What happened: Klarna (KLAR) stock plunged 22% following its earnings release and guidance that disappointed Wall Street.
What’s behind the move: The Swedish buy-now, pay-later firm trimmed its outlook for revenue and gross merchandise volume (GMV), a measure of the total value of goods sold through the platform.
Klarna now expects its 2026 gross merchandise value to come in between $149 billion and $151 billion, down from its previous forecast of $155 billion. Revenue is now expected at $4.08 billion-$4.16 billion for the year, below the previous guidance of $4.34 billion.
The company attributed the softer outlook to a slowdown in retail sales and depressed consumer sentiment in Germany, its largest market by volume.
“Our guidance simply assumes Germany stays softer rather than recovering,” said Klarna CFO Niclas Neglén, who is departing the company after six years. “We expect GMV growth in the US to be strong in the second half as we scale five significant integrations.”
What else you need to know: The guidance change overshadowed Klarna’s unexpected profit during the second quarter.
Earnings per share of $0.01 topped Wall Street forecasts for a $0.06 per share loss, according to S&P Global Market Intelligence consensus estimates. Revenue increased 27% year over year to $1.04 billion, also topping estimates of $996 million.
Notably, Klarna said the number of consumers over 30 days delinquent on their loans decreased by more than 20 basis points quarter-to-quarter.
That’s potentially a sign of improving consumer health in the K-shaped economy, as buy- now, pay-later firms are considered more exposed to lower-income consumers. According to Klarna, its customers have an average balance of $124.
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