the greenback, having plunged as low 87 cents in August.
Chatting with the Monetary Occasions earlier this yr, Durov stated Telegram, which solely has about 50 staff, was rising its monetisation efforts by way of adverts and subscriptions. This follows the everyday enterprise mannequin of rival social media and messaging platforms comparable to Meta and X, with the founder suggesting the corporate might float in 2026.
Promoting income roughly doubled to a file $120mn within the first half of the yr whereas premium subscriptions introduced in $119mn, in contrast with $32mn in the identical interval final yr, in keeping with Telegram’s monetary disclosures.
One individual accustomed to the matter stated that the corporate had taken benefit of beneficial market situations to profitably divest a few of its cryptocurrency reserves.
Nevertheless, the individual stated that this was tactical and never a part of its longer-term monetisation technique, which remained promoting adverts and premium subscriptions.
