Payments company Klarna posts minor Q4 loss; eyes return to benefit

March 01, 2023: -On Tuesday, Swedish payments firm Klarna aims to come back to profit by the summer, the “buy-now, pay-later” company said, as it reported more comprehensive losses for 2022 but improving performance in the last quarter.

Klarna posted a complete-year operating loss of 10.5 billion crowns against 6.6 billion crowns in 2021. Gross merchandise volume (GMV), the value of purchased goods through Klarna, increased by 22%, and earnings growth was 19%.

The fast-growing, held fintech saw firm conditions deteriorate last year as consumer confidence was reached by zooming inflation and the war in Ukraine, which shook its valuation.

In May, it stated that it was slashing 10% of its workforce to rein in costs, and in July, it increased $800 million in the recent financing.

In the fourth quarter, Klarna’s operating loss decreased to 2.0 billion crowns starting from 3.5 billion the year before, with GMV increasing by 19%, the company stated in its Tuesday annual report.

Klarna said the United States became its biggest market by earnings in December, and the group is focusing on returning to profitability by summer.

“The U.K. and the U.S. are growing at a very high speed, pushing up the average growth number for the whole firm,” Chief Executive Sebastian Siemiatkowski stated.

Siemiatkowski said group growth could accelerate further because of the high increase rates in those two cities. Britain is its third-biggest market.

The CEO stated further job losses of the magnitude of those stated in May were missing from the cards.

Rival Affirm Holdings Inc this month stated it would cut 19% of its workforce.

Klarna previously made a complete-year profit in 2018.