Klarna Group plc shares fell 20.55% to $15.50 on Tuesday after the company paired stronger-than-expected second-quarter results with a weaker 2026 revenue outlook. The buy now, pay later lender reported earnings of 1 cent per share, ahead of expectations for a 5-cent loss, while revenue rose 27% year over year to $1.042 billion, above the $993.39 million analyst estimate. Gross merchandise volume, or GMV (total value of goods sold through the platform), increased 18% to $36.6 billion, with U.S. GMV up 27%. The company said transaction margin dollars rose 42% to $446 million, or 42.8% of revenue, as adjusted operating income jumped 214% to $91 million. Credit performance also improved, with provisions for credit losses falling to 0.52% of GMV from 0.56% a year earlier. Consumer and merchant growth remained strong, with active consumers up 8% to 120 million and the merchant base up 54% to more than 1.2 million. Even so, management said softness in German consumer spending, especially in discretionary retail, emerged late in the second quarter and has continued into the third quarter. Klarna cut its GMV outlook to $149 billion to $151 billion from more than $155 billion, citing about $600 million in currency translation effects and a more cautious view on Germany, its largest market by volume. For 2026, the company now expects revenue of $4.08 billion to $4.16 billion, below the $4.415 billion analyst estimate. Klarna also highlighted growth initiatives including its J.P. Morgan Payments rollout and its Apple Upgrade device leasing program in the U.S. with Apple Inc. Management said the Apple partnership is expected to generate positive adjusted operating income in 2026 and could be "very accretive over time." Separately, CFO Niclas Neglén and CMO David Sandström will step down in early 2027 after transition periods.