Klarna Reports Strong Q2 Earnings but Lowers Full-Year Guidance
Swedish digital payments company Klarna (NYSE: KLAR) reported second-quarter results that showed strong revenue and profitability, with $1.04 billion in revenue—up 27% year over year—and a net income of $9 million compared to a loss the previous year. However, the company cut its full-year gross merchandise volume guidance from $155 billion to between $149 billion and $151 billion, while also lowering annual revenue projections below analyst expectations. Klarna's stock has fallen 51% year-to-date following these results. Analysts suggest that investors should focus more on the revised full-year guidance than the Q2 beats due to its greater impact on long-term growth and valuation. The company is experiencing weaker GMV expansion in Europe, particularly Germany, as well as a decline in take rates. In addition, Klarna announced it will shift from CECL accounting to fair value accounting, which changes how credit assets are valued and recognized. This change complicates the comparison of past performance with future results.
Tickers: $KLAR