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Revolut hit profitability…and 4 other things we learned from its overdue report

The BDO could not verify £477m of revenue…and other findings from Revolut’s annual report.

a group of white boxes


After months of anticipation, two missed deadlines and the release of an ever-increasing number of gadgets and gizmos, the Christmas present fintech’s been waiting for has finally arrived: Revolut’s results.

The main headline? The fintech on its way to superapp status did, in fact, follow through on its previous promises of profitability and posted its first annual profit of £26.3m in 2021.

Alongside the news of its profitability, Revolut offered a peek behind the curtain in its extensive annual report, which offered an insight into where the bulk of its revenue came from and BDO’s qualified opinion on said revenue.

And, because a whole extra year had unusually already passed by the time the 2021 results were released, Revolut gave us a bonus treat with a look into how 2022 went for it as well.

Keep reading to see the five main things we learned from Revolut’s results.

Revolut swings into the black

First things first, this was a huge win for Revolut.

2021 was a year of immense growth for the company in all areas — revenue tripled to £636m, its gross margin improved from 33 per cent in 2020 to 70 per cent in 2021 and it saw £26.3m in profit.

Part of this is down to its rapidly growing user base, which currently sits at more than 25 million retail customers.

In 2021 it saw an increase of more than 50 per cent in its weekly active retail customers and the average spend per user grew by 10 per cent.

It onboarded more than five million retail customers in 2021, which helped boost its deposit balances to £7.4bn by the end of 2021 — an increase of 58 per cent from 2020.

“Landmark achievements in profitability, product and expansion in 2021 saw our transition from a high-growth fintech to an established leader in the new era of banking,” co-founder and CEO Nik Storonsky said.

Where did the revenue come from?

Revolut saw revenue increases across the board in 2021, but where it saw a real boom in growth was in its foreign exchange and wealth division.

This accounted for 55 per cent of its total revenue in 2021, increasing more than eight times to £349m from £41.5m in 2020.

Notably, 2021 was a huge year for crypto, which was rolled into this category and not differentiated.

Where Revolut had previously shared revaluation gain on cryptocurrencies and other information around digital assets on its statement of cash flows, it didn’t this year.

It did note that it substantially increased its crypto offering over the course of 2021, growing from 10 to 60 tokens on offer through the app.

“Our ambition is to be the safest and simplest place to trade, use and learn about shares and cryptocurrencies,” Revolut said.

“2021 was the year in which crypto asset investing transitioned from early adopters to mainstream investors. We saw increased interest and crypto activity in financial media, financial markets and institutions, and of course from our own users.”

Revolut CFO Mikko Salovaara told Siftedthat crypto made up around 30 per cent of total revenues in 2021, but the crypto downturn in 2022 saw it make up just five to 10 per cent of revenues.

The fintech diversified its offering in 2020 when travel ground to a halt and has continued to do so since even as travel levels have moved back towards pre-pandemic levels.

Revenues ‘may be materially misstated’

In the report, Revolut’s auditor BDO said it was unable to satisfy itself concerning the “completeness and occurrence of certain revenues” for 2021.

In fact, it said it was unable to fully verify around £477m — or 75 per cent — of revenues.

Issuing a qualified opinion, BDO put this down to Revolut’s IT systems, which it said were not designed in a way that allowed business process controls to be “effectively tested” over the year.

It said references to the company’s revenues “may be materially misstated” and that it could not determine whether adjustments needed to be made for subscription, card delivery and foreign exchange and wealth revenue streams.

This is not the first time BDO has noted issues with Revolut’s accounts.

Back in September — when Revolut was first expected to file — it said they were “inadequate” and that there was an “unacceptably high” risk of “material misstatement”.

The wait for results is over but not for a banking licence

Not getting a resounding green light on its revenue streams from its auditors might not be a great indication of its progress on the road to getting its UK banking licence.

Having secured its licence in Lithuania in 2021 to operate as a bank in Europe, the saga to win its UK licence has been long, but according to Revolut it is in the “advanced stages” of its application to the PRA.

Now that one chapter is closed for Revolut, we will continue to wait and see when it embarks on its next journey as a bank in the UK.

A look into 2022

With the report originally due in September we got a sneak peek into 2022’s review alongside the full 2021 review.

While waiting for its licence, Revolut continued on its journey of rapid growth in 2022 with a constantly expanding suite of products.

It launched as a bank in 12 EEA countries, bringing the total to 30, received trading authorisations in Australia and Singapore, launched trading services in the US and saw revenues increase over 20 per cent to more than £850m 

It acquired international money transfer and currency exchange company Arvog Forex as part of its India expansion, added more than nine million new customers and raised more than £10m with its customers to support those affected by the war in Ukraine.

After a steep swing into profitability from a loss of £167.8m in 2020, will the upward trajectory continue for Revolut next year? We’ll have to wait until later this year — or next — to find out.

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