Revolut’s first year of profit is in doubt. The Financial Times reported Wednesday (March 1) that Revolut’s auditor BDO LLP cautioned that 2021 sales may have been “materially misstated”.
At least the company’s user base is growing—from 16 million in 2021 to over 27 million now.
The 2021 crypto boom tripled Revolut’s sales to $769 million from $266 million in 2020, helping the firm attain profitability for the first time.
Cryptocurrency income is presently around 5%.
“In 2021 we made considerable progress in meeting our ambitious goals, notably, hitting our first full year of profitability,” wrote company Chairman Martin Gilbert in a statement accompanying this week’s (Feb. 27) release of the 2021 numbers.
As reported, a summer 2021 $800 million investment round valued the corporation at $33 billion.
Despite the company’s late financial report, things were looking brighter.
But, those financial outcomes are causing problems.
According to the FT, BDO gave Revolut’s late 2021 accounts a qualified assessment since the FinTech’s IT systems could not verify up to two-thirds of income.
Revolut’s foreign exchange and wealth department’s $573 million in unverifiable income includes crypto revenues.
“Keen management of our balance sheet, alongside improvements to financial systems, processes and controls, stand as the two priorities of the finance and treasury teams,” said Mikko Salovaara, Revolut’s CFO.
Since the Financial Reporting Council declared Revolut’s audits faulty and at high risk of “misstatement,” the business was under pressure to enhance its internal financial reporting processes.
Prescient discoveries. Higher interest rates make deposits more valuable, so a U.K. banking license might boost Revolut’s profitability and help it get licenses in other countries.
The Bank of Lithuania regulates the FinTech, which has an ECB banking license.
As reported, the U.K.-based FinTech is aiming 100 million users and looks to Asia, especially Japan, to accelerate its current fast development, with a soft target of at least 10 million users throughout the Asia-Pacific (APAC) region by 2025.
Revolut’s main offering is a money account with a payment card.
