The news: Klarna’s net revenues increased 13% YoY in Q1 2025, per its quarterly report.
Klarna’s gross merchandise volume (GMV) rose 10% YoY to a whopping $25.3 billion—four times that of its nearest competitor, Affirm.
- Klarna benefits from a much more established international presence than Affirm’s US-heavy base.
- Narrowing in on the US market, our forecast shows Affirm and Klarna are neck-in-neck in payment value.
Klarna documented 100 million active customers in April 2025, an increase from 84 million in Q1 2024. And 125,000 new merchants joined the platform during Q1 2025.
Transaction margin dollars—Klarna’s key measure of profitability—rose to 4% as the company notched its fourth profitable quarter.
Strategic partnerships: Klarna credits its brand partnerships and 11 million new Stocard users—as key customer acquisition drivers.
Moderating AI enthusiasm: Klarna credited AI with increasing average revenue per employee by 152% and cutting customer service cost per transaction by 40% since Q1 2023.
However, Klarna also recently recognized that it may have gone too far in replacing full-time customer service agents with an OpenAI customer service chatbot, stating it will re-hire human customer service associates. CEO Sebastian Siemiatkowski admitted cost was “a too prominent evaluation factor” in cutting its human labor force for an estimated $40 million profit improvement.
Our take: As a global platform, Klarna maintains a healthy lead over its BNPL competitors; its gross merchandise volume trounces its nearest rival by a far margin. However, that lead quickly narrows within the US market.
Klarna has demonstrated that relying on AI to boost efficiency has its limits. While Klarna self-styles itself as an AI-forward, lean operation, it also has become an AI cautionary tale. Making too many cuts too quickly cost Klarna institutional knowledge and employee morale. Integrating AI as a strategic tool instead of cure-all measure offers the best approach forward.