Klarna turns to profitability Q3 2023

Klarna Bank AB, the world-leading payments company from Sweden, has recently reported an important milestone - their first profitable quarter since 2019. This marks a significant change in the company's financial course and points to a brighter future.

Operating profit was SEK 130 million in the third quarter of 2023 (Q323), up from SEK -2 billion in the same period last year (Q322). Credit losses as a percentage of gross merchant volume (GMV) decreased by 56% thanks to continuous improvements in precision and accuracy in credit scoring, ensuring Klarna continues to make the right lending decisions for consumers while delivering revenue growth of 30%.

The third quarter of 2023 marks the fourth consecutive quarter of gross profit in the United States, proving that investment in one of the world's largest consumer markets continues to pay off.

 

An overview of the quarter's Financial Successes

In the third quarter of 2023, Klarna reported a pre-tax profit of SEK 130 million, which is a significant improvement compared to previous years. This turnaround is the result of the company's rigorous focus on cost efficiency and innovative growth strategies.

 

Revenue growth

Klarna's revenue increased by 30% compared to the previous year, up to SEK 6 billion. This increase is a sign of the company's strong market position and its ability to attract new customers while retaining existing ones.

 

Improvements in loan losses

One key area where Klarna has made progress is in the reduction of credit losses, which are now down by 56% as a percentage of gross trade volume. This has been achieved through improvements in the underwriting process, demonstrating the company's ability to make wiser lending decisions.

 

Innovative AI-powered features

Klarna has also introduced several new AI-based features to enhance the shopping experience. This includes Klarna Shopping Lens and shoppable video content, further cementing their position as a leading player in the fintech sector.

 

Sustainability commitments

In addition, Klarna has taken important steps towards sustainability by introducing environmentally conscious products and features. This includes a conscious shopping dashboard that helps consumers monitor their COâ‚‚ emissions and interact with environmentally responsible brands.

 

Conclusion

Klarna's latest financial report is more than just a quarterly profit; it is a sign of the company's long-term sustainability and its ability to adapt to market changes. With a solid foundation in innovative technology and an increased focus on sustainability, Klarna is well positioned for continued success in the global payments and fintech industry.

 

Sources

For more detailed information on Klarna's financial success and strategies, see sources from Reuters and Klarna's official press releases.