“Buy-now, pay-later” firm Klarna aims to return to profit by summer 2023.
Jakub Porzycki | NurPhoto | Getty Images
Swedish payments group Klarna aims to return to profit by the summer, the “buy-now, pay-later” company said on Tuesday, as it reported wider losses for 2022 but an improving performance in the fourth quarter.
Klarna posted a full-year operating loss of 10.5 billion crowns ($1 billion) against 6.6 billion crowns in 2021. Gross merchandise volume (GMV) – the value of goods purchased through Klarna – was up 22% and revenue growth was 19%.
The fast-growing, privately held fintech saw business conditions deteriorate last year as consumer confidence was hit by soaring inflation and the war in Ukraine, sending its valuation tumbling.
In May, it said it was cutting 10% of its workforce to rein in costs, and in July it raised $800 million in new financing.
In the fourth quarter, however, Klarna’s operating loss shrank to 2.0 billion crowns from 3.5 billion the year before, with GMV up 19%, the company said in its annual report on Tuesday.
Klarna said the United States became its largest market by revenue in December, and the group aimed to return to profitability by summer.
“The U.S. and the UK is growing at a very high pace, pushing up the average growth number for the whole company,” Chief Executive Sebastian Siemiatkowski told Reuters.
Siemiatkowski said group growth could accelerate further on the back of the high growth rates in those two countries. Britain is its third-biggest market.
The CEO said further job losses of the magnitude of those announced in May were not on the cards.
Rival Affirm Holdings Inc this month announced it would cut 19% of its workforce.
Klarna last made a full-year profit in 2018.