Klarna reports full-year results for 2023!

Klarna announced today its financial results for the full year 2023, where the company not only surpassed its previous record for the largest Gross Merchandise Volume (GMV) but also impressively improved its adjusted operating income by a remarkable 95%. This marks a milestone for Klarna, showcasing the company's strength and success in the market. With increased growth and efficiency, Klarna has taken significant strides forward over the past year, confirming its position as a leading player in the payment industry.

“2023 was a year of firsts for Klarna. Our GMV was in touching distance of SEK 1 trillion and we saw a 95% improvement in adjusted operating result. We celebrated our first month and then first quarter of profitability in four years, and in the US we delivered SEK 1.4B gross profit propelling the entire business forward. November followed as our most successful sales month ever, with GMV surpassing SEK 100 billion and exceeding the total for all of 2015! While we continue on our journey to long-term profitability, we made a conscious decision to invest in growth in the peak shopping season of Q4. We will continue to invest wisely for growth and focus on being cost-effective, on our path towards annual profitability.”

- Sebastian Siemiatkowski, CEO för Klarna.

These events represent significant milestones symbolizing a groundbreaking era for the company. With the highest sales volume (GMV) in Klarna's history, GMV reached an impressive 981 billion SEK during the year, a remarkable 17% increase compared to 2022. During the busy shopping period in November, GMV surpassed 100 billion SEK for the first time in Klarna's history, clearly demonstrating the company's strength and growth. This success is supported by the increase in merchants offering Klarna's flexible payment methods and a significant rise in consumer purchase frequency. Klarna's impressive performance now includes handling 2.5 million transactions per day, further confirming its influence and significance in the market.

This remarkable GMV growth has translated into a significant revenue increase, with a 22% rise reaching 23.5 billion SEK for the year. An important achievement is the continued effort to reduce credit losses, resulting in an impressive gross profit of 11.7 billion SEK and an impressive margin of 50%. In 2023, Klarna reduced total credit losses by 29%, while consumer credit losses decreased by 32% compared to the previous year. This achievement is even more impressive considering the substantial growth in GMV during the same period. Consumer credit losses as a percentage of GMV improved by a whopping 42%, now standing at 0.38%.

A crucial development is the significant role of the United States as Klarna's largest revenue-generating market. In 2023, the U.S. market generated an impressive gross profit of 1.4 billion SEK, marking the first time since Klarna established itself in the market in 2015 that it achieved a full-year positive gross profit.

This success journey is also reflected in the company's effective cost management, leading to an impressive improvement in adjusted operating income by 95%, or 69% on an unadjusted basis. Despite a 31% decrease in sales and marketing costs, both GMV and purchase frequency for the company's global network of merchants increased. The net result for the period improved by 76%, resulting in a net result of -2.5 billion SEK. These fantastic results confirm Klarna's successes and strengthen its position as a leading player in the payment industry.

Summary

In summary, these impressive results and achievements highlight why Klarna is a overwhelmingly attractive investment opportunity. The company's record-breaking Gross Merchandise Volume (GMV) of 981 billion SEK, the remarkable 22% increase in revenue to 23.5 billion SEK, and the significant gross profit of 11.7 billion SEK with an astounding margin of 50% are all indicators of stable and growing financial success.

Klarna's continued focus on reducing credit losses, resulting in substantial improvements of 29% and 32% for total and consumer credit losses, along with the impressive management of 2.5 million daily transactions, reinforce confidence in the company's financial health and operational efficiency. The successful establishment of Klarna in the significant U.S. market, with a positive gross profit of 1.4 billion SEK, underscores the company's global growth potential.

The combination of these factors, along with cost-efficiency improvements and an impressive 95% increase in adjusted operating income, positions Klarna as an attractive investment destination. With the demonstrated ability to deliver strong results despite increased competition and a dynamic market, Klarna emerges as an innovative and reliable force to be reckoned with in the rapidly growing digital payment sector. Investors seeking growth and stability may find a promising opportunity in Klarna's success story.

Source: Klarna Press Release