$33 billion fintech giant Revolut reports first annual profit
$33 billion fintech giant Revolut reports first annual profit

$33 billion fintech giant Revolut reports first annual profit

06 March, 2023 11:24 AM

Fintech giant Revolut reported its first full-year profit in 2021, with subscriptions to its paid plans and overall app usage growing strongly, according to financial accounts released Wednesday.

The company reported revenue of £636.2 million ($767.1 million) for the year, tripling the previous year, and pre-tax profit of £59.1 million sterling.

In 2020, Revolut recorded a pre-tax loss of £205m.

Revolut chief financial officer Mikko Salovaara said the result was the product of Revolut's diversified operations and diligent cost control.

"The worst-case scenario could be that Revolut is unsustainable or needs external funding," Salovaara said. "The reality is that we don't need external funding. We continue to invest in our business by delivering a product that people can trust.

For 2022, Revolut gave a business update and said it expects revenue to grow by more than 30% to £850m. As a private company, it is not required to regularly share quarterly reports.

Revolut announcement a rarity in the fintech market Positive news for Klarna, a market that has been plagued by massive layoffs and slashed valuations, has been beset by massive layoffs and slashed valuations as investors reprice the sector amid deteriorating macro conditions at $6.7bn.

On Tuesday, the company announced a record loss of $1 billion for its 2022 fiscal year.

However, Revolut was slow to file accounts with UK Companies House at time. 31 Deadline. Last month, they were finally signed by Revolut auditor BDO.

Revolut is reportedly facing concerns from UK regulators over the strength of its internal financial controls.

In September, the Financial Reporting Council deemed BDO's audit of Revolut's 2021 accounts "inadequate", saying "the risk of not detecting a material misstatement is unacceptably high".

The company has no physical branches and offers digital banking, money transfer, cryptocurrency 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 become one of Europe's largest fintech unicorns, valued at $33 billion.

Revolut has worked hard to enter overseas markets, especially the United States.

S., currently has more than 500,000 customers in the region. The company also operates 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 applied for a UK banking license for the past two years, hoping to generate more revenue from its lending business.

It's been a long process and the wait is believed to be related to the late release of Revolut's results. Revolut has also been criticized for an aggressive work culture that has reportedly led to the departure of key regulatory and compliance officials.

Salovaara said Revolut hopes to get a UK banking license "soon". When asked when the company would finally get the license, he replied that it could happen before the end of the year.

While Revolut's full year 2022 results have yet to be announced, one thing is clear: the company's cryptocurrency business has fallen sharply.

Cryptocurrencies will account for around a third of sales by 2021, but that will drop to between 5% and 10% by 2022, Salovaara said.

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