Klarna Group plc (NYSE:KLAR) shares dropped 14.4% in pre-market trading after the fintech company issued full-year 2026 revenue guidance below Wall Street expectations, overshadowing stronger-than-forecast second-quarter results.
Klarna reported quarterly revenue of $1.04 billion, representing growth of 27% year on year and beating the analyst consensus of $992.82 million. Adjusted earnings per share came in at $0.01, ahead of expectations for a loss of $0.05 per share.
Currency Headwinds and Germany Weigh on Revenue Forecast
Despite the second-quarter beat, investors focused on Klarna’s revised outlook for the remainder of 2026.
The company lowered its full-year revenue forecast to between $4.08 billion and $4.16 billion. The midpoint of $4.12 billion is substantially below the analyst consensus of $4.42 billion.
Klarna attributed the weaker outlook partly to approximately $600 million of currency translation headwinds. Management also adopted a more measured forecast for transaction volumes in Germany, which remains the company’s largest market by volume.
For the third quarter, Klarna expects revenue of between $940 million and $980 million, alongside adjusted operating income of $5 million to $15 million.
Transaction Margins Improve Despite Lower Revenue Outlook
While the headline revenue guidance disappointed investors, Klarna raised its expectations for transaction margin dollars, a key profitability measure for the business.
Transaction margin dollars increased 42% year on year during the second quarter to $446 million, equivalent to 42.8% of revenue.
Klarna now forecasts full-year transaction margin dollars of between $1.62 billion and $1.65 billion, representing approximately 1.09% of gross merchandise volume. Its previous guidance called for a figure above 1.04% of GMV.
Adjusted operating income guidance remained broadly unchanged at between $280 million and $300 million.
“Over 120 million consumers now use Klarna, and each is using it for more of their everyday spend — revenue per active consumer grew 24%,” said Sebastian Siemiatkowski, CEO and Co-Founder. “That deepening engagement is why transaction margin dollars grew 42%, well ahead of revenue and volume.”
Klarna Expands Consumer and Merchant Network
Gross merchandise volume reached $36.6 billion during the quarter, an increase of 18% from the same period last year.
Klarna also continued expanding its merchant network, with the number of businesses using its platform jumping 54% year on year to more than 1.2 million.
The figures demonstrate continued growth across the platform despite the more cautious full-year revenue outlook, with increasing consumer engagement and merchant adoption supporting transaction margin expansion.
CFO and CMO to Leave Roles in 2027
Alongside its financial results, Klarna announced planned leadership changes affecting its Chief Financial Officer and Chief Marketing Officer.
Niclas Neglén, who has served as CFO for six years, and David Sandström, who has held the CMO position for nine years, are both expected to transition out of their current roles in early 2027.
The executives will continue leading their respective organisations during the transition period. Klarna said it has already begun searching for a new CFO who will be based in New York.
“Niclas and David have helped shape what Klarna is,” said Sebastian Siemiatkowski, Co-Founder and Chief Executive Officer of Klarna. “Niclas has built the finance organization that took us public and has been a trusted partner to me and the Board through six years of growth and change. David has given Klarna a voice; he took a Nordic payments company and has built one of the most recognized brands in global finance.”
Despite stronger second-quarter revenue and earnings, the significant gap between Klarna’s revised full-year revenue outlook and analyst expectations dominated the market reaction, sending Klarna Group plc (NYSE:KLAR) shares sharply lower before Tuesday’s opening bell.
Klarna stock price
