Klarna’s Q2 losses swell after hit with restructuring charge

Klarna has reported a year-on-year increase in losses in Q2 to record a net loss of $53m after it was hit by a restructuring charge relating to reducing its office footprint. Earlier this year, it was revealed the Swedish fintech company was closing offices in Amsterdam, the German city of Mannheim, and not renewing the lease on its Columbus office in the US by the end of the year.

Klarna, which is most known for its BNPL product, today said it had taken a one-time financial hit of $24m in Q2 relating to a lease restructuring charge. Profits were also dented by share-based compensation expenses of $26m related to employee and partner incentives.  Its net loss of $53m, compares to a net loss of $18m the year before.

Klarna, which is reported to be reviving its US IPO in September, reported revenues of $823m in the quarter, up from $661m the year previous. Klarna, which is currently making a big push in the US, also reported that its provisions for credit losses, which are funds to cover payment defaults, grew year-on-year from $106m to $174m in Q2.

But Klarna CEO Sebastian Siemiatkowski said: “It’s important to clarify that a rise in provision for credit losses in absolute terms does not mean more people are unable to pay us back. In fact, the opposite is true—Klarna’s delinquency rates continue to fall."

Klarna’s credit losses were below one per cent of gross merchandise volume in the period. Klarna, which recently bagged a UK EMI licence, said its customer numbers grew by 26m to 111m in the last 12 months.