Klarna Bank AB reported its first quarterly operating profit in four years as it attracted more consumers to buy-now-pay-later loans, giving the firm a boost as it lays the groundwork for an initial public offering.
The Stockholm-based fintech reported an operating profit of 130 million Swedish kronor ($12 million) for the three months through September, while revenue rose by about 30% to 6 billion kronor. It’s the firm’s first profitable result since the second quarter of 2019.
“Our growth has accelerated in Q3 and we will build on this momentum in Q4 with further investments to drive value to our consumers and merchants alike,” Sebastian Siemiatkowski, chief executive officer, said in a statement.
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Klarna, once Europe’s most valuable startup, offers credit to about 150 million shoppers globally looking to spread the cost of online purchases. The value of goods sold using Klarna rose 22 percent year-on-year in the third quarter, with the US growing nearly 50 percent. The firm said it’s now been profitable in the US for four consecutive quarters.
Despite the inflation strain on customers in many markets, the rate of credit losses improved to 0.33 percent of gross merchandise value, compared to 0.74 percent a year ago.
Klarna is setting up a British holding company as it prepares for an eventual stock exchange listing. Sky News reported at the weekend that the share sale could take place within months and value the business at more than $15 billion.
Last year, Klarna’s valuation was slashed to $6.7 billion from about $45.6 billion while it cut jobs, office space and other costs, as investors reconsidered the growth of easy credit at a time of rising interest rates.
The firm averted a strike by some of its staff after signing a collective bargaining agreement with the Financial Sector Union of Sweden on Friday night.
By Aisha S. Gani
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