Revolut swung into profit in 2021 amid crypto boom
Fintech giant Revolut has reported its first full year of profit, with its delayed accounts showing that revenues tripled in 2021 as paid subscriptions and overall usage of its app grew sharply.
The challenger bank swung into a pre-tax profit of £39.8 million ($48 million) for the year compared to a loss of £220.7 million in 2021. The London-based business yielded revenues of £636.2 million ($767.1 million), three times the £220 million it booked in 2020.
Revolut’s revenue comes from multiple sources, but overall, it was boosted by an increase of more than 50% in weekly active retail customers and a 75% increase in paid subscriptions. Meanwhile, the foreign exchange and wealth services, which includes crypto, were the biggest source of revenue. Approximately 33 percent of Revolut’s 2021 revenues came from its cryptocurrency trading business.
Revolut reportedly faced concerns from its auditor, BDO, which said it had been unable to fully verify £477 million of revenues, adding that “the risk of an undetected material misstatement was unacceptably high.”
“We have achieved our first full year of profit and shown that we can accelerate customer growth, at scale, and grow revenue across all of our product lines. In 2021 we were granted a full banking licence from the European Central Bank and welcomed millions of new customers. We also launched several new products and saw more activity from our customer base,” Revolut co-founder and CEO Nik Storonsky said in the release.
For 2022, the company gave a trading update saying it continued to grow at a slower pace, with revenue rising 30 percent to £850 million. As a privately held firm, Revolut is not required to share frequent quarterly reports.
Although its first annual profit was partly driven by a boom in crypto, Revolut held off on plans to launch its native crypto token, which aims to reward customers for their loyalty, as the London-based neobank is currently assessing the best time to do that.
A Revolut spokesperson told Financial News in an interview, in which he also shared details on the neobank’s forthcoming non-custodial wallet: “We are scoping the market conditions and assessing the best time to launch RevCoin in the coming months.”
The representative cited the contagion from the collapse of cryptocurrency exchange FTX, which spreads across the industry, as the reason for the delayed launch of the long-rumored native token.
The fiasco of Sam Bankman-Fried’s empire, once a $32 billion crypto exchange, has shattered investor confidence in cryptocurrencies. As such, Revolut is trying to gauge the extent of damage it has caused and how it will reshape the industry in the years to come.
