Klarna, which offers a “buy now, pay later” service, aims to be profitable by the summer of 2023.
Jakub Polzycki | NurPhoto | Getty Images
Klarna Inc. said it posted a profit in the first half of this year, turning around a loss last year, as the “buy now, pay later” pioneer moves closer to its much-anticipated stock market debut.
In financial results released on Tuesday, Klarna said its adjusted operating profit rose to 673 million Swedish kronor ($66.1 million) for the six months to June 2024, from a loss of 456 million kronor in the same period last year. Meanwhile, sales rose 27% year-on-year to 13.3 billion kronor.
On a net profit basis, Klarna reported a loss of SEK 333 million. However, Klarna cited adjusted operating profit as its main measure of profitability as it better reflects its “underlying business activity.”
Klarna is one of the biggest players in the so-called “buy now, pay later” sector. PayPal, blockAfterpay, and AssertThese companies offer consumers the option to pay for their purchases in interest-free monthly installments, and retailers cover the cost of their services through transactional payments.ction fee.
Klarna CEO and co-founder Sebastian Siemiatkowski said the company has seen strong revenue growth, particularly in the U.S., where sales increased 38% due to increased merchant onboarding.
“Klarna’s vast global network continues to expand rapidly, onboarding millions of new consumers and partnering with 68,000 new merchants,” Siemiatkowski said in a statement on Tuesday.
Using AI to reduce costs
The company achieved its adjusted operating profit by “focusing on sustainable, profitable growth and leveraging AI to reduce costs,” he added.
Klarna has been one of the pioneers in the corporate world when it comes to touting the benefits of leveraging AI to increase productivity and reduce operational costs.
The company said on Tuesday that its average revenue per employee over the past 12 months rose 73% year-on-year to 7 million Swedish kronor.
This comes as Klarna seeks to position itself as a leading provider of banking services to customers as it nears its much-anticipated initial public offering.
Earlier this month, the company launched its own current account-like product called “Klarna Balance” in a bid to encourage consumers to move more parts of their financial lives onto its app.
The move highlighted Klarna’s efforts to diversify beyond its core “buy now, pay later” product for which it is primarily known.
Klarna has not yet set a specific timeline for its stock market listing, which is widely expected to take place in the United States.
But an IPO this year is “not impossible,” Mr. Simiatkowski said in a February interview on CNBC’s “Closing Bell.”
“We still have some steps and work to do,” he said, “but we are eager to become a publicly traded company.”
Separately, Klarna earlier this year sold its proprietary checkout technology business, which enables retailers to offer online payments, to a consortium of investors led by Kamja Hajabdullahi, CEO and founding partner of Swedish venture capital firm BLQ Invest.
The move, which Klarna called a “strategic” step, effectively eliminated competition from rival online checkout services such as Stripe, Adyen, Block and Checkout.com.
