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KPMG’s member firms generated $36 billion in combined fee income during the fiscal year ended September 30, a healthy 8% increase over the year-ago period.

That growth rate applies when measuring KPMG’s fee income in local currency. The professional services giant is not a single company, but rather a network of regional, largely independent firms that each generate revenue in the currency of their respective markets.

When measured in U.S. dollars, KPMG’s 8% year-over-year growth turns into 5%.

KPMG’s main revenue driver is its advisory business, which provides consulting services spanning a variety of areas. The business helps clients modernize their IT systems, increase profitability and make employees more productive.

The advisory business accounted for $15.9 billion of the $36 billion in fee income KPMG generated during fiscal 2023. KPMG credited the unit’s growth to “significant investments in technology and market-leading alliances,” a likely reference to the broad AI partnership it inked with Microsoft earlier this year. KPMG hopes to generate $12 billion in annual revenue through the alliance within five years. The accounting giant added that demand for ESG consulting also contributed to the advisory unit’s growth. 

KPMG’s second largest business unit is its audit group, which works with large, publicly-traded corporations to ensure their financial reports are accurate. The group’s fee income rose 9% in fiscal 2023 to $12.6 million.

KPMG’s third major source of revenue is its tax and legal services group, which grew 10% in 2023. The unit closed the fiscal year with total fee income of $7.9 billion. The company said that one factor behind the unit’s strong performance was increased in demand from North American clients.

Notably, KPMG’s revenue grew more than twice as fast as its headcount, which climbed 3% globally to about 273,000 employees. That indicates the Big Four member’s profit margin likely improved in 2023: at professional services firms, employee count is closely correlated with profitability. If demand for a consultancy’s services is growing faster than its headcount, its revenue is likely growing faster than expenses, which translates into higher profits.

Looking ahead, KPMG COO Gary Wingrove commented that “today’s rapidly evolving environment continues to demand quality services delivered with speed and scale. Between now and 2026, KPMG is collectively investing US$4.2 billion in our people, technology and ESG.”

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