Consumer receivables

12 Months Ended

Dec. 31, 2025

Disclosure of financial assets [abstract]

Consumer receivables

Consumer receivables

Consumer receivables represent amounts due from consumers related to Klarna’s flexible payment

options, including Pay Later and Fair Financing solutions. Consumer receivables, except those which are

managed within a business model whose objective is to originate and sell or within a hold-to-collect-and-

sell business model (see Note 20), are measured at amortized cost, including outstanding principal

balances, unamortized deferred origination costs, accrued interest and net of allowances for expected

credit losses. The below table summarizes consumer receivables for the years ended December 31, 2025

and 2024:

	December 31, 2025
	Gross Carrying Amount	Allowance for ECL	Net Carrying Amount
Fair Financing receivables ..............................................................................	$4,604	$(272)	$4,332
Pay Later receivables ......................................................................................	6,347	(220)	6,127
Total .....................................................................................................................	$10,951	$(492)	$10,459

	December 31, 2024
	Gross Carrying Amount	Allowance for ECL	Net Carrying Amount
Fair Financing receivables ........................................................................	$3,085	$(131)	$2,954
Pay Later receivables ................................................................................	5,388	(201)	5,187
Total ...............................................................................................................	$8,473	$(332)	$8,141

As detailed in Note 2, to measure the ECL of consumer receivables, Klarna assigns outstanding loans

to one of three stages based on repayment performance. See Note 2 for more information. The below

tables reconcile the Group’s classification of Fair Financing and Pay Later consumer receivables by stage

for the opening and closing balances:

Fair Financing receivables	Stage 1	Stage 2	Stage 3	Total
Gross carrying amount as of January 1, 2025 ..................	$2,893	$140	$53	$3,085
New assets originated or purchased .............................	11,046	98	17	11,161
Assets repaid1......................................................................	(9,128)	(385)	(69)	(9,581)
Transfers to stage 1 ............................................................	473	(466)	(7)	—
Transfers to stage 2 ...........................................................	(1,151)	1,166	(15)	—
Transfers to stage 3 ...........................................................	(45)	(320)	364	—
Amounts written off ...........................................................	(26)	(21)	(203)	(249)
Proceeds received from the sale of uncollectible consumer receivables .......................................................	(2)	(11)	(23)	(36)
Other adjustments2 ............................................................	206	15	4	225
Gross carrying amount as of December 31, 2025 ............	$4,267	$216	$121	$4,604

____________

1  Assets repaid includes the sale of an existing portfolio of Fair Financing receivables within the period

2  Other adjustments are primarily driven by fluctuations in the USD foreign exchange rate.

Pay Later receivables	Stage 1	Stage 2	Stage 3	Total
Gross carrying amount as of January 1, 2025 ..................	$5,059	$227	$102	$5,388
New assets originated or purchased .............................	55,477	69	13	55,559
Assets repaid ......................................................................	(53,591)	(1,049)	(183)	(54,823)
Transfers to stage 1 ............................................................	169	(164)	(5)	—
Transfers to stage 2 ...........................................................	(1,795)	1,797	(1)	—
Transfers to stage 3 ...........................................................	(25)	(623)	648	—
Amounts written off ...........................................................	(31)	(21)	(324)	(376)
Proceeds received from the sale of uncollectible consumer receivables .......................................................	—	—	(109)	(109)
Other adjustments1 ............................................................	673	27	8	708
Gross carrying amount as of December 31, 2025 ............	$5,936	$263	$149	$6,347

____________

1  Other adjustments are primarily driven by fluctuations in the USD foreign exchange rate.

	Stage 1	Stage 2	Stage 3	Total
Gross carrying amount as of January 1, 2024 ..................	$7,753	$497	$144	$8,394
New assets originated or purchased .............................	55,836	163	18	56,017
Assets repaid ......................................................................	(52,841)	(1,730)	(242)	(54,813)
Transfers to stage 1 ............................................................	816	(799)	(17)	—
Transfers to stage 2 ...........................................................	(3,067)	3,080	(13)	—
Transfers to stage 3 ...........................................................	(19)	(784)	803	—
Amounts written off ...........................................................	(27)	(38)	(402)	(467)
Proceeds received from the sale of consumer receivables ..........................................................................	—	(20)	(135)	(155)
Other adjustments .............................................................	(499)	(3)	(1)	(503)
Gross carrying amount as of December 31, 2024 ...........	$7,952	$366	$155	$8,473

The activity in the Group’s allowance for credit losses recognized for Fair Financing and Pay Later

consumer receivables, based on the above stage classifications, is detailed in the below table:

Fair Financing receivables	Stage 1	Stage 2	Stage 3	Total
Allowance as of January 1, 2025 .......................................	$(69)	$(26)	$(36)	$(131)
New assets originated or purchased .............................	(318)	(20)	(11)	(349)
Assets repaid ......................................................................	227	66	52	345
Transfers to stage 1 ............................................................	(50)	46	4	—
Transfers to stage 2 ...........................................................	109	(117)	8	—
Transfers to stage 3 ...........................................................	1	182	(183)	—
Other movements in ECL allowance ..............................	(29)	(193)	(69)	(291)
Amounts written off ...........................................................	3	9	142	154
Other adjustments1 ............................................................	(1)	1	—	—
Allowance as of December 31, 2025 .................................	$(127)	$(52)	$(93)	$(272)

____________

1  Other adjustments are primarily driven by fluctuations in the USD foreign exchange rate.

Pay Later receivables	Stage 1	Stage 2	Stage 3	Total
Allowance as of January 1, 2025 .......................................	$(77)	$(57)	$(67)	$(201)
New assets originated or purchased .............................	(383)	(19)	(7)	(409)
Assets repaid ......................................................................	455	126	116	697
Transfers to stage 1 ............................................................	(7)	3	4	—
Transfers to stage 2 ...........................................................	168	(169)	1	—
Transfers to stage 3 ...........................................................	1	345	(346)	—
Other movements in ECL allowance ..............................	(227)	(294)	(99)	(620)
Amounts written off ...........................................................	5	15	313	333
Other adjustments1 ............................................................	(8)	(6)	(6)	(20)
Allowance as of December 31, 2025 .................................	$(73)	$(56)	$(91)	$(220)

____________

1  Other adjustments are primarily driven by fluctuations in the USD foreign exchange rate.

	Stage 1	Stage 2	Stage 3	Total
Allowance as of January 1, 2024 .......................................	$(139)	$(87)	$(85)	$(311)
New assets originated or purchased .............................	(551)	(26)	(15)	(592)
Assets repaid ......................................................................	612	172	162	946
Transfers to stage 1 ............................................................	(54)	44	10	—
Transfers to stage 2 ...........................................................	178	(185)	7	—
Transfers to stage 3 ...........................................................	2	402	(404)	—
Impact on ECL from change in credit risk ....................	(215)	(419)	(143)	(777)
Amounts written off ...........................................................	4	20	365	389
Other adjustments .............................................................	19	(5)	(1)	13
Allowance as of December 31, 2024 .................................	$(144)	$(84)	$(104)	$(332)

Consumer receivables increased primarily as a result of growth in Klarna’s key markets. Loans with

contractual amounts of $173 million and $241 million that were written off during 2025 and 2024 are still

subject to enforcement activity. Other adjustments within consumer receivables during 2025 primarily

relate to the impact of movements in foreign exchange rates on consumer receivables during the year.