Klarna revenue beats expectations but shares drop on widening losses

Klarna smashed through Wall Street expectations on Monday, posting $903 million in revenue for the third quarter, its first earnings report since going public on the New York Stock Exchange in September.

That figure came in higher than the $882 million analysts expected at LSEG. Still, investors weren’t feeling the cheer. Shares dropped 9% right after the numbers hit, as concerns about profitability and macro uncertainty kept the pressure on.

The Swedish buy now, pay later firm pulled in 26% more revenue than the $706 million it reported a year ago, but it didn’t turn a profit.

Klarna posted a net loss of $95 million, or 25 cents per share, compared to a slim $12 million profit and 5 cents per share last year. This sharp reversal comes as Klarna leans hard into the U.S. market, where its growth is outpacing most other regions.

Klarna sees U.S. surge as “Klarna Card” takes off

U.S. demand is exploding. Klarna said gross merchandise volume (GMV) in the U.S. grew 43% year over year, helping drive global GMV up 25% to $32.7 billion from last year’s $26.2 billion.

This growth came largely from Klarna’s fair financing tools and its Klarna Card, both of which saw major adoption across American shoppers.

Since launching in July, the Klarna Card has already signed up over four million customers and made up 15% of all Klarna transactions by October. That’s a massive shift in customer behavior—and a clear signal that U.S. buyers want flexible ways to pay. The fair financing option, which gives longer payment terms on bigger buys, saw its GMV more than triple year over year. The feature also offers varying interest rates based on creditworthiness.

CEO Sebastian Siemiatkowski told CNBC that fair financing doubled its user base from last year, even though it’s only active across about 20% of Klarna’s merchant network. “There’s tons of opportunity,” he said, noting they’re just scratching the surface with merchants. He also added, “We want to be the one that helps you save time, save money, be in control of your finances and that’s obviously not necessarily what we’ve been associated with.”

To help push that U.S. growth even further, Klarna confirmed that Elliott Investment Management is buying up $6.5 billion worth of fair financing loans, letting Klarna shift focus toward scaling instead of funding.

Klarna forecasts strong Q4 as macro clouds hover

Klarna now has 850,000 merchants, a 38% jump from the 616,000 it had a year ago.Total customer count hit 114 million, but the company admitted that average revenue per active customer has fallen.

For the fourth quarter, it expects GMV to land between $37.5 billion and $38.5 billion, with revenue projected between $1.065 billion and $1.08 billion.

Those numbers beat FactSet’s estimates. Klarna also said it’s aiming for transaction margin dollars, basically its core business profit, between $390 million and $400 million, up from $281 million in Q3.

This report comes about two months after Klarna finally launched on the NYSE, following a delayed IPO in April due to Donald Trump’s tariff drama, which rattled markets and made timing awkward. And while Klarna’s revenue is up, its stock price is down more than one-third from its highs.

CEO Siemiatkowski told CNBC they’re not seeing “material differences” in repayment behavior just yet, but they’re watching the broader slowdown closely. Market jitters have grown in recent weeks as investors eye a possible AI bubble and tighter consumer wallets.

Siemiatkowski said the company has cut its workforce by 40%, thanks in part to AI and natural attrition rates as high as 20%.He said AI fits into Klarna’s “customer-obsessed” model and that customer support response times have dropped to under two minutes.

Still, he warned that firms relying only on AI for customer service are making a “big mistake,” saying “you want to have a human connection… there’s this tremendous value.”

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