Klarna, the global digital bank and flexible payments provider, reported record results in its first quarter as a public company, surpassing analyst expectations. The company expects to exceed $1 billion in revenue in Q4 2025, its first billion-dollar quarter.
Sebastian Siemiatkowski, CEO & Co-Founder, said: “Q3 was our strongest quarter ever — proof that our AI-driven model is working at scale, with U.S. revenue up 51% and GMV up 43%. The Klarna Card has taken off with four million sign-ups in four months, and Fair Financing continues to gain market share. While accounting timing creates a short-term profitability lag, we expect transaction margin dollars to increase by over $100 million in Q4 as revenue compounds.”
Q3 Highlights:
. Revenue $903 million (+26% LfL, +28% reported) – a record high
. GMV $32.7 billion (+23% LfL, +43% U.S.)
. Klarna Card 4 million signups since July – accounting for 15% of global transactions in October
. 27 million new users and record 235,000 new merchants, reaching 850,000 in total
. Fair Financing +244% U.S. GMV – strong market share gains
Klarna Card — a global success
The debit-first Klarna Card has attracted four million signups since July, becoming one of our fastest-growing products globally. The card combines debit and credit in one product – transparent terms, no hidden fees, consumer control, proving Klarna’s vision of next generation banking resonates globally. By October, card transactions accounted for 15% of all Klarna transactions. Another one million consumers joined Klarna’s membership program for premium benefits without credit-card debt.
U.S. momentum accelerates
The U.S. led Klarna’s growth with GMV +43%, revenue +51%, and Klarna is now three times larger than the nearest competitor in Pay in 4 volume, and is uniquely positioned to scale Fair Financing profitably across its ecosystem.
Fair Financing — strategic investment in taking market share
U.S. Fair Financing GMV rose 244% YoY, offering transparent, fixed-term installments. Per standard accounting rules, provisions for credit losses are recognized upfront while revenue compounds over time creating an expected short-term profitability lag (provisions now, revenue later). Transaction margin dollars on a realized credit loss basis grew 25% in Q3 and we expect a ~$100 million uplift in Transaction Margins in Q4 as revenue compounds.
AI efficiency gains: Realised losses down, operational leverage up
„More consumers are paying on time or even early than ever before. Realized losses fell to 0.44% of GMV, evidence that our underwriting is working and improves with additional data. We have now underwritten half a trillion in volume over 20 years.” – the company explained.
Klarna continues to improve operational leverage through AI. Since 2022, revenue per employee has tripled, while operating expenses rose just 2%. Forward-flow agreements add $6.5B in capital-light capacity, with $1.2B receivables sales expected in Q4.
Outlook
Hot on the heels of a record Q3, Klarna expects an even stronger Q4. Outlook for Q4 2025: GMV $37.5–38.5B, Revenue $1.07B, TMD $390–400M.
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