- Klarna reported a $1 billion operating loss in 2022, up from a $680 million operating loss in 2021.
- Despite the loss, Klarna plans to return to profitability by this summer.
- Klarna last reported a full year profitability in 2018.
Consumer payment services company Klarna is inching toward profitability, but is still in the red.
The Swedish company released its operating figures this week, reporting an operating loss of $1 billion for 2022 (10.5 billion crowns). The negative side of the news is that Klarna’s operating loss increased– the company reported a loss of $680 million in 2021. But the positive spin is that Klarna plans to return to profitability by summer.
Last week, the buy now, pay later (BNPL) player reported it has seen a large amount of growth in its U.S. market. The region generated a 71% year-over-year increase in gross merchandise volume, while improving credit loss rates by 37%. As of December 2022, the U.S– with its 34 million consumers– has become Klarna’s largest market by revenue.
Klarna, which last posted a full-year profit in 2018, may be able to reach its 2023 profitability goal. The company has seen increased growth in the U.S. and the U.K. “The U.S. and the U.K. [are] growing at a very high pace, pushing up the average growth number for the whole company,” said company Chief Executive Sebastian Siemiatkowski in a statement to Reuters. Additionally, the company restructured in 2022. Klarna let go of 10% of its staff in May of last year in an effort to rein in costs.
With 150 million customers across the globe, Klarna is one of the pioneers in the BNPL arena and currently offers its BNPL payment tools in 45 markets. More than 400,000 retailers, including H&M, Macy’s, and IKEA, offer Klarna within their checkout flow. The company has raised $4.5 billion since it was founded in 2005.