Klarna Marks 100 Million Customers as Losses Nearly Double
Klarna, the Swedish FinTech giant, has announced that it now has 100 million active customers, a milestone revealed in its quarterly earnings report on Monday (May 19). The company’s revenues increased by 15% to $701 million, while its pretax loss nearly doubled to $92 million, up from $47 million in the same period last year.
According to Klarna’s earnings report, cited by PYMNTS, the company attributed its losses to issues such as share-based payments expense, "severance-related restructuring costs," and expenses connected to its initial public offering (IPO), which is currently on hold. Klarna Co-founder and CEO Sebastian Siemiatkowski said in a news release that the quarter had also seen the company secure partnerships with major retailers such as Walmart and DoorDash, while expanding its collaboration with eBay to the US.
Klarna’s AI-first strategy is driving exceptional returns, with the company outpacing competitors and rapidly scaling its merchant network. Siemiatkowski stated, "Our AI-first strategy is driving exceptional returns, we’re outpacing competitors, our merchant network is scaling rapidly, and our next-gen products are reshaping money management for millions." The company’s deployment of artificial intelligence (AI) has also led to significant cost savings, with Klarna cutting its workforce by 40% since 2022 and increasing its share of tech employees from 36% in 2022 to 52% in the first quarter of this year.
The company’s use of AI has also led to a significant increase in productivity, with 96% of its workers using AI daily, resulting in a 152% increase in revenue per employee since the first quarter of 2023. According to Klarna, AI has helped slash costs across the business, particularly in customer service, where costs per transaction have dropped by 40% since Q1’23 while maintaining customer satisfaction levels.
Despite the benefits of AI, Siemiatkowski recently announced that Klarna is embarking on a hiring effort to ensure customers always have the choice to speak with a human customer service representative. This move comes as the company takes a cautious approach to its IPO plans, having put them on hold last month due to new US tariffs. The decision was seen as a setback for the FinTech industry, with other companies such as Chime also delaying their listings.
Research by PYMNTS Intelligence estimates that Klarna commanded a 26.2% share of the US pay-later market as of the end of last year, making it the largest player in the market. The same research found that 128 American adults had used a BNPL product in the prior 12 months, with the country’s total BNPL transactions adding up to $175 billion. As Klarna continues to expand its customer base and merchant network, it remains to be seen how the company will navigate the challenges of the FinTech industry and achieve long-term profitability.
The company’s recent performance and future prospects will be closely watched by industry analysts and investors, as Klarna continues to play a significant role in the rapidly evolving FinTech landscape. With its AI-first strategy and expanding partnerships, Klarna is well-positioned to remain a major player in the BNPL market. As PYMNTS previously reported, Klarna’s performance has significant implications for the FinTech industry, and its future developments will be closely monitored by stakeholders.
