Klarna reported its FY2022 financial results. The key details from the filing are presented below.

• Gross merchandise volume (GMV) grew 19% YoY in Q4 FY2022 to SEK 242 billion but remained flat in USD terms (~23 billion) due to exchange rate fluctuations. The growth was driven by the US market, which became Klarna’s largest market by revenue in December 2022. Similarly, FY2022 GMV rose by 22% YoY to SEK 837 billion (~USD 83 billion) from SEK 689 billion (~USD 80 billion) in FY2021 and slightly outpaced revenue growth of 21% YoY. 

• Q4 FY2022 total net operating income (NOI) grew by 22% YoY to SEK 5 billion (~USD 0.5 billion) with FY2022 NOI having grown by 20% YoY to SEK 17 billion (~USD X billion). FY2022 commission income grew 19% to SEK 13 billion (~USD  2 billion) given continued growth in retail partnerships and higher levels of consumer adoption. FY2022 interest income grew by 9% YoY to SEK 4 billion (~USD 0.4 billion), which remained below Klarna’s total NOI as consumers focused on its interest-free, shorter-duration payment products.

• Klarna’s Q4 FY2022 adjusted non-IFRS operating losses amounted to SEK 1 billion (~USD 0.1 billion), an improvement from the SEK 3 billion loss (~USD 0.4) recorded in Q4 FY2021. However, FY2022 Adjusted Non-IFRS operating losses grew to SEK 8 billion (~USD 0.8 billion) from SEK 5 billion (~USD 0.6 billion) in FY2021 in light of higher credit losses booked given a dampened global macroeconomic environment, which led to a slight increase in credit losses to 0.68% in FY2022 from 0.67% in FY2021. Klarna stated that its current goal is to return to profitability by the summer of 2023

• Analyst QuickTake: 2022 was a turbulent year for Klarna and other players in the BNPL industry, with Klarna having announced its second round of layoffs in September 2022 as it sought to curb operating losses. Negative sentiment for Klarna was also reflected in its valuation, which dropped 85% YoY in July 2022 to USD 6.7 billion, despite the company being able to raise USD 800 million in funding in 2022.