Why did Klarna shares drop after strong revenue?

The revenue beat was overshadowed by a $250 million credit loss provision and a $26 million net loss. Investors focused on rising expected losses in BNPL, which pressure unit economics and delay the route to sustainable profit. That mix outweighed the positive headline of $1.08 billion in Q4 revenue.

What are credit loss provisions, and why do they matter for BNPL?

Credit loss provisions are amounts set aside for loans that may not be repaid. In BNPL, higher provisions signal rising risk in the customer base or weaker underwriting. As provisions climb relative to GMV, margins shrink, which can hurt growth, profitability, and valuation.

What will Klarna stock analysts focus on at the February 26 release?

They will watch provisions as a share of GMV, any commentary on loss rates and collections, operating expense control, and traction in banking products. Guidance for 2025 growth and unit economics will set expectations into Q4 2025 results and drive sentiment in Germany.

How should German investors think about BNPL risk now?

Treat BNPL risk as cyclical credit risk. Size positions modestly, demand evidence that provisions are stabilizing, and look for improving margins without heavy marketing spend. Track adoption of banking products in Germany. Be prepared for volatility around February 26 and adjust on confirmed data, not headlines.

Global Market Insights

Klarna Stock Today, February 21: Provisions Sink Shares After $1B Quarter

ByDanny Kontos February 21, 2026February 21, 2026

Klarna stock analysts say the latest slide reflects credit risk worries, not growth. Shares fell about 27% after Q4 revenue of $1.08 billion beat views, but a $250 million credit loss provision and a $26 million net loss shook confidence. With full-year results due on February 26, we think German investors should focus on loss trends, provisions as a share of GMV, and progress in banking products. These data points will shape margin outlooks and the path to sustainable profit.