Key Takeaways
- Klarna shares tumbled Tuesday after the the buy now, pay later company reported revenue and user numbers that topped analysts’ estimates but posted a wider-than-expected adjusted operating loss.
- The company plans to sell up to $6.5 billion in loans and recently unveiled a new membership program.
For buy now, pay later firm Klarna, the post-IPO honeymoon may be over.
Klarna’s first results since going public in September mostly came in better than analysts had expected, and its current-quarter outlook also topped estimates. However, Klarna (KLAR) shares fell 9% on Tuesday as the Swedish company reported an adjusted operating loss of $14 million, compared to the $11.3 million loss analysts were expecting.
Klarna reported a third-quarter net loss of $0.25 per share on revenue of $903 million, both better than the analyst consensus compiled by Visible Alpha. Gross merchandise value (GMV), or the total amount of products bought with Klarna’s services, beat estimates at $32.7 billion, as did its number of active users at 114 million.
Further, Klarna guided for fourth-quarter revenue of $1.065 billion to $1.080 billion and GMV of $37.5 billion to $38.5 billion, both better than analysts’ estimates.
Why This Matters
Klarna’s post-IPO results highlight how buy now, pay later has moved beyond a niche offering into a mainstream way to pay for everyday items like groceries and takeout. Klarna’s mixed post-IPO performance reflects the challenges of scaling BNPL services while investing in U.S. expansion and banking products. Investors are watching closely as the company looks to balance growth and profitability.
Klarna shares have lost about 30% of their value since the IPO. Despite the losses, analysts have remained bullish on Klarna’s stock.
The company continues to encourage users to sign up for its versions of traditional bank products. Klarna unveiled details of a U.S. membership program last month that it sees as an alternative to premium credit cards such as Chase Sapphire Reserve and American Express Platinum. Some members will get access to subscriptions and cash back among other perks, Klarna said.
Also on Tuesday, Klarna said it will sell up to $6.5 billion of loans in its Fair Financing portfolio to funds managed by Elliott Investment Management over a two-year period. “This is another major step in our U.S. growth journey,” said Klarna CFO Niclas Neglén.
