Revolut reports first-ever annual profit

Revolut, the financial technology company, announced on Wednesday that it had made its first-ever annual profit. The company said that revenues for the year had reached £636.2 million, which was triple its previous year’s income. Pre-tax profits for 2021 stood at £59.1 million, a stark contrast to the £205 million loss recorded in 2020. Revolut attributed its positive results to diligent cost control and its diversified business.

Mikko Salovaara, the company’s chief financial officer, described the outcome as an indication that Revolut is a sustainable business that does not require external funding. The company offers digital banking, money transfers, and cryptocurrency and stock trading through a single app. It competes with the likes of Wise, Monzo, and Starling. Revolut has grown rapidly and is now one of Europe’s largest fintech unicorns, with a valuation of $33 billion.

Revolut’s success is noteworthy given the difficulties that the fintech market has experienced in recent times. Other companies in the sector have suffered mass layoffs and significant cuts to their valuations. Swedish buy now, pay later fintech Klarna saw its valuation drop by 85% to $6.7 billion last year, and on Tuesday, the firm announced a record $1 billion loss for its 2022 fiscal year.

While Revolut’s results are encouraging, the company has faced some challenges. Regulators in the UK have raised concerns about 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. Additionally, the company’s growth plans in the UK have been hampered by its failure to secure a banking license, which it has been pursuing for two years.

Revolut has been expanding into overseas markets, including the US, Brazil, Mexico, and India, where it currently has over 500,000 clients. Despite the setbacks it has faced, the company is optimistic about the future. It hopes to obtain its UK banking license “very soon,” according to Salovaara. The company has also given a trading update, stating that it expects revenues to have grown more than 30% to £850 million in 2022.