Deloitte raised its global revenue by nearly a fifth to a record last year, as expansion in technology consulting and corporate deals helped it become the largest of the Big Four professional services firms.
The accounting and consulting group reported revenue of $59.3 billion, of which nearly $16 billion came from sales of services as part of its alliances with technology groups such as Amazon Web Services, Google, Salesforce and SAP.
Revenue from partnerships with the world’s largest technology groups is critical to consultants’ business models. EY, the third largest of the Big Four, is part of the reasons for pursuing the divestment of its audit and consulting businesses.
EY is the auditor of several large technology groups, which means that conflict of interest rules prevent the firm’s advisers from working with them in a way that helps generate revenue for Deloitte.
Deloitte Global CEO Punit Renjen has ruled out the possibility of his firm pursuing a split, saying that combining audit and advisory functions is the firm’s core business.
“We will not separate or divide our businesses,” he said. “The multidisciplinary model and culture of private partnerships will continue to be the preferred strategy and structure.”
“Our results speak for themselves,” he added. We do not generate income through the work of our collective lives or the generations before us.
EY’s proposed split – which is expected to win approval from its global bosses this week – would provide a multimillion-dollar windfall for the current generation of partners. It has led to speculation that partners in the rival Big Four firms will want to follow suit, potentially reducing financial rewards and promotional opportunities for future generations of partners.
Demand for consulting on tech projects has increased since the pandemic as companies have shifted to selling and supporting customers online and modernizing their systems to use data and make supply chains more robust.
Consulting was the fastest growing of Deloitte’s business lines last year, increasing revenues by 24.4% to $25.8bn. Deloitte is the least dependent of the big four for audit revenues, although it has the largest group revenues and generates the smallest total.
Audit and assurance revenues rose modestly by 8.7 percent to $11.4 billion as companies continued to turn to auditors to assess their climate impact.
Total sales in the 150 countries where Deloitte operates rose 18.1 percent to $59.3 billion in the 12 months. Total headcount rose to 415,000 from less than 350,000 a year ago.
The smaller financial and risk advisory segments both grew by a fifth, while sales of tax and legal advice rose 11.5 percent to $9.9 billion.
The Americas, which accounts for about half of Deloitte’s business globally, was the fastest growing region, increasing sales by 22.1 percent.
Deloitte is the first of the Big Four to publicly announce results for its latest financial year, but PwC is expected to report record sales of about $50 billion, its boss, Bob Moritz, told the Financial Times in July.
EY told staff it generated $45.4bn in global revenue in its latest financial year, a 13.5 per cent rise, the FT reported in July. KPMG is expected to report its figures in December as its financial year does not close until the end of September.
The Big Four, which say they advise companies to improve transparency and gain public trust, do not disclose their global profits.
The companies are structured as national partnership networks where profits are kept local and paid to the partners who manage the business. Domestic companies pay an annual fee to use an international trademark and agree to comply with agreed standards.
