I had it all planned out. Knowing that KPMG would likely announce its 2020 global revenue this week, I was going to give KPMG kudos and kongratulations and golf claps for finally hitting the $30 billion mark, which would be an all-time high for the firm. And then troll KPMG a little for being the last of the Big 4 firms to reach $30 billion.
But I wasn’t expecting the following news from KPMG this morning:
Through a year of economic and social turbulence, KPMG International today announced KPMG firms’ annual aggregated revenues of $29.22 billion for the fiscal year ending 30 September 2020. FY20 growth had a strong start with gross revenue growth slowing in the second half of the year. Overall billable hours and net sales increased throughout the financial year as firms continued to support clients in their response to the COVID-19 crisis.
So not only did KPMG not reach $30 billion in global revenue this year, but its 2020 revenue is 1.8% lower than last year’s $29.75 billion.
Dammit, KPMG, thanks for ruining my plans!
So if my research is correct, KPMG is the first Big 4 firm since EY in 2010 that has had a year-over-year decline in global revenue. And the last time KPMG had a year-over-year decrease in revenue was in 2009, when it fell 11% from 2008 during the global financial crisis.
I honestly didn’t think we’d see a Big 4 firm with decreased revenue in 2020 because of the coronavirus pandemic; I’m thinking that’s more of a possibility in FY 2021. But if there was one firm that would see a drop-off, it would be KPMG because its fiscal year end is so much later than PwC’s, Deloitte’s, and EY’s. So KPMG only had four or five months of pre-pandemic success, whereas the other three had seven or eight months before the pandemic really impacted their businesses.
According to the release from KPMG, the firm had a pre-pandemic growth rate of 5%, but that growth got completely wiped out and fell to -1% by the end of the financial year.
All three of KPMG’s core service lines brought in less revenue than in 2019:So for audit that’s a 0.98% decrease over 2019’s $11.18 billion, a 2.1% decrease in tax and legal ($6.62 billion in 2019), and a 2.3% decrease in advisory ($11.95 billion in 2019).
One bright spot was KPMG’s global legal services, which grew 6% in 2020, according to the release.
Of KPMG’s three regions, only one saw revenue growth in 2020, and that was Asia Pacific—up 2.3% from 2019’s $5.14 billion to $5.26 billion in 2020. The Americas region saw its revenue fall from $11.72 billion in 2019 to $11.22 billion in 2020, and the Europe, Middle East and Africa (EMA) region had $12.74 billion in 2020, down 1.2% from $12.89 billion in 2019.
According to the firm’s 2020 Annual Report, KPMG has a total headcount of 226,882, up 3.5% from last year’s 219,281.
So thus ends the Big 4 revenue pissing match of 2020. Here’s a recap of everyone’s totals (percent increase or decrease in parenthesis):
- Deloitte: $47.6 billion (+3.9%)
- PwC: $43 billion (+1.4%)
- EY: $37.2 billion (+2.3%)
- KPMG: $29.2 billion (-1.8%)