Klarna continues AI and US growth in Q1 2024

credit: Shutterstock
credit: Shutterstock

Global payments platform Klarna believes it is making progress with its efforts in growing in the US market and furthering its development of AI-backed capabilities. 

The Swedish Buy Now, Pay Later (BNPL) firm posted its Q1 2024 results by outlining its commitment in both aforementioned fields, with CEO Sebstian Siematkowski revealing the company will launch “several new products” in the next several months. 

Klarna reported an adjusted operating income of SEK 229m (€19.97m) for Q1 2024, with total revenue growing 29% year-over-year to SEK 6.4bn (€558m). 

This marks what the company hailed as a “significant turnaround” from the SEK 498m (€43.4m) loss that occurred in Q1 2023. 

Klarna credits this turnaround through its accelerated use of AI which has increased efficiency of its operations for not just its services but also within its staffbase. The company revealed that 90% of its employees have integrated AI into their daily workflows, contributing to an 11% reduction in operating expenses. 

With AI enabling Klarna for increased leverage and profitability, its AI Assistant tool, which was launched in January, has engaged with more than four million customers and delivered annual savings of $40m. 

Whilst still having a predominantly European customer base, Klarna has cited its continued push into the US market as a key growth driver. 

US revenues increased 38% year-over-year with gross profit soaring 97% in Q1 2024. This performance has contributed to 22% growth in gross profit for the company. 

Siemiatkowski praised the Q1 results and believes this will lay down the foundations for a successful year for Klarna. 

He said: “Klarna continues its acceleration with 29% revenue growth year on year, coupled with the power of AI to lower operating expenses, we have once again delivered a profitable quarter with a substantial SEK 727m improvement in adjusted operating income.

“With several new products set to launch in the coming months, we’re preparing for a truly exciting year ahead.”

Elsewhere, the BNPL company has not neglected its payment and core roots. Klarna’s gross merchandise volume grew by 17% year-over-year, helped by acquiring new partnerships, such as the one with Uber and Uber Eats in the US, Germany and Sweden. 

Klarna also partnered with Expedia and Hotels.com to gain further momentum and consolidate its standing as one of the leading BNPL platforms.