Klarna's Annual Report: A Deep Dive into Growth and Losses

Klarna's audited 2025 financials reveal record $3.5B revenue but a $294M net loss, as shares fall 48% YTD and analysts slash targets.

Today marks a critical moment for investors in Klarna, as the Swedish fintech giant releases its full, audited annual financial statements. Following a significant share price decline after its fourth-quarter results, the market's focus shifts from headlines to the underlying details. The central question remains: how does the company reconcile record revenue with expanding losses?

The Significance of the Audited Figures

Scheduled for release on February 26, as indicated in Klarna's Q4 update from February 19, this comprehensive report is anticipated to provide far more than the preliminary key figures. Stakeholders expect to see certified balance sheet data, detailed risk disclosures, and a more granular breakdown of performance across business segments.

The provisional numbers for 2025 showed revenue of $3.509 billion, a notable increase from the $2.811 billion reported for 2024. Concurrently, the company's total assets grew to $18.797 billion by the end of 2025, up from $13.804 billion at the close of 2024. The audited report will allow for a closer examination of this balance sheet expansion.

Market Pressure and Analyst Revisions

The current trading environment reflects sustained investor concern. Klarna's shares are trading at approximately €12.60, representing a decline of roughly 48% since the start of the year. This pressure was compounded by a series of analyst target price reductions following the Q4 guidance.

Notably, JP Morgan and UBS both lowered their price targets to $20 (down from $40 and $46, respectively). Other adjustments included Keefe, Bruyette & Woods cutting its target to $26 and Wells Fargo reducing its estimate to $32.

Dissecting the Q4 Performance and Annual Results

The root of recent market nervousness can be traced to the fourth quarter. While Klarna achieved a milestone by surpassing $1 billion in quarterly revenue for the first time, reaching $1.082 billion (a 38% year-over-year increase), its profitability reversed course. The quarter concluded with a net loss of $26 million, a stark contrast to the $40 million net profit recorded in the same period a year earlier.

For the full year 2025, the company reported a pre-tax loss of $241 million. The net loss attributable to shareholders was $294 million, or $0.79 per share. The market reaction was particularly severe because these figures suggested that robust top-line growth was not yet translating into a clear, sustainable path to profitability.

Forward Guidance Tempering Expectations

Adding to the disappointment was the company's outlook for the coming year. Klarna's guidance for 2026 includes a Gross Merchandise Volume (GMV) forecast of $155 billion, a Q1 revenue projection between $900 million and $980 million, and an adjusted operating margin target of 6.9% for the full year. Multiple market reports highlighted that the GMV guidance, in particular, fell below expectations, signaling a potential deceleration in growth momentum.

What Investors Seek in Today's Report

The importance of today's annual filing lies in its potential to provide two key elements. First, it will confirm whether the audited figures align with the previously released preliminary data. Second, and more crucially, it should offer greater transparency regarding the risks and the quality of earnings underpinning the company's growth.

Operational metrics from the Q4 release remain strong, including 118 million active consumers, 966,000 merchants, and quarterly GMV growth of 32%. The persistent challenge has been converting these metrics consistently into bottom-line profits.

Specifically, analysts will scrutinize the report for additional details on the drivers behind the losses, the adequacy of risk provisions, and segment-level performance. Furthermore, any commentary from management will be closely read for a plausible explanation of the 2026 outlook that recently disappointed the market.