(Adds details on results, CEO comments)
By Supantha Mukherjee
STOCKHOLM, Nov 30 (Reuters) - Swedish payments company Klarna on Wednesday forecast a return to profitability on a monthly basis in the second half of next year after reporting a 22% jump in both revenue and gross merchandise volume (GMV) in the first nine months of the year.
The company's losses for the nine month period tripled from last year to 8.34 billion Swedish crowns ($790.93 million), but losses in the third quarter were down 41% from the preceding quarter.
Klarna will achieve monthly profitability within six or seven months from now, CEO Sebastian Siemiatkowski said in an interview. "It's important to distinguish that we still may post a loss for the full year of 2023."
The company, one of Europe's high-profile tech start-ups, last made a full-year profit in 2018.
As rampant inflation and the war in Ukraine created havoc with business sentiment in the first half of the year, the Swedish company laid off about 10% of its 7,000 employees to cut costs and saw its valuation erode.
Siemiatkowski does not expect another major round of layoffs. "Unfortunately, in a macro environment like this one, you are going to have employees being concerned, that's just unavoidable," he said.
In July, Klarna raised $800 million in new funds at a valuation of $6.7 billion, down around 85% from the $46 billion price-tag it attracted last year.
Klarna was not alone as valuations of other "buy now, pay later" (BNPL) services tumbled following a broad stock market sell-off that battered shares of major tech companies as investors worried about a fall in consumer spending.
Consumer sentiment tightened a bit in August but has improved since then, Siemiatkowski said.
"The average order value of our transactions is actually fairly constant compared to last year, but when you look a little bit deeper, you do see the baskets are filled with more items with a smaller average ticket size," he said.
GMV for the period rose to $60.2 billion and revenue was up to $1.4 billion, helped mainly by growth in the U.S. and UK markets.
U.S. has become one of the fastest growing markets for Klarna where volumes grew 92% year-over-year, but regulatory concerns loom as the U.S. Consumer Financial Protection Bureau plans to start regulating BNPL companies like Klarna and Affirm Holdings. ($1 = 10.5446 Swedish crowns) (Reporting by Supantha Mukherjee in Stockholm, editing by Stine Jacobsen and Jane Merriman)