Klarna Stock Drops 20% After Company Beats on Profit But Cuts Full-Year Guidance on German Weakness

Klarna beat Wall Street on almost every number that mattered Tuesday. The stock still got hammered.

Shares of the Swedish buy-now-pay-later firm fell as much as 20% in early trading before paring the loss to around 14-19%, according to Yahoo Finance and Stocktwits. The stock posted its biggest single-day drop in roughly six months, per Stocktwits.

Klarna reported second-quarter revenue of $1.04 billion, up 27% year-over-year and above the S&P Global Market Intelligence consensus of $996 million, according to Yahoo Finance. Adjusted earnings came in at 1 cent per share, beating estimates for a 6-cent loss. Transaction margin dollars, which CEO Sebastian Siemiatkowski called the company's most important metric on the earnings call, jumped 42% to $446 million, according to BigGo Finance. Net income turned positive at $9 million, up from a loss a year earlier.

Investors didn't care. They cared about guidance.

Germany drags down the outlook

Klarna cut its full-year 2026 gross merchandise volume forecast to $149 billion-$151 billion, down from a prior outlook of more than $155 billion. Full-year revenue guidance dropped to $4.08 billion-$4.16 billion, well below the previous forecast of more than $4.34 billion, according to multiple sources including Yahoo Finance, Stocktwits and Moneycheck. That new range also lands far short of the $4.42 billion analyst consensus cited by Moneycheck.

Klarna's own CFO put the blame squarely on one country. "Our guidance simply assumes Germany stays softer rather than recovering," CFO Niclas Neglén said, according to Yahoo Finance. Germany is Klarna's largest market by volume, and the company said German retail sales grew less than 1% in real terms during the first half of the year, per Stocktwits and TradingView.

Currency swings made the math worse. Klarna said roughly $600 million of the guidance reduction came from currency movements affecting volumes across Europe and the U.K., according to TradingView and Stocktwits reporting.

Weakness is concentrated in "certain discretionary retail categories" in Europe, per TradingView, which lines up with broader concern about consumer spending pressure in Germany's economy. A German consumer pulling back on discretionary purchases hits Klarna's core lending volume directly, regardless of how well the U.S. business performs.

Two executives are heading for the exit

Klarna also confirmed CFO Niclas Neglén, who has held the role for six years, and CMO David Sandström, who has led marketing for nine years, are both departing. Both will stay on through early 2027 to manage the transition, according to Moneycheck and BigGo Finance. Klarna said it's searching for a New York-based CFO; no successor has been named for the marketing role.

Executive turnover during a guidance cut is the kind of thing that makes investors nervous even when a company insists it's a planned transition. Klarna has offered no indication the departures are tied to the German slowdown, and nothing in the earnings call transcript suggests otherwise.

The U.S. business is the bright spot

While Europe drags, Klarna's U.S. operations are accelerating. U.S. revenue rose 37% to $376 million, and transaction margin dollars in the U.S. surged 126% to $88 million, according to BigGo Finance. That growth is being driven by Fair Financing, a longer-term loan product, which grew 82% to $4.7 billion in gross merchandise volume and now makes up 13% of Klarna's total volume.

Klarna also raised its full-year transaction margin dollar outlook to $1.62 billion-$1.65 billion, up from prior guidance, and lifted its adjusted operating income projection to $280 million-$300 million, above the $161 million analyst estimate cited by Moneycheck.

Klarna said the share of customers more than 30 days delinquent on loans fell more than 20 basis points quarter-over-quarter, according to Yahoo Finance. For a lender whose customer base skews toward lower-income, more credit-exposed consumers, that's a modest sign credit quality isn't deteriorating even as spending slows.

Where coverage diverges

Crypto Briefing's account of this earnings report describes fourth-quarter 2025 results, a $26 million net loss, an IPO price of $40 with shares "trading around $19.50" mid-August, and a stock that has "lost more than half its value" since the September 2025 IPO. That doesn't match the second-quarter 2026 numbers reported by Yahoo Finance, Moneycheck, BigGo Finance and Stocktwits, which show a $9 million profit, EPS of 1 cent, and a stock price around $15.87 before Tuesday's drop, down roughly 45% year-to-date per TradingView. Readers should treat the Q2 2026 figures, confirmed across five separate sources, as the accurate current picture.

What comes next

Klarna's stock was trading around $15.87 as of 11:00 a.m. ET Tuesday, down nearly 19% on the session, according to Yahoo Finance's AlphaSpace data. Rival Affirm Holdings also fell in sympathy, per Yahoo Finance's Investor's Business Daily coverage. The open question is whether Klarna's bet on U.S. growth, Fair Financing, and higher-margin products can outrun a German consumer that management itself says isn't expected to recover this year.