By Connor Hart
Klarna has become the go-to for buy now, pay later loans. Now, the payments company is shifting focus toward new offerings that cater to big-ticket purchases, and executives say the pivot is paying off.
The company's buy now, pay later loans continue to drive growth, with gross merchandise volumes up 29% in the latest quarter. The transactions typically apply to mid-tier purchases and are paid off within a few weeks, Chief Executive Sebastian Siemiatkowski said.
Beginning last year, Klarna began shifting focus more toward fair financing, a longer-term installment loan product designed for big-ticket items. The offering has taken off faster than anticipated, with those gross merchandise volumes more than doubling from last year.
"The vast majority of those borrowers are existing customers with proven repayment history," Siemiatkowski said on a call with analysts."We took meaningful market share in less than 12 months, especially in the U.S."
The new strategy helped Klarna gain market share from competitors such as Affirm and Afterpay in the recent quarter, during which it swung to a profit and logged higher revenue.
Strong quarterly results sent shares 16% higher, to $15.88. Despite the gain, the stock has lost about two-thirds of its value over the past year.
Total gross merchandise volume, which measures the monetary value of all completed purchases over its network, rose 33% to $33.69 billion and came in above the $32.72 billion that analysts polled by FactSet expected.
The growth was broad-based across geographies, according to Finance Chief Niclas Neglén, with the U.S. accounting for just over one-fifth of total gross merchandise volumes during the period.
Klarna ended the quarter with about 119 million active customers, up about 20% from a year earlier. The company's merchant network also continued to expand, surging 49% from last year to about 1.08 million.
For its three months ended March 31, Klarna reported a profit of $1 million, compared with a loss of $99 million a year earlier. A quarterly loss of 1 cent a share wasn't as steep as the loss of 18 cents a share that analysts had expected.
Revenue jumped 44% to $1.01 billion and came in above Wall Street models for $944.1 million.
For the current quarter, Klarna guided for revenue of $960 million to $1 billion and gross merchandise volume of $35.5 billion to $36.5 billion, both of which came in below analyst views. The outlooks reflect normal seasonality and foreign-exchange normalization, Neglén said.
Despite the soft second-quarter forecast, Klarna reaffirmed its outlook for the year, targeting gross merchandise volume greater than $155 billion.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
May 14, 2026 10:47 ET (14:47 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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