Revolut’s losses increased by 57%, from 107 million in 2019 to 168 million pounds last year (from 117 million to 195 million euros), according to information published in the financial technology annual report for 2020.
Revenue also grew by the same percentage to £261 million (about €304 million), based on a customer adoption strategy – thus totaling 14.5 million retail customers and 500,000 Revolut Business customers by the end of last year – product development and strict cost control, the company notes. Which provides transfers and payments without commission or with reduced expenses and tools for managing expenses, exchange cryptocurrency and share trading.
“Although covid-19 has reduced the amount of payments since March, the losses have been more than offset by growth in subscriptions, investments, trade and corporate plans with Revolut and Revolut Business,” the fintech wrote in a statement. “Adjusted revenue in the second half of the year was 41% higher than in the first half.”
Despite controlling for discretionary expenses, administrative costs rose to 266 million pounds (309 million euros), as a result of “continuous investment in business growth, including in the areas of risk, compliance and financial control,” the company notes. Gross margin improved by 24 percentage points, from 25% in 2019 to 49% last year.
The combination of revenue growth and gross margin improvement reduced quarterly adjusted operating losses by 90% from £55 million (€64 million) in the first quarter to £6 million (€7 million) in the fourth quarter of 2020. Profit increased by 215% to 123 million pounds (143 million euros). Despite this, adjusted operating losses for the full year rose 24.5% to £122m (€142m).
This is what leads the company to assert, in a statement, that it has continued “on its path to profitability, identifying potential profitability.” [lucro] For the company, both gross margin and gross profit showed a “strong improvement quarter on quarter”, with the former increasing from 29% in the first quarter to 61% in the last quarter of 2020 and the latter improving by £16m (19 million euros) in the first quarter to 51 million pounds (59 million euros) in the fourth quarter.
The company also highlights that the number of subscribers to its paid plans – Metal and Premium – increased by 51%, outpacing overall customer growth. Customer balance increased by 96% to £4.6 billion (€5.3 million), with average deposits increasing by more than 30%.
“With the re-establishment of marketing investments in the 2021/22 biennium, key performance metrics are expected to improve further as the company enters a new phase of growth,” Revolut writes.
“The extraordinary circumstances of 2020 have created a greater trend towards financial management from digital platforms, and we continue to innovate to make life easier for our customers,” said Nikolai Storunsky, Revolut founder and CEO. “We launched 24 new products for individuals and businesses, expanded into the United States, Japan and Australia and launched banking services in Lithuania, all while increasing our profitability significantly.
Revolut’s Acquiring product was also launched in 13 European countries earlier this year, providing businesses with a comprehensive solution for managing their financial needs. Revolut Business launched in the United States in early 2021.
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