Klarna shares rise on Q1 ​profit

Klarna’s quarterly revenue rose 44% to $1 billion

Klarna, the Swedish “buy now, pay later” services provider and online bank, posted first-quarter operating ​profit and revenue ahead of analysts’ expectations on Thursday, sending ​its shares up over 12% in U.S. premarket trading.

BNPL service ⁠providers such as Klarna are benefiting from rising demand for their short-term ​loans, which allow shoppers to split purchases into instalments. The firm’s active ​consumers climbed 21% to 119 million in the quarter.

Klarna focused on profit ahead of growth in the quarter after prioritizing growth over the bottom line in the fourth quarter, ​an approach which wiped a quarter off its market value.

It obviously ​became clear to us that it was important to all the shareholders that they ‌were supportive ⁠about the growth, but they also wanted to see the bottom line growing well, Klarna CEO Sebastian Siemiatkowski told Reuters.

But while its quarterly revenue rose 44% to $1 billion, beating estimates of $945 million, Klarna’s current-quarter revenue forecast ​of $960 million to $1 ​billion was below ⁠expectations of $1.07 billion in an LSEG poll of analysts.

Klarna said its quarterly operating income was $17 million compared with ​a loss of $90 million in the year-earlier period, ahead ​of expectations ⁠of $9 million. Adjusted operating profit increased to $68 million from $3 million a year ago, it said.

Its gross merchandise volume (GMV), a metric for measuring sales, increased 33% to $33.7 ⁠billion ​in the quarter. In the second quarter, Klarna ​expects GMV of between $35.5 billion and $36.5 billion, versus expectations of $38.1 billion.