TLDR
- Klarna (KLAR) reported Q4 revenue of $1.08 billion, its first-ever billion-dollar quarter, beating estimates of $1.07 billion.
- Active users hit 118 million, GMV reached $38.7 billion — both above forecasts.
- Q1 2026 revenue guidance of $900M–$980M midpoint came in below the $965.1M Wall Street expected.
- Transaction margin dollars missed at $372 million vs. $395 million forecast — second consecutive miss.
- Shares fell over 22% to $14.68 despite the record revenue milestone.
Klarna posted its first-ever billion-dollar revenue quarter in Q4 2025. Investors weren’t buying it.
KLARNA $KLAR Q4’25 EARNINGS HIGHLIGHTS
🔹 Revenue: $1.082B (Est. $1.07B) 🟢; +38% YoY (+58% U.S.)
🔹 GMV: $38.7B; +32% YoY (+43% U.S.)
🔹 Banking Consumers: 15.8M; +101% YoY
🔹 Klarna Card Users: 4.2M active (+1.9M QoQ)
🔹 Credit Loss Provisions: 0.65% of GMV (vs. 0.72% in Q3)… pic.twitter.com/OCChIcyVjO— Wall St Engine (@wallstengine) February 19, 2026
Shares dropped more than 22% to $14.68 on Thursday after results that beat on the headline but missed where it mattered most to the market.
Q4 revenue landed at $1.08 billion, just above the $1.07 billion consensus. Revenue grew 38% year-over-year, with U.S. revenue up 58%. GMV came in at $38.7 billion, ahead of the $38.1 billion forecast. Active users reached 118 million, topping the 117 million estimate.
Strong numbers on the surface. The cracks were underneath.
Margins Tell a Different Story
Transaction margin dollars came in at $372 million, missing the $395 million estimate. It was the second straight quarter this metric fell short. Adjusted operating margin hit 4.4%, well below the 6.4% forecast.
Management credited the miss to faster-than-expected growth in its Fair Financing installment product. J.P. Morgan pointed to processing and funding costs as the real driver.
Guidance Misses Across the Board
The outlook made things worse. Q1 2026 revenue guidance of $900M–$980M put the midpoint below the $965.1M Street estimate. Q1 GMV guidance of $32–$33 billion also trailed the $33.4 billion consensus.
For the full year, Klarna guided for GMV above $155 billion versus expectations of $159 billion, and revenue growth of more than 24% — below analyst forecasts of 29–31%.
J.P. Morgan wrote that the full-year outlook “missed Street estimates across most all key metrics.”
Where Klarna Is Growing
Not all the numbers disappointed. Banking consumers doubled to 15.8 million, generating more than three times the revenue of average users. Fair Financing GMV grew 165% in Q4, accelerating from 139% in Q3. Klarna added a record 115,000 merchants, bringing the total to 966,000 — up 42% year-over-year. Credit loss provisions fell to 0.65% of GMV from 0.72% in Q3.
Revenue per employee hit $1.24 million. Since Q4 2022, revenue has grown 104% while operating expenses dropped 8%.
Klarna debuted on the NYSE in September, pricing at $40. Shares closed that first session up 15%, but the stock had already lost more than 34% in 2026 before Thursday’s drop — weighed down by fintech sector pressure, AI disruption concerns, and a proposed 10% cap on credit-card interest rates introduced in January.
Full annual financial statements are due February 26.
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