Klarna shares tumble despite Q4 revenue growth

Investing.com -- Klarna Group plc (NYSE: KLAR) reported fourth quarter revenue of $1.08 billion, slightly above analyst expectations of $1.07 billion, as the company reached its first billion-dollar revenue quarter. Despite the beat, shares tumbled over 7% premarket following the announcement.

The digital bank and flexible payments provider saw revenue grow 38% YoY, with U.S. revenue increasing 58%. Gross merchandise volume (GMV) reached $38.7 billion, up 32% YoY, with U.S. GMV growing 43%. The company highlighted its transformation from a payments network to a global digital bank, with banking consumers doubling to 15.8 million, generating more than three times the revenue of average consumers.

"We've been executing on a clear plan: acquire customers through seamless payments, then deepen those relationships into banking," said Sebastian Siemiatkowski, CEO & Co-Founder of Klarna. "Q4 showed that people want a bank that works for them, not against them."

The company reported 118 million active consumers, up 28% YoY, and added a record 115,000 merchants in the quarter, bringing the total to 966,000, a 42% increase YoY. Klarna's Fair Financing service saw GMV increase 165%, accelerating from 139% growth in the third quarter.

Provisions for credit losses declined to 0.65% of GMV in Q4 from 0.72% in Q3, demonstrating the strength of the company's underwriting capabilities. Since Q4 2022, Klarna's revenue has grown 104% while operating expenses declined 8%, with revenue per employee reaching $1.24 million.

The company will publish its full annual financial statements on February 26.

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