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KLAR posted a Q1 loss of a penny, beating estimates as revenue surged 44% to $1.01B.
KLAR's GMV rose to $33.7B, driven by higher transactions, engagement, and merchant growth.
KLAR ended Q1 with 119M consumers and 1.075M merchants, with U.S. GMV up 39% to $7.1B.
Klarna Group plc (KLAR - Free Report) reported first-quarter 2026 loss per share of a penny, a 96.2% improvement from the year-ago loss of 26 cents. The bottom line beat the Zacks Consensus Estimate of a loss of 18 cents.
Quarterly revenues jumped 44.4% year over year to $1.01 billion and topped the consensus mark by 7.6%.
The quarter was supported by higher transactions, GMV, reflecting higher consumer engagement, a widening merchant network and increased interest income.
Klarna Group plc Price, Consensus and EPS Surprise
Klarna continued to expand both sides of its payments network in the quarter. Active consumers climbed 21% year over year to 119 million, while merchants rose 49% to 1.075 million, underscoring broadening distribution and adoption.
Under the hood, GMV growth remained balanced geographically, with U.S. GMV rising 39% to $7.1 billion and global GMV outside the United States increasing 31% to $26.6 billion. Product mix also kept shifting, with point-of-sale installments (Fair Financing) GMV rising 138% year over year and representing 12% of total GMV. Total GMV of $33.7 billion beat the Zacks Consensus Estimate by 4.5%.
Klarna’s Revenue Mix
Transaction and service revenues increased 29% year over year to $671 million (beating the consensus estimate by 4.2%), while interest income advanced 56% to $284 million (beating the consensus estimate by 18.8%.
On a geographic basis, revenues in the United States rose to $399 million from $238 million a year ago, while Germany delivered $221 million and the U.K. contributed $111 million.
KLAR’s Transaction Economics Improve
Transaction margin dollars (TMD) reached $389 million in the quarter, up 44% year over year. That growth tracked revenue expansion and reflected improving unit economics as the loan book matures.
Costs tied to transactions climbed alongside volume and product mix. Processing and servicing costs increased 62% year over year to $266 million, while funding costs rose 32% to $171 million. Provision for credit losses totaled $186 million, and the provision rate was 0.55% of GMV, supported by seasonally stronger credit performance and continued maturation of the Fair Financing portfolio.
Net income reached $1 million, improving from a net loss of $99 million a year ago, translating to a 0.1% net income margin.
KLAR’s Financials (As of March 31, 2026)
Klarna ended the quarter with $2.8 billion in cash and cash equivalents, which declined from $3.8 billion at 2025-end. Total assets were $18 billion at March 31, 2026, down from $18.8 billion at 2025-end.
Notes payable and other borrowings reached $1.42 billion, up from $1.36 billion at Dec 31, 2025.
Operating cash outflow was $952 million for the first quarter, against an operating cash flow of $607 million a year ago.
KLAR’s Outlook
For the second quarter of 2026, Klarna guided GMV to $35.5-$36.5 billion and revenues within $960 million and $1 billion. The company also expects TMD of $375-$395 million and adjusted operating profit of $30-$50 million.
For full-year 2026, the company reiterated its outlook, including GMV of more than $155 billion and revenue above 2.8% of GMV. It also maintained its TMD target of more than 1.04% of GMV and adjusted operating profit above 6.9% of revenues.
Affirm Holdings, Inc. (AFRM - Free Report) posted third-quarter fiscal 2026 earnings of 30 cents per share, which beat the Zacks Consensus Estimate by 76.5% and rose from a penny a year ago. Higher interest income, transactions, solid GMV growth and repeat customer engagement boosted Affirm’s performance. The results were partly offset by an elevated expense level and rising provision for credit losses.
Mastercard Incorporated (MA - Free Report) reported first-quarter 2026 adjusted earnings of $4.60 per share, which topped the Zacks Consensus Estimate by 4.6% and increased 23.3% year over year. Its results benefited from growing cross-border volumes and solid growth in value-added services revenues. However, the upside was partly offset by Mastercard’s elevated operating expenses and higher payment network rebates from new and renewed deals.
American Express Company (AXP - Free Report) reported first-quarter 2026 EPS of $4.28, which surpassed the Zacks Consensus Estimate by 6.2% and advanced 18% year over year. Total revenues, net of interest expense, improved 11% year over year to $18.9 billion. The quarterly results were driven by increased Card Member spending, higher net interest income and improved card fee growth. However, the upside was partly offset by American Express’ elevated operating expenses.
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Klarna Q1 Earnings Beat Estimates on Strong GMV & Network Expansion
Key Takeaways
Klarna Group plc (KLAR - Free Report) reported first-quarter 2026 loss per share of a penny, a 96.2% improvement from the year-ago loss of 26 cents. The bottom line beat the Zacks Consensus Estimate of a loss of 18 cents.
Quarterly revenues jumped 44.4% year over year to $1.01 billion and topped the consensus mark by 7.6%.
The quarter was supported by higher transactions, GMV, reflecting higher consumer engagement, a widening merchant network and increased interest income.
Klarna Group plc Price, Consensus and EPS Surprise
Klarna Group plc price-consensus-eps-surprise-chart | Klarna Group plc Quote
KLAR Scales Its Network
Klarna continued to expand both sides of its payments network in the quarter. Active consumers climbed 21% year over year to 119 million, while merchants rose 49% to 1.075 million, underscoring broadening distribution and adoption.
Under the hood, GMV growth remained balanced geographically, with U.S. GMV rising 39% to $7.1 billion and global GMV outside the United States increasing 31% to $26.6 billion. Product mix also kept shifting, with point-of-sale installments (Fair Financing) GMV rising 138% year over year and representing 12% of total GMV. Total GMV of $33.7 billion beat the Zacks Consensus Estimate by 4.5%.
Klarna’s Revenue Mix
Transaction and service revenues increased 29% year over year to $671 million (beating the consensus estimate by 4.2%), while interest income advanced 56% to $284 million (beating the consensus estimate by 18.8%.
On a geographic basis, revenues in the United States rose to $399 million from $238 million a year ago, while Germany delivered $221 million and the U.K. contributed $111 million.
KLAR’s Transaction Economics Improve
Transaction margin dollars (TMD) reached $389 million in the quarter, up 44% year over year. That growth tracked revenue expansion and reflected improving unit economics as the loan book matures.
Costs tied to transactions climbed alongside volume and product mix. Processing and servicing costs increased 62% year over year to $266 million, while funding costs rose 32% to $171 million. Provision for credit losses totaled $186 million, and the provision rate was 0.55% of GMV, supported by seasonally stronger credit performance and continued maturation of the Fair Financing portfolio.
Net income reached $1 million, improving from a net loss of $99 million a year ago, translating to a 0.1% net income margin.
KLAR’s Financials (As of March 31, 2026)
Klarna ended the quarter with $2.8 billion in cash and cash equivalents, which declined from $3.8 billion at 2025-end. Total assets were $18 billion at March 31, 2026, down from $18.8 billion at 2025-end.
Notes payable and other borrowings reached $1.42 billion, up from $1.36 billion at Dec 31, 2025.
Operating cash outflow was $952 million for the first quarter, against an operating cash flow of $607 million a year ago.
KLAR’s Outlook
For the second quarter of 2026, Klarna guided GMV to $35.5-$36.5 billion and revenues within $960 million and $1 billion. The company also expects TMD of $375-$395 million and adjusted operating profit of $30-$50 million.
For full-year 2026, the company reiterated its outlook, including GMV of more than $155 billion and revenue above 2.8% of GMV. It also maintained its TMD target of more than 1.04% of GMV and adjusted operating profit above 6.9% of revenues.
Klarna currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Are KLAR’s Peers Placed This Quarter?
Affirm Holdings, Inc. (AFRM - Free Report) posted third-quarter fiscal 2026 earnings of 30 cents per share, which beat the Zacks Consensus Estimate by 76.5% and rose from a penny a year ago. Higher interest income, transactions, solid GMV growth and repeat customer engagement boosted Affirm’s performance. The results were partly offset by an elevated expense level and rising provision for credit losses.
Mastercard Incorporated (MA - Free Report) reported first-quarter 2026 adjusted earnings of $4.60 per share, which topped the Zacks Consensus Estimate by 4.6% and increased 23.3% year over year. Its results benefited from growing cross-border volumes and solid growth in value-added services revenues. However, the upside was partly offset by Mastercard’s elevated operating expenses and higher payment network rebates from new and renewed deals.
American Express Company (AXP - Free Report) reported first-quarter 2026 EPS of $4.28, which surpassed the Zacks Consensus Estimate by 6.2% and advanced 18% year over year. Total revenues, net of interest expense, improved 11% year over year to $18.9 billion. The quarterly results were driven by increased Card Member spending, higher net interest income and improved card fee growth. However, the upside was partly offset by American Express’ elevated operating expenses.