Swedish fintech Klarna has posted its biggest annual loss to date in 2022, but claims it’s made “clear progress” to return to profitability, according to annual results released Tuesday. 

Annual losses swelled by 47% to reach SEK10.4bn ($1bn) in the 12 months to December 31 2022, up from SEK7.1bn ($680m) in 2021 — it was a tough year for the fintech, which saw its valuation slashed by 85% to $6.7bn.

Klarna, which wore the crown as Europe’s most valuable private tech company until its downround last summer, also made two rounds of layoffs last year — cutting more than 700 jobs in total. At the same time, its results show that CEO Sebastian Siemiatkowski’s total renumeration increased by 35% to SEK13.2m ($1.3m). 

The buy now, pay later fintech’s performance improved as the year went on, as more of its surging customer base paid back their debts. Net losses more than halved to SEK1.9bn ($182m) in the fourth quarter, from SEK4.6bn ($441m) the previous quarter. Credit losses decreased by 18% to SEK1.4bn ($134m) in the final quarter of the year. 

The gross merchandise volume (GMV) of Klarna’s loans rose by 22%, to SEK242bn ($23bn), as shoppers flocked to the instalment payment method amid a cost of living squeeze. Klarna now has 150m consumers globally.

The US became the fintech’s largest market by revenue during the month of December 2022, where its GMV grew 71% from the same month a year earlier.

“We are making concrete progress towards profitability, simultaneously driving growth well ahead of ecommerce and reducing credit losses and costs,” said Sebastian Siemiatkowski, Klarna’s CEO and cofounder.

Siemiatkowski had previously said that he expected the fintech to return to profitability in “the second half of 2023”, but no such timeline featured in its annual results.

Klarna last posted a profit in 2018.