TLDR
- Klarna stock dropped over 22% after the company cut its full-year revenue guidance and announced the departures of its CFO and CMO.
- Full-year revenue forecast was lowered to $4.08B-$4.16B, below the prior $4.3B guidance and consensus of $4.4B.
- Q2 revenue came in at $1.04B, up 27% year over year, beating expectations of $996.5M.
- JPMorgan downgraded KLAR from Overweight to Neutral, slashing its price target from $22 to $18.
- Weakness in Germany, Klarna’s largest market, was cited as the main driver of the reduced outlook.
Klarna (KLAR) stock fell more than 22% on Tuesday, hitting $15.44, after the buy-now, pay-later company cut its revenue outlook and revealed two senior executives would be leaving the business.
CFO Niclas Neglén and CMO David Sandström are both departing in early 2027, after six and nine years at the company respectively. Klarna has not named replacements and said it is currently searching for a New York-based financial chief.
The stock is now down roughly 48% year-to-date and has lost around 67% of its value over the past year. Klarna IPO’d in late 2025 at $40 per share.
Q2 results were actually better than expected. Revenue jumped 27% year over year to $1.04 billion, topping the $996.5 million analyst estimate. Net income came in at $9 million, beating the $18 million loss Wall Street had projected. It was the company’s second straight quarterly profit beat.
The problem was the forward guidance. Klarna now sees Q3 revenue of $940 million to $980 million, well below the $1.11 billion consensus. Full-year guidance was also trimmed to $4.08B-$4.16B, down from $4.3B and short of the $4.4B analyst estimate.
Germany Weighs on Outlook
The downgrade to guidance was largely tied to softening consumer spending in Germany, Klarna’s largest market by volume. CFO Neglén said the company saw discretionary spending slow toward the end of Q2 and that softness has continued.
Klarna also flagged an estimated $600 million currency translation drag on revenue for the full year.
JPMorgan moved fast. The bank downgraded KLAR from Overweight to Neutral and cut its price target from $22 to $18, citing reduced visibility into medium-term trends. The firm also noted that Klarna originally trimmed its 2026 guidance back in February, and JPMorgan had said at that time that another cut could be thesis-changing.
JPMorgan cut its second-half 2026 adjusted operating income estimate by around 40%.
Operational Metrics Hold Up
Not everything in the report was negative. Gross merchandise volume hit $36.6 billion in Q2, slightly ahead of the $36.4 billion expected. Klarna added 9 million active users over the past 12 months, bringing the total above 12 million. Average revenue per customer also rose in the quarter.
The company expanded its tiered subscription program across 11 European countries and recently brought Apple’s device leasing program onto the Klarna platform. CEO Sebastian Siemiatkowski said the Apple partnership is already expected to boost adjusted operating income this year.
Tuesday’s drop was the steepest single-day fall for KLAR since a nearly 27% plunge in February.
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