Klarna Group plc

Operator: Hello, everyone, and welcome to Klarna's First Quarter 2026 Earnings Call. During this call, we will discuss our business outlook and make forward-looking statements. These statements are based on our current expectations and assumptions as of today. Actual results may differ materially due to various risks and uncertainties, including those described in our most recent filings with the SEC. During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of non-IFRS to IFRS measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website as well as filed with the SEC. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period in 2025. [Operator Instructions] Before we move to Q&A, we will begin with a brief presentation. Sebastian Siemiatkowski: Good morning, everyone, and thank you for joining. This quarter was a good quarter. We delivered above the high end of every line. Revenue, $1.012 billion, up 44%. Transaction margin, $389 million, up 44%. Adjusted operating profit, $68 million against $3 million a year ago, and net income turned positive. Same three products, bigger network, deeper engagement. Here are the three things we did this quarter. First, our global default PSP strategy. We cover 26 markets. We carry three payment products, debit for everyday spend, the charge card equivalent Buy Now Pay Later for mid-ticket and point-of-sale installments Fair Financing for big tickets. PSPs have been reiterating the same thing to us for years. For us to be able to be default with them and across all their merchants and reach parity with the big networks, we need relevant payment methods for every vertical of merchants they serve, subscriptions, groceries, ridesharing, airlines or fast fashion. Geography plus product range. We are borrowing from Amex 2000's parity and ubiquity playbook, and it's working. That strategy is showing up across the payment lines. Payment transactions, 27%, up from 13% a year ago. Volume, 33%, up from 6%. Transaction and service revenue, 29%, up from 7%. Stripe and Nexi are scaling, and you can already see it in our merchant count, $1.07 million, up 49%. JPMorgan Payments and Worldpay are signed, launching later this year. Second, we are still spend-centric, not lend-centric. Our book turns more than 10x a year. From 2020 through '24, our priority was Pay Later, especially in the U.S. We are now live with the majority of the U.S. top 100 online retailers. Pay Later means we start small with every new customer, $100 transaction we paid in weeks. That's how we get to know each other. In '25, we shifted to Fair Financing. The vast majority of those borrowers are existing customers with proven repayment history. Fair Financing took off faster than we forecast. We took meaningful market share in less than 12 months, especially in the U.S. We said as much in February. But let's zoom out. In our 14 profitable years before the build-out area, point-of-sale installments were 10% to 20% of volume. This quarter, Fair Financing is 12%, not a new business, it's the same business restored. Credit data confirms it. U.S. financing 30-plus days past due improved 36 basis points from the Q2 2025 peak. This quarter, the revenue margin from earlier cohorts are starting to catch up. We have listened to the feedback from this audience. Starting today, we will report volume by product and U.S. versus non-U.S. separately. We will publish provisions by cohort for both Pay Later and Fair Financing. Third, the Klarna card crossed 5 million active users globally this quarter. The everyday spend account is the center of the customer relationship, daily app usage, debit transactions and the credit option when they want it, additional bank products for the deeply engaged. Point-of-sale financing on the card unlocks revenue, the debit side unlocks engagement. Both are important. All of this builds the funding base. Everyday spend feeds the deposits, deposits fund the originations. Klarna is diversified, deposits at the core, 91% consumer deposits average duration 270 days, one of the most predictable funding profiles in banking. That base lets us price U.S. originations competitively and earn peer level returns. Our forward flow capabilities expanded this quarter as announced, they are additive, not a substitute and allow us to manage capital more efficiently. Diversified deposits at the core is a structural advantage. We will manage the mix actively. Now I was going to tell you three priorities for the rest of 2026. They are the same three things we just did, default PSPs, focus on the spend-centric foundation and everyday spend and deposit funded growth. Our biggest additional upside opportunity for transaction margin dollar growth is payment fees, which is basically the remaining gap between Europe and U.S. pay later economics. Niclas, over to you. Niclas Neglen: Many thanks, Sebastian. Good morning, everyone. Before I cover our Q1 results and outline our Q2 and full year 2026 guidance, I want to highlight that alongside our results, we've also published an enhanced supplementary data pack. This data pack is supported by a short video walk-through, which should enhance visibility and understanding of our business. I encourage you to take a few minutes to review it. Starting with the P&L summary. Before going into details, I would like to highlight that our business has executed strongly in 1Q, compounding nicely across all lines, and we're well on track for our full year guidance, which we have reiterated this morning. GMV came in at $33.7 billion, revenue at just over $1 billion and transaction margin dollars at $389 million, all accelerated quarter-on-quarter. Adjusted operating income of $68 million was up $65 million year-on-year. These results underscore the operating momentum in the business. Revenue in the first quarter grew 44% year-over-year to just over $1 billion with a like-for-like growth of 36%. Transaction costs were $623 million, up 45% year-on-year or 37% on a like-for-like basis. Within that processing and servicing costs grew 62%, reflecting the scaling of Fair Financing, our point-of-sale installment product and our card product. Provision for credit losses was $186 million or 55 basis points of GMV, a sequential decline from Q4, reflecting both favorable seasonal collections and the natural maturation of our Fair Financing book, where upfront provisioning on new originations shrink as a share of total revenue over time. Funding costs grew 32%, broadly in line with GMV. Transaction margin dollars, which is our North Star metric for the health of the business, reached $389 million, up 44% year-over-year and 34% on a like-for-like basis. You can see that progression clearly on the right-hand side of this slide from $270 million in Q1 last year to $389 million this quarter. TMD is the cleanest signal of how our model compounds because it absorbs the upfront provisioning drag of growth and shows what we earn after all variable costs. Non-transaction-related operating expenses were $373 million, up just 3% year-over-year. Transaction margin dollars are growing more than 14x faster than our cost base. This operating leverage is structural and driven by our compounding network. Adjusted operating income was $68 million, a $65 million improvement year-over-year. Operating income turned to positive $17 million from a $90 million loss a year ago, a $106 million improvement. Net income was $1 million, a $100 million year-over-year improvement, and earnings per share improved by $0.25 from a negative $0.26 to negative $0.01, effectively breakeven. EPS remained slightly negative as a portion of the net income is attributable to capital bond interest payments. Turning to GMV. Gross Merchandise Volume grew 33% year-over-year to $33.7 billion or 22% on a like-for-like basis. Growth was broad-based across geographies and products. By geography, the U.S. grew 39% to $7.1 billion, representing 21% of the total GMV. Our global ex U.S. business grew 31% to $26.6 billion. By product, Pay Later, our charge card equivalent, continues to deliver strong global growth, growing 29% and representing 77% of GMV. Fair Financing, our point-of-sale installment product is scaling rapidly at $4.1 billion, up 138% year-over-year as more merchants adopt it. 225,000 merchants now offer Fair Financing, up from 103,000 a year ago. Pay in Full, our everyday spending product contributed to $3.5 billion. The volume mix is important because it directly drives the revenue and the TMD opportunity. Higher engagement products like Fair Financing and card generate stronger TMD per dollar of GMV as they mature. Now to the revenue composition and the TMD in more detail. On the left-hand side, you see the revenue by type. Transaction and service revenue was $671 million, up 29%, broadly tracking our volume growth. Interest income grew 56% to $284 million, driven by both new originations and the continued revenue recognition from loan originated in prior periods. Gain on sale of receivables were $57 million in Q1. We will continue our asset-light strategy and act opportunistically on receivable sales. By geography, U.S. revenue grew 67% to $399 million, significantly outpacing U.S. GMV growth of 39%. The higher take rate reflects the contribution of interest income and gain on sale. Our global ex U.S. revenue grew 33% to $613 million with Fair Financing and membership fees growing -- growth driving the acceleration. On a like-for-like basis, total revenue grew 36%. Now on the right, the metric that matters the most, Transaction Margin Dollars or TMD. TMD by geography tells the story of where our model is heading. Total TMD was $389 million at a 38.4% margin on revenue, growing 44% year-over-year, 34% like-for-like. In the U.S., TMD was $106 million with a 26.6% margin on revenue, up 58% year-over-year. Our ex U.S. business delivered $283 million of TMD at a 46.2% margin. And within that, our most established markets are generating approximately 60% transaction margins. We expect the U.S. margins to continue converging towards mature markets over time. Turning to credit quality. Consumer delinquency rates remain healthy across both product lines. The charts show 2024 and 2025 vintage performance side by side. In Pay Later, our charge card equivalent product and our largest by volume, 30-day plus delinquency rates are stable and well managed. This is a short duration, high-frequency book. It turns over approximately 10x per year with an average consumer balance of $124. We underwrite every transaction individually, starting with small balances and scaling exposure as we build confidence. In Fair Financing, our point-of-sale installment product, delinquency rates are tracking favorably with both 30-plus and 60-plus day past dues rates declining quarter-over-quarter. Our ability to continuously improve underwriting driven by transaction level decisioning, short duration exposure and the data set built on over $0.5 trillion of cumulative transactions since inception remains a key competitive advantage and a direct contributor to TMD expansion. Finally, our outlook. Our full year 2026 guidance is unchanged. We continue to target GMV of greater than $155 billion, revenue of greater than 2.8% of GMV, TMD of greater than 1.04% of GMV and adjusted operating income of greater than 6.9% of revenue. For Q2, our guidance reflects normal seasonality for our retail-driven business as well as FX normalization following the sharp U.S. dollar depreciation in Q1 of last year. Specifically, we're guiding to GMV of $35.5 billion to $36.5 billion, revenue of $960 million to $1 billion, TMD of $375 million to $395 million and adjusted operating income of $30 million to $50 million. Since we provided our full year and Q1 guidance, FX has not had a material movement. To summarize, we started 2026 well. TMD grew 44% to $389 million. That is our focus, and it is compounding. Our network is scaling profitably. Our credit quality is healthy and our operating leverage is clear. Accelerating TMD growth and the value created for shareholders remain my primary focus. Operator: [Operator Instructions] Your first question comes from the line of Harshita Rawat from Bernstein. Harshita Rawat: I want to ask about the U.S. and their Fair Financing expansion. Maybe take a step back and reflect on the key learnings from the past year driven GMV growth and also quite a bit of volatility in financials. And if you talk about what in your view may be less appreciated by the investment community as it relates to Klarna U.S. growth beyond the mechanics of revenue recognition? And maybe also talk about the surprise in the first quarter, kind of what drove that on the positive side. Niclas Neglen: So I think we're seeing what we had expected over time, right? Overarchingly, Fair Financing grew about 220% in the first quarter. And we've seen that, that has driven and supported the growth of our interest income, up about 56% year-over-year. And that's also coupled with the fact that we are continuing to compound from the volumes that we saw in the second half of the year. Overarchingly, I think the first quarter really represents a good momentum in the business, and we continue to execute. We obviously beat volumes slightly higher than what we had come in and expected. That supports it. And then there's two other things. There was a later asset sale towards the back end of the quarter, which meant that we generated more interest income off that prior to the sale of those assets. And then finally, we had really strong collection performance in the first quarter. Generally, we have seasonally stronger collection performance, but this performance is even above what we had expected, particularly in the U.S. as we saw consumers repaying us off the peak season. Operator: Next, we'll go to the line of Darrin Peller from Wolfe Research. Darrin Peller: Nice quarter and nice results. Just thinking about your GMV trends and comparing what we saw in first quarter to the guidance for second quarter, maybe just provide any puts and takes on how to think about the driving factors. It was very, very strong in Q1. I know there's a tougher comp. But anything else we should think about? And then underneath that, what are the key drivers if you kind of rank ordered what you'd expect to see the strength coming from going forward for the remainder of the year? Obviously, care financing is still going to be strong, but I know it will moderate. So maybe a little more color on that, too. Niclas Neglen: Sure. So I think we've had good momentum in the business so far. One should appreciate that we are a retail-focused business that is driven by seasonality. We, in the first quarter, clocked around about 20% of our total full year volume. And in the second quarter, we're clocking about 23% of our full year GMV. So overarchingly, this is very much in line with normalized trends. And if you look to 2025, we obviously had a few central wins at the beginning of the year. I think we expect a slightly larger ramp towards the back end of the year. And then obviously, as I mentioned earlier, the significantly lower FX tailwind in Q2 versus Q1 because of the U.S. depreciation. But overarchingly, we had set up a framework for the guide of greater than. And I think we are comfortably moving towards that and focusing on beating or meeting our full year guide. Operator: Next, we'll go to the line of Will Nance from Goldman Sachs. William Nance: Thanks to Niclas and the IR team for all the work on the incremental disclosures. I'm sure that will be appreciated. If I can maybe just ask a question on some of the credit results that you guys have seen because I'm sure we'll get questions on it. I think in the deck, you're showing some of the initial cumulative losses from the second half of 2025 and non-U.S. financing cohorts. I think probably as one would expect, given some of the composition of merchant launches in the back half, the losses look like they're trending a little bit higher than prior cohorts. Maybe you can just talk about how those are trending versus your own expectations internally? And higher level, can you talk about any changes in the underwriting or in the pace of Fair Financing originations as you guys have progressed over the last 6 months? Niclas Neglen: Sure. Thank you. We're performing -- continuing to perform well and in accordance with our expectations. If you look to the forward-looking metrics, 30 days past due and 60 days past due, all of them are trending in the right way in the U.S. They're coming sequentially down in the first quarter, which just shows that we're continuing to do the underwriting in the way that we want with strong risk management. In regards to your actual question around the cumulative net charge-offs, they're also in line with expectations. As we ramped in the second half, our card business as well as our 3-month loan tenders, we saw and needed to adjust the models a little bit around that. And we're seeing good performance in both the third quarter cohort as well as the fourth quarter cohort as those normalize and our models adjust appropriately. Operator: Next, we'll go to the line of James Faucette from Morgan Stanley. James Faucette: I wanted to ask related to acceptance, et cetera. It seems like you're adding a lot of new merchants again this quarter. Just wondering how many of those merchants are net new to BNPL overall compared to merchants that already had another BNPL provider like Affirm or whomever? And what does your volume capture look like in those situations? Just trying to get a sense of how well you're being able to differentiate and attract new merchants to the product. Sebastian Siemiatkowski: Yes, this is Sebastian. So we don't have that exact number to give you, but I can give you a directional answer. Generally speaking, with our partnerships, as we highlighted -- as I highlighted in the beginning of the call today, the reason they're working with us is because we cover so many markets and that we have a payment method for every type of payment. If you are one of those PSPs and you want to allow us to be default side-by-side with Visa and Mastercard so that every merchant they work with has and offers Klarna, then it's important that our payment methods are relevant for each one of those. So some of these partnerships then sometimes are exclusive. Some of these partnerships, sometimes there's other providers. But the big difference is that they are usually not default, which means that they would require that particular merchant to add on an additional, for example, buy now, pay later provider as opposed to coming out of the box when you sign up with that PSP. And then in that case, what we track closely is if we are side-by-side with others, who would consumers actually prefer and who do they choose. And when we track that, we have seen over and over again, both in the U.S. and in Europe that we get a higher share of checkout when side-by-side with other buy now, pay later providers, which to us speaks to the strong brand and consumer preference of Klarna. Operator: Next, we'll go to the line of Bryan Keane from Citi. Bryan Keane: Niclas, maybe you could just talk about transaction margin that came in better, which was great to see. Can you just talk about the cadence as we go into second quarter and then third and fourth, what transaction margin will look like this year? Niclas Neglen: Sure. Thank you. Yes, transaction margin ended up at $389 million, up 44% in the first quarter. We expect it to continue to grow over time. It's our focus, obviously. And as you can see on transaction margin dollars, you'll see that revenue today is growing at the same pace as transaction margin dollars. We actually expect that through the year, and as you will see from our full year guide, transaction margin dollars will compound faster as the Fair Financing point-of-sale installment portfolio matures. And as such, we are guiding towards roughly about 30% growth in the transaction margin dollars versus a 22%, 23% growth in the revenue through the year. Operator: Next, we'll go to the line of Connor Allen from JPMorgan. Connor Allen: Sebastian, could you talk about the current card? You now have 5 million actives there. Any surprises in the rollout and the usage of the customers? And if you don't mind, Niclas, maybe just as a follow-up on that. Could you talk about how the ramp-up of the card this year is impacting the P&L? Sebastian Siemiatkowski: Yes, happy to start. What I'm particularly pleased about with the card and the success of it is obviously it's high growth, the fact that we now are over 5 million users globally. The additional thing that I found interesting and happy about as well is that the debit side of the card is stronger than we initially expected. So there's a lot of debit volume on it in addition to the financing point-of-sale installments that we also offer on it. So that's great to see because that speaks to the objective that we have to make this into people's truly everyday spend card that they use when shopping. Over to you, Niclas. Niclas Neglen: Thank you, Sebastian. So yes, with regards to the P&L, what we're seeing is a strong increase in our membership fees. So they're up over 600% or so in the first quarter versus prior year. And that's obviously a key element of how we continue to monetize by allowing and engaging with the consumers in the right way with the card. What we're also seeing in the card is that a card user is around -- has about 3x the frequency of a non-card user. And when you see the maturity of the performance of those, you also see an average revenue per user of about 4x higher after about 6 months of maturity into the card. So this is something that we will continue to expand on. Operator: The next, we'll go to the line of Sanjay Sakhrani from KBW. Sanjay Sakhrani: Obviously, consumers are under quite a bit of pressure around the world as a result of the geopolitical situations and your credit remains really strong. I'm just curious sort of if you could peel the onion a little bit for us and tell us what you're seeing, how you're managing the business? Is it sort of impacting how you're growing? And then specifically, maybe you could just talk about how confident or comfortable you are with the growth trends you're seeing from your key relationships here in the United States that you formed? Niclas Neglen: I'll take that one. So with regards to the first thing, I think we see a healthy Klarna user. What we're seeing is that delinquencies on the Pay Later side are stable and the delinquencies in the Fair Financing point-of-sale installments are trending stable in global ex U.S. and downwards in the U.S. as we continue to expand that portfolio, right? Overarchingly, I think the key elements of this come back to the fact that we have a short-tenured user. We have a strong brand. We have over 1 million merchants that we work with. So we're ubiquitous and people use us for everyday spending needs as well as for large ticket and medium-sized ticket. And that really is the driver here. We have done about 0.5 trillion worth of volume in the last 20 years, and we continue to improve our models, but also build on that spending with consumers. So most of our volume is actually from returning users. And then your second question with regards to the U.S., we see good performance across our large merchants and partnerships in the U.S. We continue to expand relationships, both online and offline through various partnerships. Operator: Next, we'll go to the line of Robert Wildhack from Autonomous Research. Robert Wildhack: One more on the transaction margin outlook. I hear you on the dollar growth there, but as a percentage of volume, the guidance would imply that the transaction margin is down sequentially in the second quarter and then moves even lower in the second half. And I think that's the opposite of what we might expect to see given the growth and seasoning of Fair Financing. So is there something specific that would drive that? Or any other color you could add would be helpful there. Niclas Neglen: Yes. I think, again, revenues continue to expand sequentially with regards to the Fair Financing and interest income and gain on sales. Obviously, there are some elements of timing with regards to when you do your gain on sale items. With regards to the transaction costs, you will notice that we have a strong performance with regards to our provisions for credit losses, and we expect those to be maintained. We're also looking to continue to see our processing and servicing unit economics improve over time through the year. So those are really the elements that are going to be driving the transaction margin dollars. Operator: Next, we'll go to Matthew O'Neill from Bank of America. Unknown Analyst: So just -- this is [ Caroline Lada ] on for Matt. So just on the receivables sale this quarter, generating that $57 million gain on sale. I know you said you'll act opportunistically, but how should we think about a potential run rate cadence of forward flow transactions and the impact on reported interest income volatility? Niclas Neglen: Sure. Thank you. So basically, today, we booked about $57 million worth of gain on sale. Around about 50% of that comes from routine forward flow versus the remainder through the -- what you call a back book sale. We continue to see the growth of the gain on sale sequentially every quarter is my expectation and slightly -- a slight trend increasing through the period. Operator: Next, we'll go to the line of Thomas Nilsson from Nordea. Thomas Nilsson: Could you speak a bit to the long-term earnings potential of the model with adjusted operating margin now at 6.7% in Q1 and non-transaction operating costs growing just 3%. What do you see as a sustainable medium margin target range for Klarna? Niclas Neglen: Yes. So I mean, we're slightly early to give guidance further than 2026. But generally speaking, the way we're thinking about this is the transaction margin dollars of roughly 50% as the various parts of our portfolio matures towards the more steady state. And then on the adjusted operating income, we look towards roughly 25% in the medium to long term. Operator: Next, we'll go to Nate Svensson from Deutsche Bank. Christopher Svensson: Nice results. I did want to ask about expectations for the back half of the year, I guess, in light of the reiterated full year guidance. So very solid 1Q results. Q2 looks pretty good as well. But just the implied back half growth does look a little bit lower. I know we're going to be lapping some of the larger merchant wins last year, but I was wondering if you could just walk through the puts and takes on what we should consider for growth in the back half of the year. It just looks like it's decelerating a little bit. Is there any one-timers in 2Q to keep in mind? Anything there would be helpful. Niclas Neglen: The full year guidance framework is really currently based on that greater than line items. And as we spend driven, it's just natural that seasonally in the first quarter, we've only done a bit more than about 20% of our full year overall volume expectations. And so we've got a lot of the year ahead of us, right? Given the retail-driven seasonality as well, I think, and our greater than framework. To me, there's no reason right now to change our outlook today. We have good underlying momentum in the business. We've generated strong performance in our transaction margin dollars, which is our focus point, right, up 44%. And we're going to continue to execute and deliver on that guide. Operator: Next, we'll go to the line of Andrew Bauch from BMO Capital Markets. Unknown Analyst: This is [ Connan ] on for Andrew. I appreciate the additional color on the breakout of GMV. I'm not sure if you gave it, but what was the Klarna GMV growth? I think last quarter, it was up 209% year-over-year. And then my second question is on Agentic. Could you maybe touch on your Agentic commerce strategy? Given the press release this week on Klarna embedding with Gemini and Google Pay, how do you think about presentment from a competitive standpoint versus your key peers and other payment methods? Is there a way you're thinking about better positioning Klarna to be the top choice of payment method in an Agentic transaction? Niclas Neglen: Great. So I'll take the first point. We haven't disclosed card growth. But ultimately, you will see the different payment forms that we have, and they're all growing very strongly with Fair Financing up 138%. We've got a good growth on our Pay Later, up about 29%. And then we're continuing to expand our pay in full product as well. So I think that's kind of the focus for us right now to look at those rather than the card channel. Sebastian Siemiatkowski: Right. And on the Agentic Commerce, I think Agentic Commerce need three things, and we own all three of those. That's trust, data and transaction layer. As you mentioned, this week's Google Pay launch Inside search in the Gemini app. But I would also highlight, for example, the fact that we are the solely only buy now, pay later inside Stripe Links which, if I remember correctly, is now over 200 million user wallet. So each one of these puts Klarna as a settlement layer of every major agent stack. In addition to that, it comes back to preference as we talked about in the side-by-side when Klarna is available side-by-side with other providers. So at the core of it is the strength of Klarna, the preference and then basically, whether that is executed as we today are available on Apple Pay, on Google Pay, in other Agentic layers, there will always be the question, what do you want to pay with and preference is the answer to that question. Operator: Next, we'll go to the line of Craig Maurer from FT Partners. Craig Maurer: I wanted to ask about the progress being made with Walmart and how we should expect that volume to feed into the total, considering the likely drag on margins and take rate. Niclas Neglen: So Walmart is going very well from a volume expectation and in line with what we thought. We continue to expand our partnership with One Pay and look to different ways to support them in Walmart. From our perspective, we're in a good performance, and we don't generally point or speak to particular partnership volume flows. But ultimately, we see this as a very good relationship and one that continues to expand in accordance with our expectations. Operator: Next for our final question, we'll go to the line of Jason Kupferberg from Wells Fargo. Unknown Analyst: This is [ Cassie Shannon ] on for Jason. I guess just broadly, there's been concern in the investment community about the health of the lower to middle income consumer amid rising gas prices and whether that could be a headwind for the BNPL industry overall. But is there a counterargument to be made that perhaps in times of her finances, a consumer may lean into more of BNPL as more of like a cash flow management tool. I'm just curious what your data might be showing on that front. Sebastian Siemiatkowski: Yes. I can start with answering that. I mean the Klarna consumer is showing very stable as we have seen in the numbers and that Niclas has already quoted. But I think add to that, it's important to recognize that sometimes Buy Now Pay Later may be referenced as a new phenomenon. I think about it as a charge card equivalent product. It has a short duration, people pay back and they borrow very little compared to, for example, an outstanding credit card balance might be $6,000. In general, our outstanding balance on buy now, pay later is about $120. So -- and as we have seen historically, charge card equivalents fare very well in different macro-economical environments. It is also the case that since we do take underwriting decisions in real time, it means that in the event of changing macroeconomic environments on the last 20 years, we have always had the strength of being able to adopt such underwriting and see that. It actually generally takes only about 60 days for us so that more than half of our balance sheet is underwritten by new standards. And this is another reason why we have chosen and preferred to focus the business on the Buy Now Pay Later charge card equivalent side of the business and then only extend Fair Financing to the existing user base that has a track record of payments history with Klarna in -- as they've been already using the other products. Operator: And that was our final question for today. Thank you all for joining Klarna's First Quarter 2026 Earnings Call. This concludes today's presentation. You may now log off, and we hope you have a wonderful rest of your day.