Klarna Bank AB’s losses narrowed in the first half of the year as its growing customer base continued to pay back their buy-now-pay-later debts in the face of inflation pressures.

The Stockholm-based fintech reported an adjusted operating loss of about 2 billion Swedish kronor ($185 million) for the six months through June, down from 6.2 billion kronor in the same period a year ago. Revenue rose by about 15% to 10.5 billion kronor.

“Fast-forward from our pledge a year ago to return to profitability, and here we are marking our first month in the black in Q223,” Sebastian Siemiatkowski, chief executive officer, said in a statement. Klarna’s last profitable month was August 2020.

Siemiatkowski said in an interview there was a “very straight trendline that’s pointing in a very good direction” around profitability. “We feel very, very comfortable.”

US Growth

The value of goods sold through Klarna rose 14% year-on-year in the second quarter, with the US and the UK growing particularly quickly. Klarna reported its third consecutive quarter of gross profit in the US — partly due to its recent partnership with Airbnb Inc.

Despite the inflation pressures on customers in many markets, credit losses improved to 0.39% of gross merchandise value, compared to 0.7% a year ago.

Siemiatkowski said US growth represented an important stepping stone in the firm’s path to joining the public markets. Despite a slump in fintech valuations since the 2021 peak, he said “there’s going to be an opportunity in the coming years” to take Klarna public. He confirmed his firm would not require additional fundraising in the “foreseeable future.”

Last year, Klarna’s valuation was slashed to $6.7 billion from about $45.6 billion while it cut jobs, office space and other costs, as investors reconsidered the growth of easy credit at a time of rising interest rates. Klarna reported negative cash flow of 4.3 billion kronor for the half-year, compared to 9.8 billion kronor in the same period a year ago, while its headcount shrank from more than 6,000 to about 5,200.

The firm said its rapid adoption of artificial intelligence tools such as ChatGPT helped it keep a lid on costs even as it grew, for example by saving time handling customer questions. Overall, operating expenses fell 14% in the first half of the year.

Klarna, once Europe’s most valuable startup, offers buy now, pay later credit for about 150 million shoppers globally looking to spread the cost of online purchases. Its growth comes as other BNPL players exit the European market, with Clearpay shutting its operations this summer and ZIP pulling out last year.