Afterpay vs Klarna: Revenue, Profit and Business Model
Afterpay reported ~$596.4M of revenue in FY2021 and a net loss of ~$102.8M. Klarna reported $3.5B of revenue in FY2025 and a net loss of $273M.
Latest financial snapshot
Financial summary
Afterpay
Afterpay reported standalone results in Australian dollars before Block acquired it. Total income rose from ~$903,000 (A$1.4 million) in FY2016 to ~$596 million (A$924.6 million) in FY2021, while FY2021 statutory loss after tax was ~$103 million (A$159.4 million). Block does not publish a comparable standalone Afterpay revenue series after the January 2022 close.
Klarna
Klarna's revenue grew from $2.28 billion in 2023 to $2.81 billion in 2024 and $3.51 billion in 2025, according to its 2025 Form 20-F. Net income swung from a $244 million loss in 2023 to a $21 million profit in 2024, then back to a $273 million loss in 2025, even as adjusted operating profit reached $65 million. Q4 2025 was its first billion-dollar quarter at $1.082 billion of revenue on $38.7 billion of GMV. In Q2 2026, revenue rose 27% to $1.042 billion, transaction margin dollars rose 42% to $446 million and net income was $9 million, against a $53 million loss a year earlier. The market cap was about $5.2 billion in late September 2026, well below the roughly $15 billion valuation at its September 2025 IPO.
Revenue and profit by year
Afterpay
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2021 | ~$596.4M | ~-$102.8M | -17.2% | +78.1% | Source |
| FY2020 | ~$334.9M | — | 0.0% | +96.6% | Source |
| FY2019 | ~$170.3M | — | 0.0% | +85.6% | Source |
| FY2018 | ~$91.8M | — | 0.0% | +521.4% | Source |
| FY2017 | ~$14.8M | — | 0.0% | +1535.7% | Source |
| FY2016 | ~$903,000 | — | 0.0% | — | Source |
Klarna
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $3.5B | -$273M | -7.8% | +24.8% | Source |
| FY2024 | $2.8B | $21M | 0.7% | +23.5% | Source |
| FY2023 | $2.3B | -$244M | -10.7% | — | Source |
Where the revenue comes from
Afterpay
- Merchant fees
Fees paid by merchants on transactions processed through Afterpay were the principal source of pre-acquisition income.
- Late fees
Afterpay also earned capped late fees from overdue customer installments. A current standalone percentage is not disclosed.
Klarna
- Merchant fees
Fees charged to merchants on Klarna transactions; the largest source of revenue.
- Consumer interest and fees
Interest on Fair Financing and other credit products, plus late fees where permitted.
- Card and memberships
Interchange from the Klarna Card and subscription revenue from Memberships, which grew more than 600% in Q2 2026.
- Advertising and other
Sponsored placements and affiliate revenue in the Klarna app.
Business model and strategy
Afterpay
How it makes money
Before the Block acquisition, Afterpay earned most income from merchant fees on purchases processed through its platform, with a smaller contribution from customer late fees. Customers generally paid four installments over six weeks and paid no interest. Block now reports Afterpay within its consolidated results rather than as a standalone public company.
Growth strategy
Block stated at closing that it intended to add Afterpay BNPL to Square checkout, let Afterpay customers manage installments in Cash App, and help Cash App customers discover sellers and BNPL offers. Subsequent expansion has focused on those seller and consumer connections.
Competitive advantage
Afterpay combines installment checkout with a merchant directory and an established consumer brand. Block can connect the product to Square sellers and Cash App customers, although Block identifies merchant retention and product integration as acquisition risks.
Klarna
How it makes money
Klarna earns money on both sides of a purchase. Merchants pay Klarna a fee on each transaction because offering installments tends to lift conversion and basket size; Klarna pays the merchant upfront and carries the repayment risk (its published US standard rate for Pay in 4 has been 3.29% plus $0.30).
Growth strategy
Klarna calls itself an 'everyday finance network'. The strategy has three parts: distribution through large acquirers and platforms (J.P. Morgan Payments went live in August 2026), higher-frequency products such as the Klarna Card and paid Memberships (2 million subscribers in Q2 2026, eight times a year earlier), and higher-yield lending such as Fair Financing, which 256,000 merchants offered by Q2 2026.
Competitive advantage
Klarna's edge is scale and funding. It reaches more than 120 million active consumers and over 1.2 million merchants in 26 markets, and distribution deals with payment platforms such as J.P. Morgan Payments, Stripe and Adyen switch Klarna on for merchants without a new integration.
Questions about Afterpay vs Klarna
Which company has higher revenue — Afterpay Limited or Klarna Group plc?
Afterpay Limited reported ~$596.4M (FY2021), while Klarna Group plc reported $3.5B (FY2025). By last reported revenue, Klarna Group plc is the larger business, with Afterpay Limited reporting a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of Afterpay Limited vs Klarna Group plc?
Klarna Group plc has a market capitalisation of $5.2B. A public market cap figure for Afterpay Limited was not available (it may be privately held).
Which is more financially efficient — Afterpay Limited or Klarna Group plc?
Afterpay Limited generates $459k / employee in revenue per employee, while Klarna Group plc generates $1.24M / employee. Klarna Group plc shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Afterpay Limited and Klarna Group plc make money?
Afterpay Limited and Klarna Group plc generate revenue in fundamentally different ways. Afterpay Limited: Before the Block acquisition, Afterpay earned most income from merchant fees on purchases processed through its platform, with a smaller contribution from customer late fees. Klarna Group plc: Klarna earns money on both sides of a purchase.
Is Afterpay Limited bigger than Klarna Group plc?
By last reported revenue, Klarna Group plc ($3.5B (FY2025)) is the larger company compared to Afterpay Limited (~$596.4M (FY2021)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Afterpay vs Klarna overview