Klarna has “more than halved” its operating losses in the first quarter of 2023 compared with the first financial quarter of 2022.

The Buy Now, Payer Later (BNPL) provider said its loss ratio improved by 78 per cent on an adjusted basis with the result putting it “firmly on track” to reach monthly profitability in the second half of the year.

In line with forecasts, Klarna’s credit loss rates also improved by 42 per cent year on year and credit losses by 35 per cent during the quarter.

Klarna also recorded an overall revenue increase of over 17 per cent with a 34 per cent increase in the US, which it attributed to new partnerships including one with Airbnb. The holiday rental business paired up with Klarna to offer its customers flexible repayment service options.

In line with its quarter announcement, Klarna has also launched a voluntary credit opt-out tool, reportedly the first of its kind in the UK.

Klarna also lauded its investment in AI-driven products, including partnerships with OpenAI and ClarityAI.

The company revealed it carries SKU level data on every transaction and for the first quarter used consensual data for 615 million products and over 300 billion data points which it said will continue to enhance customers’ experience.

“This quarter we’ve impressively managed to grow GMV and revenue, at the same time as we cut costs and credit losses, and also investing ambitiously in AI driven products,” said Klarna chief executive and co-founder Sebastian Siemiatkowski. “We are on track to achieve profitability this year all while revolutionising shopping and payments through our AI-powered approach."

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