Klarna (KLAR) Stock: Reports $903 Million Revenue in First Public Earnings

TLDR

• Klarna reported third-quarter revenue of $903 million, beating Wall Street estimates of $882 million in its first earnings report as a public company
• The buy now, pay later firm posted a net loss of $95 million, down from a $12 million profit in the same period last year
• U.S. gross merchandise volume grew 43% year-over-year, driving overall GMV growth of 25% to $32.7 billion
• Klarna Card reached more than four million customers since its July launch and accounted for 15% of transactions by October
• The company forecasts fourth-quarter revenue between $1.065 billion and $1.08 billion, expecting to cross the $1 billion milestone

Klarna delivered a revenue beat in its first earnings report as a publicly traded company. The Swedish fintech firm reported third-quarter revenue of $903 million, topping Wall Street’s expectations of $882 million.

Klarna Group plc, KLAR

The company went public on the New York Stock Exchange in September after delaying its initial offering in April. Market volatility from tariff concerns pushed back the original timeline.

Revenue climbed 26% from $706 million in the year-ago period. The growth comes as the buy now, pay later sector faces questions about long-term profitability.

Despite the revenue beat, Klarna posted a net loss of $95 million. This marks a reversal from the $12 million profit the company earned in the third quarter of 2024.

The U.S. market drove much of Klarna’s growth. Gross merchandise volume in the region jumped 43% year-over-year. Overall GMV rose 25% to $32.7 billion from $26.2 billion last year.

New Products Fuel U.S. Expansion

Klarna Card and fair financing features contributed to the U.S. gains. The Klarna Card launched in July and quickly gained traction with consumers.

The card reached more than four million customers by October. It accounted for 15% of all transactions during that month.

Fair financing offers longer installment options for larger purchases. The feature includes varying interest rates based on purchase size. GMV through fair financing more than tripled from a year ago.

CEO Sebastian Siemiatkowski said fair financing has doubled its user base year-over-year. The feature has only reached about one-fifth of merchants on the platform. He sees this as a major growth opportunity.

Merchant count grew 38% to 850,000 from 616,000 in the prior year period. Average revenue per active customer declined despite the merchant growth.

Outlook and Market Conditions

Klarna expects fourth-quarter GMV between $37.5 billion and $38.5 billion. Revenue is forecast to range from $1.065 billion to $1.08 billion. This would mark the first time the company crosses the $1 billion quarterly revenue threshold.

Transaction margin dollars are projected between $390 million and $400 million. The metric measures profitability of the core business. Third-quarter transaction margin dollars totaled $281 million.

Klarna shares have dropped more than one-third from their peak levels. Recent market concerns about AI valuations and consumer spending have weighed on tech stocks.

Siemiatkowski said the company hasn’t seen material changes in payback or spending patterns yet. The firm is monitoring economic conditions and the AI sector closely.

Klarna has invested heavily in artificial intelligence over the past few years. The technology helped the company reduce its workforce by 40% through a combination of AI tools and natural attrition.

The natural attrition rate at Klarna runs as high as 20% annually. Other tech firms including Palantir, Salesforce, and Amazon have also reduced hiring or cut staff due to AI adoption.

AI has improved customer service efficiency at Klarna. The average time to resolve a customer service issue now sits under two minutes. Siemiatkowski stressed the importance of maintaining human connections despite AI capabilities.

The company continues to position itself as a financial management tool rather than just a payment option. Siemiatkowski said Klarna wants to help customers save time, save money, and maintain control of their finances.

The post Klarna (KLAR) Stock: Reports $903 Million Revenue in First Public Earnings appeared first on Blockonomi.