N26, the German fintech company, has achieved a significant milestone by reporting its first-ever quarterly profit. The challenger bank, which has millions of customers across Europe, generated a net operating income of €2.8 million during the third quarter of 2024.

This achievement is not only a testament to N26's growth but also a significant development for the fintech industry as a whole. Challenger banks like N26, Monzo, Revolut, and Starling were once the most hyped startups in Europe, raising billions in funding and expanding aggressively. However, with investors now requiring a clear path to profitability, N26's milestone marks a shift towards sustainability.

N26's profitability can be attributed to the lifting of a cap on new signups by Germany's financial regulator BaFin earlier this year, which has had a significant impact on the company's bottom line. The fintech has seen a 40% revenue increase in 2024 compared to 2023, with over 200,000 people opening an account every month. N26 is on track to generate €440 million in annual revenue this year, with 50% of its revenue coming from interest revenues from customer deposits and retail lending activities.