Dive Brief:

• Klarna Group reduced its financial outlook for 2026 on Tuesday, with the buy now, pay later provider citing weaker consumer spending in Germany, its largest market by merchandise volume. Part of the pullback stems from a $600 million financial hit due to changes in currency exchange rates.
• Klarna now expects gross merchandise volume of between $149 billion and $151 billion this year, below its prior view of more than $155 billion, the company said in its second-quarter earnings report. The weakness in Germany is “particularly in the discretionary spend on the retail side, and that’s what we're playing out through the rest of the year,” CEO Sebastian Siemiatkowski said on a quarterly earnings call.
• Separately, Klarna announced that Chief Financial Officer Niclas Neglén will leave the company early next year, along with David Sandström, the chief marketing officer. The search for a new CFO is underway, according to a press release on the exits that didn’t mention a replacement process for the CMO. A Klarna spokesperson declined to comment Tuesday on why they are departing.

Dive Insight:

German retail sales grew less than 1% in the first half, while growth in the U.S. – Klarna’s fastest-growing large region – remains on track for expansion this year, Neglén told analysts. “Our guidance assumes Germany stays softer rather than recovering,” he said. The company pointed to softness in that country across the entire retail sector for the period.

As a market, Germany accounts for Klarna’s largest gross merchandise volume, while the U.S. is the largest by revenue, Siemiatkowski said.

Klarna’s third-quarter guidance is “below our estimate across the board” for revenue, gross merchandise volume, transaction margin dollars and adjusted operating profit, TD Cowen analysts Moshe Orenbuch and Hoang Nguyen wrote Tuesday in a client note describing their reaction to Klarna’s quarterly report. “Overall, we view the print as negative.”

Klarna said it has begun searching for a New York-based financial chief to take over in 2027, with Siemiatkowski describing the U.S. as a critical market. Klarna shares are traded on the New York Stock Exchange with a large portion of the analysts who cover the company based there. 

“Having a stronger presence in New York is important to us,” he said. “At the same time, we think it’s also helpful to be close to the investor relations community and the stock market.”

"It’s been an extraordinary six years and I'm deeply proud of what we have built together,” Neglén said in the press release. In terms of Neglen’s departure, Siemiatkowski said that the CFO “told me with plenty of runway, and I respect that.”

Last month, Klarna applied with Utah regulators to become an industrial bank in the U.S. The company already operates a bank in Europe, where it uses deposits to help fund its lending business. The company reported $11.7 billion in deposits at the quarter’s end, constituting 88% of its funding, down from $13 billion at the end of last year.

Two large BNPL rivals, PayPal Holdings and Affirm Holdings, have also applied for industrial loan charters, while the CEO of competitor Sezzle has said his company will seek a national bank charter this quarter.

Klarna reported second-quarter net income of $9 million, compared to a $53 million loss in the same period of 2025. Revenue rose 27% to $1.04 billion from $823 million a year ago, according to the release.

Company shares fell about 20% Tuesday on the guidance cut, part of a 46% decline so far this year.