Klarna and Affirm, the two largest buy-now-pay-later lenders in the US and European markets, both reported genuine profitability in their most recent quarters, and their stocks moved in opposite directions on the news. Affirm’s shares climbed after its fiscal third-quarter 2026 results; Klarna’s continued trading below its September 2025 IPO price. The split says less about which company is actually performing better and more about how differently public markets are now pricing credit risk inside the BNPL model, eight months into Klarna’s life as a public company.
The headline numbers themselves look similar enough that the divergence is genuinely surprising at first glance. Klarna’s first-quarter 2026 revenue hit $1 billion, up 44% year over year, on gross merchandise volume of $33.7 billion, with adjusted operating profit of $68 million, sharply up from just $3 million a year earlier, and net income of roughly $1 million, a real swing from a $99 million loss in the same period last year. Klarna now counts 119 million active consumers and more than 1 million merchant partners. Affirm’s fiscal third quarter, ended in March, posted $1.04 billion in revenue, up 33%, on GMV of $11.6 billion, up 35%, with a GAAP operating profit of $88.4 million, an 8.5% operating margin, and net income of $102.9 million, translating to earnings per share of $0.30, versus a single cent a year earlier.
The gap that actually matters to investors sits in the credit metrics, not the growth numbers. Affirm’s 30-day-plus delinquency rate held flat year over year at 2.8%, and the company built its allowance for credit losses up to $512 million, 6.0% of loans held for investment, a heavier provisioning posture that fintech analyst Zennon Kapron, writing for Forbes, read as a signal of prudent risk management rather than distress: Affirm was setting aside more against potential losses even while its actual delinquency rate stayed steady, which the market interpreted as disciplined caution. Klarna’s provision for credit losses, by contrast, ticked up only marginally, from 0.54% to 0.55% of GMV, matching its profitability gains without a comparable increase in loss provisioning, and the market read that combination as a company that hasn’t yet proven its credit model can survive a real credit downturn at its current cost of risk, given Klarna’s larger exposure to younger, thin-file borrowers who are historically more vulnerable when the economic cycle turns.
That distinction lands against an industry-wide backdrop that’s genuinely worsening. A LendingTree survey cited in the same reporting found 47% of BNPL users paid late at least once in the past year, up from 41% in 2025 and 34% in 2024, a trend line moving in exactly the wrong direction as BNPL usage broadens into a larger and more financially stretched share of consumers. Kapron’s broader read is that public markets have shifted from rewarding BNPL companies purely on user growth to actively demanding profitability paired with visible credit discipline, effectively re-rating the entire sector using the same standards applied to traditional consumer lenders rather than the growth-at-all-costs framework fintech IPOs were valued on for most of the past decade.
Klarna’s specific stock trajectory makes the shift concrete. The company priced its IPO at $40 per share in September 2025, valuing it near $15 billion, itself already a steep discount to the roughly $45.6 billion private valuation Klarna carried back in 2021. Eight months later, the stock has fallen a further 62% from that already-discounted IPO price, even as the company has now posted two straight quarters of genuine profitability. That’s a striking gap between operating performance and market valuation, and it suggests investors are pricing in credit-cycle risk that hasn’t materialized yet in Klarna’s actual numbers but that the broader rise in late payments across the BNPL industry makes look increasingly plausible.
For a Philippine BNPL market that’s growing faster than almost any other segment of local fintech, projected to reach $8.90 billion in 2026 alone, the Klarna-Affirm divergence is a preview of a scrutiny cycle Philippine providers like BillEase, Cashalo, and TendoPay haven’t yet faced from local capital markets, since none of them are public. But international investors backing the next round of Philippine BNPL fundraising will increasingly be applying the same lens Wall Street has just applied to Klarna: not just how fast a BNPL provider is growing its GMV, but how much of that growth is being provisioned for against the realistic chance that a meaningful share of borrowers, especially newer, thinner-file ones exactly like the demographic BNPL is designed to serve in an underbanked market, eventually pay late or don’t pay at all.
The broader signal for the BNPL category worldwide is that its first true test as a mainstream consumer lending product, not a novelty checkout feature, is happening in real time. LendingTree’s finding that nearly half of BNPL users have now paid late at least once suggests the product has scaled past the relatively disciplined early-adopter base that used it in its first several years and into a much broader, more financially stretched population, exactly the growth trajectory every BNPL provider has spent the last five years chasing. Klarna and Affirm are simply the two furthest along that curve, and both further along than any Philippine BNPL provider has yet reached. What Wall Street is now pricing into their stocks isn’t a verdict on BNPL as a concept, it’s a verdict on which specific companies have built underwriting and provisioning discipline sturdy enough to survive that broader, riskier user base without their credit losses eventually catching up to their growth.
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