$33 billion fintech giant Revolut reports first annual profit

  • Digital banking app Revolut recorded revenue of £636.2m ($766.9m) in 2021, three times what it made the previous year, and reached a net profit of 59 .1 million pounds.
  • For 2022, Revolut has issued a trading update saying it expects revenue to have grown by more than 30% to £850m.
  • Revolut was late in filing its accounts at UK Companies House in time for the December 31 deadline.

Nikolay Storonsky, founder and CEO of Revolut.

harry murphy | Sportsfile for the Web Summit via Getty Images

Financial technology giant Revolut reported its first-ever full-year profit in 2021, according to financial accounts released Wednesday, as subscriptions to its paid plans and overall usage of its app surged.

The company reported revenue of £636.2 million ($767.1 million) for the year, three times what it made the previous year, and achieved pre-tax profit of 59. £1 million. In 2020, Revolut posted a pre-tax loss of £205m.

Mikko Salovaara, chief financial officer of Revolut, told CNBC that the results were the product of Revolut’s diversified business and diligent cost control.

“The worst possible scenario would be if Revolut was unsustainable or required external funding,” Salovaara said. “The reality is that we don’t need external funding. We continue to invest in our business by providing products that people can rely on.”

For 2022, Revolut has issued a trading update saying it expects revenue to have grown by more than 30% to £850m. As a private company, it is not required to share frequent quarterly reports.

Revolut’s announcement is rare positive news in a fintech market that has been plagued by mass layoffs and huge valuation drops as investors re-evaluate the space amid deteriorating macroeconomic conditions.

Klarna, the Swedish buy now, pay later fintech, saw its valuation plunge 85% to $6.7 billion last year. On Tuesday, the company posted a record $1 billion loss in its 2022 fiscal year.

Asked about Revolut’s valuation on Wednesday, Salovaara said he couldn’t say how much the company was worth because it hasn’t raised funds since 2021, but he would “find it hard to believe that investors wouldn’t continue to be satisfied with our performance.”

However, Revolut was late in filing its accounts with the UK companies registry, Companies House, in time for the December 31 deadline. They were finally signed by BDO, Revolut’s auditors, last month.

Revolut has reportedly faced concerns from UK regulators over the robustness of its internal financial controls. In September, BDO’s audit of Revolut’s 2021 accounts was deemed “inadequate” by the Financial Reporting Council, which said the “risk of undetected material misstatement was unacceptably high”.

The company, which has no physical branches, offers digital banking, money transfers, cryptocurrencies and stock trading through a single app. It competes with the likes of Wise, Monzo and Starling.

Founded in 2015 by former Lehman Brothers trader Nikolay Storonsky and software developer Vlad Yatsenko, Revolut has quickly grown to become one of Europe’s biggest fintech unicorns, with a valuation of $33 billion.

Revolut has been pushing hard in overseas markets, especially in the United States, where it currently has over 500,000 customers. The company has also opened operations in Brazil, Mexico and India. In November, Revolut announced that it had 25 million users worldwide.

Closer to home, however, the company’s growth plans have suffered some setbacks. Revolut has been seeking a UK banking license for two years, with the aim of making more of its income from the lending business.

This process has been long and the wait is believed to be related to delays in releasing Revolut results. Revolut has also faced criticism over an aggressive work culture, which has reportedly led to the departure of key regulatory and compliance officials.

Revolut hopes to get its UK banking license “very soon”, Salovaara said. Pressed on when the company would finally get its license, he suggested it would probably happen before the end of the year.

Although Revolut’s full year 2022 results have yet to be disclosed, one thing is clear: the company’s crypto business has deteriorated sharply. Salovaara said that in 2021, crypto accounted for around a third of sales, but in 2022 it fell to between 5 and 10%.

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