TLDR
- Klarna delivered third-quarter revenue of $903 million, surpassing analyst estimates of $882 million in its debut earnings as a public company
- The fintech reported a $95 million net loss compared to a $12 million profit in the same quarter last year
- U.S. market performance stood out with 43% gross merchandise volume growth driving overall GMV up 25% to $32.7 billion
- Klarna Card attracted over four million users since launching in July and represented 15% of October transactions
- Fourth-quarter revenue guidance projects $1.065 billion to $1.08 billion, crossing the billion-dollar threshold for the first time
Klarna exceeded Wall Street expectations in its first quarterly report as a public company. The Swedish fintech posted third-quarter revenue of $903 million against estimates of $882 million.
The buy now, pay later company listed on the New York Stock Exchange in September. It had postponed its IPO plans from April due to market turbulence caused by tariff concerns.
Revenue increased 26% from $706 million in the prior year period. The company reported a net loss of $95 million, reversing from a $12 million profit a year earlier.
Gross merchandise volume climbed 25% to $32.7 billion from $26.2 billion. The U.S. market led growth with a 43% jump in GMV compared to last year.
Strong Product Adoption Drives Growth
The Klarna Card launched in July and rapidly gained traction. More than four million customers signed up for the card within months. By October, it accounted for 15% of all platform transactions.
Fair financing options also contributed to expansion. This feature allows longer payment terms with variable interest rates for bigger purchases. GMV through fair financing increased more than threefold year-over-year.
CEO Sebastian Siemiatkowski told CNBC that fair financing doubled its user base. The product has only reached about 20% of merchants on the platform. He identified this as a major growth avenue.
The merchant base expanded 38% to 850,000 from 616,000 last year. Average revenue per active customer decreased despite the merchant growth.
Forward Guidance and Market Challenges
Klarna forecasts fourth-quarter GMV between $37.5 billion and $38.5 billion. Revenue projections range from $1.065 billion to $1.08 billion. Transaction margin dollars should land between $390 million and $400 million, up from $281 million in Q3.
Shares have fallen more than one-third from peak levels. Recent concerns about AI valuations and consumer spending have pressured tech stocks.
Siemiatkowski said the company hasn’t observed material shifts in customer payment behavior or spending patterns. The firm continues monitoring economic conditions.
AI Integration Reshapes Operations
Klarna has embraced artificial intelligence across its operations. The technology combined with natural attrition helped cut the workforce by 40%. The company’s natural attrition rate reaches up to 20% annually.
AI improved customer service efficiency dramatically. Average resolution time for customer issues now sits below two minutes. Siemiatkowski emphasized the continued importance of human connections despite AI capabilities.
Other tech companies including Palantir, Salesforce, and Amazon have similarly reduced hiring or implemented cuts due to AI adoption. Klarna positions itself as a financial management platform helping users save time and money while maintaining financial control.
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