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Klarna shares slumped by greater than 1 / 4 on Thursday after the purchase now, pay later group reported a $273mn internet loss for 2025 and elevated its provisions for loans it expects prospects shall be unable to repay.
The stock had already halved because the Swedish group secured a $15bn valuation in a New York listing in September. Thursday’s 27 per cent decline to $13.85 introduced the post-IPO slide to virtually 68 per cent and minimize its market worth to $5.3bn.
The firm mentioned that it had put aside $250mn for credit score losses within the fourth quarter — up virtually 60 per cent on the identical interval in 2024.
The improve in provisions was partly because of the progress of its “fair financing” product — a longer-term interest-bearing scheme that requires provisions to be booked upfront although revenues are generated all through the lifetime of the loan.
Klarna primarily gives interest-free shopper loans for retail purchases and gives a possibility to pay in a number of instalments.
It has been making an attempt to pivot away from its purchase now, pay later companies in direction of becoming a neobank that gives merchandise together with debit playing cards and interest-bearing loans.
The hovering provisions meant the group posted a internet quarterly lack of $26mn, in contrast with a internet revenue of $40mn in the identical interval a yr earlier.
The annual loss was additionally a reversal of the $21mn internet revenue for 2024.
The loss overshadowed elevated revenues of virtually $1.1bn for the final three months of 2025, up 38 per cent from the identical interval a yr earlier.
Klarna’s chief government and co-founder Sebastian Siemiatkowski mentioned on an analyst name that the rise in provisions was a consequence of his firm’s push to develop.
“The more we grow in these [fair financing loans] the more profit we’re generating for the future. So the real question is simply: Do we want to make more money, even if it means slightly less today, to make significantly more tomorrow?”
Despite hovering provisions, Niclas Neglén, Klarna’s chief monetary officer, mentioned customers weren’t in a extra precarious state. “From a credit perspective, what we’re seeing is actually stability, not a deterioration. Provision for credit losses actually declined in Q4 versus Q3,” he mentioned.
The firm mentioned it now had 4.2mn energetic customers of its debit card and the FT beforehand reported that the corporate was contemplating making use of for a US banking licence.
Siemiatkowski mentioned: “We’ve been executing on a clear plan: acquire customers through seamless payments, then deepen those relationships into banking.”
The firm now has 118mn energetic customers, a 28 per cent improve on final yr. Klarna makes about $107 in annual income per banking buyer, in contrast with $30 for its common shopper.
Klarna has been vocal about utilizing AI expertise to maintain a lid on costs. Siemiatkowski has claimed that the expertise has allowed Klarna to halve its workforce in recent times by not changing employees who go away. An AI chatbot handles two-thirds of customer support inquiries.
Siemiatkowski has been a champion of AI and personally invested in corporations together with OpenAI and xAI via his household workplace at Flat Capital.
Klarna is because of publish its full annual outcomes on February 26.
