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Klarna reported a wider net loss in the second quarter as the buy now, pay later company gears up for its long-awaited New York listing.
The fintech, which primarily offers interest-free consumer loans for retail purchases, on Thursday reported a net loss of $53mn for the three months to June, up from a net loss of $18mn a year earlier.
Klarna’s earnings will be closely watched by investors as it readies a second attempt to go public in the autumn. The Swedish group paused its listing plans in April after US President Donald Trump’s trade tariffs disrupted markets.
However, recent market exuberance and blockbuster initial public offerings, including that of design software group Figma and crypto company Bullish, have signalled strong demand for technology and financial stocks and renewed hope for Klarna.
Klarna’s second-quarter loss included a $24mn charge after shrinking its office space as part of a wider cost-cutting drive. The company has been cutting its workforce and expanding its use of artificial intelligence.
Revenues rose almost 21 per cent year on year to $823mn as Klarna continued its rapid US expansion.
The company has been pivoting away from its bread and butter model of offering short-term, interest-free instalments at retailers’ checkouts towards becoming a full-fledged neobank that offers debit cards and interest-bearing loans.
Its newer loan book of traditional interest-bearing loans grew more than twofold year on year to make up 8 per cent of its total volume. As a result of this and its rapid growth, Klarna increased its provision for potential losses to $174mn, up from $106mn a year earlier.
However, Klarna’s realised credit losses declined slightly to represent 0.45 per cent of volume, compared with 0.48 per cent a year earlier.
Chief executive Sebastian Siemiatkowski said a record number of transactions were repaid on time or early in the second quarter and that credit losses remained low.
Klarna’s global delinquency rate on BNPL loans dropped to 0.89 per cent, lower than the 1.03 per cent rate it recorded a year earlier.