Klarna Crossed the $1 Billion Revenue Line and Nearly Broke Even — But Can a Stock Down 50% From Its IPO Sustain the Rally?

Shares surged 9% to $22.06 as investors digested a first quarter that flipped the script on Klarna's post-IPO slide. Revenue hit $1.012 billion — up 44% year-over-year — while gross merchandise volume (the total value of purchases made through its platform) reached $33.7 billion, a 33% jump. The results crushed Wall Street forecasts, yet the stock still trades roughly half its $40 IPO price from September 2025, posing a sharp question: is this a turnaround or a dead-cat bounce?

• A $100 Million Profit Swing Shows the Business Model Is Starting to Work

Net income turned positive at $1 million — a $100 million improvement from the prior year — with adjusted operating profit at $68 million versus just $3 million a year ago.

Operating expenses grew only 3% while revenue and transaction profits both rose 44%. That gap — fast-growing revenue with nearly flat costs — is exactly the kind of operating leverage investors in money-losing fintechs dream about.

• The U.S. Is Becoming Klarna's Growth Engine

U.S. GMV grew 39%, outpacing international growth of 31%.

Active consumers climbed 21% to 119 million, and the merchant network expanded 49% to over one million partners.

The Klarna Card surpassed 5 million active users globally , deepening engagement beyond one-time checkout purchases — a crucial step toward earning recurring revenue per customer.

• Next Quarter's Guidance Took Some Air Out of the Balloon

Klarna projected Q2 revenue of $960 million to $1 billion, missing the $1.05 billion analysts had expected.

Transaction costs climbed 45% year-over-year , a reminder that lending more money to more people costs money too. Management reiterated full-year targets including GMV above $155 billion and adjusted operating profit margins above 6.9% , but the softer near-term outlook could cap the stock's upside until Q2 proves otherwise.

• The Valuation Debate Is Far From Settled

The consensus among 20 analysts is a "Buy" rating with a $23.26 average price target — only about 5% above today's price. The bear case centers on Klarna still being loss-making on a reported per-share basis , while bulls argue Q1 shows operating leverage "inflecting positively" and that the stock has been oversold relative to its growth. At roughly $22, investors are betting profits will materialize — but not betting much.