Revolut reports its first ever year of profit

Revolut reported its first year of profit on Wednesday, in a long-awaited set of 2021 financial results that showed the neo-bank growing its customer base and revenue on higher-margin products.

Revenue at the neobank nearly tripled, from £220m in 2020 to £636m in 2021. That meant the bank made a £39m pre-tax profit – its first results in the black.

“2021 was a pivotal point in Revolut’s journey – a year characterized by three key themes: our business model proving its profitability through revenue growth, expanding our product range and continued global expansion,” CEO Nik Storonsky said of the figures.

“Landmark achievements in profitability, product and expansion in 2021 saw us move from a high-growth fintech to an established leader in the new era of banking,” he added.

The currency and wealth division – which comprises the crypto trading arm – accounted for over half of total revenues in 2021, increasing more than eightfold to £349m, from £41m in 2020.

Revolut benefited from the pandemic crypto trading boom: the neobank said it increased the number of crypto tokens on its trading platform from 10 to 60 tokens in 2021, “in response to consumer demand.”

Revenue from its crypto-trading arm is likely to have fallen significantly in fiscal 2022 from the pandemic peak in 2021, as retail investors fled the asset class amid a global crypto market rout and following the collapse of crypto exchange FTX.

Revolut’s number of personal customers rose by almost 50%, to 16.4 million in 2021, and the neobank said this figure is now 27 million. The pandemic helped increase the number of customers and the amount they used the banking app, amid an accelerated shift to digital services and remote working, Revolut said.

Chief financial officer Mikko Salovaara said revenue continued to rise in 2022, rising more than 30% to £850m, but did not share Revolut’s profitability for the past year.

Revolut’s total director pay jumped to £3.7m in 2021, up from £580,000 in 2020, with share-based payments making up the vast majority of this remuneration. Neobank’s highest-paid director was paid £200,000 in 2021, up from £65,000 in 2020. Revolut declined to comment on who that person is.

It marks a major turnaround for Revolut’s performance. When the $33bn fintech last published its 2020 accounts, losses had doubled to £207m, which it attributed to investment in new parts of the business.

Results released on Wednesday showed the neobank also restated its 2020 figures as it changed its accounting standards, posting an even bigger loss for 2020 than previously reported – of £221m before tax.

Storonsky had previously told Sifted in November that the bank had been profitable for two years – something we had to wait a while to confirm after it missed two deadlines to report its 2021 annual accounts.

Only three of Europe’s most valuable companies have managed to achieve profitability. It is even rarer among the neobanking tribe – so far only UK rival Starling Bank has posted an annual profit.

But unlike its UK-headquartered neobank competitors, Revolut faces a key roadblock to growth: it still hasn’t obtained a banking license in its home market, the UK.

Amy O’Brien is Sifted’s fintech reporter. She tweets from @Amy_EOBrien and writes our fintech newsletter — You can register here.