KPMG outpaces Big Four rivals as audit and tax units shine

New York, December 17, 2024

Firm’s strong annual revenue growth helps narrow gap against competitors

KPMG has narrowed the gap with its larger rivals in the past year, according to figures posted on Tuesday that showed it had the strongest revenue growth of the Big Four accounting and consulting firms.

The firm recorded global revenue of $38.4bn in the 12 months to September 30, a 5.4 per cent increase on the previous year. Stripping out the effect of currency fluctuations, the rise was 5.1 per cent.

That eclipsed the growth at Deloitte, EY and PwC, and each of KPMG’s three main business lines posted growth rates that were at or near the top of the pack. The strong revenue growth narrowed a gap that had widened in recent years between KPMG and the other three firms.

The firms’ advisory businesses have been held back since the end of the pandemic by a slowdown in demand for technology services and a dearth of merger and acquisition work.

But there have been stronger performances in the less economically-sensitive audit business, KPMG’s revenues were up 6.2 per cent to $13.4bn, and tax advice. KPMG’s global tax and legal services business was up 9.6 per cent to $8.7bn.

The Big Four, by the numbers  

Bill Thomas, KPMG’s global chief executive, said the growth reflected investments the firm had made in technology and training, and faster-growing business lines such as artificial intelligence and environmental, social and governance (ESG) work. A year ago, KPMG extended Thomas’s leadership term by 12 months to September 2026 to see through a three-year investment programme.

“Commitment to our multidisciplinary model has also fuelled greater synergies, growth and cross-border collaboration across our network,” he said.

The headline growth rates masked significant differences in different parts of the world. In Asia-Pacific, where professional services firms have been struggling with an economic slowdown in China and a political backlash against the Big Four in Australia, KPMG’s local currency growth was just 0.5 per cent. It also shrank its headcount in the region by 2 per cent in the year to September.

Revenue was up 4.2 per cent to $15.2bn in the Americas, its largest region, but it also shrank its workforce there, through more judicious hiring, tougher performance reviews of existing staff and some lay-offs in parts of the advisory business, as it worked to protect partner profits.

[The Financial Times]