Klarna Sees Credit Losses Fall 41% and Adds AI-Powered Solutions


Klarna reported earnings results for the first half of 2023, showcasing a profitable second quarter that exceeded its expectations.

The Stockholm-based, artificial intelligence (AI)-powered global payments network and shopping assistant has successfully aligned its strategic focus on both profitability and growth, Klarna said in a Thursday (Aug. 31) press release.

“I’m super proud that we have returned to black numbers, with a profitable month in Q223, well ahead of the target we set for later this year,” Klarna CEO Sebastian Siemiatkowski said in the release.

One of Klarna’s successes lies in its approach to underwriting short-term lending to consumers, according to the release. Coupled with a merchant-funded approach, credit losses decreased 41% year over year, resulting in a global credit loss rate of 0.39% for the first half of the year.

At the same time, Klarna recorded growth, with its gross merchandise volume (GMV) increasing 14% year over year in the second quarter, surpassing the stagnant global eCommerce growth rate of 0%, the release said.

Klarna’s revenue also experienced a boost, with a 17% year-over-year increase in the second quarter, per the release. The company’s expanding merchant partner network, which includes AirbnbBodenDeichmannSelfridgesJuventusAC Milan and Uniqlo, has contributed to this growth. During the second quarter, Klarna also recorded its third consecutive quarter of gross profit in the United States market.

“Some claimed Klarna would face difficulties in the tough macroeconomic climate with high-interest rates, but having led the company through the 2008 financial crisis, I knew we had a strong and resilient business model to see us through,” Siemiatkowski said in the release. “Despite the volatile environment, we have done exactly what we set out to do.”

The company also highlighted its various AI-driven initiatives to enhance performance and improve the experience for its 150 million global customers. For instance, a recently-launched solution within customer services has improved the efficiency of resolving merchant disputes, saving over 60,000 hours annually.

Among its consumer-facing offerings, Klarna has also introduced an AI-powered search feature and an Ask Klarna personal shopping assistant that allow customers to access results from a selection of 10 million products, per the release.

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