Last year wasn’t an easy one for European fintech giant Klarna. The visitor saw its valuation stuff truncated in an $800 million funding round, and coverage of its 2022 results focused on contrasting its stiff losses versus a increasingly inobtrusive market. This post argued at the time of its earnings report that if we looked at Klarna’s quarterly results, things were looking up toward the end of last year:
More platform usage (GMV) leading to increasingly revenue, contrasted with falling credit losses and modest improvements to operating costs, yielded a much less unprofitable Klarna at the end of 2022 than at the beginning. This is the visitor unquestionably managing what every unicorn is supposed to do today: alimony the growth coming and cut the losses.
The good news for Klarna stans — founders, investors and employee shareholders — is that Q1 2023 data from the visitor supports our often positive vibes. A few good quarters do not make for a comeback, but there’s lots to like well-nigh the visitor weightier known for its buy now, pay later services.
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This morning, we’re going to parse Klarna’s Q1 2023 results, compare that to where the visitor was during its time in the barrel, and then tropical with its notes on AI — an interesting cultural riff embedded in the Klarna investor report that is worth looking at. Sounds good? To work!
Holistic improvements
To understand Klarna’s results, we need to start one step up from revenue. What leads to revenue at Klarna? Gross merchandise value (GMV), or the total worth of stuff that consumers bought using Klarna services.
In the first quarter of 2023, Klarna’s GMV rose 13% to 210.7 billion Swedish Krona ($19.65 billion) from a year earlier. This number isn’t too impressive on its own, but it is significant considering that overall e-commerce growth has been lackluster in the last year. In its investor note, Klarna says the global e-commerce market unquestionably shrunk by 2% between Q1 2022 and Q1 2023.
