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💡 Main takeaway:
Key takeaways
- Klarna shares fell on Tuesday after buy now, and the company later reported revenue and user numbers that beat analyst estimates but posted a wider-than-expected adjusted operating loss.
- The company plans to sell up to $6.5 billion in loans and recently unveiled a new membership program.
For buy now, pay later for Klarna, the post-IPO honeymoon may be over.
Klarna’s first results since going public in September were better than analysts expected, and its forecast for the current quarter also beat estimates. However, Klarna (KLAR) shares fell 9% on Tuesday as the Swedish company reported an adjusted operating loss of $14 million, compared to the $11.3 million loss analysts had expected.
Klarna reported a third-quarter net loss of $0.25 per share on revenue of $903 million, both better than the analyst consensus compiled by Visible Alpha. Gross merchandise value (GMV), or the total amount of products purchased using Klarna services, exceeded estimates of $32.7 billion, as did the number of active users of 114 million.
Furthermore, Klarna guided for Q4 revenue of $1.065 billion to $1.080 billion and TSR of $37.5 billion to $38.5 billion, both better than analyst estimates.
Why is this important?
Klarna’s post-IPO results highlight how buy now, pay later is moving beyond niche offerings to a mainstream way to pay for everyday items such as groceries and ready meals. Klarna’s mixed post-IPO performance reflects the challenges of scaling BNPL services while investing in US expansion and banking products. Investors are watching closely as the company looks to balance growth and profitability.
Klarna shares have lost about 30% of their value since the IPO. Despite the losses, analysts remained optimistic about Klarna stock.
The company continues to encourage users to subscribe to its versions of traditional banking products. Klarna unveiled details of its American Membership program last month, which it sees as an alternative to premium credit cards such as the Chase Sapphire Reserve and American Express Platinum. Some members will get access to subscriptions and cash back among other perks, Klarna said.
Also on Tuesday, Klarna said it would sell up to $6.5 billion of loans in its equitable financing portfolio to funds managed by Elliott Investment Management over two years. “This is another major step in our growth journey in the US,” said Niklas Neglin, Klarna’s CFO.
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