Buy now, pay later giant Klarna has narrowed its first half losses and reported a profitable month for the first time in three years.
The improving financial position comes after a torrid time for the BNPL pioneer, which has cut a tenth of its workforce and seen its valuation savaged amid a tech market recalibration.
Sebastian Siemiatkowski, CEO of Klarna says:, "I'm super proud that we have returned to black numbers, with a profitable month in Q223, well ahead of the target we set for later this year."
Klarna still recorded a $71 million operating loss for Q2, although that was down four-fifths from a year ealier.
Revenues in the second quarter increased 17 per cent to SKr5.5 billion while credit losses fell 41% to one billion krona. Gross mechandise value continued to outpace e-commerce, growing at 14% YoY in Q223 while global e-commerce remained flat at 0%.
"Today’s results clearly rebut the misconceptions around Klarna’s business model, evidencing that it is incredibly agile and sustainable as we support our healthy consumer base in making sound financial decisions," says Siemiatkowski. "Some claimed Klarna would face difficulties in the tough macro-economic climate with high interest rates, but having led the company through the 2008 financial crisis I knew we had a strong and resilient business model to see us through. Despite the volatile environment, we have done exactly what we set out to do.”
Siemiatkowski says Q2 also marked the third consecutive quarter of gross profit in the US, driven in part by Klarna’s new partnership with Airbnb, which will expand from the US to European markets within the coming weeks.