Klarna AB’s Chief Executive Officer, Sebastian Siemiatkowski, utilized an artificial intelligence avatar to present the Swedish buy-now-pay-later firm’s updated quarterly earnings. The avatar was nearly indistinguishable from a real person, with only slight imperfections in voice synchronization and a lack of blinking. Siemiatkowski emphasized Klarna’s focus on artificial intelligence ahead of its planned initial public offering, stating, “We’re an AI company. We’re not just a fintech company.”
Quarterly Earnings Highlights
- Klarna reported another profitable quarter, marking four consecutive quarters with positive earnings.
- The company attributed its success to:
- Streamlined operations.
- Increased revenue per employee following layoffs that reduced its workforce by around 2,000 since 2020.
AI in Leadership
Research indicates that AI can outperform human CEOs in certain situations but struggles with unexpected events, such as market crashes during pandemics. A study from the University of California Berkeley and Carnegie Mellon University found that an AI model called AlphaStar excelled in chess tournaments but faltered when faced with unexpected moves or rule changes.
Siemiatkowski has been using the avatar more frequently since its introduction last year to improve efficiency and reduce travel costs for meetings. He plans to continue using it even after he steps down as CEO next year, when Lars Olofsson will take over.
The Rise of AI Avatars
The use of avatars is becoming increasingly common among executives seeking to save time and money while effectively communicating with employees or investors remotely. While some view avatars as impersonal, others see them as a means to connect across different cultures and languages without the barriers of language or cultural differences.
Earnings Presentation Details
During the earnings presentation via video conference from Stockholm, Siemiatkowski answered questions from analysts at UBS Group AG’s annual technology conference earlier this month via video link from London. He appeared on stage with sunglasses, holding handwritten notes instead of reading directly from a script.
Financial Performance
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Klarna reported a second-quarter net income increase of about $20 million compared to the same period last year, primarily due to:
- Higher revenue per user.
- Lower operating expenses, including significant reductions in staff costs following mass layoffs.
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Despite the positive trends, Siemiatkowski noted that net income would be slightly lower than expected due to:
- A shift in user payment methods from credit cards to debit cards.
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Key financial metrics included:
- Net sales climbed by approximately $10 million year-over-year.
- Operating profit margin was slightly below expectations despite cost savings from restructuring efforts.
User Growth
- Total active users grew by 6%, reaching 47.9 million globally.
- Monthly active users increased by 33.8%, totaling 21.9 million individuals.
- Active customers rose by 7%, reaching 43.6 million globally, with monthly active customers also seeing a 34.8% increase.
Klarna’s continued focus on AI and innovative communication methods positions it as a forward-thinking player in the fintech space, adapting to the evolving landscape of digital finance and customer engagement.
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