Klarna, the AI-powered payments network and shopping assistant, today announced financial results for the full year, 2023. The company booked its biggest ever year in terms of Gross Merchandise Value (GMV), while at the same time improving adjusted operating result by 95% over the year.
Sebastian Siemiatkowski – CEO of Klarna said, “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.”
Key financial highlights:
Biggest GMV in the history of the company. GMV reached SEK 981B (over 87 billion euro) for the year, 17% higher than 2022. The peak shopping season was especially strong, with GMV in November hitting SEK 100B (almost 9 billion euros) for the first time in Klarna’s history. The continued GMV growth was driven by an increase in the number of merchants offering Klarna’s flexible payment methods, combined with an increase in consumer purchase frequency. Klarna now manages 2.5M transactions per day. This adds up to a 22% increase in revenue, to SEK 23.5B (2 billion euros) for the year.
Continued focus on credit losses drives SEK 11.7B gross profit at a margin of 50%. Klarna reduced absolute credit losses by 29% in 2023 and consumer credit losses by 32% YoY, „which is all the more impressive when you consider the 17% growth in GMV over the same period” – the company said.
As a percentage of GMV, consumer credit losses improved by 42% to 0.38%. This led to an overall gross profit of SEK 11.7B, up 60% YoY in FY23, with a gross profit margin of 50%. The US, now Klarna’s largest market by revenue, delivered SEK 1.4B gross profit and 2023 was the first full year of gross profit in the US since Klarna entered the market in 2015.
Cost efficiencies drive „a massive improvement” in operating result. Continued efficiencies led to a 95% improvement in adjusted operating result (SEK -378M), or 69% on an unadjusted basis. Net result for the period improved 76% to SEK -2.5B (0,2 billion euros). Klarna found further cost efficiencies in Sales & Marketing, where costs are down 31% while at the same time driving increased GMV and purchase frequency for its worldwide network of merchants.
______________
1 Euro = 11,2 Sweedish Krona
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
