Klarna and Affirm, two leading buy-now-pay-later (BNPL) lenders, both reported profits this spring, yet their stock performances have diverged significantly. Klarna's shares now trade below its IPO price, while Affirm's stock has surged following its recent earnings report.
In the first quarter of 2026, Klarna achieved $1 billion in revenue, a 44% increase year-over-year, driven by a gross merchandise volume of $33.7 billion. The company also reported an adjusted operating profit of $68 million, a notable rise from $3 million a year earlier, and a net income of approximately $1 million, reversing a $99 million loss from the previous year. Klarna now boasts 119 million active consumers and over one million merchant partners, indicating a strong recovery in its business model.
Conversely, Affirm's fiscal third quarter results, ending in March, revealed $11.6 billion in gross merchandise volume, a 35% increase, and revenue of $1.04 billion. Affirm achieved GAAP operating income of $88.4 million, translating to an 8.5% margin, and net income of $102.9 million, with earnings of 30 cents per share, a significant improvement from one cent a year earlier. The company also reported a 41% rise in revenue less transaction costs, highlighting its robust unit economics.
The contrasting market responses stem from differing perceptions of credit risk and customer engagement. Affirm's metrics, including a 22% increase in active consumers to 26.8 million and a 44% growth in active merchants to 515,000, suggest deeper customer engagement and prudent credit management. In contrast, despite Klarna's strong revenue growth, concerns about late payments and potential losses have overshadowed its positive results.
This divergence in stock performance may lead to increased scrutiny of the BNPL sector, influencing investor sentiment toward credit risk in consumer finance. As both companies navigate profitability and market dynamics, their strategies will be closely watched by investors.
Investors will monitor upcoming earnings reports for further insights into consumer behavior and credit trends in the BNPL market.