Buy now pay later giant Klarna has revealed a jump in sales over recent months after partnering with more retailers and making more money from loans and paying subscribers.
However, the US-listed financial firm downgraded its outlook for the second half of the year amid a recent drop in its share price.
Klarna recorded a 27% increase in revenues for the three months to the end of June, compared with the same period last year.
Some 1.2 million merchants let customers pay with Klarna, which is 54% higher than the same period last year.
Klarna charges a fee for retailers that offer its flexible payment options to customers at the checkout.
Gross merchandise volumes (GMV) – the total value of all purchases, excluding any additional fees or returns – was up by 18% year-on-year.
Its buy now, pay later offering accounts for more than three quarters of the group’s GMV, whereby shoppers can pay 30 days after making a purchase, or split the cost over three interest-free instalments.
Consumers can face late fees and debt collection if they miss a payment.
But its financing arm – where payments can be spread out over a longer period and are charged interest – has been driving profitable growth, Klarna said.
GMV for the division jumped by 82% year-on-year and has taken a bigger share of the market in the US amid new partnerships with the likes of Bolt and Southwest Airlines.
Revenues from paying subscribers also soared by 600% year-on-year, after rolling out new membership plans that offer cashback and benefits.
Klarna also said it was benefiting from more consumers using its services more frequently across a broader range of categories, such as events, services, homeware and electronics.
However, looking ahead, Klarna said it was expecting revenues and GMV for the full-year to be lower than previously expected.
This was due to currency movements, and a “more measured view of European volumes in the second half, particularly in Germany, our largest market by volume, and pronounced in certain discretionary retail categories”, the company cautioned.
“Our guidance assumes Germany stays soft through the second half rather than recovering.”
Klarna launched its shares on the New York Stock Exchange last year, marking one of the biggest flotations to occur during the year.
However, its share price has tumbled since the initial public offering (IPO) and was about a fifth lower in early trading on Wall Street on Tuesday.