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Growth in U.S. markets helped Swedish fintech firm Klarna to achieve a 26% jump in third-quarter revenue, beating expectations in its first report as a public company and forecasting revenue above $1 billion in the current quarter, the company said on Tuesday. The buy now, pay later lender, which went public in September in New York, reported revenue of $903 million, beating analysts’ expectations of $882 million, according to data compiled by LSEG. “To a large degree, AI is accelerating our ability to ship new features and products,” CEO Sebastian Siemiatkowski told Reuters. Klarna had been an early adopter of AI and used the technology to help customers and merchants cut jobs, create marketing campaigns, and improve products. However, Siemiatkowski expressed some nervousness about the huge spending on building data centres. While there will be an uptick in demand for AI in both the consumer space and enterprises, there will be more compression of data in businesses, hitting future compute demand, he said. Tech companies have announced massive spending plans this year for building data centres as they expect AI to fuel demand. Klarna’s gross merchandise volume (GMV), a commonly used e-commerce metric for measuring sales, rose 23% to $32.7 billion in the quarter. In the U.S., Klarnas largest market, GMV grew 43% and revenue rose 51%. Active customers rose 32% to 114 million from a year ago. The company, however, reported a net loss of $95 million, compared with a profit of $12 million in the year-ago period, which it said was partly due to a shift to U.S. accounting principles following its New York listing. In the current quarter, the company expects revenue of $1.07 billion, compared with expectations of $1.06 billion. Supantha Mukherjee, Reuters
Category:
E-Commerce
Roblox is stepping up its age verification system for users who want to privately message other players and implementing age-based chats so kids, teens, and adults will only be able to message people around their own age. The moves come as the popular gaming platform continues to face criticism and lawsuits over child safety and a growing number of states and countries are implementing age verification laws. The company had previously announced the age estimation tool, which is provided by a company called Persona, in July. It requires players to take a video selfie that will be used to estimate their age. Roblox says the videos are deleted after the age check is processed. Users are not required to submit a face scan to use the platform, only if they want to chat with other users. Roblox doesnt allow kids under 13 to chat with other users outside of games unless they have explicit parental permissionand unlike different platforms, it does not encrypt private chat conversations, so it can monitor and moderate them. While some experts have expressed caution about the reliability of facial age estimation tools, Matt Kaufman, chief safety officer at Roblox, said that between the ages of about five to 25, the system can accurately estimate a person’s age within one or two years. But of course, theres always people who may be well outside of a traditional bell curve. And in those cases, if you disagree with the estimate that comes back, then you can provide an ID or use parental consent in order to correct that, he said. After users go through the age checks, they will be assigned to age groups ranging from under nine, nine to 12, 13 to 15, 16 to 17, 18 to 20 and over 21. Users will then be able to chat with their age group or similar age groups, depending on their age and the type of chat. Roblox said it will start enforcing age checks in Australia, New Zealand, and the Netherlands in the first week of December and the rest of the world in early January. A growing number of tech companies are implementing verification systems to comply with regulations or ward off criticism that they are not protecting children. This includes Google, which recently started testing a new age-verification system for YouTube that relies on AI to differentiate between adults and minors based on their watch histories. Instagram is testing an AI system to determine if kids are lying about their ages. Barbara Ortutay, AP technology writer
Category:
E-Commerce
Home Depot‘s third-quarter was mixed with fewer violent storms reaching shore, more anxiety among U.S. consumers, and a housing market that is in a deep funk. The company lowered its fiscal 2025 adjusted earnings forecast but raised its expectations for sales growth. For the three months ended Nov. 2, Home Depot earned $3.6 billion, or $3.62 per share. A year earlier, it earned $3.65 billion, or $3.67 per share. Removing one-time charges and benefits, earnings were $3.74 per share, a dime short of Wall Street expectations, according to a poll by FactSet. It is the third consecutive quarter that Home Depot, an overperformer in recent years, has missed profit expectations. Home Depot’s stock declined more than 3% before the opening bell Tuesday. Shares of rival Lowe’s, which will report its quarterly results on Wednesday, fell more than 2%. Our results missed our expectations primarily due to the lack of storms in the third quarter, which resulted in greater than expected pressure in certain categories, CEO Ted Decker said in a statement. Additionally, while underlying demand in the business remained relatively stable sequentially, an expected increase in demand in the third quarter did not materialize. We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand. Revenue for the Atlanta company rose to $41.35 billion from $40.22 billion, topping Wall Street projections of $41.15 billion. Sales at stores open at least a year, a key gauge of a retailers health, increased 0.2%. In the U.S., comparable store sales edged up 0.1%. Customer transactions fell 1.4% in the quarter. The amount shoppers spent rose to $90.39 per average receipt from $88.65 in the year-ago period. Neil Saunders, managing director of GlobalData, said that Home Depot’s quarter was negatively impacted by external factors, not missteps made by the company. Americans who have grown more anxious over the economy were were definitely a contributor, he said. The summer months were particularly challenging in this regard as consumers were actively making choices over how to spend their money, and home improvement took something of a back seat to experiences, travel, and personal indulgences, he said. Home Depot now anticipates fiscal 2025 adjusted earnings will decline approximately 5% from fiscal 2024s $15.24 per share. It previously expected adjusted earnings would fall about 2% from its results in the prior fiscal year. The chain now foresees fiscal 2025 sales growth of about 3%. Its prior forecast was for sales growth of approximately 2.8%. The company predicts comparable sales growth will be slightly positive. Previously, it predicted comparable sales growth of about 1%. In August, Home Depot said that shoppers should expect modest price increases in some categories as a result of rising tariff costs, though they wouldnt be broad-based. Company executives told analysts during its earnings call then that more than 50% of its products are sourced domestically and wouldnt be subject to any tariffs. Home Depots results come as the U.S. housing slump drags on, with the countrys home turnover rate at the lowest level in decades. About 28 out of every 1,000 homes changed hands between January and September, the lowest U.S. home turnover rate going back to at least the 1990s, according to an analysis by Redfin. The home turnover rate represents the number of homes sold, divided by the total number of existing sellable properties. While sales data show whether more or fewer homes are selling in a given period, the home turnover rate helps illustrate how homeowners are staying put longer. The U.S. housing market has been in a slump dating back to 2022, the year mortgage rates began climbing from historic lows that fueled a homebuying frenzy at the start of this decade. Michelle Chapman, AP business writer
Category:
E-Commerce
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