Klarna slumps 19% as FY26 guidance cut on German softness

Klarna Group reported Q2 revenue of $1.04 billion, up 27% and beating estimates, but cut its full-year outlook on softer German spending.

"We delivered above the high end of our guidance on every line for the second consecutive quarter," Chief Executive Sebastian Siemiatkowski said.

Revenue of $1.04 billion topped the $993 million consensus, while diluted EPS of $0.01 beat the expected $0.05 loss. Gross merchandise volume rose 18% to $36.6 billion, and transaction margin dollars climbed 42% to $446 million. Net income turned positive at $9 million, versus a $53 million loss a year earlier.

Metric	Actual	Consensus	Beat/Miss
Revenue	$1.04B	$993M	+4.7%
EPS	$0.01	-$0.05	+$0.06
GMV	$36.6B	—	+18% YoY

Shares fell 19% premarket to $15.72, near the low end of their $12.06-$57.20 52-week range. The company cut full-year GMV guidance to $149-$151 billion from above $155 billion and revenue to $4.08-$4.16 billion from above $4.34 billion, citing currency moves and weaker German consumer spending.

Guidance cut on German softness

Klarna attributed roughly $600 million of the GMV reduction to currency movements across Europe, the U.K. and other markets. The company took a cautious stance on European volumes for the second half, particularly in Germany, its largest market by volume, where retail sales grew less than 1% in real terms during the first half.

The company maintained its adjusted operating income guidance at $280-$300 million, more than four times the $65 million reported for all of 2025. Transaction margin dollars guidance was raised to $1.62-$1.65 billion, or 1.09% of GMV, up from the 1.04% guided in May.

U.S. revenue rose 37% to $376 million, driven by Fair Financing, a long-term installment product that grew 82% to $4.7 billion in GMV. Subscription revenue grew more than 600% as paying membership reached 2 million subscribers, up eightfold from a year earlier.

Klarna also said CFO Niclas Neglén and marketing chief David Sandström will step down in early 2027 as part of a planned transition. The company has begun searching for a New York-based CFO.

Despite the premarket decline, retail sentiment on Stocktwits turned "extremely bullish" from "neutral" over the past 24 hours, with some users calling the drop a buying opportunity. The stock has fallen more than 45% this year.

The guidance cut shows management expects German discretionary spending to stay soft through year-end. Investors will watch the third-quarter investment period and fourth-quarter launches, including the Apple Upgrade program and J.P. Morgan Payments integration, for signs of a rebound.

This article is for informational purposes only and does not constitute investment advice.