Telegram's revenue surges but losses reach 220 million! TON plummets 69%, dragging down IPO

Telegram’s first-half revenue reached $870 million, a 65% increase, but it posted a loss of $220 million (compared to a profit of $334 million in the same period last year). $300 million of the revenue comes from the TON protocol, but a 69% drop in TON’s value led to asset write-downs, with $450 million worth of TON sold. Additionally, $500 million of Russian bonds have been frozen, CEO Durov is under investigation in France, and an IPO is in doubt.

The Contradiction of Revenue Surge by 65% and Turning Profit into Loss

(Source: CoinGecko)

According to a report by the Financial Times on Tuesday, Telegram’s revenue for the first half of 2025 reached $870 million, a 65% growth from $525 million in the same period last year. The report cites unaudited financial statements. However, Telegram announced a net loss of over $220 million for the first half of 2025, compared to a net profit of $334 million last year. This sharp contrast from profit to loss has attracted market attention.

The reason for the revenue growth but incurring losses is due to the write-down of TON assets. According to the Financial Times, citing anonymous sources, Telegram’s holdings of Toncoin have been significantly devalued. Data from CoinGecko shows that Toncoin’s value will have lost 69% by 2025. This accounting treatment requires the company to adjust asset values to market prices, and the plummet in TON’s price is directly reflected in the financial statements, resulting in substantial paper losses.

About one-third of the revenue, or $300 million, comes from “exclusive agreements” related to the cryptocurrency Toncoin associated with Telegram, with these agreements tied to revenue. This high dependence on TON is a double-edged sword; when TON’s price rises, it can generate considerable income, but when the price crashes, it causes severe losses. The report states: “The company told investors that so far this year, it has sold more than $450 million worth of Toncoin.” According to CoinGecko, as of press time, this amount accounts for approximately 10% of TON’s $4.6 billion market cap.

This large-scale sell-off may be one of the reasons for the 69% drop in TON’s price. When related parties like Telegram sell large amounts of tokens, the market interprets it as a lack of confidence, triggering panic selling. Moreover, the $450 million sell-off represents about 10% of the market cap, and such selling pressure can overwhelm markets with low liquidity.

Three Major Concerns About Telegram’s Financial Situation

Over-reliance on TON: $300 million revenue from TON-related agreements, accounting for 34% of total revenue; price fluctuations directly impact performance

Frozen Russian Bonds: $500 million bonds frozen due to Western sanctions, increasing liquidity pressure

Profitability Uncertain: Revenue surges but losses persist, raising questions about the sustainability of the business model

Liquidity Crisis from the Freezing of $500 Million Russian Bonds

According to the Financial Times, due to Western sanctions, Telegram’s $500 million bonds held at the Russian Central Securities Depository have been frozen. In response, a Telegram spokesperson stated that the $500 million figure refers to bonds issued in 2021. The spokesperson also noted that the most recent bonds issued in 2025 exclude Russian investors.

The spokesperson emphasized: “Telegram does not rely on Russia or Russian capital, nor will it face bond-related issues due to sanctions. Sanctions do not pose a risk to Telegram: typically, bond repayment funds are transferred to international intermediaries, and subsequent payments to bondholders are not the company’s responsibility, even if some bondholders cannot receive payments.”

While this explanation may hold legally, the freezing of $500 million in bonds still impacts investor confidence. In recent years, Telegram has issued multiple bonds, including a $1.7 billion convertible bond issued in May 2025. Reports indicate that major supporters of this issuance include investment giants BlackRock and Abu Dhabi’s Mubadala. According to sources from the Financial Times, Telegram has repurchased most of the bonds due in 2026, indicating active debt management.

Durov Case and Uncertainty Over IPO

At the time of this report, Telegram CEO Pavel Durov is still under formal investigation in France for allegedly failing to address crimes including child abuse content on the platform. Reports say that during recent conference calls with some bondholders, Telegram stated it would continue cooperating with authorities regarding Durov’s case and that more solutions are needed to advance the company’s IPO process.

The Durov case poses a significant obstacle to Telegram’s IPO. Public market investors are highly sensitive to regulatory risks; an actively investigated CEO would severely impact valuation. Even if Durov is ultimately exonerated, the uncertainty during the investigation could delay the IPO timeline. If developments are unfavorable, Telegram might be forced to replace the CEO or significantly revise content moderation policies.

The company aims to achieve $2 billion in revenue in 2025. With $870 million in the first half, reaching $2 billion for the full year would require $1.13 billion in the second half, a 30% increase over the first half. While challenging, this goal is not impossible considering Telegram’s user growth and commercialization efforts. However, ongoing losses will likely suppress IPO valuation.

Overall, Telegram presents a paradox of high growth but high risk. The 65% revenue surge indicates successful commercialization, but asset write-downs, frozen bonds, the Durov investigation, and other risks make the IPO outlook uncertain.