Klarna's Q2 reveals 20% revenue growth but net losses more than double
Swedish BNPL giant Klarna reported an 823 million dollar revenue for Q2, a 20% increase year-over-year. However, net losses surged to 53 million dollars, more than doubling from the previous year.
Swedish payments firm Klarna posted a second-quarter revenue of $823 million, marking a 20% increase compared to the same period last year. Despite the revenue growth, the company's net losses significantly widened, reaching approximately $53 million, more than double the previous year's figure. This comes as Klarna continues its aggressive expansion in the U.S. market and secures new merchant partnerships.
The company's delinquency rate improved to 0.89% from roughly 1.03%, with CEO Sebastian Siemiatkowski highlighting a record number of transactions paid on time or early. Growth was driven by the addition of 202,000 new merchants, including major retailers like Walmart and eBay, integrating Klarna at the point of sale.
However, the increased losses were attributed to higher credit loss provisions, which rose to $174 million from $106 million. Restructuring charges and the costs associated with funding its growing loan book also impacted profitability. Klarna has also emphasized its investments in artificial intelligence and automation, which have led to a notable reduction in headcount.
Despite the widened losses, Klarna is moving forward with preparations for a potential initial public offering. The company had previously paused its IPO plans due to market volatility earlier this year but may reconsider a listing as early as September. A public offering would subject Klarna's financial performance and strategy to heightened scrutiny.