Klarna Group PLC (NYSE:KLAR) saw its revenue top $1 billion, beating analyst estimates and sending shares of the buy now, pay later company up nearly 16% in morning trading.
The Swedish fintech posted a net profit of $1 million in the first quarter, a milestone for a company that has been working to prove its profitability ahead of its New York Stock Exchange listing last year.
Revenue grew 44% year-over-year to $1.1 billion, surpassing analyst estimates of $944.43 million.
Adjusted operating profit reached $68 million, up sharply from $3 million in the same period a year ago, while gross merchandise volume climbed 33% to $33.7 billion.
Operating income also turned positive at $17 million, reversing a $99 million operating loss from the first quarter of 2025.
Active consumers grew 21% year over year to 119 million, while the number of merchants on the platform rose 49% to more than one million.
Klarna's higher-margin installment lending product, Fair Financing, saw GMV surge 138% year-over-year, reflecting the company's push into larger-ticket purchases. Provisions for credit losses remained low at 0.55% of GMV.
For the second quarter, Klarna guided for GMV of $35.5 billion to $36.5 billion, revenue of $960 million to $1 billion, and adjusted operating income of $30 million to $50 million.
Klarna said a $2 billion forward flow facility put in place in Q1 supports $17 billion of US financing capacity, with runway to sustain Fair Financing's growth trajectory.
Adding to the positive backdrop, Klarna recently announced it will bring its flexible payment options to Google's Gemini app and Google Search via Google Pay in the US, expanding its distribution reach significantly.