Fintech company Klarna lowered its revenue forecast and saw its market capitalization drop by 20%

Swedish payment company Klarna, the leading European BNPL (buy now, pay later) fintech firm, has revised its revenue forecast for the current year. It attributed the downward revision to currency fluctuations and a slowdown in consumer activity in Germany—its largest market by volume. The company believes that weak demand there will persist through the end of the year. Following this announcement, Klarna’s stock plummeted by 20%.

Klarna now expects its revenue this year to range from $4.08 billion to $4.16 billion, whereas it had previously projected approximately $4.3 billion.

At the same time, the company’s second-quarter results exceeded market expectations, though they failed to convince investors. Net income totaled $9 million, compared with a net loss of $53 million in the same period last year. Analysts surveyed by Bloomberg had again expected a loss—of $18 million. Revenue increased by approximately 27% to $1.04 billion, which also beat Wall Street estimates, the agency reports.

Average revenue per active user rose by 24%, a trend the company attributed to the popularity of recurring and frequently used products, such as subscriptions. Customer engagement helped increase so-called transaction margin—which Klarna defines as revenue minus total transaction costs—by 42%.

The company also announced that its CFO, Niklas Neglen, will step down early next year, and the search is now underway for his successor, who will be based in New York. It is important for Klarna to have a stronger presence in the U.S. market; it continues to expand its business there and, in July, applied for a banking license in the U.S.

The payment company went public on the New York Stock Exchange last fall, but its stock price has been under pressure ever since. The stock fell by about 50% after the IPO, although it has been on an upward trend since March.

15 of the 25 Wall Street analysts who cover Klarna recommend buying its stock. The remaining ten are neutral.

This article was AI-translated and verified by a human editor