Buy now, pay later company Klarna plans to return to profitability by summer 2023.
Jakub Bolzycki | Noor Photos | Getty Images
Klarna said the company was profitable in the first half of the year, swinging back from losses last year, as buy-now-pay-later Pioneer gets closer to its much-anticipated stock market debut.
Klarna said in results released on Tuesday that its adjusted operating profit was 673 million Swedish kronor ($66.1 million) in the six months to June 2024, up from a loss of 456 million Swedish kronor in the same period a year earlier. At the same time, revenue increased by 27% year-on-year to 13.3 billion crowns.
In terms of net profit, Klarna reported a loss of SEK 333 million. However, Klarna uses adjusted operating income as its main indicator of profitability because it better reflects “underlying business activity.”
Klarna is one of the biggest players in the so-called “buy now, pay later” space. with peers PayPal, cloggedof postpayment, and confirmthese companies give consumers the option to pay for their purchases through interest-free monthly installments, while merchants pay for their services through Transacchemical fee.
Sebastian Siemiatkowski, CEO and co-founder of Klarna, said the company's revenue growth was particularly strong in the United States, where sales grew 38% due to an increase in the number of merchants.
“Klarna's vast global network continues to expand rapidly, with millions of new consumers joining and 68,000 new business partners,” Siemiatkowski said in a statement on Tuesday.
Use artificial intelligence to cut costs
He added that the company achieved adjusted operating profit “by focusing on sustainable profitable growth and leveraging artificial intelligence to reduce costs.”
Klarna has been one of the pioneers in the corporate world in promoting the benefits of using artificial intelligence to increase productivity and reduce operating costs.
On Tuesday, the company said average revenue per employee rose 73% year-on-year to SEK 7 million in the past 12 months.
Meanwhile, Klarna is on the verge of a much-anticipated initial public offering as it seeks to position itself as a key banking provider to customers.
The company earlier this month has launched its own checking account-like product called Klarna Balance in a bid to convince consumers to move more of their financial lives onto its app.
The move highlights how Klarna is looking to diversify beyond its core “buy now, pay later” product for which it is famous.
Klarna has yet to set a firm timetable for its stock market debut, which is widely expected to take place in the United States
However, Siemiatkowski said in an interview with CNBC's “Closing Bell” in February that an IPO this year is “not impossible.”
“We're still a few steps away and need to keep working hard,” he said. “But we're passionate about becoming a public company.”
Separately, Klarna earlier this year Offloading its proprietary checkout technology businesswhich allows merchants to provide online payment services to a consortium of investors led by Kamjar Hajabdolahi, CEO and founding partner of Swedish venture capital firm BLQ Invest.
Klarna called the move a “strategic” step that effectively eliminates competition from rival online checkout services such as Stripe, Adyen, Block and Checkout.com.
