Buy now, pay later firm Klarna swings to first-half profit ahead of IPO

cnbc.com:

Klarna said it posted a profit in the first half of the year, swinging into the black from a loss last year as the buy now, pay later pioneer edges closer toward its hotly anticipated stock market debut.

In results published Tuesday, Klarna said that it made an adjusted operating profit of 673 million Swedish krona ($66.1 million) in the six months through June 2024, up from a loss of 456 million krona in the same period a year ago. Revenue, meanwhile, grew 27% year-on-year to 13.3 billion krona.

On a net income basis, Klarna reported a 333 million Swedish krona loss. However, Klarna cites adjusted operating income as its primary metric for profitability as it better reflects «underlying business activity.»

Klarna is one of the biggest players in the so-called buy now, pay later sector. Alongside peers PayPal, Block's Afterpay, and Affirm, these companies give consumers the option to pay for purchases via interest-free monthly installments, with merchants covering the cost of service via transaction fees.

Sebastian Siemiatkowski, Klarna's CEO and co-founder, said the company saw strong revenue growth in the U.S. in particular, where sales jumped 38% thanks to a ramp-up in merchant onboarding.

«Klarna's massive global network continues to expand rapidly, with millions of new consumers joining and 68k new merchant partners,» Siemiatkowski said in a statement Tuesday.

The company achieved its adjusted operating profit «by focusing on sustainable, profitable growth and leveraging AI to lower costs,» he added.

Klarna has been one of the forerunners in the corporate world when it comes to touting the benefits of using AI to increase productivity and cut operating costs.

On Tuesday, the company said that its average revenue per