Key Takeaway
Klarna, the European fintech giant, reports a profitable month in the second quarter of 2022, accompanied by a 14% growth in gross merchandise volume (GMV). The company’s revenue and total operating income also show significant increases compared to the previous year. Klarna’s credit losses continue to improve, and it has achieved three consecutive quarters of gross profit in the U.S., bolstered by its partnership with Airbnb for flexible payments. CEO Sebastian Siemiatkowski highlights the company’s focus on optimization and continued innovation in its long-term strategy.
Klarna’s Growth Streak Continues in Q2
European fintech giant Klarna continues to thrive, despite a challenging 2022. The company recently announced its second-quarter results, which showcased a profitable month and impressive growth in gross merchandise volume (GMV). With its buy now, pay later offerings gaining popularity, Klarna reported a 14% increase in GMV, reaching 238.6 billion Swedish Krona ($21.8 billion) in Q2 2022, a significant rise from 209.2 billion Krona ($19.1 billion) in the same quarter of the previous year.
Revenue and Operating Income on the Rise
Alongside the growth in GMV, Klarna’s revenue also showed robust growth, surging by 17% to 5.5 billion Krona ($502.2 million) compared to the same period in the previous year. The company’s total operating income witnessed a 21% increase compared to Q2 2022. These strong financial results reflect Klarna’s ability to navigate market uncertainties and capitalize on its responsible lending approach.
Improving Credit Losses and Expansion Efforts
Klarna’s credit losses continue to improve, decreasing by 41% in the second quarter of 2022. The company attributes this improvement to its responsible lending approach, which has kept credit losses at a low level of 0.39% of GMV in the first half of the year. Klarna’s efforts to attract U.S. customers paid off, as the company achieved three consecutive quarters of gross profit in the U.S. Furthermore, Klarna’s partnership with Airbnb to offer flexible payments for guests has been successful, leading to plans for expansion into Europe.
Focusing on Optimization and Innovation
Klarna’s CEO, Sebastian Siemiatkowski, emphasizes the company’s healthy and robust business model. He attributes Klarna’s recent successes to optimization efforts and the introduction of new features. Despite facing challenges due to flat growth in the e-commerce industry, especially in Klarna’s mature European markets, which already have high adoption rates, Siemiatkowski remains optimistic. He highlights the importance of providing additional value to customers through innovative features, such as displaying purchased items with images in their purchase history.
In conclusion, Klarna’s second-quarter results demonstrate its ability to thrive in a highly competitive market. The company’s profitable month, accompanied by significant growth in GMV, revenue, and operating income, highlights Klarna’s successful business strategy. With a focus on optimization, continued innovation, and expansion efforts, Klarna remains well-positioned for long-term profitable growth.
