Klarna Hits Profit Milestone in Q3, Eyes $15 Billion IPO

Klarna Hits Profit Milestone in Q3, Eyes $15 Billion IPO
Klarna Financial Results Q3 2023

Good morning!

Today's news is all about Klarna:

After avoiding a strike, Klarna reported its latest financial results revealing a net profit in Q3 2023. Operating profit was SEK 130 million in Q323, up from SEK -2bn in Q322 as Klarna prepares to invest in the busy Q4 period. 

Credit losses as a % of GMV reduced 56% due to continuous improvements in underwriting precision and accuracy ensuring Klarna continues to make the right lending decisions for consumers while at the same time delivering 30% revenue growth. 

Q323 marks the fourth consecutive quarter of gross profit in the US, proving that the investment into one of the world’s largest consumer markets continues to pay off. 

Klarna’s US 🇺🇸 Growth Soars with GMV Up Nearly 50% YOY in Q3

Klarna is also setting up a new British holding company, kicking off preparatory work for an eventual stock exchange listing that could value the “buy now, pay later” provider at upwards of $15 billion.

The buy-now-pay-later firm has initiated a process for a legal entity restructuring to set up the holding company, which requires shareholder approval and is “an important early step on a journey towards an eventual IPO,” a spoksesperon said in an e-mailed statement.

Setting up the holding company is an administrative change that has been in the works for more than 12 months and “does not affect anyone’s roles, nor Klarna’s Swedish operations,” they added.

Klarna Holding will be followed by Sweden’s financial regulator and will continue to hold a Swedish banking license. 

The entity would be registered in the UK, the spokesperson said.

Klarna could be ready for an initial public offering within months depending on market conditions at a valuation of more than $15 billion, Sky News reported earlier. 

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