Swedish “buy now, pay later” provider Klarna (KLAR.N) delivered a robust first-quarter performance, reporting operating profit and revenue that surpassed analysts’ expectations. The positive news sent the company’s shares up over 12% in U.S. premarket trading on Thursday. Klarna is a Swedish financial technology firm providing “buy now, pay later” services and an online bank. It enables shoppers to split purchases into instalments via short-term loans. The firm is benefiting from rising demand for such deferred payment services globally.
Klarna’s Q1 revenue surged 44% to US$1 billion, exceeding estimates of US$945 million. The company achieved an operating income of US$17 million, a significant turnaround from a US$90 million loss in the year-earlier period, and well above the anticipated US$9 million. Adjusted operating profit also jumped to US$68 million from US$3 million a year ago. This quarter marked a strategic pivot, with Klarna prioritising profit over growth, reversing a previous approach that impacted its market value. CEO Sebastian Siemiatkowski acknowledged shareholder desires for a growing bottom line alongside growth. Active consumers increased 21% to 119 million, and gross merchandise volume (GMV) rose 33% to US$33.7 billion.
However, Klarna’s outlook for the current quarter presented a more conservative picture. Its revenue forecast for the second quarter, projected between US$960 million and US$1 billion, fell short of analyst expectations of US$1.07 billion. Similarly, anticipated GMV for Q2, estimated at US$35.5 billion to US$36.5 billion, was below the US$38.1 billion forecast by analysts, indicating a mixed sentiment moving forward despite the strong initial results.
