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%)
You know its ironic that accounting firms issue press releases, but they don’t actually publish audited financial statements.
Member firms do…. usually audited by a mid tier firm.
When did you retire?
Only in the UK and a few others — not on a global basis. Could be done, however — Andersen’s global F/S were audited for several years in the 1970s by Haskins & Sells. Would not be a tough job, although the geographic scope would require using another of the Big Four.
Retired in 2015 but left public accounting in 1988. My experience with US accounting firms is that they don’t even keep their books on a GAAP basis. It’s closer to some kind of modified cash accounting for partnership purposes. Maybe it’s changed recently but I haven’t seen it. I would especially be interested to see an internal control report showing how they recognize revenue on an hourly basis.
I worked at KPMG Dallas for 15 years. I was told I would be managing offshore IT development groups. Then, after their training in June 2020. I was told i was being fired and replaced with my offshore team and that they were sorry for lying to me. Fuck KPMG. THEY DID THIS TO THEIR ENTIRE US DEV TEAM, 1700+ Americans lost their job to cheap shitty outsourcing group in India. The amount of internal unpunished fraud at KPMG is out of control. Hopefully they will go down in flames and we will have the BIG 3 after.
Could’ve seen that one from a mile off. After 15 years you didn’t get yourself into a position where you were too valuable to fire. Heck people make partner in 10. No wonder you have a lot of butt hurt. US Dev team is poor quality output and overpaid anyway.
Besides welcome to the global world if you guys weren’t so protectionist about sharing “your IP” with the rest of the network maybe you’d still have a job. Reap what you sow. #americafirst doesn’t apply.
Right on. You said it. Plus the guys in India are so much smarter. Silicon Valley recruits their top talent from India. The entire North American office is a bunch of old dogs leeching off a herd of overpriced newbies. They bill at a hyped up hourly rate then give a 30% discount to be ‘nice’ to loyal clients. By the way, old dog, the partnership path is six years, up or out. Not 15 nor 10. If you were 15 years in there and not a partner, you were just a grunt.
> US Dev team is poor quality output and overpaid anyway
I’ve heard partners grumbling about this for the last two years… in 2019, one of them said dev is so bad that the only option is to burn it down and start over.
Not sure that sending it to India was the right move though.
KGS, by way of comparison, is the most incompetent group of people I have worked with in my entire life. It’s laughable we have to send 30% of engagements to KGS to maximize profits when all shit products and services KGS delivers always needs to be redone by someone onshore. So, ironically, instead of lowering costs, KGS actually costs KPMG more.
BS that it was all Covid, in my firm we are up still YoY the first 5 months of this fiscal year, all lines of service. Covid will be the excuse for everything for a while, some are real, like old retail, some like KPMG, are just more of the corporate BS. In fact KPMG has been hit hard in some key markets due to their unrelenting years of poor press brought on by their inability to audit. All the Big 4 have bad press in this area, but KPMG truly is the red headed step child for a reason.
Bit US centric Zac … you think EY has a great reputation for auditing right now across Europe? •cough• wirecard, luckin, NMC and those “gold bars” …. yeah pull the other one.
Strange article. You seem at first to defend K by saying they were exposed to Covid for twice as many months given their September fiscal year end. But then you seem to make fun of them for missing their number.
What are the revenue/employee numbers across the big 4? That would be informative
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