Swedish fintech Klarna’s first quarter results show cuts made to the business in 2022 are beginning to narrow losses.
Quarterly losses more than halved to SEK 1.3bn ($120m) in January through March, down 52% from SEK 2.6bn ($240m) the same time last year.
At the same time, its credit losses shrank by 35% to SEK 800m ($74m) in the quarter, down from SEK 1.2bn ($110m) in the first quarter of 2022.
“This quarter we’ve impressively managed to grow GMV and revenue, at the same time as we cut costs and credit losses, and also investing ambitiously in AI-driven products,” said Sebastian Siemiatkowski, Klarna’s CEO and cofounder.
“We are on track to achieve profitability this year all while revolutionising shopping and payments through our AI-powered approach."
It comes after the fintech, which wore the crown as Europe’s most valuable private tech company until an 85% valuation cut last year, had a bruising 2022. A large part of its cost cutting is thanks to mass layoffs — it made two rounds of staff cuts last year, cutting more than 700 jobs in total.
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Klarna posted its largest-ever loss at its full year results for 2022, of $1bn, up 47% from 2021.