Swedish buy-now-pay-later service, Klarna, has reported a significant financial turnaround in Q3, transitioning from a SEK 2.13 billion loss last year to a net profit of SEK 90 million ($8.3 million). The company attributed this positive shift to strategic investments made throughout the year.
In addition to the profit increase, Klarna's revenue rose by 30% to SEK 6 billion. This growth was coupled with a reduction in credit losses by 46%, a result of improved model precision that led to a 0.33% GMV loss ratio.
The firm's Gross Merchandise Volume (GMV) also experienced an uptick, rising by 22% to SEK 243 billion. This increase is largely due to surging demand for Klarna's AI-powered services, which have grown in popularity among its user base.
In the U.S., Klarna marked its fourth continuous quarter of gross profit, demonstrating consistent growth in this key market. This comes amid the ongoing global expansion of Klarna's partnership with Airbnb (NASDAQ:ABNB), which is projected to have an even broader reach by 2024.
Klarna's growth trajectory continues with over 150 million active users globally and alliances with more than 500,000 retailers worldwide. These partnerships and its expanding user base contribute to Klarna's positive financial performance and its position as a leading player in the buy-now-pay-later sector.
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