Telegram's "Encrypted Accounting": Net Loss Behind Revenue Surge and the $450 Million Coin Sale Controversy

Article: Zen, PANews

Telegram recently once again drew attention due to a financial report sent to investors: revenue is trending upward, but net profit has turned downward. The key variable here is not user growth slowdown, but the downward price movement of TON, which has “penetrated” asset volatility into the profit and loss statement.

Selling over $450 million worth of TON tokens has prompted the outside world to reassess its interests and boundaries with the TON ecosystem.

Telegram Revenue Surges Despite Low TON Price and Still Posts Net Loss

According to FT, in the first half of 2025, Telegram achieved a significant jump in revenue. Unaudited financial reports show that the company’s revenue in the first half of the year reached $870 million, a 65% year-over-year increase, far exceeding the $525 million in the first half of 2024; operating profit was nearly $400 million.

Looking at the revenue structure, Telegram’s advertising income grew by 5%, reaching $125 million; premium subscription income soared by 88%, reaching $223 million, nearly double that of the same period last year. The key driver of this revenue growth is primarily due to an exclusive agreement signed with the TON blockchain—TON became the exclusive blockchain infrastructure for Telegram’s mini-program ecosystem, bringing in nearly $300 million in related income.

Overall, Telegram continued the strong growth initiated in 2024 during the first half of last year—2024 marked Telegram’s first annual profit, reaching $540 million, with total revenue hitting $1.4 billion, significantly higher than $343 million in 2023.

Of the $1.4 billion revenue in 2024, about half came from its so-called “partnerships and ecosystem,” roughly $250 million from advertising, and $292 million from its premium subscription services. Clearly, part of Telegram’s growth benefited from a surge in paying users, and more from its cryptocurrency-related collaborations.

However, the high volatility of cryptocurrencies also poses risks for Telegram. Despite nearly $400 million in operating profit in the first half of 2025, Telegram still reported a net loss of $222 million. Insiders say this is because the company had to revalue its holdings of Ton tokens. Due to the continued downturn of altcoins in 2025, the price of Ton tokens kept falling throughout the year, dropping more than 73% at the lowest point.

Selling $450 million worth of tokens—cash-out or adhering to decentralization principles?

Accustomed to the long-term stagnation of altcoin prices and the paper losses of many DAT-listed companies, retail investors are not surprised by Telegram’s losses due to virtual asset depreciation. More surprising and displeasing to the community is FT’s report that Telegram has sold a large amount of TON tokens, with sales exceeding $450 million. This figure surpasses 10% of the token’s current circulating market cap.

As a result, the continuous decline in TON’s price, combined with Telegram’s disposal of its large token holdings, has triggered doubts and controversy within some TON communities and investors about “selling tokens for cash” and “backstabbing TON investors.”

According to a public statement from Manuel Stotz, Chairman of TONStrategy (NASDAQ: TONX), the company managing TON’s treasury, all TON tokens sold by Telegram are set with a four-year phased unlock. That is, these tokens cannot be traded on the secondary market in the short term, avoiding immediate selling pressure.

Furthermore, Stotz stated that the main buyers connected with Telegram are long-term investors led by TONX, which he heads. Their purchase of these tokens is for long-term holding and staking. As a listed company in the US specializing in TON ecosystem investments, TONX’s acquisitions of Telegram’s tokens are primarily for strategic long-term purposes, not for speculation or quick profit.

Stotz also emphasized that Telegram’s net holdings of Ton tokens have not significantly decreased after the sales; they may have even increased. This is because Telegram has used part of its stock to distribute locked tokens and continues to earn new TON income through advertising revenue sharing and other business activities, maintaining a high overall position.

Telegram’s long-term business model of holding TON tokens has previously raised concerns within some community members—holding an excessively high proportion of tokens is seen as detrimental to TON’s decentralization. Telegram founder Pavel Durov takes this concern seriously. As early as 2024, he stated that the team would keep Telegram’s TON holdings below 10%. If holdings exceed this threshold, the excess would be sold to long-term investors to promote broader token distribution and raise funds for Telegram’s development.

Durov emphasized that these sales would be conducted at a slight discount below market price, with lock-up and vesting periods to prevent short-term selling pressure and ensure the stability of the TON ecosystem. This plan aims to prevent the concentration of TON in Telegram’s hands from causing price manipulation concerns and to uphold the project’s decentralization principles. Therefore, Telegram’s token sales are more like asset restructuring and liquidity management rather than simple profit-taking during price peaks.

It is worth noting that the continued decline of TON’s price in 2025 has indeed put downward pressure on Telegram’s financial reports, but in the long run, the close linkage between Telegram and TON has created a mutually beneficial and risky situation.

Telegram’s deep involvement in the TON ecosystem has generated new revenue streams and product highlights, but it also exposes the company to the financial impacts of cryptocurrency market volatility. This “double-edged sword” effect is a factor that investors must consider when evaluating its value ahead of an IPO.

Telegram’s IPO Prospects

With improved financial performance and diversified business, the prospect of Telegram going public has become a focus of market attention. Since 2021, the company has raised over $1 billion through multiple bond issuances; in 2025, it issued another $1.7 billion in convertible bonds, attracting participation from international institutions like BlackRock and Mubadala of Abu Dhabi.

These financing measures not only provide capital for Telegram but are also seen as preparations for an IPO. However, the path to listing is not smooth—its debt arrangements, regulatory environment, and founder-related factors will influence the IPO process.

Currently, Telegram has two main outstanding bonds: one with a 7% coupon maturing in March 2026, and another with a 9% coupon maturing in 2030, which is a convertible bond. Of the $1.7 billion in the second bond, about $955 million is used to refinance old debt, and $745 million is new capital for the company.

The convertible bond includes an IPO conversion clause: if the company goes public before 2030, investors can redeem or convert at approximately 80% of the IPO price, effectively a 20% discount. This means these investors are betting on Telegram’s successful IPO and substantial valuation premium.

Currently, Telegram has already redeemed or repaid most of its 2026 maturing bonds through debt refinancing in 2025. Durov publicly stated that the old debt from 2021 has been mostly cleared and does not pose current risks. Regarding the impact of the $500 million Russian bond freeze, he responded that Telegram does not rely on Russian capital, and no Russian investors are involved in the recently issued $1.7 billion bonds.

Thus, Telegram’s main remaining debt is the 2030 convertible bonds, leaving a relatively wide window for listing. However, many investors still expect Telegram to seek a listing around 2026-2027, to convert debt into equity and open new financing channels. Missing this window could mean the company faces long-term debt interest pressures and may lose the opportunity to transition to equity financing.

When evaluating Telegram’s listing value, investors also focus on its profitability prospects and fee models. Currently, Telegram has about 1 billion monthly active users, with an estimated 450 million daily active users, providing a large user base with commercial potential. Although its business has grown rapidly in recent years, Telegram still needs to prove that its business model can sustain profitability.

The good news is that Telegram currently maintains absolute control over its ecosystem. Durov recently emphasized that the company’s sole shareholder remains himself, and creditors are not involved in corporate governance.

Therefore, Telegram might, without being constrained by short-sighted shareholders, sacrifice some short-term profits to foster long-term user engagement and ecosystem prosperity. This “delayed gratification” strategy aligns with Durov’s consistent product philosophy and will be central to telling its growth story to investors during the IPO process.

However, it should be noted that an IPO depends not only on financial and debt structures. FT points out that Telegram’s potential listing plans are still affected by ongoing legal proceedings against Durov in France, adding uncertainty to the timing. Telegram has also acknowledged in communications with investors that this investigation could pose an obstacle.