Klarna Shares Drop on Rising Costs

Klarna reported a quarterly net loss as rapid expansion drove up operating costs, prompting a sharp decline in its share price.

The company posted a net loss of $26 million for the fourth quarter, compared to a profit in the same period a year earlier. Despite this, revenue surpassed $1 billion for the first time, reflecting strong growth in its services.

Higher processing and funding expenses contributed to weaker-than-expected results, while the outlook for 2026 fell short of investor expectations.

Klarna’s leadership noted that upfront investments tied to growth are expected to yield returns over time as operations mature.

The fintech firm has also increased its use of artificial intelligence to streamline processes, allowing workforce reductions while boosting average employee compensation.