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Remember when “buy now, pay later” company Klarna partnered with DoorDash and everyone said that people wanting to pay for food on layaway was a recession indicator? Well, that might not have actually been one, but this might be.
Klarna reported $99 million in losses for the first quarter of 2025, more than double what it lost last year over the same period. It also delayed its US IPO, citing market uncertainty from the Trump administration’s tariff policies.
On the other hand, the company also reported a 13% increase in revenue and reached an important milestone, 100 million active users.
Buy now, pay later platforms should have recession protection, as the usage of their products usually increases when people are in financial stress or economic uncertainty. According to a survey from LendingTree, more people are using financing options to pay for groceries, up from 14% last year to 25% in 2025.
According to Pymnts Intelligence, Klarna held 26% of the US BNPL market share at the end of 2024, making it the leader in a crowded field with the likes of Affirm, Afterpay, and Sezzle. Klarna could be valued at $15 billion, fueled by partnerships with the aforementioned DoorDash but also Walmart, eBay and many popular fashion brands.
But it still couldn’t turn a profit. The company attributed the losses to expenses related to the IPO, share-based payments, and severance costs. Klarna laid off 40% of its customer service employees as it pushed an AI integration, claiming it was cutting costs.