Klarna has made a Klarna revenue target cut, trimming its full-year 2026 revenue forecast to between $4.08bn and $4.16bn from a prior target of over $4.34bn, blaming softer European volumes and unfavourable currency moves. The Swedish buy now, pay later group’s shares fell nearly 19% in early trading to below $16.
Gross merchandise volume (GMV) guidance was reduced to $149bn from $151bn, against an earlier expectation of more than $155bn. Klarna said around $600m of the GMV downgrade was attributable to currency movement affecting European markets and the UK.
Germany Weighs on Klarna Revenue Target
Germany, Klarna’s largest market by volume, is at the centre of the downgrade. The group pointed to retail sales growth of less than one per cent in the country and said it now expected conditions to remain ‘soft through the second half rather than recovering’.
‘We have taken a more measured view of European volumes in the second half… and pronounced in certain discretionary retail categories,’ Klarna said.
According to Klarna’s Q2 2026 results, US assumptions are unchanged and the US remains Klarna’s fastest-growing large region. Only European and currency-related factors drove the GMV revision.
The UK is Klarna’s third-largest market globally, with over 11m active customers and around 60,000 retail partners.
Profitability Holds as Transaction Margins Improve
Klarna posted a $27m net profit in the second quarter, swinging from a $46m loss in the same period of 2025. Adjusted operating income reached $91m in Q2 2026, a 214% year-on-year increase, according to the company’s investor relations page.
Revenue exceeded $1bn for the third consecutive quarter, with Q2 GMV up 18% year-on-year to $36.6bn. Active consumers rose to 120m, up eight per cent annually.
Memberships increased eight-fold; the group now counts 2m paying subscribers. Subscription revenue surged 600%, providing a material lift to transaction margins because that income stream carries no transaction or credit loss costs.
Klarna nudged its full-year transaction margin dollar target up to between $1.62bn and $1.65bn from a prior $1.61bn.
For Q3 2026, Klarna guided for GMV of $35bn–$36bn, revenue of $940m–$980m, and adjusted operating income of $5m–$15m, according to its Q2 results release. The lower operating income range for the quarter reflects the seasonal reset after a strong first half.
Klarna listed on the New York Stock Exchange under the ticker KLAR on 10 September 2025, pricing at $40.00 per ordinary share. The stock is down more than 50% since the float.
US Banking Licence Adds a Longer-Term Lever
On 6 July 2026, Klarna filed applications with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation seeking to establish Klarna Bank USA as a Utah-chartered industrial bank, according to Klarna’s press release. The proposed entity would be a wholly owned subsidiary of Klarna Inc., with its own independent board and governance structure.
Gary Harding, who previously served as chairman and chief executive of Milestone Bank and president and chief executive of Prime Alliance Bank, has been selected as president and chief executive of the proposed Klarna Bank USA.
Klarna has operated as a licensed bank in Europe since 2017 and currently serves US customers through partner banks. The new charter would allow it to bring those operations in-house.
Klarna is not alone in this pursuit. PayPal and Affirm have also filed for industrial loan company charters in recent months, according to Banking Dive. The company said a banking licence would allow it to serve its 30m US consumers ‘across their everyday spending, saving and payments, with better quality and a lower cost to serve’.
Regulatory approval of the US banking application is the next binary event investors will watch, with the FDIC process typically taking 12 months or more to resolve. A full-year SEC filing from Klarna’s EDGAR filings provides additional detail on the group’s financial position.
