Summary of Katapult (KPLT) FY Conference Call - September 05, 2025 Company Overview - **Company**: Katapult Holdings - **Industry**: E-commerce-based financial technology, specifically in the lease-to-own (LTO) space - **CEO**: Orlando Zayas Core Product and Market Position - **LTO Product**: Allows non-prime consumers to acquire durable goods from hundreds of retailers across the U.S. [2][3] - **Market Size**: Estimated total U.S. market for LTO is $60 billion, with Katapult and competitors capturing less than 1% [3] - **Differentiation**: Katapult's LTO product is technologically advanced and user-friendly, leading to high Net Promoter Scores (NPS) and repeat purchase rates [3] Consumer Demographics and Needs - **Target Audience**: Non-prime consumers, including those without traditional credit scores or those unable to qualify for traditional financing [4][6] - **Financial Vulnerability**: 37% of U.S. adults cannot cover a $400 emergency expense; over 40% lack sufficient savings for three months of living expenses [7][14] Product Features and Benefits - **Transparency**: No interest, penalties, or late fees, allowing consumers to understand the full cost of ownership upfront [5] - **Flexibility**: Customers can return products at any time during the lease, with lease terms up to 18 months [5] - **Affordability**: LTO is more affordable than other options, saving consumers an average of $300 compared to common payment alternatives [15] Marketplace Development - **App Launch**: The Katapult app was launched two years ago, transitioning from reliance on merchants for traffic to creating a self-sustaining marketplace [8][10] - **K-Pay Feature**: Introduced to allow seamless checkout using a proprietary virtual credit card, enhancing consumer experience and engagement [9][10] - **Growth Metrics**: In 2024, approximately $127 million of gross originations began in the app, with K-Pay enabling nearly $77 million of those [10] Financial Performance - **Recent Growth**: 11 consecutive quarters of year-over-year gross originations growth; Q2 2025 saw a 30.4% increase in gross originations and over 22% revenue growth [11][16] - **Future Outlook**: For Q3, expected gross originations growth of 25% to 30%, revenue growth of 20% to 25%, and adjusted EBITDA of $3 million to $3.5 million [16][17] Strategic Partnerships and Merchant Benefits - **Merchant Engagement**: Katapult provides merchants access to a new pool of engaged shoppers, with benefits including high repeat rates and lower abandoned cart rates [11][12] - **Risk Mitigation**: Merchants face no risk from customer defaults or returns and do not incur transaction-related interchange costs [12] Conclusion - **Mission Focus**: Katapult remains committed to providing fair and transparent LTO options for consumers while serving as a growth partner for merchants [17]

Company Overview - Katapult Holdings, Inc. is an e-commerce focused financial technology company that operates a technology-driven lease-to-own platform [3] - The company integrates with omni-channel retailers and e-commerce platforms to provide purchasing solutions for underserved U.S. non-prime consumers [3] - Katapult's services include point-of-sale integrations and a mobile app featuring Katapult Pay, allowing consumers access to a growing network of merchant partners [3] Upcoming Events - Orlando Zayas, CEO, and Nancy Walsh, CFO, will participate in the H.C. Wainwright 27th Annual Global Investment Conference from September 8 to 10, 2025 [1] - A presentation by Orlando Zayas will provide an overview of the Katapult business [1] - The presentation will be available via on-demand webcast starting at 7:00 AM ET on September 5, 2025 [2]

PART I. Financial Information [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements and accompanying notes for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($K) | | :--- | :--- | :--- | :--- | | Total Assets | 90,584 | 93,171 | (2,587) | | Total Liabilities | 144,646 | 139,965 | 4,681 | | Total Stockholders' Deficit | (54,062) | (46,794) | (7,268) | | Cash and cash equivalents | 3,659 | 3,465 | 194 | | Restricted cash | 5,331 | 13,087 | (7,756) | | Property held for lease, net | 69,393 | 67,085 | 2,308 | | Revolving line of credit, net | 80,617 | 82,582 | (1,965) | | Term loan, net, current | 28,280 | 30,047 | (1,767) | | Derivative liability - new term loan | 3,558 | — | 3,558 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations Highlights (dollars in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($K) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 71,886 | 58,863 | 13,023 | 22.1% | | Cost of Revenue | 60,718 | 48,935 | 11,783 | 24.1% | | Gross Profit | 11,168 | 9,928 | 1,240 | 12.5% | | Operating Expenses | 12,578 | 12,549 | 29 | 0.2% | | Loss from Operations | (1,410) | (2,621) | 1,211 | (46.2%) | | Net Loss | (7,835) | (6,888) | (947) | 13.7% | | Net Loss per Common Share | (1.63) | (1.61) | (0.02) | 1.2% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($K) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 143,832 | 123,924 | 19,908 | 16.1% | | Cost of Revenue | 118,315 | 97,508 | 20,807 | 21.3% | | Gross Profit | 25,517 | 26,416 | (899) | (3.4%) | | Operating Expenses | 27,463 | 25,237 | 2,226 | 8.8% | | Income (loss) from Operations | (1,946) | 1,179 | (3,125) | (265.1%) | | Net Loss | (13,523) | (7,458) | (6,065) | 81.3% | | Net Loss per Common Share | (2.87) | (1.75) | (1.12) | 64.0% | [Condensed Consolidated Statements of Stockholders' Deficit](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) Stockholders' Deficit Changes (amounts in thousands) | Metric | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Balances at Period End (Shares) | 4,447 | 4,570 | | Total Stockholders' Deficit | (46,794) | (54,062) | | Accumulated Deficit | (148,451) | (161,974) | | Issuance of warrants (Refinancing Agreement) | — | 3,934 | | Stock-based compensation expense (Six Months) | — | 1,930 | | Issuance of shares (litigation settlement) | — | 752 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (dollars in thousands, Six Months Ended June 30) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | (3,196) | 1,352 | | Net cash used in investing activities | (660) | (337) | | Net cash (used in) provided by financing activities | (3,706) | 8,548 | | Net (decrease) increase in cash, cash equivalents and restricted cash | (7,562) | 9,563 | | Cash and cash equivalents and restricted cash at end of period | 8,990 | 38,374 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - Katapult operates a technology-driven lease-to-own platform for underserved U.S. non-prime consumers, with **revenue strongest in Q1** due to holiday originations and tax refunds[25](index=25&type=chunk)[26](index=26&type=chunk) - Key accounting estimates include property held for lease depreciation/impairment, derivative liability fair value, and deferred tax asset valuation[29](index=29&type=chunk)[30](index=30&type=chunk) Property Held for Lease and Cost of Revenue (dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property held for lease, net | 69,393 | 67,085 | | Cost of Revenue Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Depreciation expense for property held for lease | 41,473 | 34,441 | | Depreciation for early lease purchase options (buyouts) | 9,346 | 7,144 | | Depreciation for impaired leases | 7,300 | 5,932 | | Other | 2,599 | 1,418 | | **Total cost of revenue** | **60,718** | **48,935** | - On June 12, 2025, the company entered into a Refinancing Agreement, establishing a New Revolving Facility with an initial committed amount of **$110 million** and a New Term Loan with an initial principal amount of **$33 million**[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - The company's financial statements are prepared on a going concern basis, but rigorous covenants of the New Revolving Credit Facility **raise substantial doubt about its ability to continue as a going concern**[76](index=76&type=chunk) - Warrants to purchase **486,264 shares** of common stock were issued to Blue Owl with an exercise price of $0.01 per share[90](index=90&type=chunk)[91](index=91&type=chunk) - The DCA Litigation was settled for **$3.0 million**, and the Shareholder Litigation was settled for **$12.0 million**[97](index=97&type=chunk)[100](index=100&type=chunk)[104](index=104&type=chunk) Fair Value Measurements (dollars in thousands, June 30, 2025) | Metric | Carrying Amount | Fair Value | | :--- | :--- | :--- | | New Revolving Facility | 80,617 | 79,995 | | New Term Loan | 28,280 | 29,097 | | Derivative Liability - New Term Loan | 3,558 | 3,558 | | Warrant liability | 103 | 103 | - Subsequent to June 30, 2025, stockholders approved the issuance of shares for the Blue Owl Warrants and Term Loan Conversion, setting the Refinancing Agreement maturity date to December 31, 2026[115](index=115&type=chunk)[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting revenue growth from Katapult Pay, offset by declining margins, increased net losses, and liquidity challenges [OVERVIEW](index=29&type=section&id=OVERVIEW) - Katapult Holdings, Inc. operates a technology-driven lease-to-own platform that integrates with omnichannel retailers and e-commerce platforms to serve underserved U.S. non-prime consumers[121](index=121&type=chunk) [Key Performance Metrics](index=29&type=section&id=Key%20Performance%20Metrics) Gross Originations (dollars in thousands) | Period | 2025 | 2024 | Change ($K) | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | 72,138 | 55,311 | 16,827 | 30.4% | | Six Months Ended June 30 | 136,337 | 110,941 | 25,396 | 22.9% | - Wayfair's share of gross originations (excluding Katapult Pay) **decreased to 27%** for the three and six months ended June 30, 2025, down from 48% in the prior year periods[124](index=124&type=chunk)[126](index=126&type=chunk) - Katapult Pay's share of gross originations **increased to 39%** for the three months ended June 30, 2025 (from 28% in 2024) and to 37% for the six months (from 27% in 2024)[125](index=125&type=chunk)[127](index=127&type=chunk) [RESULTS OF OPERATIONS](index=31&type=section&id=RESULTS%20OF%20OPERATIONS) Total Revenue and Gross Profit (dollars in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($K) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 71,886 | 58,863 | 13,023 | 22.1% | | Cost of Revenue | 60,718 | 48,935 | 11,783 | 24.1% | | Gross Profit | 11,168 | 9,928 | 1,240 | 12.5% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($K) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 143,832 | 123,924 | 19,908 | 16.1% | | Cost of Revenue | 118,315 | 97,508 | 20,807 | 21.3% | | Gross Profit | 25,517 | 26,416 | (899) | (3.4%) | - **Gross profit as a percentage of total revenue decreased** to 15.5% for Q2 2025 (from 16.9% in 2024) and to 17.7% for H1 2025 (from 21.3% in 2024)[140](index=140&type=chunk)[147](index=147&type=chunk) - Interest expense increased by **$0.7 million** for the three months and **$1.3 million** for the six months ended June 30, 2025, due to higher outstanding debt balances[143](index=143&type=chunk)[148](index=148&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP Financial Measures (dollars in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted Gross Profit | 9,211 | 8,296 | 21,703 | 23,143 | | Adjusted EBITDA | 322 | (377) | 2,562 | 5,253 | | Adjusted Net Loss | (5,659) | (5,445) | (9,015) | (4,462) | | Fixed Cash Operating Expenses | 9,159 | 9,102 | 19,561 | 18,492 | [LIQUIDITY & CAPITAL RESOURCES](index=36&type=section&id=LIQUIDITY%20&%20CAPITAL%20RESOURCES) - As of August 8, 2025, the combined principal balance outstanding under the New Revolving Facility and New Term Loan was approximately **$115.9 million**[158](index=158&type=chunk) Cash Flow Summary (dollars in thousands, Six Months Ended June 30) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | (3,196) | 1,352 | | Net cash used in investing activities | (660) | (337) | | Net cash (used in) provided by financing activities | (3,706) | 8,548 | | Cash, cash equivalents and restricted cash at end of period | 8,990 | 38,374 | - The company's financial statements are prepared on a going concern basis, but rigorous covenants of the New Revolving Credit Facility **raise substantial doubt about its ability to continue for one year**[166](index=166&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk from its variable and fixed-rate debt facilities, with a 100 basis point change significantly impacting annual interest expense - The New Revolving Facility accrues interest at a SOFR-based rate plus 7.00% per annum, resulting in an **11.9% interest rate** as of June 30, 2025[177](index=177&type=chunk) - The New Term Loan bears a **fixed interest rate of 18.0%** per annum, accruing as PIK interest weekly[178](index=178&type=chunk) - A hypothetical **100 basis point change** in interest rates would alter the annual interest expense by approximately **$0.8 million** for the New Revolving Facility and **$0.3 million** for the New Term Loan[179](index=179&type=chunk) - Inflation has indirectly impacted the business by **negatively affecting consumer spending** and the sales of key merchants[180](index=180&type=chunk) [ITEM 4. Controls and Procedures](index=40&type=section&id=ITEM%204.%20Controls%20and%20Procedures) As of June 30, 2025, management concluded that the company's disclosure controls and procedures were effective, with no material changes in internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[182](index=182&type=chunk) - **No material changes** in internal control over financial reporting occurred during the six months ended June 30, 2025[183](index=183&type=chunk) PART II. Other Information [ITEM 1. LEGAL PROCEEDINGS](index=40&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company details its involvement in various legal proceedings, including settled lawsuits and an ongoing patent claim - The company is involved in various legal proceedings, with details provided in Note 9 to the Unaudited Condensed Consolidated Financial Statements[184](index=184&type=chunk) [ITEM 1A. RISK FACTORS](index=40&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from its debt agreement, merchant concentration, consumer behavior, competition, and legal and compliance challenges - If the company triggers an event of default under the Refinancing Agreement, **obligations could accelerate**, materially impacting the business[186](index=186&type=chunk)[193](index=193&type=chunk)[196](index=196&type=chunk) - The New Term Loan and Blue Owl Warrants may result in **substantial dilution to stockholders**, with the Term Loan Conversion potentially issuing up to **21,378,017 shares**[186](index=186&type=chunk)[197](index=197&type=chunk) - The company has substantial indebtedness, with approximately **$113.6 million principal outstanding** under the Refinancing Agreement as of June 30, 2025[190](index=190&type=chunk)[198](index=198&type=chunk) - The Refinancing Agreement includes **restrictive and financial maintenance covenants** that could limit operations or growth strategies[190](index=190&type=chunk)[202](index=202&type=chunk) - A significant portion of gross originations is concentrated with **Wayfair (27% for Q2 and H1 2025)**, creating vulnerability[190](index=190&type=chunk)[205](index=205&type=chunk) - The company's success depends on customers making timely lease payments, which is influenced by factors affecting **non-prime consumer spending**[212](index=212&type=chunk) - Proprietary algorithms and decisioning tools may not accurately predict consumer behavior, potentially leading to **increased delinquencies and write-offs**[213](index=213&type=chunk)[214](index=214&type=chunk) - The company has a history of operating losses, with a net loss of **$13.5 million** for the six months ended June 30, 2025, and an accumulated deficit of approximately **$162.0 million**[227](index=227&type=chunk) - The company utilizes AI/ML in its business, which carries risks related to model design, data quality, and **evolving regulatory frameworks**[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - The company is subject to **stringent and changing data privacy and security laws** (e.g., TCPA, CCPA, PCI DSS), which could increase compliance costs and risks[243](index=243&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) - **Data security breaches or other security incidents** could result in regulatory investigations, litigation, fines, and reputational harm[259](index=259&type=chunk)[262](index=262&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - The company's auditors issued a **going concern opinion**, indicating substantial doubt about its ability to continue as an ongoing business[195](index=195&type=chunk)[283](index=283&type=chunk) - The price of the company's securities is **likely to be volatile** due to macroeconomic conditions, operating results, and other market factors[300](index=300&type=chunk)[301](index=301&type=chunk)[303](index=303&type=chunk) - Future sales of common stock could increase the number of shares eligible for public resale and result in **dilution to existing stockholders**[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=65&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company issued shares as part of class action lawsuit settlements, relying on Section 3(a)(10) of the Securities Act for these unregistered sales - On April 10, 2025, the company issued **54,024 shares** of common stock in connection with a class action lawsuit settlement[320](index=320&type=chunk) - On June 13, 2025, the company issued **29,793 shares** of common stock in connection with another class action lawsuit settlement[320](index=320&type=chunk) - Both issuances were **unregistered sales of equity securities**, made in reliance upon Section 3(a)(10) of the Securities Act[320](index=320&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=65&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported for the period - No defaults upon senior securities were reported[317](index=317&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=65&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) No mine safety disclosures were reported for the period - No mine safety disclosures were reported[321](index=321&type=chunk) [ITEM 5. OTHER INFORMATION](index=66&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No Rule 10b5-1 trading plans were reported for the period - No Rule 10b5-1 Trading Plans were reported[322](index=322&type=chunk) [ITEM 6. EXHIBITS](index=66&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, credit agreements, and officer certifications - The exhibits include the Second Amended and Restated Certificate of Incorporation, Form of Warrant to Purchase Stock, and the Amended and Restated Loan and Security Agreement[323](index=323&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer are also included[323](index=323&type=chunk) [SIGNATURES](index=68&type=section&id=SIGNATURES) The report was duly signed on behalf of the registrant by the Chief Financial Officer on August 13, 2025 - The report was signed by Nancy Walsh, Chief Financial Officer, on August 13, 2025[329](index=329&type=chunk)

Financial Data and Key Metrics Changes - In Q2 2025, gross originations grew by 30.4% year over year to $72.1 million, exceeding the top end of the outlook range [6][29] - Revenue for Q2 2025 increased by 22.1% to $71.9 million, surpassing the expected growth of 17% to 20% [6][31] - Adjusted EBITDA was slightly above breakeven at over $300,000, compared to expectations of breakeven [6][34] Business Line Data and Key Metrics Changes - Total app originations grew by 56% to $43.1 million, with approximately 60% of gross originations starting in the app marketplace [9][29] - KPay originations accelerated to approximately 81% year over year, totaling $28.3 million [9][20] - Unique new customers increased by approximately 40%, contributing to a total customer base growth of about 32% [10][13] Market Data and Key Metrics Changes - Gross originations for the top 25 merchants grew by 28% in Q2, with a notable 65% growth when excluding the largest merchant, Wayfair [30][31] - Direct and waterfall merchants accounted for approximately 61% of total gross originations, with a growth of about 11% [22][23] - Excluding home furnishings and mattress categories, gross originations grew by 62% year over year [29][30] Company Strategy and Development Direction - The company aims to build a successful two-sided marketplace for lease-to-own consumers, focusing on consumer engagement, merchant engagement, referral partnerships, and improving unit economics [11][28] - The strategy includes enhancing the consumer journey and experience to drive engagement and conversion [15][19] - The company is actively working on partnerships to drive top-of-funnel traffic and referrals [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of customers despite macroeconomic factors and expects write-offs to remain within the targeted range of 8% to 10% [44][45] - The company is raising its 2025 outlook for gross originations to a growth range of 25% to 30% [41][42] - Management is closely monitoring macroeconomic headwinds and is prepared to adapt to changes in economic policies [27][41] Other Important Information - The company completed a refinancing agreement that increased liquidity and reduced interest rates on its revolving line of credit [38][39] - Cash used for operations in Q2 2025 was $3.2 million, compared to $1.4 million generated in Q2 2024 [40] Q&A Session Summary Question: What drove the year-over-year increase in lease merchandise charge-off rate? - Management noted fluctuations in quarterly results are not concerning as they remain within the targeted range [44][45] Question: What does the pipeline look like for new partners? - The pipeline is strong, with interest from various segments, including auto and home furnishings [47][48] Question: What strategies are being implemented to drive higher application activity? - The company has focused on digital marketing and customer referral strategies to attract new customers [52][54] Question: What is the competitive environment like regarding pricing and credit? - Management indicated stability in the competitive landscape and emphasized optimizing pricing for conversion and repeat rates [55][57]

Business Overview - Katapult operates a lease-to-own solution connecting consumers and merchants for omnichannel transactions[6] - The company's mission is to enable consumers to acquire durable goods and connect retailers with engaged consumers[11] - Katapult estimates a total US addressable market of $50-60 billion for underserved consumers[26] Financial Performance - Gross originations grew by 30.4% year-over-year in Q2 2025[20] - Revenue increased by 22.1% year-over-year in Q2 2025[20] - Adjusted EBITDA was $0.3 million in Q2 2025, exceeding the breakeven outlook[20] - Total app originations have reached $300.3 million since the launch of the app marketplace in Q1 2023[35] - KPay originations grew 81% year-over-year in Q2 2025, representing approximately 39% of total gross originations[20, 36] Customer Base and Engagement - Approximately 990,000 applications were approved in the last twelve months[10] - Repeat customers accounted for 58.4% of gross originations in Q2 2025[14, 20, 44] - Total application volume grew by over 91% year-over-year in Q2 2025[17, 20] Marketplace and Merchant Partnerships - The platform includes over 200 merchants[10, 42] - Approximately 60% of Q2 2025 gross originations started in the app marketplace[20, 31, 33, 35]

Katapult Delivers Second Quarter Gross Originations, Revenue and Adjusted EBITDA Above Outlook Raising Full Year 2025 Gross Originations Outlook Gross Originations, Revenue and Adjusted EBITDA Growth to Continue In Third Quarter PLANO, Texas, August 13, 2025 — Katapult Holdings, Inc. ("Katapult" or the "Company") (NASDAQ: KPLT), an e-commerce-focused financial technology company, today reported its financial results for the second quarter ended June 30, 2025. "We came out of the gate strong in 2025 and that ...

Core Insights - Katapult Holdings, Inc. reported strong financial performance in Q2 2025, with a 30% increase in gross originations and a 22% rise in revenue year-over-year, indicating robust growth momentum [2][4][6] - The company is raising its full-year 2025 gross originations outlook, expecting growth between 20% and 25%, driven by a strong customer base and expanding merchant partnerships [7][10] Financial Performance - Gross originations for Q2 2025 reached $72.1 million, a 30.4% increase compared to Q2 2024, with KPay gross originations growing by approximately 81% year-over-year [4][10] - Total revenue for Q2 2025 was $71.9 million, reflecting a 22.1% increase from the previous year [4][39] - Adjusted EBITDA improved to $0.3 million in Q2 2025, compared to a loss of $0.4 million in Q2 2024 [9][37] Customer Metrics - The unique new customer base grew by approximately 40% year-over-year, with a repeat customer rate of 58.4% for Q2 2025 [2][4] - Customer satisfaction remained high, with a Net Promoter Score (NPS) of 63 as of June 30, 2025 [4] Operational Highlights - Approximately 60% of gross originations in Q2 2025 originated from the Katapult app marketplace, which saw a 56% year-over-year growth in gross originations [4][6] - KPay's unique customer count grew nearly 87% year-over-year, with 39% of total gross originations transacted using KPay [4][6] Refinancing and Capital Structure - Katapult entered a new Refinancing Agreement with Blue Owl Capital, increasing its revolving line of credit to $110 million and extending the maturity date to December 4, 2026 [5][11] - The interest rate on the revolving line of credit was reduced by approximately 150 basis points, enhancing the company's liquidity position [5][11] Market Outlook - The company anticipates continued growth in 2025, supported by a large addressable market of underserved, non-prime consumers, particularly as lease-to-own solutions become more attractive in a tightening credit environment [6][7] - The outlook for the home furnishings and mattress category remains cautious, with expectations that performance will not improve materially from 2024 [8]

Group 1 - Momentum investing contrasts with the traditional strategy of "buy low and sell high," focusing instead on "buying high and selling higher" [1] - Identifying the right entry point for fast-moving stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] Group 2 - Katapult Holdings, Inc. (KPLT) has shown significant price momentum, with a four-week price change of 48.8% [3] - KPLT has gained 61.7% over the past 12 weeks, indicating strong long-term momentum [4] - The stock has a beta of 1.75, suggesting it moves 75% more than the market in either direction [4] Group 3 - KPLT has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 2 (Buy), supported by upward revisions in earnings estimates [6] - KPLT is trading at a Price-to-Sales ratio of 0.21, suggesting it is undervalued at 21 cents for each dollar of sales [6] Group 4 - KPLT appears to have significant growth potential and is part of a broader list of stocks that meet the 'Fast-Paced Momentum at a Bargain' criteria [7] - There are over 45 Zacks Premium Screens available to help identify winning stock picks based on various investing styles [8]

Company Announcement - Katapult Holdings, Inc. will release its second quarter 2025 financial results before the market opens on August 13, 2025 [1] - A conference call and webcast will be held at 8:00 AM ET on the same day to discuss these results [1] Investor Relations - A live audio webcast of the conference call will be available on the Katapult Investor Relations website [2] - A replay of the call will also be accessible on the investor relations website following the event [2] Company Overview - Katapult is a technology-driven lease-to-own platform that collaborates with omni-channel retailers and e-commerce platforms [3] - The company focuses on providing purchasing solutions for underserved U.S. non-prime consumers through point-of-sale integrations and a mobile app featuring Katapult Pay™ [3] - Katapult aims to offer a simple, fast, and transparent process for consumers who may not have access to traditional financing [3]

Financial Performance - Total revenue for the three months ended March 31, 2025, was $71,946,000, representing an increase of $6,885,000 or 10.6% compared to $65,061,000 in the same period in 2024[107] - Rental revenue increased by $6,936,000 or 10.8% to $71,078,000 for the three months ended March 31, 2025, compared to $64,142,000 in 2024[107] - Gross profit decreased to $14,349,000 for the three months ended March 31, 2025, down $2,139,000 or 13.0% from $16,488,000 in the same period in 2024[107] - Net loss for the three months ended March 31, 2025, was $5,688,000, an increase of $5,118,000 or 897.9% compared to a net loss of $570,000 in 2024[107] - Adjusted gross profit for the three months ended March 31, 2025, was $12,492,000, down from $14,847,000 in the same period in 2024[119] - Adjusted EBITDA for the three months ended March 31, 2025, was $2,240,000, a decrease of $3,390,000 or 60.3% from $5,630,000 in 2024[121] - Adjusted net income (loss) for the same period was $(3.356) million, a decrease from an adjusted net income of $0.983 million in 2024[123] Operating Expenses - Operating expenses increased by $2,197,000 or 17.3% to $14,885,000 for the three months ended March 31, 2025, compared to $12,688,000 in 2024[115] - Fixed cash operating expenses increased to $10.402 million in Q1 2025 from $9.390 million in Q1 2024, reflecting a rise of approximately 10.8%[124] Cash Flow and Liquidity - Cash provided by operating activities increased by $1.5 million to $3.438 million in Q1 2025 compared to $1.980 million in Q1 2024[130] - As of May 12, 2025, the company had total cash on hand of $12.8 million, including $7.1 million of unrestricted cash, raising concerns about its ability to repay loans at maturity[126] - The company had a combined principal balance outstanding of approximately $113.3 million related to the RLOC and term loan, both maturing within twelve months[125] - The company experienced a decrease in net proceeds from the RLOC of $4.9 million, contributing to a change in cash used in financing activities of $12.2 million in Q1 2025 compared to Q1 2024[132] Debt and Interest Rates - The interest rate on the RLOC increased from 7.5% to 8.5% per annum, with the current rate at 12.9% as of March 31, 2025[141] - The interest rate on the Term Loan was 18.4% as of March 31, 2025, which includes 6.00% PIK interest[142] - The company is currently seeking to refinance its loans prior to maturity in June 2025, which raises substantial doubt about its ability to continue as a going concern[126] Originations and Write-offs - Gross originations for the three months ended March 31, 2025, were $55,630,000, a decrease of $8,569,000 or 15.4% from $64,199,000 in the same period in 2024[99] - Write-offs as a percentage of total revenue were 9.0% for the three months ended March 31, 2025, compared to 8.4% in the same period in 2024, remaining within the target range of 8% to 10%[109] - Katapult Pay represented 35% of gross originations during the three months ended March 31, 2025, up from 26% in the same period in 2024[100]