Klarna reports record Q3 revenue of $903 million, 4 million card signups

Klarna (NYSE: KLAR) reported record third-quarter revenue of $903 million, representing a 28% increase from the prior year period. The digital payments company also announced 4 million signups for its Klarna Card since its July launch.

The company's gross merchandise volume reached $32.7 billion in the quarter, up 23% on a like-for-like basis. U.S. operations showed particular strength with revenue growth of 51% and GMV growth of 43%.

Klarna added 27 million new users and 235,000 new merchants during the quarter, bringing its total merchant count to 850,000. The company now processes 3.4 million transactions daily across its network of 114 million global active users.

The Klarna Card accounted for 15% of all company transactions by October. The card combines debit and credit functionality in a single product. Fair Financing, Klarna's installment product, saw U.S. GMV increase 244% year-over-year.

Despite revenue growth, Klarna reported an operating loss of $83 million for the quarter, compared to a $13 million profit in the same period last year. The company attributed this to accounting timing related to credit loss provisions being recognized upfront while revenue compounds over time.

Klarna's realized credit losses decreased to 0.44% of GMV. The company stated that transaction margin dollars on a realized credit loss basis grew 25% in the quarter.

For the fourth quarter, Klarna forecasts GMV of $37.5-38.5 billion, revenue of $1.065-1.080 billion, and transaction margin dollars of $390-400 million. The company expects this would mark its first billion-dollar revenue quarter.

The financial results were based on information from a company press release.

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