Last year wasn’t an easy one for European fintech giant Klarna. The company saw its valuation being truncated in an $800 million funding round, and coverage of its 2022 results focused on contrasting its stiff losses against a more conservative market. This column argued at the time of its earnings report that if we looked at Klarna’s quarterly results, things were looking up toward the end of last year:

More platform usage (GMV) leading to more revenue, contrasted with falling credit losses and modest improvements to operating costs, yielded a much less unprofitable Klarna at the end of 2022 than at the beginning. This is the company actually managing what every unicorn is supposed to do today: keep the growth coming and cut the losses.

The good news for Klarna stans — founders, investors and employee shareholders — is that Q1 2023 data from the company supports our generally positive vibes. A few good quarters do not make for a comeback, but there’s lots to like about the company best known for its buy now, pay later services.

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This morning, we’re going to parse Klarna’s Q1 2023 results, compare that to where the company was during its time in the barrel, and then close with its notes on AI — an interesting cultural riff embedded in the Klarna investor report that is worth looking at. Sounds good? To work!

Holistic improvements

To understand Klarna’s results, we need to start one step up from revenue. What leads to revenue at Klarna? Gross merchandise value (GMV), or the total worth of stuff that consumers bought using Klarna services.

In the first quarter of 2023, Klarna’s GMV rose 13% to 210.7 billion Swedish Krona ($19.65 billion) from a year earlier. This number isn’t too impressive on its own, but it is significant considering that overall e-commerce growth has been lackluster in the last year. In its investor note, Klarna says the global e-commerce market actually shrunk by 2% between Q1 2022 and Q1 2023.

Put another way, Klarna managed to nab market share in a contracting market, keeping its own growth story afloat despite stiff headwinds.