- Key insights: Klarna's stock plunged after it lowered its full-year outlook and said Chief Financial Officer Niclas Neglén and Chief Marketing Officer David Sandström will depart the aspiring neobank in early 2027.
- What's at stake: The U.S. is Klarna's largest market by revenue and an important pillar of its growth strategy as it looks to offer more banking services to its customers.
- Forward look: Klarna plans to search for a U.S.-based CFO amid elevated demand for banking talent.
Klarna is looking for a new U.S.-based finance chief at a time when
The Swedish lender's long-time Chief Financial Officer Niclas Neglén will depart the company in 2027 after a six-year tenure that included Klarna's
"This is an early heads up, not a goodbye," Klarna CEO Sebastian Siemiatkowski said Tuesday morning during the company's second quarter earnings call. "Nothing changes tomorrow."
Chief Marketing Officer David Sandström will also depart the company at the beginning of next year after nine years.
"David built one of the most recognized brands in global finance, and he hands it over the same way Nicholas hands over the numbers, deliberately and from strength," Siemiatkowski said.
Klarna will begin the search for a U.S.-based CFO. The U.S. is an important pillar in Klarna's growth strategy as it looks to offer more banking services to its customers beyond buy now, pay late. The region is its largest market by revenue, and fastest growing large-market. Klarna has more than 30 million customers in the States.
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"Having a stronger presence in [the U.S.] is important to us," Siemiatkowski said. "It's also helpful to be close to the investor relations community and the stock market."
The C-suite departures came as Klarna reported its second quarter earnings, which beat analysts estimates. Revenue hit $1.04 billion in the second quarter, a 27% year-over-year increase and ahead of expected $988 million. Gross merchandise value jumped 18% to $36.6 billion and transaction margin dollars — which Klarna now says will be its north-star KPI instead of GMV — rose 42% to $446 million. Active customers notched up 8% to 120 million and active merchants increased 54% to 1.2 million.
But Klarna's earnings beat was overshadowed by the management churn and a pullback in forward-looking guidance. Klarna now expects gross merchandise volume to $149 billion to $151 billion, down from more than $155 billion, largely due to currency conversions and a softening in Germany, its largest market by volume.
Revenue is now expected to hit $4.08 billion to $4.16 billion, driven by its volume adjustments and changes to the way it accounts for revenue from originations of its long-term lending product, Fair Financing, in the U.S. and Germany. Klarna will now measure those originations at fair value, meaning that income will be booked as an upfront gain rather than over the life of the loan.
Transaction margin outlook was raised to $1.62 billion to $1.65 billion, or 1.09% of GMV, an increase from 1.04% that Klarna guided in May.
Shares of Klarna tumbled down 22.3%, or $4.36, to $15.17 as of 2:45 p.m. in New York today, a sign of investor rebuke, according to Zack Investment Research stock strategist Jeremy Mullin. Klarna's
"Klarna is telling the market it would rather be smaller and more profitable than chase GMV, and the guide reiterates that idea," Mullin told American Banker in an email. "But pairing that pivot with a CFO news isn't sitting well. The sell-off signals that traders won't be taking the margin story on faith, especially with U.S. transaction margin still far behind mature markets."
The shift to fair value accounting mid-year is also likely to raise some questions, according to KBW analyst Sanjay Sakhrani.
Klarna's Neglén said the company is shifting to fair financing accounting as it looks to sell more of its loans on the secondary market and limit the number of loans it keeps on its balance sheet.
"We are very focused particularly on the fair financing forward flows," Neglén said. We've ramped them up to a certain level now, [and] we've come to the point where substantially all of our loans will be eligible to be sold in the second half of this year, and that's where we're making that fair value change."
