Klarna Group Plc (NYSE:KLAR) shares traded higher Thursday after the buy now, pay later company reported first-quarter results that topped Wall Street estimates, driven by strong consumer and merchant growth across its global payments network.
Revenue rose 44% year over year to $1 billion, ahead of the analyst consensus estimate of $945.1 million. Gross merchandise value climbed 33% to $33.7 billion, supported by 39% growth in the U.S. and 31% growth outside the U.S.
Klarna Profitability And Margins Improve
Adjusted operating profit improved to $68 million from $3 million a year earlier, while net income swung to a profit of $1 million from a loss of $99 million in the prior-year quarter.
Transaction margin dollars increased 44% year over year to $389 million, while the transaction margin reached 38.4%, reflecting stronger monetization and operating leverage.
Klarna processed $623 million in transaction costs during the quarter, up 45% from a year earlier, driven by continued expansion of its Fair Financing and card products.
Consumer And Merchant Network Expands
The company ended the quarter with 119 million active consumers, up 21% year over year, and more than 1 million merchants, representing 49% annual growth.
"Klarna addresses the entire consumer wallet: Pay Now for everyday spending and saving, Pay Later our charge card equivalent at 0% interest for mid-size ticket spending, and POS installments (Fair Financing) for big-ticket purchases. In Q1 we executed well across all the business, driving every line of our P&L and compounding growth across our global network. Growing network. Same three products. Deeper consumer engagement," said Sebastian Siemiatkowski, CEO and co-founder of Klarna.
Outlook Signals Continued GMV Expansion
Klarna reaffirmed its full-year 2026 outlook, projecting GMV above $155 billion while continuing to focus on transaction margin dollar growth and payment monetization expansion.
For the second quarter, the company forecast revenue between $960 million and $1 billion, below the analyst consensus estimate of $1.065 billion.
Klarna also projected GMV of $35.5 billion to $36.5 billion, transaction margin dollars of $375 million to $395 million, and adjusted operating profit between $30 million and $50 million.
Klarna Price Action
KLAR Price Action: Klarna shares were up 14.61% at $15.68 at the time of publication on Thursday, according to Benzinga Pro data.
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