Klarna Group reported a third-quarter adjusted operating loss of USD 14 million due to doubled provisions for credit losses. Revenue and gross merchandise volume grew by 32% and 29% respectively. Investors seek profitability while monitoring US and European consumer credit quality. Klarna’s expansion of longer-term financing options boosts balances, but provisions increased due to IFRS 9 rules. Despite concerns, Klarna’s underlying performance contradicts credit quality fears, making shares appealing. Transaction margin dollars grew 25% year over year, with guidance pointing to increased profitability in the fourth quarter as interest income from longer-term financing kicks in.

Read more at Morningstar: Klarna Earnings: Rapid Growth in Longer-Term Financing Spikes Provisions; Shares Attractive