Revolut revenue grew 34% in 2022 to 850 million sterling, Chief Financial Officer Mikko Salovaara told Forbes, as the London-based digital bank revealed prior-year results that were delayed by an accounting overhaul that followed a U.K. regulatorâs criticism of the companyâs 2020 audit. The company did not release further 2022 figures, but the rising top line coincided with new business operations in Brazil, Mexico and India. Deposits are now above 10 billion sterling, Salovaara says, up from 7.4 billion sterling at the end of 2020.
In the 2021 report, the privately held company said it tripled its revenue in 2021, bringing in 636 million sterling and reporting 26 million sterling in net profit, following a restated loss of 224 million pounds in 2020. The results were driven by 5 million new users and a 75% increase in the number of customers paying for premium plans that offer perks such as unlimited foreign exchange with no fees and free teller machine withdrawals.
The companyâs gross margin, which excludes marketing outlays, increased to 70% in 2021 from 33% the year before. âWe held our fixed costs together at a lower pace of growth such that weâre able to engender this operating leverage and profit,â Salovaara says.
While some neobanks struggle to diversify their revenue outside of collecting interchange fees from card swipes, Revolut has launched a slate of offerings for retail and commercial customers. Its services range from currency exchange, budgeting tools and commission-free trading for everyday consumers to treasury management, corporate cards and payment processing for business clients. In 2022, the company launched in Brazil, Mexico and India. This year it plans to inaugurate services in New Zealand and is exploring new markets.
A cloud hovering overhead the strong report was the months-long delay submitting it, which was caused by a redesign of Revolutâs internal accounting system. Last year, the Financial Reporting Council, a U.K. audit regulator, said auditing firm BDO completed an inadequate review of an unnamed financial services provider and noted that the risk of âmaterial misstatement was unacceptably high.â That provider was Revolut, the Financial Times reported. Revolut stated that the matters raised were appropriately addressed in the 2021 audit plan.
A significant portion of Revolutâs ballooning deposits are from business clients that typically bring in larger balances than retail consumers, according to Salovaara. Revolut Business has processed 125 billion pounds of transactions for its clients since launching in 2017 and processes 6.5 billion a month, Revolutâs sales manager for Spain and Portugal Elisabet Girvent told CE Noticias Financieras in December.
Loans and advances to customers as of December 2021 stood at 17.8 billion pounds. âWe expect to be able to generate a steady income based on the low-cost funding provided by our customer liabilities,â the report reads.
Revolut holds a full banking license from the European Central Bank. Two years ago, the company applied for a banking license in the U.K which is currently pending. Revolut holds a broker-dealer license in the United States under which it offers commission-free stock trading. The licenses allow Revolut to avoid costs that come from working with banking partners but may raise expenses in other areas like compliance. Revolut said it raised $800 million in a series E funding round last year at a $33 billion valuation.