Klarna has reported a jump in sales over recent months, driven by partnerships with more retailers and increased revenue from loans and paying subscribers. The US-listed financial firm recorded a 27% increase in revenues for the three months to the end of June compared with the same period last year.
Merchant and subscriber growth
Some 1.2 million merchants now let customers pay with Klarna, a 54% increase year-on-year. Klarna charges retailers a fee for offering its flexible payment options at checkout. Gross merchandise volumes (GMV), the total value of all purchases excluding fees and returns, rose 18% year-on-year.
Its buy now, pay later offering accounts for more than three quarters of the group’s GMV, allowing shoppers to pay 30 days after purchase or split the cost over three interest-free instalments. Consumers can face late fees and debt collection if they miss a payment.
Financing and subscriptions drive growth
The financing arm, which spreads payments over longer periods with interest, has been driving profitable growth. GMV for that division jumped 82% year-on-year, gaining market share in the US through new partnerships with companies including Bolt and Southwest Airlines. Revenues from paying subscribers soared 600% year-on-year after new membership plans offering cashback and benefits were introduced.
Klarna also said it was benefiting from more frequent use across categories such as events, services, homeware and electronics.
Outlook downgraded
Looking ahead, Klarna expects full-year revenues and GMV to be lower than previously anticipated due to currency movements and a “more measured view of European volumes in the second half, particularly in Germany, our largest market by volume, and pronounced in certain discretionary retail categories”. The company cautioned: “Our guidance assumes Germany stays soft through the second half rather than recovering.”
Klarna launched its shares on the New York Stock Exchange last year, one of the biggest flotations of the year. However, its share price has tumbled since the IPO and was about a fifth lower in early trading on Wall Street on Tuesday.
