Klarna Achieves Highest Revenue Yet, but Strategic Lending Leads to Losses

Klarna Group Plc (KLAR)

, outperforming analyst expectations in its debut earnings release as a listed company, though it recorded a net loss due to higher reserves for loan defaults. The Swedish buy-now-pay-later (BNPL) leader, which entered the public market in September 2025, , signaling a significant milestone as the company competes in a dynamic fintech sector.

The firm’s revenue

, propelled by a 23% rise in gross merchandise volume (GMV) to $32.7 billion and a 43% increase in U.S. GMV. This momentum was largely attributed to the swift uptake of its Card, which , making up 15% of worldwide transactions in October. Marketed as a "debit-first" solution that merges debit and credit functionalities, the product .

Although Klarna exceeded revenue expectations, it

, a reversal from the $12 million profit reported in the same quarter last year. This downturn was mainly due to increased credit loss provisions, which rose to 0.72% of GMV from 0.44% a year earlier, as the company expanded its longer-term "Fair Financing" loan products. , require upfront provisioning under accounting standards, temporarily impacting profitability. CEO Sebastian Siemiatkowski , and the company continues to invest in growing its market share despite short-term financial pressure.

Klarna’s outlook for the fourth quarter

, with GMV projected to hit $37.5–38.5 billion. The company also to sell U.S. Fair Financing receivables, boosting liquidity for further growth. Even though shares have dropped 13% from the IPO price, , highlighting the scalability of its AI-driven model and the rising popularity of its membership program, which gained one million premium subscribers during the quarter.

The company’s emphasis on artificial intelligence

, cutting customer service resolution times to under two minutes and enabling a 40% reduction in staff through automation. Nevertheless, , such as fluctuations in AI valuations and shifts in consumer spending, both of which have affected the wider technology sector.