A busted IPO with the jaws opening
A dollar reporter with most of its volume in euros, sterling and kronor. Beside it, the single number management guides to and the one this page is built around.
Indexed to 100 two years ago. Roughly 80% of GMV is earned outside the US
Revenue less processing, credit losses and funding. The number the company guides to
Fair Financing is the growth product and the loss product. It carries interest, it carries a US book that loses four times what Europe does, and it is the reason the US margin line moved the way it did.
US$ billions per quarter. Fair Financing is the interest-bearing, higher-loss, higher-margin product
The US book loses roughly four times more per dollar of volume than Europe
This is the thesis. Revenue and margin dollars compounding while adjusted costs barely move. The question is whether the gap holds when volume growth slows, which management has just told you it will.
Indexed to Q1 2024 = 100. The jaws opened in 2026
US$ millions, label is margin on revenue. H1 2026: $159m against $32m a year earlier
Base case is inside the FY2026 guide (TMD $1,643m against $1,620-1,650m guided) and reaches a 16% adjusted margin by FY2030. The thesis driver is Fair Financing share of volume; interest income, the held book, credit losses and funding are all set consistent with it, so the credit business is modelled with its costs, not just its revenue.
US$ millions. Solid bars actual, muted bars modelled
Actuals from the 20-F and 6-Ks, FY2026E onward from the base-case drivers
Two views of the same forecast: what the revenue is made of, and how much of it reaches operating income as costs grow slower than the top line.
Share of total revenue. Interest and gain on sale are the credit business; muted bars are your estimates
Indexed to FY2023 = 100. Solid is reported, dotted is the model
What the model tracks underneath the P&L: every line as a share of volume, and the engines that move it. Revenue outgrows GMV because of take rate; margin dollars outgrow revenue because credit and funding costs fall per unit of volume.
The P&L as a stack of take rates; the gap between the bottom two lines is the operating leverage
Volume outgrows consumers, revenue outgrows volume, margin dollars catch up
Klarna funds receivables with retail deposits under a Swedish banking licence and is now selling receivables forward. The book grows far slower than volume, which is what lets earnings reach the equity holder rather than the balance sheet. Beside it, the cost side of the thesis in one number.
US$ billions. The bank inside the payments company
US$ millions. Headcount is an input in the forecast, not a driver
Every route lands above the price; the bear does not. Value is a FCFE DCF with exit P/E and TMD-multiple cross-checks, rolled to the pricing date.
Exit P/E on FY2030E earnings. Shares trade at $13.83
Probability-weighted $21.97 against $13.83 traded
What the position earns to FY2028 and FY2030 across exit multiples, on reported and on adjusted earnings, and what earnings look like if the drivers are wrong in either direction.
Exit at FY2028E (3-year) or FY2030E (5-year) earnings times the multiple, from today's price
Bear, base and bull are separate driver sets, snapshotted from the model
The five things worth watching, in the order they would move the estimate.