Klarna reports Q4 revenue up 38% YoY to $1.08B, a $26M net loss, down from a $40M net profit in Q4 2024, provision for credit losses up 59%; KLAR drops 26.9%
Financial TimesLaith Al-Khalaf
Context & Ripple Effects
Klarna's post-IPO reporting arc has paired rapid top-line expansion with uneven earnings: its first post-IPO Q3 report showed a $95 million loss despite revenue beating expectations. The latest quarter extends that tension, with revenue growth accelerating while profitability reverses and credit-loss provisioning rises.
The result also contrasts with Klarna's earlier recovery period, when its 2023 report showed declining credit losses alongside a sharply narrower annual loss. That makes the current increase in provisions a material signal for how investors assess the quality of growth.
First-order effects
KLAR's 26.9% decline immediately reprices Klarna around weaker earnings and higher expected credit costs, rather than revenue growth alone.
The 59% increase in credit-loss provisions directly offsets more of the benefit from Q4 revenue growth, contributing to the swing from profit a year earlier to a $26 million loss.
Second-order effects
Klarna faces greater pressure to show that expanding transaction and revenue volume can be sustained without a comparable rise in credit losses; subsequent quarterly disclosure will be scrutinized on that linkage.
For listed consumer-credit platforms, the reaction reinforces that markets can penalize growth when loss provisioning suggests a deteriorating risk-adjusted earnings profile.
Third-order effects
If this pattern persists, BNPL valuations will increasingly rest on demonstrable underwriting performance and durable profitability, not customer or revenue growth in isolation.
The episode points to a more mature BNPL market in which public-market accountability makes credit-cycle exposure a central strategic constraint.
The trend: BNPL is moving from a growth-led narrative toward investor assessment based on risk-adjusted profitability and credit-loss discipline.
At the same time, we continue to transform our cost structure through AI-enabled productivity. Since Q4 2022, revenue is up 104% while operating expenses declined 8% and headcount is down 49%. That's driven revenue per employee to $1.24 million, up 3.6 times since 2022.
Amazing a video like this is possible nowadays, without me spending virtually any time on it. Instead, I get more time working on Klarnas business and addressing things like the amazing feedback we collected here earlier. As well as spend even more time with customers!
What an exciting quarter! Q4 2025 marked our first $1B revenue quarter—proof that consumers want banking that works FOR them, not against them. The highlights🚀: - Banking customers up 101% to 15.8 million users - $1.082B revenue (+38% YoY) - $38.7B GMV (+32% YoY) - 4.2m active
We just announced our Q4 results, our first billion dollar revenue quarter. In Q4 we delivered. 👉Active consumers reached 118 million, up 28% year-over-year. 👉Merchants grew to 966 thousand, up 42% year-over-year. 👉GMV came in at $38.7 billion, above the top end of our
15.8 million consumers use our banking services. This group of consumers: ✅Use one of Klarna's financial services such as the card, Fair Financing, or savings. ✅Grew 101% year-over-year. ✅Generate $107 in revenue per user compared to $30 for the average Klarna customer.
‘The company said that it had set aside $250mn for credit losses in the fourth quarter — up almost 60 per cent on the same period in 2024.’ www.ft.com/content/dbe5...