Klarna's stock plummeted 20% on Tuesday, August 22, 2026, after the Swedish buy-now, pay-later provider significantly lowered its financial outlook for the year. The company now anticipates gross merchandise volume (GMV) to be between $149 billion and $151 billion, down from its previous forecast of over $155 billion. Full-year revenue is now projected to be $4.08 billion-$4.16 billion, a reduction from the earlier guidance of $4.34 billion. This revised outlook primarily stems from a slowdown in retail sales and depressed consumer sentiment in Germany, Klarna's largest market by volume, along with a $600 million hit from currency exchange rate changes. Despite the negative guidance, Klarna reported a second-quarter net income of $9 million, a significant improvement from a $53 million loss in the same period of 2025. Revenue rose 27% year-over-year to $1.04 billion, exceeding analysts' estimates of $996 million. The company's earnings per share of $0.01 also beat forecasts of a $0.06 per share loss. Analysts from TD Cowen, Moshe Orenbuch and Hoang Nguyen, described Klarna's third-quarter guidance as "below our estimate across the board" for revenue, GMV, transaction margin dollars, and adjusted operating profit, viewing the report as negative.
In addition to the revised financial outlook, Klarna announced leadership changes, with Chief Financial Officer Niclas Neglén and Chief Marketing Officer David Sandström set to depart early next year. Klarna is actively searching for a New York-based finance chief to take over in 2027, emphasizing the U.S. as a critical market. CEO Sebastian Siemiatkowski highlighted the importance of a stronger presence in New York to be closer to the investor relations community and the stock market. The company is also pursuing a U.S. banking license, having applied with Utah regulators to become an industrial bank. This move aligns with competitors like PayPal and Affirm Holdings, who have also sought industrial loan charters. Klarna currently operates a bank in Europe, utilizing deposits for its lending business, which totaled $11.7 billion at the end of the quarter.
The stock decline contributed to a 46% year-to-date drop for Klarna shares, wiping out two-thirds of its value since its listing and leaving a market capitalization of just $5.9 billion. Concerns among analysts include the lack of a U.S. banking license, which limits Klarna's ability to directly extend credit in the U.S., making it reliant on partners like Stripe and JPMorgan. UBS analysts specifically warned that without its own U.S. banking charter, Klarna's profitability and speed of execution remain subject to the whims and commercial terms of its banking and technology partners. Furthermore, the company's business model, which heavily relies on short-term credit, makes it vulnerable to macroeconomic downturns, potentially leading to increased credit losses and delinquencies.
