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Klarna Reports $1 Billion Loss

Swedish BNPL giant Klarna reported losses for 2022.

Klarna Reports $1 Billion Loss

Source: Pixabay.com

According to the results of last year, this company recorded losses amounting to $ 1 billion. In 2021, the firm also faced losses, but its size was much smaller. According to the results of the year before last, this figure amounted to $ 680 million, which is 47% less than the result for 2022.

Klarna does not consider the current situation as catastrophic or as the beginning of a negative trend that heralds hard times. The firm promises investors a profit in 2023. As a justification for the favorable forecast, the company points to the fact that in the fourth quarter of last year, there was a steady increase in gross sales and an increase in revenue of 19%.

The last time Klarna reported an annual profit was at the end of 2018. After that, the firm focused on implementing an expansionary growth strategy. As a result of following this concept of activity, the company faced large losses against the background of macroeconomic problems.

Large losses led to the fact that the firm had to start restructuring, which turned out to be painful for it. As part of this process, Klarna has reduced its staff by 10%. The company’s value has also decreased.

But the firm also has positive results. Ambitions to develop the US financial market have begun to bear fruit. The American business is currently the main source of the company’s income. The indicators for the fourth quarter of 2022 in this direction turned out to be positive. Operating losses decreased and gross sales increased by 19%. Against the background of improved credit loss indicators, the operating result for the second half of 2022 increased by 35% compared to the first half of the year.

Sebastian Siemiatkowski, CEO of the company, said that the current dynamics of the firm’s activities in the American market are a guarantee of profitability in the future.

As we have reported earlier, Klarna to Introduce Charges for Late Payments.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.