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Why Klarna Stock Crashed 22% on Tuesday Morning

The Motley Fool · 2d ago

Key Points

  • Klarna reported earnings of $0.01 per share on $1.04 billion of revenue, beating analyst estimates on both counts.

  • Management cut full-year revenue guidance to roughly $4.12 billion, well below the $4.42 billion analysts expected.

  • Klarna also announced that its CFO and CMO will step down in early 2027.

Klarna (NYSE: KLAR) is Swedish for "clear up" or "sort it out." The name feels ironic today, with the stock down 21.9% as of 10 a.m. ET, despite a strong Q2 report. Aren't headline surprises supposed to lift stocks?

Q2 2026 was the easy part

That wasn't a typo. The Stockholm-based fintech crushed Wall Street's estimates in the second quarter of 2026. The average analyst expected a net loss of $0.05 per share on revenues near $993 million. The company reported positive earnings of $0.01 per share and $1.04 billion of top-line revenues. That's not even a close call, and sales rose 27% year over year.

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The stock fell anyway, for at least two clear reasons.

  • Management offered full-year revenue guidance of $4.12 billion, give or take $40 million. The current analyst consensus points to $4.42 billion, and Klarna's earlier guidance was above $4.34 billion. Klarna pointed to currency-exchange headwinds and shifting consumer trends in the German market.
  • The earnings report wasn't Klarna's only news today. The company also announced transitions for its CFO and Chief Marketing Officer (CMO) roles. Six-year CFO Niclas Neglén and nine-year CMO David Sandström will remain in their roles into early 2027, but Klarna is looking for new talent in New York.

It's hard to say which item weighed more heavily on Klarna's stock today. Weak guidance and executive turnover make a tough single-day combo.

An investor shrugs over stock charts on several computer screens.

Image source: Getty Images.

Down 47% and still hard to read

After today's drop, the "buy now, pay later" specialist's stock is down 47% year to date. The company is growing rapidly while forming partnerships with OpenAI, where its AI shopping app now lives inside ChatGPT, and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), which is bringing Klarna's payment options to Google Search and the Gemini app. However, investors aren't sure what to make of its cloudy financial picture.

Klarna is clearing up its profit problem and creating a credibility issue instead. Beating a quarter is easy to celebrate; cutting the year is harder to explain away, especially while the CFO and CMO are packing their bags. I wish Klarna would live up to its clear-eyed name.

Anders Bylund has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Klarna Group. The Motley Fool has a disclosure policy.