Klarna Q1 revenues climb to $700M but losses widen

Klarna today said US growth has helped lift revenues 13 per cent year-on-year to $701m in Q1, but losses more than doubled to $99m at the BNPL fintech.

The Swedish fintech, most well-known for its BNPL offering, did not divulge fresh details of its IPO plans in its Q1 statement.

Klarna paused plans to IPO in April amid investor uncertainty following the Trump tariffs.

In Q1, Klarna reported revenues up 13 per cent year-on-year to $701m while net losses increased from $47m to $99m in the period.

Klarna also pointed out that it had hit 100m active consumers in the period.

Revenues were helped by 33 per cent revenue growth in the US, its biggest market, driven by rising consumer demand and increasing merchant adoption.

Klarna has recently inked deals in the US with Walmart and DoorDash.

However, losses increased after Klarna was hit by higher transaction costs and increased consumer credit losses, which refer to the financial losses Klarna sustains when a borrower defaults.

Klarna has been a pioneer in its use of AI, after signing a deal with OpenAI.

However, Klarna CEO and co-founder Sebastian Siemiatkowski said in a recent interview with Bloomberg it would still be using humans in its AI-powered customer service offering.

In its Q1 results, Klarna said as of December 2024 headcount stood at 3,442, compared to 5,527 at the end of 2022, which it attributed to AI.

Klarna said: “This shift reflects the growing impact of AI and automation in eliminating manual, time-consuming work across Klarna. By streamlining operations and doubling down on core capabilities, we’re building a leaner, more technically focused organization that is better equipped to scale.”

It added: “From customer service to legal to marketing and finance, AI is enabling us to do more with less, supporting us to scale efficiently without compromising on quality or growth.”