By the numbers: Klarna’s total revenues increased 23% YoY during the first nine months of 2024, per its financial statement.
Why it matters: Earlier this month, Klarna filed to go public. It’s expected to start trading in the first half of 2025. As it’s prepped to go public, it’s been focusing on achieving long-term profitability.
While Klarna still had a net loss for the first nine months of the year, it posted a profit for Q3, with a net income of SEK 216 million ($20.35 million).
Here are some factors that helped Klarna improve its profitability:
But there are still some areas dragging down profitably. Klarna’s consumer credit loss rate was 0.44%, compared with 0.26% in 2023. Its funding costs also increased 67% YoY.
What’s next for Klarna:
Our take: Klarna has made smart moves along its profitability journey. Investing in AI to cut expenses, launching new value-added services, and growing payments volume in less saturated BNPL segments like in-store are all setting up Klarna for a strong IPO.
These efforts will be especially important for Klarna as the BNPL boom fades, leading to slowing user growth: The number of US BNPL users will rise just 6.9% YoY in 2024, compared to 17% in 2023 and 20.5% in 2022, per our forecasts.
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