Klarna reports second-quarter results before the U.S. market opens Tuesday, August 18, with investors looking beyond headline revenue growth to the cost of producing it.
The company has guided for revenue of $960 million to $1.00 billion, gross merchandise volume of $35.5 billion to $36.5 billion, transaction margin dollars of $375 million to $395 million and adjusted operating profit of $30 million to $50 million. Klarna will discuss the results on an earnings webcast at 8:30 a.m. ET.
Search interest in Klarna has been running at roughly twice its normal level ahead of the report. FinanceFeeds previewed Klarna’s setup on August 15, but Tuesday’s numbers put a different question at the center of the story: whether growth in Klarna’s expanding credit products is producing enough margin to compensate for the losses and provisions that come with it.
The Numbers Versus the Guide
As of Monday afternoon, Klarna had not released the Q2 actuals, leaving Tuesday’s print to be measured against the company’s $960 million-to-$1.00 billion revenue range.
For comparison, Klarna generated $1.012 billion of revenue in Q1, up 44% year over year, on $33.7 billion of GMV. Transaction margin dollars reached $389 million and adjusted operating profit was $68 million. The Q2 guidance therefore allows for higher sequential GMV while revenue and adjusted profit could come in below Q1 levels.
Transaction margin dollars will be particularly important because Klarna calculates the measure after processing and servicing costs, credit-loss provisions and funding costs. A revenue beat accompanied by weaker transaction margins would therefore carry a very different message from a beat driven by healthy economics.
Credit Losses and Provisioning — the Line That Matters
Klarna provisioned $186 million for credit losses in Q1, equivalent to 0.55% of GMV, compared with 0.54% a year earlier. Management said collections had been better than expected after the holiday season but warned that provisions would rise through Q2-Q4 because of normal seasonality, while saying underlying delinquency trends remained stable.
That makes the provision ratio one of Tuesday’s cleanest tests.
In Q2 2025, provisions represented 0.56% of GMV while realized losses were 0.45%. Klarna said at the time that global Pay Later delinquencies had fallen to 0.89% from 1.03% a year earlier, while Fair Financing delinquencies eased to 2.23% from 2.34%. Any deterioration needs to be judged against both those comparisons and management’s warning about seasonal provisioning.
The issue has become more important as Klarna pushes further into longer-duration Fair Financing. Javelin Strategy & Research analyst Brian Riley has pointed to credit quality, liquidity and lending standards as central tests for BNPL providers as they move closer to conventional financial services.
US Growth and Merchant Mix
The U.S. remains Klarna’s fastest-growing major market. Q1 U.S. GMV increased 39% to $7.1 billion while U.S. revenue rose 67%. Klarna had more than 1 million merchant partners, up 49% year over year, as integrations with Stripe and Nexi ramped and JPMorgan Payments and Worldpay prepared launches during 2026.
But the mix behind that growth matters.
Fair Financing GMV jumped 138% in Q1 and reached 12% of total GMV. At the same time, apparel and accessories declined to 33% of GMV from 39%, while Events & Services and Leisure gained share. Longer-term financing can lift revenue per transaction, but it also creates more funding and provisioning exposure than short-duration Pay Later transactions.
What the IPO and Listing Path Means Now
The listing itself is no longer an open question. Klarna completed its IPO last September after pricing shares at $40, with KLAR beginning trading on the New York Stock Exchange on September 10, 2025.
The question now is what the public market makes of the model. KLAR was trading around $19.38 Monday afternoon, down about 6.8% on the session and less than half its IPO price. That makes Tuesday’s credit metrics as much a test of post-IPO credibility as of quarterly growth.
What It Means for the BNPL Cohort
Affirm offers a useful, though not directly comparable, benchmark. Its latest reported quarter showed 30-plus-day delinquencies on monthly installment loans excluding Peloton and Pay in X at 2.8%, up 29 basis points year over year, while its allowance for credit losses stood at 6.0% of loans held for investment. Affirm said recent Pay in 4 vintages were still tracking to ultimate net charge-offs below 1% of GMV.
Different products and accounting make a straight Klarna-Affirm loss-rate comparison misleading. The broader question is simpler: can BNPL companies keep expanding credit without giving the growth back through provisions?
For Klarna, a revenue beat matters. Holding credit losses and transaction margins together while Fair Financing grows would matter more.
