Revolut Reports Record Profits as Customer Numbers Surpass 50 Million
Revolut, Europe’s most valuable start-up, has reported a record profit of £1 billion for the last year, more than doubling its profits from £438 million the previous year. The London-based fintech company, which has surpassed 50 million customers, has seen a surge in revenue to £3.1 billion, up from £1.8 billion the previous year. According to its annual report, Revolut’s pre-tax profits have increased significantly, driven by growth in customer numbers and a surge in cryptocurrency trading.
The company’s founder and chief executive, Nik Storonsky, described 2023 as a "landmark year" for Revolut, during which the company secured a banking licence in its home market and achieved a valuation of $45 billion. "But we’re just getting started," he said, adding that the company was now targeting 100 million daily active customers across 100 countries. As the company continues to expand, it is focusing on convincing its customers to use its services for their primary bank account.
Revolut’s record profits were underpinned by growth in customer numbers, which boosted its two largest sources of revenue: the fees it makes from card payments and the interest it earns on deposits. The company added almost 15 million new customers last year, taking its total customer balances from £18 billion to £30 billion during the year. The company’s wealth business, which comprises stock and digital asset trading, brought in £506 million in revenues — a nearly fourfold increase on the previous year.
The surge in crypto trading helped the fintech last year, with Revolut’s wealth business lifting the company to its first annual profit in 2021 when retail traders were rushing to get a slice of a crypto boom. However, the company’s revenues from crypto deflated the following year. Despite attracting millions of customers to its sleek mobile app, Revolut still faces a significant challenge in convincing them to use it for their primary bank account. Gathering a critical mass of deposits is a crucial part of the company’s plan to unlock funding for loans and compete with the largest retail banks.
According to the Financial Times, Revolut’s total customer balances rose significantly during the year, with the company reporting a £979 million loan book that includes credit cards and buy now, pay later products. The company secured a UK banking licence with restrictions in July last year, representing a milestone that will enable Revolut to roll out lending products in its home market. Revolut has said it is testing mortgages internally. As the company continues to expand, it is seeking to expand its ranks of paying subscribers, with revenue from fees on premium subscription plans rising 74 per cent year on year to £423 million.
Revolut’s business offering now accounts for about 15 per cent of revenues, as the company targets corporate customers. The company’s growth plans are ambitious, with a focus on expanding its services and increasing its customer base. As Revolut continues to grow, it will be closely watched by the financial services industry, which is seeing significant disruption from fintech companies. The company’s success in securing a banking licence and achieving record profits is a significant milestone in its journey to become a major player in the financial services industry.
The information in this article is sourced from the Financial Times, which reported on Revolut’s annual report and the company’s record profits. According to the Financial Times, Revolut’s profits have more than doubled, driven by growth in customer numbers and a surge in cryptocurrency trading. As the company continues to expand, it will be interesting to see how it navigates the challenges of the financial services industry and achieves its ambitious growth plans.
The company’s growth plans have been spurred on by its valuation which has soared in recent years. As Financial Times reports, this valuation currently stands at $45bn. The company, which added 15 million new customers in the past year, is aiming to expand into new markets and provide a broader range of financial services to its customers.
As Revolut looks to the future, it will be closely watched by investors, analysts, and customers alike. The company’s success will be a key indicator of the health of the fintech sector as a whole, and its impact on the wider financial services industry. With its sights set on 100 million daily active customers across 100 countries, Revolut is certainly a company to watch in the years to come.
As Financial Times quotes Nik Storonsky, "2024 was a landmark year for Revolut… But we’re just getting started."
