US continues to be engine of growth with GMV doubling with all markets showing gains
Stockholm, New York - 31 August 2022 – Klarna, the global leader in the generational shift away from credit cards, today announced its financial results for the first half of the year. Klarna continues to show exceptional growth in the US and UK, with all markets showing Gross Merchandise Volume (GMV) growth.
The US continues to be the engine of growth as demand for Klarna’s interest-free payments, cards and marketing services accelerates among consumers and retailers. The US remains Klarna’s fastest growing market with GMV doubling, up 109% YoY, comfortably outperforming both US peers and e-commerce growth rates. Purchase frequency increased 37% to 6.3x as US consumers use Klarna for more of their purchases, recognising the benefits of a superior shopping experience both in-store and online. Klarna has gone from an unknown Swedish payments company to becoming a market leader in the US, with 30m users, 60% brand awareness, and 49 of the top 100 US retailers partnering with us. Credit losses from newer consumers are down 29% vs Q221 with US GMV now growing twice as fast as credit losses as the US matures in line with Klarna’s established market trajectories. Klarna will focus on consolidating growth and expanding its leading market position in the US as a result of the recent oversubscribed $800m funding round announced in June.
Sebastian Siemiatkowski, CEO and Co-Founder of Klarna commented:
“Klarna’s stellar growth in the US continues at pace with sales volumes doubling, outperforming both US peers and e-commerce growth as consumers recognise the value Klarna provides compared to interest-laden credit cards. Our European business continues to perform strongly, driving $1bn gross profit each year. Improvements in underwriting mean credit loss rates are well ahead of our peers with 99% of Klarna consumers paying us back, and 70% of global Pay Later orders actually paid off early. Together with the significant investments we have made in entering 11 new markets since 2020, and investing in growing our platform and services for the benefit of consumers and retailers, the foundation for a global leader has been set.
“We have taken prudent and pre-emptive measures in order to prioritize profitability and growth in consideration of the changing macroeconomic environment. We will continue to leverage the platform and global scale we have built in the last few years to support Klarna’s 150m consumers and 450,000+ retailers during more challenging economic conditions, freeing consumers from the unnecessary debt trap of credit cards, and helping our retailer partners succeed in an increasingly competitive global marketplace.”
Our established European markets are making USD 1bn in gross profit on an annual basis, while our growth markets continue to progress with GMV increasing 105% YoY. The UK is performing particularly strongly, with GMV increasing 8x since 2018, growing 70% YoY in the first half of 2022. The UK is an excellent example of Klarna’s expected market trajectory, with UK gross margin now >50% and credit loss rates at an historic low of 0.4% of GMV.
Revenue is growing faster than GMV growth, increasing 24% YoY1 to USD 950m2 GMV increased 21% in H122 to USD 41bn3, significantly outstripping e-commerce growth which declined -4%4. In Q222 GMV grew 22% to USD 21.3bn5 vs an e-commerce contraction of -6%. Net operating income increased 18% to USD 782m5. Credit losses are in line with expectations at 0.7% of GMV.
The full reports are available on www.klarna.com
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Since 2005 Klarna has been on a mission to revolutionize the retail banking industry. With over 150 million global active users and 2 million transactions per day, Klarna is meeting the changing demands of consumers by saving them time and money while helping them be informed and in control. Over 400,000 global retail partners, including H&M, Saks, Sephora, Macys, IKEA, Expedia Group, and Nike have integrated Klarna's innovative technology to deliver a seamless shopping experience online and in-store. Klarna has over 5,000 employees and is active in 45 markets. For more information, visit Klarna.com
1 All percentages are calculated on SEK basis as that is the currency Klarna reports in. Exchange rates used are the average for the reporting period: 1 USD = SEK 9.6.
2 SEK 9.1bn
3 SEK 396bn
5 SEK 209bn
6 SEK 7,495m
This disclosure contains information that Klarna Bank AB (publ) is obliged to make public pursuant to the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 31-08-2022 08:01 CET.