Pavel Durov's Balancing Act: How TON's Market Turmoil Created a $222 Million Net Loss Despite Telegram's Record $870 Million Revenue

When Telegram reported its H1 2025 financial results to investors, the numbers told a paradoxical story—one that Pavel Durov now has to explain to potential IPO buyers. The messaging app giant achieved a remarkable $870 million revenue surge (65% year-on-year growth), yet simultaneously reported a staggering $222 million net loss. This contradiction doesn’t reflect operational failure; rather, it exposes how deeply intertwined Telegram’s fortunes have become with The Open Network (TON) cryptocurrency—and how vulnerable the company is to crypto market swings.

The $870 Million Mirage: Strong Growth Masked by One Fatal Weakness

Telegram’s first-half 2025 performance initially appears stellar. The company generated nearly $400 million in operating profit, with revenue climbing from $525 million (H1 2024) to $870 million—a growth rate that would make most tech companies envious. The drivers were diverse: advertising revenue increased to $125 million, premium subscriptions jumped 88% to $223 million, and a landmark exclusive partnership with TON blockchain contributed nearly $300 million in ecosystem-related revenue.

By traditional standards, this would signal a thriving, diversified business. But crypto volatility rendered this operational success almost irrelevant on the bottom line. The culprit: Telegram’s massive TON token holdings. When the company revalued these assets to reflect current market prices, it absorbed a devastating paper loss. TON’s price, which had already faced headwinds throughout 2025, eventually collapsed over 73% from earlier peaks—a decline that translated directly into Telegram’s balance sheet as a $222 million net loss, erasing the entire operating profit and then some.

This dynamic reveals a fundamental challenge Pavel Durov and his team must address: Telegram’s strategic bet on crypto integration has created an earnings volatility that traditional investors may find troubling. For comparison, in 2024, when Telegram achieved $540 million in annual profit on $1.4 billion revenue, approximately half derived from “partnerships and ecosystem” revenue—effectively, the TON deal. That reliance continues to grow, even as it exposes Telegram to cryptocurrency’s notorious price swings.

The $450 Million Dilemma: Cash-Out Accusation Meets Decentralization Pledge

The controversy that followed Telegram’s token movements only amplified investor anxiety. The Financial Times broke the news that Telegram had divested over $450 million in TON tokens—a figure exceeding 10% of TON’s current market capitalization at the time. The timing, amid TON’s price collapse and Telegram’s reported losses, sparked immediate backlash: some community members accused Telegram of “cashing out” while the ecosystem collapsed, a narrative that suggested Pavel Durov was abandoning ship.

Yet the fuller story complicates this interpretation. According to Manuel Stotz, chairman of TONX (a US-listed company investing in the TON ecosystem), all TON tokens sold by Telegram came with four-year lock-up agreements. This lock-up structure prevents the buyers—primarily long-term institutional investors like TONX—from flooding secondary markets with supply in the near term, thus avoiding the immediate price pressure that prompted community concerns in the first place.

Moreover, Durov had publicly committed as early as 2024 to capping Telegram’s TON holdings at no more than 10% of total supply. The recent sales appear to fulfill that commitment rather than betray it. According to available statements, the company structured these sales at slight discounts to market prices, with vesting schedules designed to shield the ecosystem from sudden liquidations. In essence, what looked like a fire sale was actually a deliberate restructuring: Pavel Durov trading some existing holdings for long-term locked tokens, while continuing to accumulate TON through ongoing revenue streams.

The strategic rationale is coherent: by distributing its token concentration, Telegram reduces concerns about price manipulation while positioning itself as a responsible steward of TON’s decentralization principles. Yet the optics remain challenging. The fact that these sales occurred while TON prices plummeted and Telegram’s financials showed massive losses will likely feature prominently in critical analyses of Pavel Durov’s judgment—a narrative that could shadow Telegram’s path to IPO just as the market tests his credibility.

Telegram’s Crypto Bet: A Double-Edged Sword for Investor Confidence

The deeper issue underlying both Telegram’s financial results and token sales is structural: the company has welded its growth strategy to a single cryptocurrency ecosystem. This integration created new revenue opportunities—the ~$300 million in TON-related fees represents transformative cash flow. But it also imported crypto’s volatility directly into Telegram’s financial statements.

For perspective: in 2024, Telegram’s cryptocurrency-related revenue (from partnerships and ecosystem deals) totaled roughly $700 million of its $1.4 billion total revenue. By H1 2025, ecosystem revenue remained critical to the company’s profitability story, yet the same assets that generated this revenue also created a $222 million revaluation loss. Investors considering an IPO must grapple with this asymmetry. Telegram is no longer a traditional software-as-a-service company; it’s increasingly a platform that monetizes crypto integration while carrying crypto asset risk.

Pavel Durov’s assertion that Telegram and TON share a “prosperity and loss” dynamic is technically accurate but may not reassure institutional investors accustomed to more stable earnings streams.

The IPO Reckoning: Convertible Bonds, Founder Control, and Legal Uncertainty

Telegram is actively preparing for an IPO, having raised over $1 billion in bonds since 2021, with an additional $1.7 billion in convertible bonds issued in 2025 (backed by major institutions including BlackRock and Abu Dhabi’s Mubadala). These financing rounds serve a dual purpose: capital for operations and structured preparation for public listing.

The convertible bonds carry a critical mechanism: if Telegram goes public before 2030, bondholders can exchange their debt for equity at approximately 80% of the IPO price—a 20% discount that effectively makes these investors profit sharers in the listing event itself. This incentive structure explains why institutions like BlackRock have been willing to participate: they’re betting on a successful IPO and the valuation premium it will bring.

Durov has indicated confidence in managing Telegram’s debt. The company redeemed or swapped out the vast majority of bonds maturing in 2026, leaving primarily 2030 maturity debt—a timeline that provides adequate runway for an IPO. Regarding frozen Russian bond assets, Durov stated that Telegram has no meaningful Russian capital exposure in recent fundraising rounds.

However, two factors complicate the IPO timeline and Pavel Durov’s control narrative. First, the company still must convince ~1 billion monthly active users (and their regulators) that Telegram’s business model can sustain profitability without relying on speculative crypto asset gains. Second, and more immediately, French legal proceedings against Pavel Durov pose an unquantified risk. Telegram has acknowledged in investor communications that this investigation could become an obstacle to public listing.

The combination is thorny: Telegram needs to demonstrate that its cryptocurrency integration is strategic strength, not financial risk; Pavel Durov must resolve legal uncertainties that could undermine investor confidence; and the company must secure a favorable IPO window (market consensus points toward 2026-2027) before convertible bond holders’ discount opportunities expire or debt interest pressures accumulate.

The Pavel Durov Equation: Vision, Risk, and Regulatory Jeopardy

What makes Telegram’s story particularly fragile is the centrality of Pavel Durov’s individual judgment to nearly every strategic choice. He remains the sole shareholder, giving him absolute control over the company’s direction and, critically, the autonomy to sacrifice short-term profits for ecosystem development. This concentration of power is a feature when Durov’s long-term vision aligns with investor interests, but a liability when regulatory or legal risks emerge.

The French investigation adds a wild card that could reshape the IPO calculus overnight. Any adverse outcome—or prolonged uncertainty—could spook institutional investors who were already uneasy about Telegram’s crypto dependency and founder-driven governance. For Pavel Durov, the next 12-18 months represent a high-wire act: execute a successful IPO before legal clouds darken further, while simultaneously proving that Telegram’s TON integration generates sustainable profitability rather than volatile speculative gains.

What’s Next: The TON Wildcard in Telegram’s IPO Story

Ultimately, Telegram’s financial paradox—record revenue alongside massive net losses—cannot be solved by accounting adjustments. It requires TON prices to stabilize and eventually recover, proving that Telegram’s crypto ecosystem bet was strategically sound. With TON currently trading at $1.52 (as of January 2026), down sharply from historical highs, that recovery remains uncertain.

For Pavel Durov and Telegram’s leadership, the message to potential IPO investors is clear: the company’s future depends not just on user growth or advertising monetization, but on the success of The Open Network as a cryptocurrency asset. That’s a narrative that few traditional tech investors have learned to embrace—and one that explains why Telegram’s IPO, though drawing closer, remains shrouded in unique challenges that few of its peers in Silicon Valley must contemplate.