Klarna stock plunges 20% on lowered guidance amid retail slowdown

Klarna’s stock cratered after the Swedish fintech posted fourth-quarter results that managed to be simultaneously record-breaking and deeply disappointing. Revenue hit $1.08 billion for the quarter, up 38% year over year and slightly above consensus. The stock dropped anyway, falling roughly 23-27% to an all-time low in the $13.80 to $14.53 range.

The culprit wasn’t the top line. It was everything underneath it: a $26 million net loss, credit provisions that ballooned 59% year over year, and forward guidance that landed below what Wall Street was expecting. For a company that IPO’d at $40 per share just months ago, the math is getting uncomfortable.

Record revenue, record anxiety

Klarna’s Q4 2025 numbers tell a story of a company growing fast into a headwind. Gross merchandise volume reached $38.7 billion, a 32% jump from the prior year.

The guidance for Q1 2026 made things worse. Klarna projected revenue of $900 million to $980 million, a range whose midpoint sits right around the consensus estimate of roughly $965 million. The full-year GMV target of $35.5 billion to $36.5 billion for 2026 also failed to inspire confidence.

Shares debuted at $45.82 on September 9, 2025, after pricing the IPO at $40. As of mid-August 2026, they were trading around $19.50, meaning the stock has shed more than half its value since going public.

Germany’s retail slump adds pressure

Part of what’s weighing on Klarna is geographic. Germany is one of the company’s most important markets, and German retail sales fell 0.6% month over month in February 2026.

Klarna’s 59% increase in credit provisions reflects that tension. More people want to split payments. More of those people are also struggling to make those payments on time.

The BNPL sector’s credibility test

Analysts have generally maintained positive outlooks on Klarna, pointing to strategic partnerships as potential catalysts. A collaboration with Apple has been cited as one avenue for expanding the company’s reach and embedding its payment infrastructure more deeply into consumer habits.

The company’s full-year GMV target of $35.5 billion to $36.5 billion implies management expects transaction volumes to moderate from the 32% growth rate posted in Q4.

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