Financial super app Revolut has turned in its first annual profit after growing its revenues nearly threefold in 2021.
The much anticpated, and twice delayed, financial accounts reveal that Revolut hit a £26 million profit as revenues rose from £220m in 2020 to £636m in 2021.
The accounts were signed off by the company's auditor BDO, but with a number of caveats. BDO flagged concerns that it could not verify £477m of revenue, nor vouch for their “completeness or occurrence”, due to the configuration of Revolut's internal IT systems. The risk of material misstatements was most acute for the company's foteign exchange, wealth and crypto business.
Revolut replaced its internal accounting systems after the Financial Reporting Council, a UK body responsible for regulating auditors, said the company's audit for 2020 was “inadequate” and that “the risk of an undetected material misstatement was unacceptably high”.
A spokesman for Revolut says that the inadequacies referred to by BDO were remedied in 2021 and that there were no longer any question marks hovering over the revenue statement.
CEO Nik Storonsky chose to revel in the company's profit statement: "Our profitability in 2021 was despite the economy suffering a significant prolonged shock from global lockdowns, continued travel bans and COVID-19 effects. But at the same time, the accelerated shift to digital services and remote working boosted our number of customers and the amount that they used our app."
All told, Revolut onboarded more than five million retail customers in 2021, and the number of users on paid plans increased by 75%. The number of weekly active users grew by 50% with customer average spend growing by 10% per user.
Revolut also rolled out banking services to 18 European countries in 2021 and closed the year with almost two million customers, ten times the number from the previous year.
Despite its succcess in achieving banking status in the EU, Revolut still awaits a banking licence from the Financial Conduct Authority in the UK, which has reportedly been delayed over auditing, compliance and corporate culture concerns.
Indirectly adressing the issue, Mikko Salovaara, chief financial officer, comments: "Within the treasury we have built teams in order to meet a bank-grade standard at the group level and across our relevant entities. Our focus has been to develop the infrastructure and monitoring capabilities to ensure compliance with capital and liquidity requirements while also developing a treasury management strategy and execution capability to optimise our balance sheet.
"We have made improvements to our financial controlling function in order to continue to match and support the fast growth of the business. The team is working hard to continue to develop world-class and real-time accounting and control technology in order to provide this support, which we expect to bear fruit for the FY22 audit cycle."