Klarna narrows its losses and is ready for an IPO.

Purchase now, pay later behemoth Klarna, which is preparing for an expected IPO later this year, discloses its yearly financial loss for the seventh consecutive year.

Madilyn Swift

February 28, 2024

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In 2023, the Swedish company recorded a net loss of SKr2.5 billion ($241 million), which is less than its 2022 loss of SKr10.4 billion. Sales increased by 22% to SKr23.5 billion.

The raw numbers conceal a strengthening turnaround at Klarna, which recorded its highest-ever gross merchandise value year and improved adjusted operating result by 95% year over year.

2.5 million transactions are being handled daily by Klarna. This translates into a 22% rise in income, or Skr23.5B, for the entire year.

As it pursues yearly profitability, Sebastian Siemiatkowski, CEO of Klarna, says the company deliberately chose to invest in expansion during the busiest shopping season in Q4.

Our GMV was very close to Skr1 trillion, and our adjusted operating performance improved by 95%. In the US, we generated Skr1.4B in gross profit, driving the entire business ahead, and we celebrated our first profitable month and then quarter in four years. Our best-ever sales month was November, when GMV surpassed SEK 100 billion and surpassed the entire amount of 2015."

With Skr1.4B in gross profit, the US is now Klarna's largest market by sales. 2023 marked the first full year of gross profit in the US since Klarna's 2015 market entry.

According to Siemiatkowski, operating results saw a "massive improvement" as a result of cost savings. By 2023, the company had reduced expenses from sales and marketing by 31%, while terminating 1200 employees.

In January, Siemiatkowski stated that it was "very likely" that Klarna would begin listing on the US stock market "quite soon". According to Bloomberg, the business is moving forward with its ambitions at a $20 billion valuation, which is more than half of the $46 billion price tag it commanded in 2021 during the height of the fintech boom.