Klarna Converts Checkout Traffic Into $13 Billion in Deposits

Klarna’s fourth-quarter results offer a snapshot into the appeal of paying over time. They also provide a window into the mechanics of a rapidly scaling financial network, where checkout activity, cards and deposits increasingly reinforce one another.

The most consequential signals sit inside the banking metrics disclosed alongside earnings. Consumer deposits climbed to $13 billion, up 37% year over year, while Klarna’s banking customer base reached 15.8 million users, representing 101% growth from the prior year, as detailed in the company’s earnings materials and conference call.

Those figures in the Thursday (Feb. 19) earnings presentation and earnings conference call are notable for what they illustrate about conversion dynamics across Klarna’s broader ecosystem. The result is a financial platform that monetizes customer relationships across multiple touchpoints.

The company’s total consumer base now stands at 180 million users, up 28% year over year. That scale effectively transforms Klarna’s payments activity into a distribution engine for banking products, creating what management repeatedly framed as a structural advantage.

CEO Sebastian Siemiatkowski described Klarna as “a bank with an exceptional network,” arguing that the company has already captured “the consumers’ everyday spend.”

Across Klarna’s overall consumer base, average revenue per user (ARPU) sits at $30, with users transacting roughly 10 times annually. Among banking customers, however, ARPU rises to $107, while annual transaction frequency increases to 28.5. Deposit balances follow a similar pattern, climbing from an average of $64 for payers to $475 for banking customers, according to the conference call commentary.

Siemiatkowski underscored this dynamic, noting that once consumers repeatedly use Klarna at checkout, “the step into a banking relationship is natural, low friction and extraordinarily cost effective.”

The same network logic appears on the merchant side. Klarna’s merchant base expanded 42% year over year to 966,000 merchants, while gross merchandise volume (GMV) reached $38.7 billion for the quarter, exceeding the upper end of guidance. Revenue advanced 38% to more than $1 billion.

Card adoption provides a clear example of this convergence. Klarna reported 4.2 million active card users, up 288% year over year. Management emphasized that usage reflects “a very healthy proportion” of debit transactions, suggesting Klarna is capturing not only financed purchases but also everyday spend flows.

Against this backdrop of expansion, transaction margin dynamics (and thus profitability) emerged as the primary source of investor unease, which sent the shares down 23% in intraday trading on Thursday. Transaction margin dollars fell short of expectations, a result management attributed largely to accelerated lending growth and the accounting effects of upfront provisioning.

“This quarter’s transaction margin dollar result did not land where we guided,” Siemiatkowski acknowledged.

Faster loan originations increase near-term expected credit loss recognition, while revenue accrues over time. Management emphasized that underlying credit performance remains stable. Provisions for credit losses declined from 0.72% of GMV in the third quarter to 0.65% in the fourth quarter.

CFO Niclas Neglen stated: “From a credit perspective, what we are seeing is actually stability, not a deterioration.”

Charge-off rates for the U.S. fair financing product held within the 3% to 4% range. Klarna banking customers exhibited a 1.1% charge-off rate compared with 0.6% for payers. Both levels remain below typical revolving credit card benchmarks, reinforcing the view that margin pressure stems more from accounting timing than credit stress.

Looking forward, Klarna expects GMV and revenue growth in 2026 to remain broadly in line with 2025 levels. Transaction margin growth is projected to accelerate into the second half of the year as lending cohorts mature, while adjusted operating income margins are expected to exceed 6.9%.

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