Klarna Shares Plummet After Missing Q4 Earnings Expectations
Klarna Group PLC experienced a significant drop in share value, falling nearly 25% after its fourth-quarter earnings report revealed a larger-than-anticipated net loss. Despite achieving a milestone with its first billion-dollar quarter, the financial results did not meet Wall Street expectations.
Klarna’s Fourth Quarter Results
For Q4, the company reported a net loss of $26 million, equating to $0.19 per share. Analysts had forecasted a much smaller loss of $0.02 per share. This represents a stark contrast to the same period last year, when Klarna posted a profit of $40 million.
Revenue and Growth Metrics
Despite the loss, Klarna saw a 38% year-over-year increase in revenue, totaling $1.082 billion. This exceeded the analysts’ predictions of $1.07 billion. Key metrics included:
- Transaction and service revenue grew by 24%.
- U.S. revenue surged 58% year-over-year.
- Gross merchandise volume (GMV) rose 32% to $38.7 billion.
Consumer and Merchant Expansion
Klarna’s active user base grew significantly, with a 28% increase to 118 million consumers. Additionally, the merchant base expanded by 42%, reaching 966,000.
Future Outlook
The company also reported an adjusted operating profit of $47 million for the quarter. Klarna is investing in its subscription offerings, currently piloting 3.5 million subscriptions that are expected to enhance future revenues.
CEO Sebastian Siemiatkowski emphasized the growth trajectory in a letter to shareholders, highlighting the company’s ambition to become a global digital bank. He expressed confidence that consumers are increasingly looking for solutions that save time and money.
Investor Reactions
Despite the positive growth indicators, investors focused on the earnings miss and net loss, which contributed to the steep decline in Klarna’s share price following the earnings announcement.
