Klarna, the Swedish "buy now, pay later" service provider and online bank, recently reported a substantial 38% year-on-year increase in its fourth-quarter sales, exceeding market expectations. For the first time, the fintech group, which went public in New York last September, saw its quarterly revenue climb past the billion-dollar mark, reaching an impressive $1.08 billion, slightly above the LSEG analysts' forecast of $1.07 billion.
A key driver of this impressive performance was the remarkable expansion of its banking services, with the user base doubling to 15.8 million. CEO Sebastian Siemiatkowski emphasized that this achievement validates the company's dual strategy of establishing a global payments network and fostering genuine banking relationships. Furthermore, Klarna's strategic adoption of artificial intelligence across its operations has played a crucial role in managing workforce size while expanding rapidly. This efficiency gain has allowed the company to significantly increase employee compensation, with the average pay rising by 60% since 2022. Siemiatkowski also noted a shift in the nature of jobs at Klarna, with a growing focus on human relationships, particularly in supporting merchants and consumers.
The company's Gross Merchandise Volume (GMV), a critical e-commerce metric, saw a robust 32% rise globally, hitting $38.7 billion for the quarter. The United States, Klarna's largest market, demonstrated particularly strong growth, with GMV increasing by 43% and revenue by 58%. While these results highlight a period of significant growth and strategic success, the full fourth-quarter earnings report, which will provide a comprehensive financial overview, is scheduled for release on February 26. In the preceding third quarter, Klarna had reported a net loss of $95 million.
Klarna's journey exemplifies how innovative fintech solutions, combined with strategic market expansion and a forward-thinking approach to technology like AI, can lead to remarkable business growth. Their success in the highly competitive U.S. market and their commitment to both technological advancement and employee well-being set a positive example for the industry, demonstrating that progress and human-centric values can coexist and thrive.