Revolut’s profits soar as fintech eyes share sale valuing it above $40bn

Revolut posted a better-than-expected $428 million (€398 million) profit last year as the London-based fintech eyes a share sale that would value it at above $40 billion.

The profit topped chief executive Nik Storonsky’s forecast that net profit would come in at around $350 million, up from $7 million in 2022 and marking a third straight year of profitability. The company’s revenues, which soared 95 per cent to $2.2 billion, also was about $200 million above what it had previously guided.

The filing comes three months in advance of a statutory deadline. It is the first time that Revolut had not had to seek an extension on the submission of its annual accounts in years and is seen as an important signal as the company seeks a banking licence from UK regulators that would allow it to expand its offering in its home country.

“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,” Mr Storonsky said.

Last year, the fintech needed a three-month extension to publish its 2022 annual accounts. And the company’s 2021 accounts weren’t published until March 2023 — several months after the company’s already extended deadline. The group operates in the euro zone under a Lithuanian banking licence and came under the direct supervision of the European Central Bank at the start of this year because of its size.

The Financial Times reported last week that Revolut is targeting a valuation exceeding $40 billion in a share sale that would cement its status as Europe’s most valuable start-up. The SoftBank-backed company is working with Morgan Stanley to sell about $500 million worth of existing shares, including those held by employees, the report said.

Revolut, which was cofounded by Mr Storonsky and Vlad Yatsenko in 2015, is Europe’s most valuable start-up. It was previously given a $33 billion valuation in a 2021 fundraising. This latest target, if reached, would defy a difficult market for European fintech groups in the past two years as valuations were depressed amid heightened interest rates.

Net interest income at Revolut rose more than 500 per cent to $621 million, driven by interest earned on excess cash placed with central banks, while revenue from cards and transactions jumped 59 per cent to $605 million. Revenues from foreign exchange and wealth products increased 46 per cent to $491 million, while those from subscriptions increased 53 per cent to $303 million.

The company added almost 12 million new customers globally last year, the most in 12 months since it was established, to bring its total number to 38 million. Its base grew to 45 million in the first half of this year.

Customer deposits increased by 41 per cent to $22 billion, while its loan book grew by 159 per cent to $680 million.

Customer numbers in the Republic increased by 21 per cent last year to 2.7 million, or roughly one in every two individuals in the State. The company has set its sights on increasing its Irish customer base to above 3 million this year.

Earlier this year, the company said it expects its global workforce to reach 11,500 by the end of 2024, which would be a 40 per cent increase from 2023.

— Additional reporting: Bloomberg