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Revolut slipped to a loss last year despite a 45 per cent jump in revenues, as increased costs offset the benefits from higher customer deposits and rising interest rates.
Although the surge in cryptocurrency trading that boosted earnings in 2021 has abated, revenues climbed to £923mn last year. Revolut said it expected to report revenues of £1.7bn for 2023 and a “double digit net profit margin” by the end of the year.
It reported a pre-tax loss for 2022 of £25mn, however, reversing the previous year’s profit of £40mn, after a hiring spree drove up administrative expenses. Revolut doubled its number of employees to about 6,000 last year, and said it now employs more than 8,000 people.
The group’s auditor BDO said previous issues around Revolut’s internal controls had been “resolved”, removing one potential obstacle to the group’s longstanding application for a UK banking licence.
Revolut submitted its application almost three years ago. Revolut chair Martin Gilbert on Friday declined to comment on the status of the application but stressed the London-based fintech’s commitment to its home market.
“Let’s be clear, UK is our headquarters, we want to remain here based in the UK, we like the UK regulatory set-up, it’s a very well respected regulator globally . . . this is our home and that’s where we want to be,” Gilbert said.
Chief executive Nik Storonsky said: “Looking ahead, our focus is on continued growth across all our markets. We remain committed to our ongoing UK banking licence application in addition to bringing the Revolut app to new markets and customers around the world.”
In March, BDO warned the bulk of Revolut’s 2021 revenues “may be materially misstated”, noting shortcomings in the company’s IT controls. The auditor said it had “been able to obtain sufficient appropriate audit evidence in respect of the relevant balances” for 2022.
BDO issued another qualified audit opinion on Revolut’s delayed 2022 accounts but said this was in respect to the comparisons between the current revenue figures and related balances with the previous year.
The company’s 2022 results had been due to be filed by the end of September but the group was handed a three-month extension by Companies House for a second consecutive year.
The results showed that interest income increased to £83mn from £1.7mn a year earlier, as the fintech attracted almost 10mn new customers, bringing the total to around 38mn. Administrative costs rose to £667mn from £380mn, while the company also spent more heavily on sales and marketing.
It increased pay to its highest-paid director from £10.3mn to £17.8mn last year, although almost all of that was in share-based payments.
Revolut was valued at $33bn at its last funding round in 2021. But valuations of unprofitable tech start-ups have fallen sharply since then, as central banks have increased interest rates.
