Klarna delivered a stronger-than-expected second quarter, but investors focused on what comes next, which led to a counterintuitive stock decline.
The Swedish buy now, pay later (BNPL) company Klarna reported $1.04 billion in revenue, up 27% year over year, and swung to a $9 million net profit from a $53 million loss a year earlier. The financial results also beat market expectations.
Yet Klarna shares fell about 21% on August 18, marking one of the stock’s steepest single-day declines since its 2025 New York IPO. The reaction was driven less by the quarter that had just ended than by a weaker outlook for the rest of 2026.
Klarna cut its full-year revenue forecast to between $4.08 billion and $4.16 billion, down from an earlier expectation of about $4.34 billion. It also reduced its gross merchandise volume, or GMV, forecast to $149 billion-$151 billion from more than $155 billion.
GMV measures the total value of purchases processed through Klarna and is closely watched because it shows the scale of consumer activity on the platform. The company said the revised outlook reflects roughly $600 million in foreign-exchange translation effects and weaker discretionary spending in Germany, its largest market.
That helps explain why the market reaction was so severe. For a newly public fintech, investors are not only asking whether the business can grow, but whether management can deliver against the growth expectations built into its valuation. A strong quarter can therefore be overshadowed by a forecast that suggests growth may slow.
Klarna’s second-quarter operating figures were more encouraging than the stock move suggests. GMV increased 18% to $36.6 billion, while U.S. GMV grew 27%. Transaction margin dollars, a measure of revenue after transaction-related costs, increased 42%. The company’s full-year outlook for this measure was actually raised to $1.62 billion-$1.65 billion.
Other growth areas also point to a broader business beyond traditional BNPL. Klarna Card users reached 6.5 million, while Fair Financing volume rose sharply. Subscription and other higher-margin revenue streams are also becoming increasingly important as Klarna tries to turn more frequent consumer usage into sustainable earnings.
The quarter also brought a leadership change. CFO Niclas Neglén and Chief Marketing Officer David Sandström are due to leave early next year. Klarna is searching for a new CFO based in New York, as the company continues to expand its U.S. business and strengthen its position as a broader financial-services platform.
Importantly, Klarna’s sell-off did not turn into a broad BNPL rout. The reaction was concentrated on Klarna, suggesting investors were responding primarily to its individual guidance and company-specific execution concerns rather than abandoning the entire sector.
