Klarna Pops 4.4% Before Earnings, But Can a Stock Down 64% From Its IPO Really Prove the Skeptics Wrong?

Shares shifted as Klarna (NYSE: KLAR) jumped +4.4% to $14.29 in pre-market trading on May 14, reversing a five-session slide ahead of its Q1 2026 earnings report due before the opening bell. The company will publish results before market open , with an earnings webcast at 8:30 a.m. ET . For a stock that debuted at $40 just eight months ago, today's report is less about one quarter and more about whether Klarna can convince investors its losses are shrinking fast enough to justify sticking around.

Wall Street Expects Nearly $1 Billion in Revenue — But Still a Loss

The consensus EPS estimate is -$0.13 and the consensus revenue estimate is $943.87M . That revenue figure would represent roughly flat growth from Q4's record $1.08 billion, though Q1 is seasonally lighter. The real test: last quarter delivered a -250% EPS surprise and the stock cratered -30.98% . Investors are bracing for a repeat of violent post-report moves.

The IPO-to-Now Collapse Tells the Real Story

Klarna priced its IPO at $40 in September 2025, jumped as much as 30% on day one, but has since declined more than 60% . A 25% plunge followed the 2025 full-year net loss of $0.79 per share , which blindsided investors who believed profitability was near. At $14.29, the company's market cap sits around $5.4 billion — a fraction of its $45 billion private peak in 2021.

Growth Metrics Are Strong, But Profits Haven't Followed

Full-year 2025 revenue hit $3.5 billion (+25% year-over-year) with adjusted operating profit of just $65 million — a razor-thin 1.9% margin . Revenue has doubled since Q4 2022 while operating expenses fell 8%, and revenue per employee tripled to $1.24 million after a 49% headcount cut — largely thanks to AI. Yet the platform is "just breaking even, starting to eke out a marginal operating profit" , per Morningstar.

New Partnerships Could Shift the Narrative — If Execution Follows

Klarna recently announced its flexible payment options will come to Google's Gemini app and Google Search via Google Pay . Combined with 118 million active users and 3.4 million daily transactions across 26 countries , the distribution is massive. Analysts project 2026 gross merchandise volume exceeding $155 billion and revenue around $4.34 billion . But until losses meaningfully narrow, growth alone won't rescue the stock. Today's report will either begin that proof — or extend the fall.