TLDR
- Klarna (KLAR) posted its first-ever billion-dollar revenue quarter at $1.08 billion, beating estimates of $1.07 billion.
- Q4 active users hit 118 million, GMV reached $38.7 billion, both above analyst forecasts.
- Q1 2026 revenue guidance of $900M–$980M came in below the $965.1M Wall Street expected.
- Full-year 2026 GMV guidance of $155 billion missed consensus of $159 billion; revenue growth target of 24% fell short of the 29–31% Street expected.
- Adjusted operating margin of 4.4% and transaction margin dollars of $372 million both missed forecasts, sending shares down over 22%.
Klarna hit a milestone in Q4 2025 — its first-ever billion-dollar revenue quarter. The market’s response? A sell-off.
Shares dropped more than 22% to around $14.68 on Thursday after the company posted results that beat on the top line but disappointed in several key areas underneath.
Q4 revenue came in at $1.08 billion, just above the $1.07 billion Wall Street had penciled in. Revenue grew 38% year-over-year, with U.S. revenue up 58%. GMV hit $38.7 billion, ahead of the $38.1 billion forecast, and active users reached 118 million, topping estimates of 117 million.
On the surface, those numbers look solid. But investors were focused on what was missing.
Transaction margin dollars came in at $372 million, below the expected $395 million. It marked the second straight quarter this metric fell short of analyst estimates. Adjusted operating margin was 4.4%, well below the forecasted 6.4%.
Guidance Disappoints Across the Board
The guidance picture didn’t help. For Q1 2026, Klarna projected revenue between $900 million and $980 million. Analysts were looking for $965.1 million, which sits above the midpoint of that range. Q1 GMV guidance of $32–$33 billion also came in under the $33.4 billion consensus.
For the full year, Klarna guided for GMV above $155 billion versus Street expectations of $159 billion. The company sees revenue growing more than 24%, but analysts had forecast growth of 29–31%.
J.P. Morgan analysts wrote that the full-year outlook “missed Street estimates across most all key metrics,” adding that the transition from scaling to engagement and lending growth is “weighing on some KPIs.”
Management pointed to the faster-than-expected growth of its Fair Financing installment product as a driver of the transaction margin miss. J.P. Morgan’s own analysis attributed the shortfall to processing and funding costs.
Banking Push Shows Early Promise
There were genuine bright spots in the report. Banking consumers doubled to 15.8 million, generating more than three times the revenue of average consumers. Fair Financing GMV grew 165% in Q4, accelerating from 139% growth in Q3.
Klarna also added a record 115,000 merchants in the quarter, bringing the total to 966,000 — a 42% increase year-over-year. Credit loss provisions declined to 0.65% of GMV from 0.72% in Q3.
Revenue per employee reached $1.24 million, and since Q4 2022, revenue has grown 104% while operating expenses fell 8%.
Still, Klarna shares had already lost more than 34% this year before Thursday’s earnings drop. The stock has been under pressure from broader fintech weakness, concerns about AI disruption, and a proposed 10% cap on credit-card interest rates introduced in January.
Klarna made its NYSE debut in September, pricing at $40. Shares closed that first session up 15%, but the momentum didn’t last.
The company is set to publish its full annual financial statements on February 26.
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