Klarna Posts $9 Million Q2 Profit but Cuts 2026 Volume Outlook

Klarna posted a $9 million net profit for the second quarter, reversing a $53 million loss a year earlier, as revenue and transaction margins grew faster than the value of purchases processed through its network. The improvement in earnings came with a less favorable growth signal: the payments company cut its full-year 2026 gross merchandise volume forecast to $149 billion to $151 billion from more than $155 billion.

Second-quarter revenue rose 27% to $1.042 billion and GMV increased 18% to $36.6 billion. Transaction margin dollars, a non-IFRS measure that Klarna uses to track revenue after processing, servicing, credit-loss provisions and funding costs, climbed 42% to $446 million. The company also lowered its reported full-year revenue forecast to $4.08 billion to $4.16 billion from more than $4.34 billion.

Profitability improves as transaction economics strengthen

Klarna’s second-quarter results showed a broader improvement in profitability than the net-income figure alone. Operating income was $27 million, compared with a $46 million operating loss in the same quarter last year, while adjusted operating income rose to $91 million from $29 million. The adjusted operating margin reached 8.7% of revenue.

In its second-quarter results, Klarna said transaction margin dollars increased faster than revenue, and revenue increased faster than GMV. That relationship matters for the company’s current strategy because it suggests Klarna is generating more margin from each dollar of payment volume even as its overall volume growth slows. Transaction margin dollars represented 42.8% of revenue in the quarter, up by roughly 4.5 percentage points from a year earlier.

Credit costs also moved in a favorable direction relative to volume. Provisions for credit losses were $192 million, equal to 0.52% of GMV, compared with 0.56% in the second quarter of 2025. Processing and servicing costs were $233 million, while funding costs were $171 million. Klarna attributed the margin improvement to factors including underwriting performance, maturing Fair Financing loans and a greater use of arrangements that move receivables off its balance sheet.

The U.S. remained the company’s fastest-growing large region. U.S. GMV rose 27% to $7.9 billion, and U.S. revenue increased 37% to $376 million. U.S. transaction margin dollars more than doubled to $88 million, with the transaction margin reaching 23% of revenue from 14% a year earlier. Outside the U.S., transaction margin dollars were $358 million, up 30%, at a margin of 54% of revenue.

Klarna also continued to expand the two sides of its payments network. Active consumers reached 120 million, up 8% from a year earlier, while the reported merchant count rose 54% to about 1.21 million. Average revenue per active consumer increased 24% to $33.70. Fair Financing GMV, which covers the company’s point-of-sale installment product, rose 82% to $4.7 billion and accounted for 13% of total GMV.

Germany and currency moves weigh on the 2026 volume forecast

The change in full-year guidance is centered on Europe rather than the U.S. Klarna said about $600 million of the GMV revision reflects currency translation since its May forecast. It also adopted a more cautious view of second-half European volumes, particularly in Germany, which it described as its largest market by volume. The company said weakness has been most pronounced in discretionary retail categories and that its guidance now assumes German conditions remain soft through the second half rather than recover.

The revised GMV range of $149 billion to $151 billion implies growth of roughly 17% for the year. In May, Klarna had guided to more than $155 billion. The company’s U.S. volume assumptions are unchanged, with management expecting growth there to remain strong as payment-service-provider integrations and large merchant relationships expand.

The second quarter itself was still a growth quarter across Klarna’s geographies. GMV rose 18% overall, including 27% in the U.S., although management said Germany grew at a more measured pace. The mix of spending also continued to broaden. Events and services increased to 14% of GMV from 9% a year earlier, while home and electronics rose to 20% from 18%. Apparel and accessories fell to 34% of GMV from 41%, reducing Klarna’s concentration in a category that has historically been closely associated with buy-now-pay-later services.

Klarna’s SEC-filed earnings release also set third-quarter guidance below the second-quarter run rate. The company expects GMV of $35 billion to $36 billion, revenue of $940 million to $980 million, transaction margin dollars of $340 million to $360 million and adjusted operating income of $5 million to $15 million. Management described the third quarter as an investment period, with marketing spending occurring before some of the volume expected from new payment-platform launches.

The revenue guidance needs an additional accounting qualification. From the second half of 2026, Klarna expects new U.S. and German Fair Financing originations to be classified and measured at fair value through profit and loss. Under the new presentation, more economics are recognized upfront rather than through interest income and provisions over the life of the loan. Klarna estimates that the change will reduce reported revenue by about 10 basis points of GMV while producing a similar reduction in transaction costs. The company expects a roughly 2-basis-point positive timing effect on full-year transaction margin as a share of GMV.

Klarna raises margin guidance despite processing less volume

The lower GMV forecast did not translate into a lower transaction-margin outlook. Klarna raised its full-year transaction margin dollar forecast to $1.62 billion to $1.65 billion, or about 1.09% of GMV, from a previous expectation of more than $1.61 billion and more than 1.04% of GMV. Excluding the estimated benefit from the fair-value accounting change, management said the implied transaction margin would be about 1.07% of GMV, still above its May forecast.

That distinction is central to the quarter. Klarna is now expecting less payment volume and lower reported revenue than it did three months ago, but stronger transaction economics. The company said the improvement reflects a more favorable mix and continued growth in products such as Klarna Card, Fair Financing and paid memberships. Klarna Memberships reached 2 million paying subscribers in the quarter, while the Klarna Card had 6.5 million active users across 16 countries.

Full-year adjusted operating income is now expected to be $280 million to $300 million, equivalent to 6.9% to 7.2% of revenue. The prior forecast called for more than $299 million and an adjusted operating margin above 6.9%. Klarna characterized the new profitability outlook as in line to modestly above its May view because the lower end reflects reinvestment of stronger transaction margin into second-half launches. The company generated $159 million of adjusted operating income in the first half, compared with $65 million for all of 2025.

The mixed guidance leaves a clear test for the second half. Klarna needs stronger unit economics to keep offsetting slower European volume growth while it spends ahead of new distribution launches. Its third-quarter targets of $35 billion to $36 billion in GMV and $340 million to $360 million in transaction margin dollars will provide the next measure of whether the company can continue expanding profit per dollar processed even if Germany remains soft.