Klarna Achieves Highest Revenue Yet, but Strategic Lending Leads to Losses

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Klarna Achieves Highest Revenue Yet, but Strategic Lending Leads to Losses

Bitget-RWA2025/11/18 13:44

By:Bitget-RWA

- Klarna reported $903M Q3 revenue (up 31.6%) but $95M net loss due to higher loan loss provisions as it expands "Fair Financing" loans. - Klarna Card drove 4M sign-ups (15% of October transactions) and 23% GMV growth to $32.7B, central to its AI-driven banking strategy. - Q4 revenue guidance of $1.065B-$1.08B reflects $37.5B-$38.5B GMV, supported by $1B facility to sell U.S. loan receivables. - CEO cites stable loan portfolio and AI-driven efficiency (40% workforce reduction) but warns of macro risks incl

Klarna Group Plc (KLAR)

achieved an all-time high in third-quarter revenue, reaching $903 million

, outperforming analyst expectations in its debut earnings release as a listed company, though it recorded a net loss due to higher reserves for loan defaults. The Swedish buy-now-pay-later (BNPL) leader, which entered the public market in September 2025,

anticipates Q4 2025 revenue will top $1 billion

, signaling a significant milestone as the company competes in a dynamic fintech sector.

The firm’s revenue

climbed 31.6% compared to the previous year

, propelled by a 23% rise in gross merchandise volume (GMV) to $32.7 billion and a 43% increase in U.S. GMV. This momentum was largely attributed to the swift uptake of its

Klarna

Card, which

has seen 4 million users sign up since its launch in July

, making up 15% of worldwide transactions in October. Marketed as a "debit-first" solution that merges debit and credit functionalities, the product

stands out as a central element in Klarna’s AI-powered digital banking approach

Klarna Achieves Highest Revenue Yet, but Strategic Lending Leads to Losses image 0

Although Klarna exceeded revenue expectations, it

posted a net loss of $95 million

, a reversal from the $12 million profit reported in the same quarter last year. This downturn was mainly due to increased credit loss provisions, which rose to 0.72% of GMV from 0.44% a year earlier, as the company expanded its longer-term "Fair Financing" loan products.

These fixed-term loans, which expanded by 244% in the U.S. and 139% globally

, require upfront provisioning under accounting standards, temporarily impacting profitability. CEO Sebastian Siemiatkowski

stressed that the loan portfolio remains "very stable"

, and the company continues to invest in growing its market share despite short-term financial pressure.

Klarna’s outlook for the fourth quarter

estimates revenue between $1.065 billion and $1.08 billion

, with GMV projected to hit $37.5–38.5 billion. The company also

revealed a $1 billion agreement with Elliott Investment Management

to sell U.S. Fair Financing receivables, boosting liquidity for further growth. Even though shares have dropped 13% from the IPO price,

Siemiatkowski remains optimistic about the company’s long-term prospects

, highlighting the scalability of its AI-driven model and the rising popularity of its membership program, which gained one million premium subscribers during the quarter.

The company’s emphasis on artificial intelligence

has transformed its business processes

, cutting customer service resolution times to under two minutes and enabling a 40% reduction in staff through automation. Nevertheless,

Siemiatkowski warned that the company remains alert to broader economic uncertainties

, such as fluctuations in AI valuations and shifts in consumer spending, both of which have affected the wider technology sector.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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