Buy-now, pay-late company Klarna aims to return to profit by summer 2023.
Jakub Porzycki | NurPhoto | Getty Images
Klarna said it posted a profit in the first half of the year, swinging into the black from a loss last year, as the market now, the latecomer moves closer to its long-awaited IPO.
In results published on Tuesday, Klarna said it made an adjusted operating profit of 673 million Swedish crowns ($66.1 million) in the six months to June 2024, up from a loss of 456 million crowns in the same period a year ago. Revenue, meanwhile, rose 27% year-on-year to 13.3 billion kroner.
In net income, Klarna reported a loss of SEK 333 million. However, Klarna reports adjusted operating income as its main measure of profitability, as it better reflects the “underlying business”.
Klarna is one of the biggest players in the so-called buy now, pay later sector. Next to peers PayPal, Barrier‘s Afterpay, and Certifythese companies enable consumers to pay for purchases through interest-free monthly installments, with merchants covering the cost of the service via transadofees.
Sebastian Siemiatkowski, CEO and co-founder of Klarna, said the company saw strong revenue growth in the US in particular, where sales jumped 38% thanks to increased merchant onboarding.
“Klarna’s massive global network continues to expand rapidly, with millions of new consumers joining and 68,000 new merchant partners,” Siemiatkowski said in a statement on Tuesday.
Using artificial intelligence to reduce costs
The company achieved its adjusted operating profit “by focusing on sustainable, profitable growth and leveraging artificial intelligence for lower costs,” he added.
Klarna has been one of the pioneers in the corporate world in touting the benefits of using AI to increase productivity and reduce operational costs.
On Tuesday, the company said its average revenue per employee over the past twelve months rose 73% year-on-year to 7 million Swedish kronor.
It comes as Klarna tries to position itself as a primary banking provider for customers as it nears a long-awaited initial public offering.
The company earlier this month launched its own checking account-like product, called Klarna balance, in an attempt to convince consumers to move more of their financial lives to its app.
The move underscored how Klarna wants to differentiate itself beyond its core buy-now, pay-later product for which it is primarily known.
Klarna has yet to set a firm timetable for the IPO, which is widely expected to take place in the US
However, in an interview on CNBC’s “Closing Bell” in February, Siemiatkowski said an IPO this year was “not impossible.”
“We still have a few steps and we are working ahead,” he said. “But we want to become a public company.”
Separately, Klarna earlier this year offloaded its dedicated cash register technology businesswhich allows merchants to offer online payments, to a consortium of investors led by Kamjar Hajabdolahi, CEO and founding partner of Swedish venture capital firm BLQ Invest.
The move, which Klarna called a “strategic” step, effectively eliminated competition for rival online checkout services, including Stripe, Adyen, Block and Checkout.com.
