After four misses to lodge 2021 accounts, Revolut has finally presented its overdue and long-awaited earnings report. However, the anticipation has paid off, as the company reported an operating profit for the first time in its history, which reached a level of £59.1 million ($71 million).
Revolut Finally Publishes Its 2022 Report and Shows Robust Income
According to the yearly financial report for 2021 published on Wednesday, the fintech giant reported revenues of £636.2 million, beating its previous results from 2020 by threefold. Net profit after tax was £26.3 million.
Along with the 2021 report, the company also published a trading update for the previous year forecasting revenue growth of more than 30% to £850 million. For comparison, in 2020, the company reported a pre-tax loss of £205 million.
"Our revenue nearly tripled, from £220 million in 2020 to over £636 million in 2021 and our Gross Margin improved from 33% in 2020 to nearly 70% in 2021. This strong revenue growth came from across all business lines including Payments, Revolut Business and Wealth & Trading, proving our diversified model, and was a significant factor in us becoming profitable," Nikolay Storonsky, the CEO and Co-Founder of Revolut, commented in the financial report.
The company credits the improved performance to a growing number of subscriptions to its paid packages and a significant jump in the number of active users of its mobile app. In 2021, the number of users using paid options increased by 75% and the number of active weekly users by 50%.
Neobank is increasing its share of the US market, which now has more than 500,000 users, opening up to India, Mexico and Brazil. Last November, the company announced that its customer base exceeded 25 million.
Fifth Time's a Charm?
Revolut had promised to publish its 2021 report by December 31, 2022. However, a few days before that deadline, the company backtracked and announced that the report would not be available until 2023. The fintech giant thus postponed the publication of its report four times. Admittedly, as a private rather than a publicly-traded company, there are no obligations to publish regular reports. However, such long delays have raised many questions from customers and existing investors.
Mikko Salovaara, in charge of the company's finances, noted in the report that Revolut is currently compliant with International Financial Reporting Standards (IFRS). At the same time, the company wants to share its results with the market more quickly and at more regular intervals.
"Finally, the Group has for the first time produced its financial information under International Financial Reporting Standards (IFRS). This is in line with the ambitions of the Group allowing for more transparency and the ability to compare the Group's results against its peers," Mikko Salovaara, the CFO of Revolut, added.
Revolut's Delayed Crypto Push
In January 2023, the Financial News reported that the London-headquartered challenger bank delayed the launch of its native cryptocurrency dubbed RevCoin. According to sources familiar with the matter, the collapse of the FTX cryptocurrency exchange is believed to be the primary cause for the delay.
Revolut had initially planned to launch its cryptocurrency late last year, but the neobank has since altered its plans. The extended period of low cryptocurrency prices commonly referred to as the 'crypto winter', combined with the turmoil caused by the failure of prominent digital asset exchanges, made it an unfavorable time for Revolut to introduce new cryptocurrency offerings.
Revolut's latest report does not mention anything about RevCoin. It only emphasizes that the company has increased the number of available cryptocurrencies from 10 to 60 in 2021.
A month ago, the global fintech reported the launch of a cryptocurrency staking service for the European Economic Area (EEA) and UK customers. At this time, the product has only been made available to a select group of users, but its complete launch was anticipated to occur in the next few weeks. Customers can generate additional income by staking popular cryptocurrencies, but the feature will still be considered in a 'soft test' phase.
