Revolut Announces its First Year of Full-Time Profit

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Revolut Announces: The complete fintech application Revolut has published the annual reports for its 2021 fiscal year. The year 2021 was over one year ago, and the report has some notable figures, as the company has nearly doubled its revenue in the period between 2020 and 2021. Due to this rapid growth rate, the company surpassed the point of profitability for the first time in its history.

Revolut’s financial growth begins at the very top of the funnel. By the end of 2021, Revolut had more than 16 million customers. This is an increase of 46% when in comparison to 2020.

Revolut’s main service is an account that allows you to make, receive, and send money in conjunction with a payment card. Although Revolut is yet to get an official banking license within the U.K. (it’s home country) however, the company currently has a complete banking license in Lithuania.

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The license can be used throughout all the European Economic Area through passporting rules. This means that Revolut can be considered a bank within Europe. Apart from these standard banking services, the company provides a variety of fintech services — more on this later.

First, let’s look at the big figures and convert them to dollars using today’s exchange rate:
  • In 2021, Revolut generated $769 million (£636 million) in revenue vs. $266 million (£220 million) in 2020.
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  • In 2021, Revolut reported a net income of $31 million (£26 million) vs. a net loss of $270 million (£223 million) in 2020.
  • Gross margin also jumped from 33% to 70% between 2020 and 2021.

“We have achieved our first full year of profit and shown that we can accelerate customer growth, at scale, and grow revenue across all of our product lines,” Revolut co-founder and CEO Nik Storonsky said in the announcement. “In 2021 we were awarded an entire banking license from the European Central Bank and welcomed thousands of brand new clients. We also introduced a number of new products, and saw increased activity from our customers.”

Everything is moving upwards towards the right. Also, the outlook is great at Revolut at the moment. That’s the reason the company was able to raise an $800 million financing round with an estimated $33 billion in the middle of 2021.

Revolut Announces Earning revenue from trading in crypto and other costs

The revenue of Revolut comes from many sources. Although customers can open accounts for free, they have to pay a fee to access certain money management services. Customers who are the most enthusiastic are able to opt for a premium subscription to avoid some charges and gain access to additional options.

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In addition, Revolut generates revenue from interchange fees. Each time Revolut customers pay for something using a credit card, merchants are required to pay transaction charges to the card. The fees are divided between the bank of the merchant as well as the scheme that is used to process transactions (Visa as well as Mastercard for instance) as well as the card’s issuer bank (Revolut in this instance). Although Revolut is only receiving a small percentage of the transaction it can be a significant amount when you have a large number of customers.

Revenue can be broken down into three big pillars:
  • Cards and interchange represent 23% of total revenue ($180 million/£149 million).
  • Subscriptions represent 17% of total revenue ($129 million/£107 million).
  • Foreign exchange and wealth services represent 55% of total revenue ($421 million/£349 million).

While the first few items are fairly easy to grasp, however, the final one comes with many Revolut services. Revolut began as an application for seamless foreign exchange that was paired with a multi-currency credit card. Revolut charges at a minimum of 0.5 percent in exchange charges over a specific limit for users who are free. For all users (including paying users) There are additional charges when you make a change on the weekend or are exchanging a foreign currency.

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Revolut also allows you to trade commodities, stocks, and cryptocurrencies like silver and gold. In these financial products, Revolut charges some significant charges ranging from 1.49 percent and 1.99 percent for transactions in crypto and between 0.5 percent and 1.5 percent when it comes to precious metals.

2021 was an exceptional year with a cryptocurrency boom that resulted in a rise in transactions using crypto and new interest from investors who are retailing in stocks. Remember, 2021 began in the form of the GameStop brief squeeze of WallStreetBets.

Although 2022 may not be like 2021’s, Revolut already shared a brief preview of the previous year’s figures. In 2022, Revolut’s revenue was up to over one billion (PS850 million). This is a rise of 30 but is still less than the increase of 189% in 2021. However, many large-scale startups would be very content with an increase of 30% in revenue. Revolut currently is serving 27 million people.

It’s now time to bring the business into balance since Revolut was unable to publish its financial statements in time. If the company is planning to go public in the upcoming years, it’ll have to streamline its internal procedures. This will also be helpful in getting a bank certificate within the U.K.

Sunil Kumar writes about smartphones and laptops for Gadgets360TechNews, out of Delhi. He is the Deputy Editor (Reviews) at Gadgets360TechNews. He has frequently written about the smartphone and PC industry and also has an interest in photography.

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