Klarna Group (NYSE:KLAR) reported another strong quarterly performance on Tuesday, topping Wall Street revenue forecasts and offering an outlook that came in ahead of consensus estimates. Shares fluctuated between modest gains and losses following the update.
The Stockholm-based payments and lending firm posted third-quarter revenue of $903 million, rising 26% on a like-for-like basis and surpassing analyst expectations of $885.59 million.
Gross merchandise volume (GMV) also showed solid momentum, climbing 23% year over year to $32.7 billion, with U.S. GMV jumping 43% as Klarna continues to expand in its fastest-growing market.
The company also underscored the swift adoption of the Klarna Card, which has seen more than 4 million sign-ups since July and represented 15% of global transactions in October.
“Q3 was our strongest quarter ever — proof that our AI-driven model is working at scale, with U.S. revenue up 51% and GMV up 43%,” said CEO and co-founder Sebastian Siemiatkowski.
“The Klarna Card has taken off with four million sign-ups in four months, and Fair Financing continues to gain market share. 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.”
Looking ahead, Klarna guided for an even more robust fourth quarter. The company expects Q4 GMV between $37.5 billion and $38.5 billion, above the consensus estimate of $37.3 billion, and revenue of $1.065–$1.080 billion, also ahead of forecasts.
Klarna sees transaction margin dollars (TMD) coming in between $390 million and $400 million, slightly above the average analyst expectation of $387 million, according to Wolfe Research.
Wolfe analysts said Klarna delivered a “3Q beat across metrics and 4Q guidance above expectations,” adding that they will be watching management’s commentary on Q4 drivers, Klarna Card momentum, funding strategy, take-rate trends, and margin plans.