Klarna Group (NYSE;KLAR), the London-based fintech giant, reached a significant commercial landmark in the fourth quarter by delivering its first billion-dollar revenue period.
However, the achievement was overshadowed by a larger-than-expected net loss that sent shares tumbling more than 20% on Thursday.
The "buy now, pay later" pioneer reported a net loss of $47 million, or 12 cents per share, for the quarter ending December 31.
The result was significantly wider than the 3-cent loss anticipated by analysts.
The bottom line was pressured by a spike in credit loss provisions as the company rapidly expanded its loan originations in the U.S. and increased marketing spend ahead of its upcoming March lock-up expiry.
Revenue for the period surged 38% to $1.08 billion, surpassing the $1.07 billion projected by Wall Street.
The top-line growth was fueled by a 58% jump in U.S. revenue and a doubling of its banking consumers to 15.8 million.
For the full year 2025, Klarna reported a net loss of $294 million on record revenue of $3.51 billion.
Looking ahead, Klarna issued a cautious outlook for the first quarter of 2026, projecting revenue between $900 million and $980 million as it navigates a cooling consumer spending environment.