Nearly $33 billion fintech firm Revolut says an initial-ever annual profit

March 2, 2023: On Wednesday, Financial technology company Revolut reported its initial annual profit in 2021, according to financial accounts released, as subscriptions to its paid packages and overall usage of its app increased.

The company reported earnings of £636.2 million, three times what it made the last year, and swung to a pre-tax profit of £59.1 million. In the year 2020, Revolut recorded a pre-tax loss of £205 million.

Mikko Salovaara, the chief financial officer of Revolut, said the outcomes were the product of Revolut’s diversified firm and diligent cost control.

“The worst possible scene would be if Revolut weren’t sustainable or if it were to require external funding,” Salovaara stated. “The reality is we don’t need external funding. We continue investing in our business, providing products people can rely on.”

For 2022, Revolut gave a trading update stating it expects revenues to have grown over 30% to £850 million. As a privately conducted company, it is not required to continue frequent quarterly reports.

Revolut’s announcement is a rare cheerful piece of news in a fintech market plagued by mass layoffs and increased valuation cuts as investors reassess the space between worsening macroeconomic conditions.

Klarna, the Swedish buy currently, pay later fintech, seeing its valuation plunge 85% to $6.7 billion in the previous year. On Tuesday, the firm posted a $1 billion loss in its 2022 fiscal year.

Asked about Revolut’s valuation, Salovaara said he couldn’t know how much the firm was worth since it has yet to raise cash since 2021; he’d be “hard-pressed to believe investors wouldn’t continue to be pleased with our performance.

However, Revolut needed to be on time in producing its accounts to the U.K. company register, Companies House, in time for the deadline, by December. BDO finally signed them off, Revolut’s auditors in the previous month.

Revolut faced concerns from U.K. regulators over the robustness of its internal financial controls. In September, BDO’s audit of Revolut’s 2021 accounts deeming “inadequate” by the Financial Reporting Council, which stated that “the risk of a material misstatement was unacceptably high.”

The firm has zero physical branches and offers digital banking, money exchange, cryptocurrency and stock trading via a single app. It is competing with the likes of Wise, Monzo and Starling.

Founded in 2015 by retired Lehman Brothers trader Nikolay Storonsky and software creator Vlad Yatsenko, Revolut has grown to become one of Europe’s most giant fintech unicorns, with a valuation of $33 billion.

Revolut pushes hard into overseas markets, particularly the U.S., which currently has more than 500,000 clients. The company has also started operations in Brazil, Mexico and India. In November, Revolut stated that it has 25 million users all over the world.