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Klarna Beats Earnings Expectations But Shares Tumble Nearly 10%

MarketDash Editorial Team
20 days ago
Klarna Group delivered what it called record-breaking third-quarter results, beating both earnings and revenue estimates while raising guidance. Yet investors sent shares down almost 10% as profitability concerns overshadowed the growth story.

Klarna Group PLC (KLAR) reported third-quarter earnings Tuesday morning that looked pretty solid on paper. The buy-now-pay-later giant beat on both the top and bottom lines, raised guidance, and touted what CEO Sebastian Siemiatkowski called the company's "strongest quarter ever." So naturally, the stock got hammered.

The Numbers Tell a Growth Story

Klarna posted a quarterly loss of 25 cents per share, comfortably beating the Street's expectation for a 33-cent loss. Revenue came in at $903 million, ahead of the $881.9 million estimate. The company also delivered what it called "record-breaking" performance, adding 4 million card sign-ups over the past four months.

For the current quarter, Klarna guided revenue between $1.065 billion and $1.08 billion, topping the $1.058 billion consensus. U.S. revenue surged 51% while gross merchandise volume climbed 43%, evidence that the company's AI-driven approach is gaining serious traction.

So Why the Selloff?

"While accounting timing creates a short-term profitability lag, we expect transaction margin dollars to increase by over $100 million in Q4 as revenue compounds," Siemiatkowski explained. Translation: the path to profitability involves some timing mismatches that make the near-term picture look messier than the underlying business fundamentals.

The company also announced Tuesday that its flexible payment products are now available through Apple Pay in Denmark, Spain and Sweden, expanding on existing availability in the U.K., U.S. and Canada.

At last check, Klarna shares were trading down 9.42% at $31.70, proving once again that in growth stocks, expectations matter as much as results.

Back to News

Klarna Beats Earnings Expectations But Shares Tumble Nearly 10%

MarketDash Editorial Team
20 days ago
Klarna Group delivered what it called record-breaking third-quarter results, beating both earnings and revenue estimates while raising guidance. Yet investors sent shares down almost 10% as profitability concerns overshadowed the growth story.

Klarna Group PLC (KLAR) reported third-quarter earnings Tuesday morning that looked pretty solid on paper. The buy-now-pay-later giant beat on both the top and bottom lines, raised guidance, and touted what CEO Sebastian Siemiatkowski called the company's "strongest quarter ever." So naturally, the stock got hammered.

The Numbers Tell a Growth Story

Klarna posted a quarterly loss of 25 cents per share, comfortably beating the Street's expectation for a 33-cent loss. Revenue came in at $903 million, ahead of the $881.9 million estimate. The company also delivered what it called "record-breaking" performance, adding 4 million card sign-ups over the past four months.

For the current quarter, Klarna guided revenue between $1.065 billion and $1.08 billion, topping the $1.058 billion consensus. U.S. revenue surged 51% while gross merchandise volume climbed 43%, evidence that the company's AI-driven approach is gaining serious traction.

So Why the Selloff?

"While accounting timing creates a short-term profitability lag, we expect transaction margin dollars to increase by over $100 million in Q4 as revenue compounds," Siemiatkowski explained. Translation: the path to profitability involves some timing mismatches that make the near-term picture look messier than the underlying business fundamentals.

The company also announced Tuesday that its flexible payment products are now available through Apple Pay in Denmark, Spain and Sweden, expanding on existing availability in the U.K., U.S. and Canada.

At last check, Klarna shares were trading down 9.42% at $31.70, proving once again that in growth stocks, expectations matter as much as results.