Klarna Group Plc (Klarna (KLAR)) shares are trading lower on Friday after the buy-now-pay-later company delivered a mixed bag of news: a strong first-quarter earnings beat, but a softer-than-expected outlook for the current quarter.

On Thursday, Klarna reported first-quarter results that topped Wall Street estimates, driven by strong consumer and merchant growth across its global payments network. Revenue rose 44% year over year to $1 billion, ahead of the analyst consensus estimate of $945.1 million. Net income swung to a profit of $1 million from a loss of $99 million in the prior-year quarter. That's a pretty dramatic turnaround, and the market initially cheered the news.

But the celebration was short-lived. For the second quarter, Klarna forecast revenue between $960 million and $1 billion, below the analyst consensus estimate of $1.065 billion. The company also projected GMV of $35.5 billion to $36.5 billion, transaction margin dollars of $375 million to $395 million, and adjusted operating profit between $30 million and $50 million. That softer guidance is what's weighing on the stock today.

Klarna reaffirmed its full-year 2026 outlook, projecting GMV above $155 billion while continuing to focus on transaction margin dollar growth and payment monetization expansion. So the long-term story remains intact, but the near-term numbers are giving investors pause.

Analysts Update Price Forecasts After Earnings

Several analysts revised their forecasts following the earnings report, and the reactions were a bit of a mixed bag:

• BMO Capital analyst Andrew Bauch maintained a Market Perform rating and raised the price forecast from $16 to $17.
• Wells Fargo analyst Jason Kupferberg maintained an Overweight rating but lowered the price forecast from $32 to $26.
• Keefe, Bruyette & Woods analyst Sanjay Sakhrani maintained an Outperform rating and increased the price forecast from $22 to $26.
• Needham analyst Kyle Peterson reiterated a Hold rating on the stock.

Needham's Peterson said Klarna delivered a strong first quarter, beating Wall Street estimates on GMV, revenue and profitability, while showing improving delinquency trends in its fair financing portfolio. The firm noted that Klarna's earnings profile is becoming healthier as financing matures, forward-flow deals improve balance sheet mix and AI-driven cost discipline keeps expense growth under control.

Although the stock rallied after earnings, Needham views the current risk-reward as balanced and maintained its Hold rating, adding it could turn more bullish if Klarna's KPIs move closer to top-performing publicly traded BNPL peers.

KLAR Price Action: Klarna shares were down 6.47% at $15.40 at the time of publication on Friday, according to market data.