Klarna grew transaction margin dollars 42% in the second quarter of 2026, more than twice as fast as the 18% rise in the volume it processed, the company reported on August 18, 2026. The Swedish bank, which runs a pay later and installment payments network and has been listed in New York since 2025, steers the business by that metric: revenue minus the direct costs of processing, credit risk and funding.
In the same release, Klarna cut its full-year volume guidance, citing soft consumer spending in Germany, and raised its transaction margin guidance.
Margin outpaces revenue, and revenue outpaces volume
“The important point is the order: transaction margin dollars grew faster than revenue, and revenue faster than volume,” the company wrote. Each dollar processed now earns more than it did a year ago. Operating expenses outside transaction costs rose 16%, well below all three growth rates. Reported operating income turned positive at $27 million, and earnings per share went from a loss of $0.14 to a profit of $0.01.
| Metric | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| Gross merchandise volume (GMV) | $31.2B | $36.6B | +18% |
| Total revenue | $823M | $1,042M | +27% |
| Revenue take rate | 2.64% | 2.84% | +20 basis points |
| Transaction margin dollars | $315M | $446M | +42% |
| Provisions for credit losses | 0.56% of GMV | 0.52% of GMV | -4 basis points |
| Adjusted operating income | $29M | $91M | +$62M |
| Net income | -$53M | $9M | +$62M |
Fair Financing grows 82% but Pay Later still dominates
Klarna splits its offering into three products by ticket size and repayment term. Pay Later, which the company describes as a charge-card equivalent, accounts for 77% of GMV and grew 13%. Pay in Full, aimed at everyday spending, contributed $3.6 billion, or 10% of volume. Point-of-sale installment loans, sold as Fair Financing, reached $4.7 billion, up 82%, for 13% of volume.
The category mix is shifting too. Events and services rose to 14% of GMV from 9%, and home and electronics to 20% from 18%, while apparel and accessories fell to 34% from 41%. Average revenue per active consumer reached $33.7, up 24%, across 120 million active consumers. Adjusted operating income for the first half came to $159 million, compared with $65 million for all of 2025.
Payment processors now drive merchant growth
Klarna had 1.208 million merchants at the end of the quarter, up 54% from a year earlier and up 133,000 from the first quarter. That growth comes less from direct sales than from large payment service providers switching Klarna on by default in their menus of payment methods. J.P. Morgan Payments, which Klarna calls the largest US merchant acquirer with $2.6 trillion in annual payments, went live on August 6, 2026. Stripe and Nexi are already live, and Adyen, Fiserv’s Clover, Worldline and Worldpay are expected to follow ahead of the peak holiday season.
Germany drags down the volume forecast
Klarna now expects full-year GMV of $149 billion to $151 billion, down from more than $155 billion. It gave two reasons. About $600 million of the cut reflects currency movements since its May guidance. The rest comes from a more cautious view of European volumes in the second half, above all in Germany, its largest market by volume. German retail sales grew less than 1% in real terms in the first half, and the new guidance assumes Germany stays soft rather than recovering.
| Metric | May guidance | Revised guidance |
|---|---|---|
| Gross merchandise volume | > $155B | $149B to $151B |
| Revenue | > $4.34B | $4.08B to $4.16B |
| Transaction margin dollars | > $1.61B | $1.62B to $1.65B |
| Adjusted operating income | > $299M | $280M to $300M |
An accounting change clouds the revenue line. From the second half of 2026, new US and German Fair Financing loans will be held at fair value through profit or loss. That lowers both reported revenue and reported transaction costs by about 10 basis points of GMV. The reported take rate therefore drops to 2.74% to 2.75%, while on a comparable basis it rises to 2.84% to 2.85%, above the 2.80% Klarna guided to in May.
A short-duration loan book funded mostly by deposits
Klarna’s credit model rests on small, short loans that turn over quickly. The average consumer balance is $124, with an average duration of about 40 days, and the book turns over roughly 10 times a year. Since inception, the company says it has underwritten more than $700 billion in transactions, with provisions for credit losses of around 0.6%. As of June 30, 2026, customer deposits stood at $11.7 billion and made up 88% of its funding.
An investment quarter before the holidays
Klarna calls the third quarter an investment period. It guides to GMV of $35 billion to $36 billion, revenue of $940 million to $980 million, and adjusted operating income of just $5 million to $15 million. Marketing spend lands ahead of the volume it is meant to generate, and share-based compensation peaks for the year. The company expects the fourth quarter, which includes the holiday season, to be its strongest for transaction margin in 2026.