With 9M Daily Users, Is Klarna's App the New Daily Money Ritual?

Klarna Group plc KLAR recently announced tremendous growth in its app usage, supported by its new launches, such as a debit card, cashbacks, mobile phone plans, as well as peer-to-peer payments in Europe. Globally, the Klarna app now reached over 55 million active users per month. Daily usage surged 53% from the last year to 9 million people.

In the fourth quarter of 2025, its global payments network connected 118 million consumers, which was up 28% year over year. Revenue take rate rose 14 basis points to 2.8%. In the United States alone, the number of consumers reached 29 million. This expanding base fuels more transactions and cross-sell opportunities. Merchant additions surged, bringing the total to 966 thousand in the quarter, up 42% year over year.

The fourth quarter of 2025 marked Klarna’s first billion-dollar revenue quarter, with the figure reaching $1.08 billion, a 38% year-over-year increase. Total gross merchandise volume (GMV) rose 32% year over year to $38.7 billion, while the U.S. GMV jumped 43%. The company’s focus on deepening engagement via banking products will help it increase lifetime value and generate more revenue per consumer.

Fair Financing, which involves longer-tenor credit products, remains a high-growth segment unlocking new volumes and enabling further market capture. It drives higher revenue per transaction than zero-interest buy now, pay later (BNPL) offers. Fair Financing GMV grew 165% year over year to $4.5 billion in the quarter.

Competition is Fierce for Klarna

While London-based KLAR is expanding its U.S. footprint, it faces growing competition from peers like Affirm Holdings, Inc. AFRM and PayPal Holdings, Inc. PYPL.

Affirm’s higher transactions, repeat customer engagement, and servicing income are enhancing performance. In the last reported quarter, its GMV jumped 36% year over year to $13.8 billion. It has expanded operations in the U.K. and is expected to roll out across Europe in partnership with Shopify, with launches expected in France, Germany and the Netherlands.

Meanwhile, PayPal already has a massive presence across 200 markets. Its strong performance in the U.S. market is supporting volume growth. PayPal crossed $40 billion BNPL TPV in 2025, up more than 20% year over year.

Klarna’s Price Performance, Valuation and Estimates

Shares of Klarna have declined 42.2% over the past month, underperforming the broader industry’s 6.3% fall.

From a valuation standpoint, Klarna trades at a forward price-to-earnings ratio of 24.21X, higher than the industry average of 17.82X. Klarna carries a Value Score of D.

The Zacks Consensus Estimate for Klarna’s 2026 and 2027 EPS is currently pegged at a loss of 1 cent and a profit of 91 cents, respectively.

The stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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