Credit losses in the fourth quarter rose 59 percent to $250 million, pushing net income down to a loss, compared to a profit last year, according to Klarna's 2025 financial statements.
On top of that comes a slightly weaker-than-expected forecast for trading volume during the first quarter.
“Strongest quarter”
This overshadowed an unexpectedly strong 38 percent year-on-year increase in revenue to $1.08 billion, the first time it topped $1 billion in a single quarter. Analysts had expected $1.07 billion, according to Bloomberg.
"The strongest quarter we've ever had, actually," co-founder and CEO Sebastian Siemiatkowski tells TT.
He also highlights that the number of users of Klarna's various cards has increased to 4.2 million, the majority of which are in the United States.
"We have about 15 million customers now who use us as a bank and not just a payment solution. That group grew by 100 percent. It's pretty awesome," he says.
The growing loan losses are an accounting effect that all fast-growing banks struggle with, according to Siemiatkowski.
When Klarna lends to new customers, the company has to set aside money to cover potential credit losses in the future. And with 165 percent growth in the niche of larger and longer loans – and growth in the US, where the overall credit loss level is slightly higher than in Sweden – there is upward pressure on the credit loss rate.
"But if you look at loan stock by loan stock, loan losses are very stable. Rather, it has gotten a little better in some cases," says Siemiatkowski.
Focus on profitability and growth
Before the report, Klarna's shares had lost almost 70 percent since its price peak last fall.
"I am 100 percent focused on the company, both in terms of profitability and growth. I think the growth we are delivering is fantastic and profitability is getting better and better and we are convinced that it will continue to get better. That is what I can do something about. Then the market will make its assessment of the results," Siemiatkowski says about the price decline.
Fintech and software companies “have had a rough few weeks,” he notes. But he reminds us that Klarna can also be seen as a bank:
"Give us this growth for another year and a half, and we will be the same size as Swedbank in terms of revenue. And in terms of number of customers, we have significantly more and we have a quarter as many employees."
Joakim Goksör/TT
Facts: Klarna's report in brief
TT
Swedish payments company Klarna, listed on the New York Stock Exchange since September, reported a 38 percent year-on-year increase in revenue in the fourth quarter of last year, up to $1.08 billion. Analysts had on average expected an increase to $1.07 billion, according to Bloomberg.
Gross trade volume – the total value of all goods and services sold via Klarna’s payment solutions – rose 32 percent to $38.7 billion, exceeding expectations of $38.1 billion.
The number of active consumers using Klarna's services during the quarter increased to 118 million, compared to 92 million a year earlier and an average forecast for the fourth quarter of 117 million. The number of merchants using Klarna has also increased by 42 percent to 966,000.
After tax, the quarterly loss was $26 million. This compares to a profit of $40 million in the fourth quarter of 2024. However, adjusted operating income rose slightly to a profit of $47 million, from a plus of $42 million in the fourth quarter of 2024.
Credit losses are trending upwards to 0.65 percent of gross trading volume. This compares to 0.53 percent in the fourth quarter of 2024.
Source: Klarna
Corrected: In a previous version of the fact box, there was an incorrect figure regarding net profit in the fourth quarter of 2024.
Since the beginning of the year, Klarna's shares have – with Thursday's report fall – fallen by almost 50 percent to around $14.50. The price can be compared to the introduction price on the New York Stock Exchange on September 10 last year of $40 and the peak price in connection with the listing of just over $57.
In Swedish kronor – when the dollar's fall against the krona since last autumn is also taken into account – this means that Klarna's market capitalisation has plummeted from a peak of over 200 billion to today's just under 50 billion. That's a decline of 75 percent.
Klarna's value development on the New York Stock Exchange can also be compared to a historical valuation peak of $377 billion as an unlisted company in 2021.
Sources: TT and Bloomberg
