Klarna Hits First $1 Billion Revenue Quarter as Banking Users Double

Klarna said in a fourth-quarter earnings report that it doubled its number of banking customers over the past year.

During the fourth quarter, Klarna’s number of banking customers grew 101% year over year to reach 15.8 million, the company said in a Thursday (Feb. 19) earnings press release.

Klarna defines banking customers as those who use the company’s services beyond payments, such as the Klarna Card, Fair Financing or savings accounts.

The fourth quarter saw the number of active card users increase 288% year over year to 4.2 million, Fair Financing gross merchandise volume (GMV) grow 165% year over year to reach $4.5 billion, and the amount of consumer deposits rise 37% to $13 billion, according to a presentation released Thursday.

The Klarna Card allows users to pay from stored cash or activate one of the company’s pay later plans. Fair Financing is Klarna’s flexible payment method for large ticket purchases that lets merchants get paid up front while allowing consumers to pay over time with loan terms of up to 36 months.

“Traditional banking monetizes misery through revolving debt,” Klarna CEO and Co-founder Sebastian Siemiatkowski said in a letter from the CEO released Thursday. “We’re building a global digital bank that saves consumers time and money and puts them in control of their finances. Our results show consumers are hungry for it.”

Siemiatkowski said Klarna’s banking customers generate three times more revenue per user than the company’s base customers, “demonstrating the power of deepening relationships with consumers we already serve.”

Klarna’s shares fell 15% in pre-market trading Thursday as the firm reported a net loss of $26 million for the quarter, The Wall Street Journal reported Thursday. The Financial Times highlighted Klarna’s $273 million net loss for the year in a Thursday report and said the firm’s shares dropped a quarter on Thursday and have fallen 66% since its September initial public offering.

Overall, across its entire business during the fourth quarter, Klarna saw its revenue increase 38% year over year to reach $1.082 billion (marking the company’s first $1 billion quarter), its GMV increase 32% year over year to reach $38.7 billion, its number of active customers rise 28% to 118 million and its number of merchants increase 42% to 966,000, according to the press release.

Klarna said in the release that it continues to “transform its cost structure through AI-enabled productivity.” Over the past three years, the company reduced its headcount by 49% and its operating expenses by 8% while growing its revenue by 104%, per the release. Siemiatkowski said in the letter from the CEO that this transformation was enabled by “focused, disciplined AI adoption.”