Klarna delivered a stronger-than-expected revenue performance in its first earnings report since listing on the New York Stock Exchange in September. Despite beating Wall Street estimates for the third quarter, the company’s stock fell by 9%, reflecting investor caution amid broader market volatility.

The Swedish fintech giant reported revenues of $903 million, outpacing the forecasted $882 million. This marked a 26% increase from the $706 million generated during the same period last year. However, the company posted a net loss of $95 million, or 25 cents per share, reversing its net income of $12 million a year earlier.

A major driver of growth came from Klarna’s expanding U.S. presence. Gross merchandise volume (GMV) in the U.S. surged 43% year-over-year, while global GMV rose 25% to $32.7 billion, up from $26.2 billion last year. Klarna said the rapid adoption of products such as the Klarna Card and its fair financing options—designed to offer longer-term installment plans—played a key role in its American momentum. The fair financing feature, which includes variable interest rates, saw its GMV more than triple from a year ago.

Since launching in July, the Klarna Card has attracted more than four million users and made up 15% of all transactions by October. Klarna CEO Sebastian Siemiatkowski noted that fair financing has doubled its user base over the past year, yet still reaches only about 20% of merchants. He said this limited penetration highlights “tons of opportunity” for future expansion.

Siemiatkowski emphasized that Klarna aims to evolve its brand perception. “We want to be the one that helps you save time, save money, be in control of your finances,” he said, acknowledging that this image is not what most consumers traditionally associate with the company. According to him, improving financial empowerment will remain a core focus.

To further support U.S. growth in its fair financing segment, Klarna reached an agreement with Elliott Investment Management, which will purchase $6.5 billion worth of Klarna’s fair financing loans. The move is expected to free up resources for the company to scale the product more aggressively.

Merchant partnerships also expanded significantly. Klarna added 234,000 new merchants over the past year, bringing its total to 850,000, a 38% increase. However, average revenue per active customer declined, even as total customers reached 114 million.

Looking ahead to the fourth quarter, Klarna expects GMV between $37.5 billion and $38.5 billion, with revenue projected to fall between $1.065 billion and $1.08 billion—both above FactSet estimates. Transaction margin dollars, a key measure of profitability for the company’s core business, are anticipated to reach between $390 million and $400 million, up from $281 million in Q3.

Still, analysts remain divided. Bank of America noted that Klarna’s focus on fair financing weighed on expected transaction margins, though overall Q4 guidance was in line with market expectations. JPMorgan said the projected sequential rise in transaction margins is “encouraging,” signaling potential improvement in operational efficiency.

Klarna’s debut on the NYSE came after the company postponed its IPO plans earlier this year due to market turbulence triggered by former President Donald Trump’s tariff proposals. More recently, global stocks have faced pressure amid fears of an emerging AI-driven bubble and concerns over weakening consumer spending, factors that have contributed to Klarna’s share price falling more than one-third from its peak.

Siemiatkowski said Klarna has not yet observed major changes in consumer repayment behavior or spending patterns due to the broader economic environment. Still, the company is closely watching the growing influence of artificial intelligence, particularly as AI adoption begins reshaping white-collar industries.

Klarna is no stranger to AI investment. The company has long leaned on AI technologies, and Siemiatkowski said in May that AI, combined with natural workforce attrition, has contributed to a 40% reduction in staff. He noted that attrition alone can reach as high as 20%.

Other major tech players like Palantir, Salesforce, and Amazon have also cautioned that AI-related efficiencies could lead to workforce reductions or slower hiring.

For Klarna, AI plays directly into its goal of elevating customer service. According to Siemiatkowski, the company has reduced the average resolution time for customer support issues to under two minutes thanks to AI tools. Still, he stressed the importance of maintaining human connection in customer experience. Companies that rely solely on automated interactions, he said, are “making a big mistake,” adding that human engagement continues to hold immense value.