Revolut stories first full 12 months of revenue

The all-in-one fintech app Revolut has launched its annual report for 2021. Whereas 2021 ended greater than a 12 months in the past, this report consists of some vital figures as the corporate almost tripled its income between 2020 and 2021. Due to this explosive progress trajectory, the corporate reached profitability for the primary time.

Revolut’s monetary success begins on the prime of the funnel. On the finish of 2021, Revolut had greater than 16 million clients, representing a 46% improve in comparison with 2020.

Revolut’s core product is an account to ship, maintain and obtain cash mixed with a fee card. Whereas Revolut has but to acquire a banking license within the U.Ok. (its dwelling nation), the corporate now has a full banking license in Lithuania.

It could actually use this license throughout the European Financial Space by means of passporting guidelines, which implies that Revolut could possibly be thought-about as a financial institution in Europe. Along with these fundamental banking options, the corporate gives a ton of fintech merchandise — however extra on that later.

First, let’s have a look at the large figures and convert them to {dollars} utilizing at the moment’s change price:

• In 2021, Revolut generated $769 million (£636 million) in income vs. $266 million (£220 million) in 2020.
• In 2021, Revolut reported a internet revenue of $31 million (£26 million) vs. a internet lack of $270 million (£223 million) in 2020.
• Gross margin additionally jumped from 33% to 70% between 2020 and 2021.

“We now have achieved our first full 12 months of revenue and proven that we will speed up buyer progress, at scale, and develop income throughout all of our product traces,” Revolut co-founder and CEO Nik Storonsky stated within the launch. “In 2021 we have been granted a full banking licence from the European Central Financial institution and welcomed tens of millions of latest clients. We additionally launched a number of new merchandise and noticed extra exercise from our buyer base.”

All the things is transferring up and to the fitting. In different phrases, issues are wanting nice at Revolut proper now. That’s why the corporate managed to lift a $800 million funding spherical at a $33 billion valuation in the midst of 2021.

Producing income from crypto buying and selling and different charges

Revolut’s income comes from a number of sources. Whereas clients can create an account totally free, customers must pay some charges for some cash administration providers. Probably the most enthusiastic clients can even select to pay for a premium subscription plan to waive some charges and entry extra options.

On prime of that, Revolut generates income from interchange charges. Each time a Revolut customers pay for one thing with a card, retailers must pay some card transaction charges. These charges are break up between the service provider’s financial institution, the cardboard scheme (Visa or Mastercard for instance) and the cardboard issuing financial institution (Revolut in that case). Whereas Revolut solely will get a tiny fraction of the transaction quantity, it could actually add up when you will have tens of millions of consumers.

Income might be damaged down in three huge pillars:

• Playing cards and interchange characterize 23% of whole income ($180 million/£149 million).
• Subscriptions characterize 17% of whole income ($129 million/£107 million).
• International change and wealth providers characterize 55% of whole income ($421 million/£349 million).

Whereas the primary objects are fairly simple to grasp, the final one consists of fairly just a few Revolut providers. Revolut began as a seamless overseas change app mixed with a multi-currency card. Revolut expenses at the least 0.5% in change charges above a sure restrict totally free customers. For everybody (together with paid customers), there are extra charges if you change cash on the weekend or when you find yourself exchanging an unusual forex.

Revolut additionally allows you to commerce cryptocurrencies, shares and commodities like gold and silver. For these monetary merchandise, Revolut expenses some vital charges — between 1.49% and 1.99% for crypto transactions, between 0.5% and 1.5% for treasured metals.

2021 was a particular 12 months with a crypto increase that led to a spike in crypto transactions in addition to some renewed curiosity from retail buyers for shares. Keep in mind, 2021 began with the GameStop brief squeeze on WallStreetBets.

Whereas 2022 may not look as dramatic as 2021, Revolut already shared a brief preview of final 12 months’s numbers. In 2022, the corporate’s income elevated as soon as once more to greater than $1 billion (£850 million). It’s a 30% improve, which is way decrease than the 189% improve in 2021. And but, many large-scale startups can be fairly pleased with a 30% income bounce. Revolut now has 27 million clients.

Now, it’s time to stabilize the enterprise as Revolut did not launch its monetary statements on time. If the corporate desires to go public within the coming years, it must enhance its inner processes. That will additionally assist with regards to acquiring a banking license within the U.Ok.