The Swedish “Buy Now, Pay Later” (BNPL) fintech Klarna announced a first-quarter 2025 net loss of $99 million, more than twice as much as it lost in the same quarter the previous year ($47 million).
The company blamed rising consumer defaults for the loss, with credit losses jumping 17% year-on-year to $136 million. Sebastian Siemiatkowski, CEO of Klarna, blamed the rise in missed payments on several factors, including declining consumer confidence in the United States and market volatility, which was partly caused by economic uncertainty during Donald Trump’s second term.
Klarna’s revenue increased 13% to $701 million in spite of the deficit, and the company now has over 99 million active customers. The company emphasised that it can react swiftly to changing borrower behaviour because 83% of its lending portfolio is updated every three months.
Klarna’s performance was also impacted by higher funding costs, as interest expenses increased by 15% to $130 million. Due to erratic market conditions in the United States, the company has postponed its plans for an initial public offering (IPO).
