Klarna Group plc (NYSE:KLAR) stock edged higher in Wednesday premarket trading after plunging 22.81% in the previous session. The stock is attempting to stabilize after the sharp selloff as investors digest the buy now, pay later company’s second-quarter results and weaker-than-expected 2026 sales outlook.
During the earnings call, executives flagged continued weakness in German consumer spending, particularly in discretionary retail. The company said softness that emerged late in the second quarter has continued into the third quarter.
Klarna now expects Germany, its largest market by volume, to post only marginal growth. The company also assumes the market will remain soft rather than recover this year.
Klarna Earnings Snapshot
Klarna reported earnings of 1 cent per share, beating the consensus estimate for a loss of 5 cents per share. Revenue rose 27% year over year to $1.042 billion, beating the $993.39 million analyst estimate.
Volume increased 18% year over year. Transaction margin dollars, or TMD, jumped 42% to $446 million, beating the company’s guidance of $375 million to $395 million.
Gross merchandise volume, or GMV, rose 18% to $36.6 billion, or 15% on a like-for-like basis. U.S. GMV increased 27% to $7.9 billion and accounted for 22% of total GMV. GMV outside the U.S. rose 15% to $28.8 billion.
Transaction margin reached 43% of revenue. The U.S. margin improved to 23% from 14%, while the margin outside the U.S. reached 54%.
Klarna’s membership base reached 2 million subscribers, eight times the year-ago level. Subscription revenue surged more than 600%.
Klarna Card users climbed to 6.5 million across 16 countries, more than doubling over nine months.
J.P. Morgan Payments went live Aug. 6, allowing merchants to offer Klarna products without a new integration. The platform processes about $2.6 trillion in payments annually.
Klarna and Apple Inc. (NASDAQ:AAPL) also launched the Apple Upgrade device leasing program in the U.S. Management expects the partnership to generate positive adjusted operating income in 2026. Executives said it could be “very accretive over time.”
Outlook
For the third quarter, Klarna expects volume of $35 billion to $36 billion and revenue of $940 million to $980 million. The revenue forecast missed the $1.108 billion analyst estimate.
The company also expects TMD of $340 million to $360 million and adjusted operating income of $5 million to $15 million.
Klarna expects the third quarter to be its main investment quarter. It anticipates higher share-based compensation and launch-related spending, with benefits expected to emerge in the fourth quarter.
The company lowered its 2026 GMV outlook to $149 billion to $151 billion from more than $155 billion. Klarna cited $600 million in currency translation effects and weaker volume expectations in Germany. Its U.S. assumptions remain unchanged.
Klarna expects 2026 revenue of $4.08 billion to $4.16 billion, missing the $4.415 billion analyst estimate. The company raised its TMD guidance to $1.62 billion to $1.65 billion and expects adjusted operating income of $280 million to $300 million.
Klarna aims to exit 2026 with five payment service providers offering Klarna as a default option. It also expects its leasing program and a higher-margin product mix to support growth. TMD remains a key performance metric as Klarna seeks to generate more revenue and earnings from each dollar of GMV.
Klarna Price Action
KLAR Stock Price Activity: Klarna shares were up 0.40% at $15.12 during premarket trading on Wednesday, according to Benzinga Pro data.
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