TikTok’s UK business has increased the amount reserved for potential legal disputes and regulatory investigations to more than $1 billion, even as the company reported a major improvement in its financial performance.
Provisions and contingent liabilities for legal and related matters reached about $1.05 billion for the year ending December 2025, up more than 13% from the previous year, according to company filings.
TikTok said provisions are recorded when legal costs are considered probable and the potential losses can be reasonably estimated. The company also warned that the final outcome of legal proceedings remains uncertain.
A significant part of the increase relates to ongoing disputes involving Ireland’s Data Protection Commission. The regulator fined TikTok €530 million last year over concerns about the protection of European users’ data transferred to China. The company has also faced previous penalties concerning the treatment of children’s accounts and compliance with European data protection rules.
The provisions do not yet cover several major regulatory issues facing TikTok in Britain. These include the UK government’s planned ban on social media access for children under 16 and an Ofcom investigation into whether TikTok is adequately protecting children from harmful content.
TikTok said it would continue monitoring regulatory developments and working with policymakers while updating its safety measures.
The legal risks come as TikTok UK reported a sharp financial turnaround. Turnover increased 45.7% to $9.2 billion in 2025, while pre-tax profit reached $280.4 million, compared with a $616 million loss the previous year.
The company also recorded its first annual operating profit, reaching $451.9 million.
TikTok described 2025 as an important turning point as it moved from a period of heavy investment towards sustained profitability. It attributed part of the improvement to spreading infrastructure costs across a larger revenue base.
The company also pointed to continued growth in livestreaming and ecommerce. TikTok Shop has expanded rapidly in Britain, with sales of beauty products rising by 60% during the year, making the platform the country’s fourth-largest retailer in that category.
At the same time, TikTok has reduced its workforce as its Chinese parent company ByteDance expands the use of artificial intelligence in content moderation.
Average monthly employment across TikTok UK and its international subsidiaries fell by more than 1,000 to 6,842. Operational and administrative roles declined from 5,289 to 4,671, while sales and marketing positions fell from 2,330 to 1,834.
Hundreds of content moderation jobs were also cut, prompting criticism from unions and campaigners who questioned whether greater reliance on AI could affect online safety.
Former moderators have launched legal action against the company, alleging unfair treatment and union-busting, claims TikTok has rejected.
The latest accounts show a business growing rapidly and returning to profit while facing significant legal, regulatory and employment challenges.
