KPMG keeps revenues flat at $2.1 billion before scandal fallout hits

The Australian branch of professional services firm KPMG has posted revenues of $2.1 billion for its financial year to July, a slight 1% reduction ahead of what’s sure to be an upcoming wipe-out.

The figures, around $25 million shy of the previous year’s tally, signaled a recovery from KPMG’s more significant declines following a previous peak of $2.5 billion in 2023, but were mostly achieved prior to the fall-out from the firm’s current data-sharing scandal.

While the full extent of the financial damage from that affair won’t be known for some time, KPMG is also being forced to confront the impact of AI on its business, reduced government spending, and a diving consulting market which was previously a growth-driver.

Once a $1 billion business, KPMG’s consulting division last year suffered another 17 percent downturn to $632 million, following reductions of 18 and 14 percent over the two previous periods. As such, professionals from the practice have found themselves first in the firing line for what is expected to be a huge number of job cuts, with the practice also undergoing yet another restructure.

In contrast, KPMG’s four other divisions all grew, including gains of 11 percent for both its audit & assurance and tax & legal practices, which respectively contributed $405 and $268 million to the overall tally. Mid-market & private meanwhile rose by over 6 percent (but will also be subject to the restructure), adding $449 million, with deal advisory & infrastructure up 3 percent to $342 million.

“This result reflects the resilience of our business and, above all, the commitment of our people in a very challenging year,” said recently-installed CEO John Sams. “They continued to deliver outstanding work for more than 13,000 clients, while supporting one another through a difficult period for the firm. I am incredibly thankful for their hard work, professionalism, and care.”

Sams, however, didn’t paint a rosy picture for the future, scandal aside; “Economic growth is expected to remain subdued until at least 2028, affecting client investment and extending decision-making time-frames. The sector is also changing rapidly as client expectations evolve, AI reshapes the way services are delivered, and government spending on consultants remains lower.”

Having only just replaced former CEO Andrew Yates, Sams also said the firm recognised the challenges created by its own failings, although the financial ramifications are hard to predict. Following its own confidentially breach, PwC immediately lost ~$680 million of income in being pushed to sell its public sector practice, but faced somewhat less of a corporate backlash.

That sale also ensured some 1,000 Australian workers remained employed, whereas KPMG’s redundancies – forecast by the AFR to reach a similar number – could see those axed through no fault of their own completely out of work, adding to community anger. As well as a loss of lucrative audit clients, the firm will also have to contend with an increasingly impatient government.