Varo must boost revenue per account

The swing back to deeper losses in 2025 shows that Varo is still a volume business first, where small changes in customer acquisition and card spend can overwhelm cost cuts. Revenue was basically flat at $154.8M in 2024 and $153.4M in 2025, and nearly all of it came from interchange and fees, so pushing growth again likely meant paying more to win and reactivate users without the offset of a bigger high margin lending or subscription engine.1 2 3 4

• Varo’s revenue mix stayed narrow. Non interest income was about $110M in 2023, $139.1M in 2024, and $135.5M in 2025, while net interest income remained small at $19M, $15.6M, and $17.9M. That means profit improvement depends less on balance sheet leverage and more on getting enough debit spend and fee activity per user to cover marketing and servicing costs.1 4
• The charter helps Varo keep more debit interchange than a partner bank fintech, because there is no sponsor bank taking a cut, but it also loads the company with much heavier compliance and operating costs. That trade can work at scale, but it is unforgiving when growth slows or when customer acquisition has to be turned back on.2 5
• The broader neobank market shows what Varo is missing. The winners in 2023 and 2024 added interest income, lending, subscriptions, or other higher margin products. Monzo, for example, had 51% of 2023 revenue from interest and 27% from subscriptions, while Varo remained mostly an interchange and fees business. That makes Varo more exposed to marketing cycles and consumer spend volatility.3 4

The next step is clear. Varo needs to turn its bank charter into more revenue per account, not just more accounts. That means moving customers from a debit card relationship into products like small dollar credit, secured credit, and richer deposit balances, where each active user generates more profit and losses stop widening every time growth spending returns.2 3 5