Dive Brief:

• Buy now, pay later juggernaut Klarna Group’s merchant count surged 27% to 724,000 businesses that offer its services as of the end of the first quarter, compared to the year-earlier period, per a first-quarter financial report issued Monday.
• Meanwhile, the number of consumers using Klarna’s installment payment services jumped 18% as of the end of March to 99 million users, but the losses the company is incurring on its financings also expanded, per the first-quarter press release.
• Since then, the active user count climbed to 100 million in April, the company said. The company also “secured exclusive partnerships with major retailers like Walmart through OnePay, teamed up with DoorDash, and expanded our partnership with eBay to the U.S.,” Klarna CEO Sebastian Siemiatkowski said in the press release.

Dive Insight:

Along with that growth, Klarna’s first-quarter revenue rose 13% to $701 million. However, the company’s first-quarter net loss also widened to $99 million, from $47 million in the year-earlier period.

The loss ballooned as Klarna’s consumer credit losses mushroomed. Its first-quarter consumer credit losses grew 17% to $136 million for the first quarter this year from $117 million for the same period last year, according to the earnings release.

The financial metrics are increasingly important because Klarna plans to sell stock in the U.S. this year in an initial public offering. 

The Swedish-born company, which previously had headquarters in Stockholm, said as part of a March IPO filing with the Securities and Exchange Commission that it had shifted its main office to London. The shares are to be offered on the New York Stock Exchange.

Klarna competes in a crowded field of BNPL players that includes competitors like Afterpay, Sezzle, and Affirm. The company contended in the first quarter release that its pay-in-four-installments gross merchandise volume is four times higher than its nearest competitor.

Klarna’s U.S. revenue climbed 33% over the year-ago quarter, with help from a recently announced partnership with digital payments processor Stripe, according to the release.

To continue its growth trajectory, Klarna will lean on more new payment partners, including JPMorgan Chase’s payments arm, the processor Worldpay and European paytech company Nexi, with all of those ties adding to its merchant base. 

In February, the company said it plans to offer its buy now, pay later services to JPMorgan Chase’s business clients. The following month, the company debuted its partnership with Walmart to become the retail giant’s exclusive buy now, pay later provider, eventually replacing Affirm.

Klarna said using artificial intelligence will keep costs in check. While it has reduced its workforce by about 40% since 2022, its roster of tech workers grew to 52% as of Q1 2025, the release said. Klarna’s reliance on AI and workforce reduction has brought the company closer to generating $1 million in revenue per employee. 

As of the end of 2024, 2023 and 2022, Klarna had 3,422, 4,352 and 5,527 full-time employees, respectively, the SEC filing said.

“Our AI-first strategy is driving exceptional returns, we’re outpacing competitors, our merchant network is scaling rapidly, and our next-gen products are reshaping money management for millions,” Siemiatkowski said in the press release.