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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. 

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