Klarna cuts revenue target as it forecasts softer European volumes
Klarna has downgraded its revenue target for the year following unfavourable currency shifts and reduced activity from softer European volumes.
The Swedish fintech unicorn said it expects to make between $4.08bn and $4.16bn for the current financial year, down from its previous forecast of over $4.34bn (£3.21bn).
This came alongside a reduction in predicted gross merchandise volume (GMV) – which measures the total sales value of everything sold on a platform before any fees or costs are taken out – to $149bn from $151bn. Previously the firm was expecting GMV in excess of $155bn.
“We have taken a more measured view of European volumes in the second half… and pronounced in certain discretionary retail categories,” Klarna said.
The company’s stock was down nearly 19 per cent in early trading to below $16.
Klarna pointed to growth of less than one per cent in German retail sales, which is the firm’s largest market by volume. The fintech said it had forecast for the country to remain “soft through the second half rather than recovering”.
The UK is Klarna’s third-largest market globally, where it hosts over 11m active customers and partners with some 60,000 retailers.
The group said around $600m of the GMV hit was also pegged to “currency movement” which had effected “European volumes as well as other markets including the UK”.
Despite this, Klarna modestly upgraded its transaction margin dollars, which measures how much real cash the firm retains from activity. The target was upgraded from $1.61bn to between $1.62bn and $1.65bn after a boost in income streams that require less transaction costs.
Klarna picks up momentum
Klarna managed to deliver another profit in the second-quarter after returning to the black in the first three months of the year. The firm posted a $27m profit, which also marked a swing from a $46m loss in the same period in 2025.
It marks the second quarterly profit since the group’s bruising IPO last September. Its stock remains down over 50 per cent since the public float.
Revenue surpassed $1bn for the third consecutive quarter as GMV jumped 18 per cent year-on-year to $36.6bn.
The amount of active consumers using the firm swelled to 120m, sealing annual growth of eight per cent. Meanwhile memberships increased eight-fold with the group now counting 2m paying subscribers.
This led to subscription revenue rocketing 600 per cent in a major boost to the group’s transaction margins, with the income stream not carrying transaction or credit loss costs.
In July, Klarna lodged a bid for a US banking licence. The firm said the application would help it serve the 30m US consumers in its network “across their everyday spending, saving and payments, with better quality and a lower cost to serve”.