Klarna (KLAR) Q3 2025 Earnings Report

Klarna rose to the top of Wall Street third quarter revenue expectations in your first earnings report After debuting on the New York Stock Exchange in September.

Shares fell 9%.

Here’s how the company performed compared to LSEG estimates

• Revenue: USD 903 million against the expected USD 882 million

Revenue increased 26% from $706 million in the same period a year ago. The company reported a net loss of $95 million, or 25 cents per share, down from a year earlier, when its net income was $12 million, or 5 cents per share.

The buy now, pay later company said its growth was driven by massive growth in the US, where gross merchandise volume increased by 43% compared to the previous year. Gross merchandise volume, which measures goods sold, rose 25% to $32.7 billion from $26.2 billion last year.

US gains were helped by the adoption of features such as the Klarna Card and Fair Financing, which offer longer installment options for larger purchases. The feature offers differentiated interest rates, and gross merchandise volume was more than three times higher than a year ago.

Since its July launch, the fintech company said its Klarna card had reached more than four million customers and accounted for 15% of transactions by October.

CEO Sebastian Siemiatkowski said fair financing had doubled the number of users from a year ago, but only reached about one-fifth of merchants. This creates a “tremendous opportunity” for Klarna, he told CNBC.

“We want to be the one that helps you save time, save money, be in control of your finances, and of course that’s not necessarily what we’re associated with,” he said, adding that Klarna will continue to work to earn that reputation.

Klarna also told Elliott Investment Management agreed to buy $6.5 billion its fair financial loans so it can focus on product growth in the US.

The number of sellers increased 38% to 850,000 from 616,000 in the year-ago period, but average revenue per active customer fell. The number of customers was $114 million.

Klarna expects fourth-quarter gross merchandise volume to be between $37.5 billion and $38.5 billion and revenue between $1,065 million and $1.08 million. Both exceeded FactSet estimates.

The transaction margin, a measure of the profitability of the company’s core business, is expected to range from USD 390 million to USD 400 million. In the third quarter, that amount was $281 million.

In a note to clients, Bank of America said its focus on fair financing drove Klarna’s expected transaction margin in dollar terms, with fourth-quarter guidance being on-street.

“Based on our discussions, we believe investors remain cautious about credit-led growth,” the bank said.

JPMorgan called fourth-quarter forecasts for “sequential growth” in transaction margins “encouraging.”

Klarna launched on the New York Stock Exchange about two months ago delaying the initial public offering plans for April as President Donald Trumpaggressive tariff plans shook financial markets.

Shares have fallen in recent weeks on growing concerns about the potential AI bubble with stretched valuations. Concerns about a slowdown in consumer spending have also increased.

Klarna shares have lost more than a third of their value from their highs.

Siemiatkowski said the company is not yet seeing “material differences” in reimbursements or spending habits due to the microenvironment, but is monitoring the AI ​​wave that is expected to impact more white collar careers.

For years, Klarna has been focusing on artificial intelligence. Siemiatkowski told CNBC in May that the technology, along with wear and tear, has helped the fintech company shrink labor force by 40%.

He said its natural attrition rate is as high as 20%.

Klarna is not alone. Palantir, Sales power AND Amazon all warned they planned to reduce their workforce or slow hiring due to the adoption of AI.

Siemiatkowski said AI is linked to the company’s “customer-obsessed” mentality and has reduced the average time to resolve a customer service issue to under two minutes.

Companies that only use artificial intelligence or robots to serve customers are making “a big mistake because you want to have contact with a human,” Siemiatkowski said. “There is this tremendous value.”