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Key Takeaways
- Klarna (KLAR) delivered record Q4 revenue of $1.08 billion, surpassing the $1.07 billion Wall Street projection and achieving its first-ever billion-dollar quarter.
- Gross merchandise volume (GMV) reached $38.7 billion while active users hit 118 million, both exceeding analyst expectations.
- Transaction margin dollars disappointed at $372 million compared to the $395 million consensus — marking the second consecutive quarter of underperformance on this metric.
- Forward guidance for Q1 2026 revenue and full-year GMV projections both trailed Wall Street consensus estimates.
- The stock tumbled 22% to close at $14.68, compounding a year-to-date decline of 34% prior to the earnings release.
On paper, Klarna’s fourth-quarter performance looked impressive. The Swedish fintech giant posted revenue of $1.08 billion, eclipsing analyst projections and crossing the billion-dollar threshold for the first time in company history. GMV reached $38.7 billion against expectations of $38.1 billion. The platform’s active user base expanded to 118 million, surpassing the anticipated 117 million.
Despite these achievements, investors sent shares plummeting over 22% to $14.68 during Thursday trading. The surface-level wins masked underlying weaknesses that caught Wall Street’s attention.
Year-over-year revenue expansion reached 38%, with particularly robust performance in the United States where revenue climbed 58%. American GMV advanced 43%. While these growth figures appear solid, market participants zeroed in on more troubling indicators.
Profitability Metrics Miss the Mark
Transaction margin dollars totaled $372 million, falling short of the $395 million consensus. This represented the second straight quarter where this critical metric underperformed relative to analyst projections. The adjusted operating margin registered 4.4%, significantly below the anticipated 6.4%.
Klarna explained that the transaction margin shortfall stemmed from unexpectedly rapid expansion in its Fair Financing installment offering. Analysts at J.P. Morgan identified processing and funding expenses as the main culprits, highlighting the variance from their internal forecasts.
J.P. Morgan characterized the annual outlook as having “missed Street estimates across most all key metrics.”
Forward Projections Fall Short of Expectations
Looking ahead to Q1 2026, [[LINK_START_2]]Klarna[[LINK_END_2]] projected revenue between $900 million and $980 million. The guidance midpoint sits below the $965.1 million analyst consensus. First-quarter GMV guidance of $32–$33 billion similarly lagged the $33.4 billion estimate.
For the complete 2026 fiscal year, the company forecast GMV exceeding $155 billion, trailing the $159 billion Wall Street expectation. Revenue growth is projected at more than 24% annually — falling short of the 29–31% range analysts had modeled.
The company’s banking initiative demonstrated notable traction. Banking customers doubled to reach 15.8 million, generating revenue at three times the rate of typical users. Fair Financing GMV accelerated 165% during Q4, improving from 139% expansion in the third quarter. The merchant network expanded by a record 115,000 businesses in the quarter, pushing the total to 966,000 — a 42% year-over-year jump.
Credit loss provisions improved to 0.65% of GMV from the prior quarter’s 0.72%. Revenue per employee climbed to $1.24 million. Comparing Q4 2025 to Q4 2022, revenue doubled while operating expenses declined 8%.
[[LINK_START_2]]Klarna[[LINK_END_2]] debuted on the New York Stock Exchange last September with an initial price of $40 per share. After gaining 15% on opening day, momentum evaporated rapidly. Entering the Q4 earnings announcement, shares had already retreated more than 34% year-to-date in 2026.
Multiple headwinds contributed to the stock’s weakness — broader fintech sector challenges, anxieties surrounding artificial intelligence disruption, and proposed legislation in January seeking to impose a 10% ceiling on credit card interest rates.
The company plans to publish its complete annual financial statements on February 26.
