Swedish fintech company Klarna reported first-quarter profit and revenue that surpassed analysts' expectations, but its outlook for the coming months fell short of forecasts, sending shares lower in early trading.
Financial Highlights
The buy-now-pay-later lender posted adjusted operating profit of 1.2 billion Swedish crowns ($115 million) for the quarter ended March 31, compared with a loss of 1.4 billion crowns a year earlier. Revenue rose 27% to 6.5 billion crowns, beating the average analyst estimate of 6.3 billion crowns.
Klarna's gross merchandise volume (GMV), the total value of transactions processed on its platform, increased 22% to 241 billion crowns, driven by strong growth in the United States and Germany.
Outlook Misses
However, the company's guidance for the second quarter disappointed investors. Klarna forecast revenue growth of 18-22% year-over-year, below the 24% expected by analysts. The company cited cautious consumer spending and increased competition in the buy-now-pay-later market.
"While we are pleased with our first-quarter performance, we are taking a prudent view on the near-term environment," said CEO Sebastian Siemiatkowski in a statement. "Consumer sentiment remains uncertain, and we are focusing on maintaining profitability while investing for long-term growth."
Market Reaction
Shares of Klarna, which listed on the New York Stock Exchange in March, fell 4% in pre-market trading following the earnings release. The stock had gained 35% since its initial public offering, giving the company a market capitalization of approximately $35 billion.
Analysts noted that while the quarterly results were strong, the softer outlook raised concerns about the pace of growth in the competitive payments sector. "Klarna is executing well, but the guidance suggests headwinds ahead," said Sandeep Rao, an analyst at Kepler Cheuvreux.
Strategic Initiatives
Klarna has been expanding its credit card and banking services to reduce reliance on transaction fees. The company also announced a partnership with Visa to offer installment payments directly through Visa cards in Europe.
Despite the cautious outlook, Klarna maintained its full-year guidance for double-digit revenue growth and continued improvement in profitability.
