Klarna’s stock tumbled 19.43% to $15.72 on Tuesday after the Swedish buy-now-pay-later company reported strong second-quarter results but reduced its full-year guidance, citing cautious consumer spending trends.
The company reported revenue of $1.04 billion for Q2 2026, a 27% increase year-over-year, driven by a 42% rise in transaction margin dollars to $446 million. Net income turned positive at $9 million, a $62 million improvement from a $53 million loss in the same period last year, and exceeded analyst expectations of a $0.05 loss per share with a positive $0.01 EPS. Gross merchandise volume (GMV) grew 18% to $36.6 billion, while the active consumer base expanded 8% to 120 million.
Transaction margins improved to 42.8% of revenue, up 4.5 percentage points year-over-year, supported by a 54% increase in the merchant base to 1.2 million. Adjusted operating profit reached $91 million, more than tripling from $29 million in Q2 2025. Credit loss provisions rose 11% to $192 million, while transaction costs increased 17% to $596 million.
Regional performance showed divergence, with U.S. GMV surging 27% to $7.9 billion, now accounting for 22% of total volume. The U.S. transaction margin as a percentage of revenue jumped 9 points to 23%, while global ex-U.S. markets generated $28.8 billion in GMV with 15% growth and a 54% transaction margin ratio. Subscription revenue grew over 600% year-over-year, reaching $2 million subscribers, while the Klarna Card surpassed 6.5 million active users.
Despite the strong operational metrics, Klarna revised its full-year 2026 guidance downward. Gross merchandise volume expectations were lowered to $149–151 billion from a prior target above $155 billion, and revenue guidance was reduced to $4.08–4.16 billion from above $4.34 billion. The company maintained its adjusted operating income target of $280–300 million for the year, more than four times the $65 million reported in 2025. For Q3 2026, Klarna projected GMV of $35–36 billion, revenue of $940–980 million, transaction margin dollars of $340–360 million, and adjusted operating income of $5–15 million.
Credit performance metrics improved, with 30+ day delinquency rates for point-of-sale installments declining 20 basis points to 3.0% and 60+ day rates down 30 basis points to 3.3% in the Q1 2026 cohort. The company’s CFO noted that approximately $0.56 of every additional transaction margin dollar flows to the operating line, highlighting efficiency gains in its business model.
