Hey Everyone,
Good morning & happy Monday! Today, we’re diving deep into Klarna's latest financials to see how the strongest merchant-distribution machine in BNPL just beat on every headline number and still crashed 23%, & why its 42% margin growth was really 20% with a $69M assist from a line item that didn't exist a year ago (breaking down the most important facts & figures from Klarna's Q2 2026, including the $2B Google judgment buried in a footnote & the guidance raise that's actually flat on the old accounting basis, to see whether KLAR 0.00%↑ is still worth your time & money + bonus deep dive into the latest financials of Nubank & The Complete Guide to YC’s Open-Source AI Agent Harness inside inside), and how Anthropic built the smartest AI model on the planet and then watched its own customers buy the cheaper one instead (Fable 5's spending plateau, why Opus 5 is already outselling it, & what this means for app-layer builders and fintechs + The Ultimate Guide to Qwen3.8-27B & The Age of the One-Person Company inside). So let’s just jump straight into the interesting stuff 🌶️
Klarna’s Q2 2026: the 42% growth that’s really 20%, a hidden $2B Google win & why KLAR stock crashed 23% anyway 💳📉
Earnings time 🤑 BNPL giant Klarna KLAR 0.00%↑ just reported the beat everyone wanted - revenue up 27% to $1.04B vs $996M expected, EPS of $0.01 against a forecast $(0.06) loss, transaction margin dollars up 42%, adjusted operating income more than tripled to $91M, net income positive - and the stock crashed 22.81% by the close, then another 4.8% by Friday. Not nice 🥲
At $14.33, KLAR now sits 74.9% below its 52-week high of $57.20 and more than 66% under its $40.00 September 2025 IPO price 🤷♂️
The crash itself is no mystery though: Klarna cut its full-year outlook - GMV down to $149-151B from “>$155B”, revenue to $4.08-4.16B from “>$4.34B” against a $4.415B consensus - and Germany, its biggest market, is soft. That’s the story every headline ran with. But it’s not the interesting one.
The most important number of the quarter wasn’t the beat, and it wasn’t the crash either. It was $69 million - the “gain on sale of consumer receivables” line. It was $0 in every quarter through Q3 2025, and this quarter it accounts for 53% of the entire year-over-year increase in transaction margin dollars - the metric management says it optimises for, and a phrase the company uses 25 times in a 20-page release. Strip the line from both periods (a clean comparison, since the prior year is zero) and 42% TMD growth becomes 19.7%. Revenue growth of 26.6% becomes 18.2% - behind GMV growth of 17.5%. And the “+4.5 points” of margin expansion becomes +0.5 🥲
Which leaves Klarna as a strange one: the strongest merchant-distribution machine in BNPL just printed a record quarter, and half the record rests on a line that didn’t exist a year ago.
So let’s dive deeper into Klarna’s Q2 2026, unpack the figures that actually matter, and see whether KLAR 0.00%↑ is worth your time & money in the years to come.
