Swedish fintech giant Klarna is turning things around following a bruising 2022, which saw its valuation cut by 85% and the company lay off 700 employees. In the second quarter of 2023, its losses decreased by 77% on the same period last year.
Its second-quarter results, released on Thursday, show the cuts made to the business in 2022 are continuing to have a positive impact on its finances.
Quarterly losses more than halved to SEK 0.9bn (€76m) from April to June, down 77% from SEK 3.8bn (€320m) in the same period last year.
At the same time, its credit loss rate shrank to 0.41% for the quarter, equivalent to credit losses of 1bn SEK (€84m) — down from 0.80%, equivalent to SEK 1.7bn (€140m) in the second quarter of 2022.
The buy now, pay later (BNPL) company also increased its revenue to 5.5bn SEK (€460m) in the quarter, compared to 4.7bn SEK (€400m) in the second quarter of 2022, a 17% increase in revenue year on year.
According to CEO and cofounder Sebastian Siemiatkowski, Klarna has now reached one month of profitability.
“I can now talk about Klarna’s return to profitability in real terms. Fast forward from our pledge a year ago to return to profitability, and here we are marking our first month in the black in Q2 23 and smashing our targets ahead of schedule,” says Siemiatkowski in the quarterly report.
The CEO is optimistic about the impact AI could have on the business and says Klarna will evolve into a digital assistant “that looks out for consumers’ best interests, saving them time, money and helping them worry less”.
“Six months ago, this [AI development] was a vision. Today, it’s a reality we are actively shaping. That’s why AI is such a massive shift and we are all in.”
“Now at Klarna we are focused on sustainable, profitable growth but with the huge opportunity generative AI brings,” he said.
