Telegram, the widely used encrypted messaging platform, has unveiled a significant aspect of its financial profile: a substantial cryptocurrency portfolio valued at $400 million. This disclosure comes as the company grapples with a $108 million operating loss for 2023 and faces heightened scrutiny over its handling of illegal content and recent controversies involving its founder.
Despite generating $342.5 million in revenue last year, Telegram's financial performance has been marred by considerable operating losses. The company's recent financial statements highlight its deepening reliance on cryptocurrency-related activities as a key revenue source. Notably, over 40% of Telegram's revenue is now derived from its integrated crypto wallet and the sale of digital collectibles.
The integrated wallet, which allows users to store, send, and trade various cryptocurrencies, has become a significant revenue driver. The platform's revenue streams also include the sale of virtual assets such as usernames and phone numbers, which together contributed nearly $148 million in 2023. This innovative approach underscores Telegram's strategy to leverage digital assets to bolster its financial standing.
Telegram's financial disclosures reveal a complex landscape of digital asset management. The company holds a substantial amount of Toncoin, the native token of its blockchain project, The Open Network (TON). This strategic asset management, including the sale of Toncoin before a recent market downturn, indicates Telegram's proactive efforts to mitigate risks associated with volatile cryptocurrency markets.
The company's substantial digital asset holdings and revenue from crypto activities offer insight into its financial health. However, Telegram is also facing challenges, including a $108 million operating loss and recent controversies involving Pavel Durov, the platform's founder. Durov's arrest in France, linked to allegations of insufficient action against illegal content on the platform, adds to the company's challenges.
Despite these hurdles, Telegram's investments in digital assets and strategic revenue streams highlight its substantial presence in the cryptocurrency space. Telegram's financials, audited by PwC in Dubai, show a modest gain from revaluing digital assets, although the company has recorded an $86 million gain under other comprehensive income.
Telegram's high dependence on digital assets is evident from its financial reports. As of the end of 2023, the value of its crypto assets substantially surpassed its cash reserves, showcasing the company's significant commitment to this sector. In addition to its digital asset holdings, Telegram raised over $2.3 billion through convertible bonds from various investors, including sovereign wealth funds and hedge funds.
Personal investments by Durov, including a $64 million purchase of Telegram's convertible bonds and $300,000 worth of Telegram Premium subscriptions using Toncoins, reflect his substantial financial stake in the company. This high level of personal investment underscores Durov's commitment to Telegram, even as the company navigates financial and regulatory challenges.
