“Buy-now, pay-later” firm Klarna aims to return to profit by summer 2023.

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Klarna said it posted a profit in the first half of the year, swinging into the black from a loss last year as the buy now, pay later pioneer edges closer toward its hotly anticipated stock market debut.

In results published Tuesday, Klarna said that it made an adjusted operating profit of 673 million Swedish krona ($66.1 million) in the six months through June 2024, up from a loss of 456 million krona in the same period a year ago. Revenue, meanwhile, grew 27% year-on-year to 13.3 billion krona.

On a net income basis, Klarna reported a 333 million Swedish krona loss. However, Klarna cites adjusted operating income as its primary metric for profitability as it better reflects “underlying business activity.”

Klarna is one of the biggest players in the so-called buy now, pay later sector. Alongside peers PayPal, Block‘s Afterpay, and Affirm, these companies give consumers the option to pay for purchases via interest-free monthly installments, with merchants covering the cost of service via transaction fees.

Sebastian Siemiatkowski, Klarna’s CEO and co-founder, said the company saw strong revenue growth in the U.S. in particular, where sales jumped 38% thanks to a ramp-up in merchant onboarding.

“Klarna’s massive global network continues to expand rapidly, with millions of new consumers joining and 68k new merchant partners,” Siemiatkowski said in a statement Tuesday.

Using AI to cut costs

The company achieved its adjusted operating profit “by focusing on sustainable, profitable growth and leveraging AI to lower costs,” he added.

Klarna has been one of the forerunners in the corporate world when it comes to touting the benefits of using AI to increase productivity and cut operating costs.

On Tuesday, the company said that its average revenue per employee over the previous twelve months increased 73% year-over-year, to 7 million Swedish krona.

It comes as Klarna tries to pitch itself as a primary banking provider for clients as it approaches a much-anticipated initial public offering.

The firm earlier this month launched its own checking account-like product, called Klarna balance, in a bid to persuade consumers to move more of their financial lives onto its app.

The move highlighted how Klarna is looking to diversify beyond its core buy now, pay later product, for which it is primarily known.

Klarna has yet to set a fixed timeline for the stock market listing, which is widely expected to be held in the U.S.

However, in an interview with CNBC’s “Closing Bell” in February, Siemiatkowski said an IPO this year was “not impossible.”

“We still have a few steps and work ahead of ourselves,” he said. “But we’re keen on becoming a public company.”

Separately, Klarna earlier this year offloaded its proprietary checkout technology business, which allows merchants to offer online payments, to a consortium of investors led by Kamjar Hajabdolahi, CEO and founding partner of Swedish venture capital firm BLQ Invest.

The move, which Klarna called a “strategic” step, effectively removed competition for rival online checkout services including Stripe, Adyen, Block, and Checkout.com.