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

Financial technology giant Revolut reported its first ever annual profit in 2021, according to financial statements released on Wednesday, as subscriptions to paid packages and overall usage of the app surged.

The company reported revenue of 636.2 million pounds ($767.1 million) for the year, three times what it earned the year before, and rose to a pre-tax profit of 59.1 million pounds. In 2020, Revolut recorded a pre-tax loss of £205 million.

Revolut’s announcement is a rare bit of positive news in a fintech market that has been plagued by mass layoffs and massive write-downs as investors reassess the space amid worsening macroeconomic conditions.

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

For 2022, Revolut gave a trading update saying it expects revenues to have grown by more than 30% to £850m, citing a diversified business model. As a privately held company, it is not required to share frequent quarterly reports.

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

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

The company, which has no physical branches, offers digital banking, money transfers and cryptocurrency and stock trading through a single app, competing 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 largest fintech unicorns, valued at $33 billion.

Revolut has pushed hard into overseas markets, particularly the US, where it currently has over 500,000 customers. The firm has also opened operations in Brazil, Mexico and India. In November, Revolut announced that it has 25 million users worldwide.

Closer to home, however, the company’s growth plans have suffered some setbacks. Revolut has been applying for a banking license in the UK for the past two years, in an attempt to derive more of its revenue from lending activity.

That process has been long, and the waiting time is believed to be related to the delays in publishing Revolut’s results. Revolut has also faced criticism for an aggressive work culture, which has reportedly led to the departure of key regulators and compliance executives.