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Klarna reports $1 billion loss

Swedish buy now, pay later giant Klarna continues to bleed red ink, posting a $1 billion loss for 2022, 47% up from a $680 million loss in 2021.

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Klarna reports $1 billion loss

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Klarna has been promising investors a pathway to profitability in 2023, with Q4 figures showing steady growth in gross merchandise volume (GMV) and a 19% uplift in revenue.

Klarna last made a full year profit in 2018. Since then, a costly expansionist growth policy has led to spiralling losses in the face of macro-economic headwinds. The company has been forced to undergo a year of painful restructuring which has seen its valuation slashed and the sacking of 10% of staff.

However, Klarna's long-standing ambition to crack the American market appears to be finally coming good, with the US now representing its biggest revenue-generating stream globally. Q4 figures also show an uplift as operating loss shrank and GMV climbed 19%. With credit loss rates imrproving, H222 showed a marked turnaround in operating result with a 35% improvement compared to the first half of the year.

Commenting on the firm's growth in the US, CEO Sebastian Siemiatkowski, says: “We’re thrilled at the growth and momentum we’ve achieved in the US, and are confident in our path towards profitability.”

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Comments: (1)

A Finextra member 

1 billion USD in losses, that is 44% of their equity and 14% of their outstanding lending to the customers. A company like this should probably make at least 20% return on equity to please investors. Quite a long way to go from the present full year performance. 

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

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