Financial Performance - Gross originations for Q1 2025 were $64.2 million, representing a 15.4% increase year-over-year, while total revenue reached $71.9 million, up 10.6%[8] - Total revenue for Q1 2025 was $71,946,000, representing a 10.3% increase from $65,061,000 in Q1 2024[38] - Net loss for Q1 2025 was $5.7 million, compared to a net loss of $0.6 million in Q1 2024, primarily due to higher costs[8] - Net loss for Q1 2025 was $5,688,000, compared to a net loss of $570,000 in Q1 2024, indicating a significant increase in losses[38] - Adjusted EBITDA for Q1 2025 was $2.2 million, down from $5.6 million in Q1 2024, impacted by increased cost of sales[8] - Adjusted EBITDA for Q1 2025 was $2,240,000, down from $5,630,000 in Q1 2024[43] - Fixed cash operating expenses increased to $10,402,000 in Q1 2025, compared to $9,390,000 in Q1 2024, reflecting a rise of 10.8%[43] Customer Metrics - KPay originations grew by approximately 57% year-over-year, with 35% of total gross originations transacted using KPay[3] - The Katapult app marketplace accounted for ~59% of first quarter gross originations, with total app originations increasing by 42% year-over-year[3] - The repeat customer rate for Q1 2025 was 57.4%, indicating strong customer retention[3] - Customer satisfaction remained high, with a Net Promoter Score of 66 as of March 31, 2025[3] Future Projections - The company expects gross originations to grow at least 20% for the full year 2025, with revenue growth projected at 17% to 20%[12][17] - The company plans to introduce new merchants to the Katapult App Marketplace during 2025 to enhance growth opportunities[7] Financial Position - Cash and cash equivalents at the end of Q1 2025 were $5,965,000, up from $3,465,000 at the end of Q4 2024[39] - Total liabilities increased to $140,222,000 as of March 31, 2025, compared to $139,965,000 at the end of 2024[39] - The company’s accumulated deficit reached $154,139,000 as of March 31, 2025, compared to $148,451,000 at the end of 2024[39] - Write-offs as a percentage of revenue were 9.0% in Q1 2025, within the company's long-term target range of 8% to 10%[8] Shareholder Information - The weighted average common shares outstanding increased to 4,618,000 in Q1 2025 from 4,242,000 in Q1 2024[38]

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 a growing consumer base[11] - Katapult estimates a total US addressable market of $50-60 billion for underserved consumers[25] Financial Performance and Growth - In Q1 2025, gross originations grew by 15.4% year-over-year[20, 122], and revenue increased by 10.6% year-over-year[20, 122] - Approximately 59% of Q1 2025 gross originations started in the app marketplace[20, 30, 32, 34] - KPay gross originations grew 57% year-over-year in Q1 2025, reaching approximately $23 million, representing approximately 35% of total gross originations[20] - Total app originations since the launch of the app marketplace in Q1 2023 reached $257.2 million[34] - Total KPay originations since the feature launch in Q1 2023 reached $141.4 million[35] Customer Base and Engagement - Approximately 57.4% of Q1 2025 gross originations were from repeat customers[14, 20, 44] - Total application volume grew approximately 59% year-over-year in Q1 2025[17, 20] Financial Metrics - Adjusted EBITDA for Q1 2025 was $2.2 million[20, 122] - Fixed cash operating expenses increased by 10.8% year-over-year in Q1 2025[122, 127]

Core Insights - Katapult Holdings, Inc. reported strong financial results for Q1 2025, with double-digit growth in gross originations and revenue, driven by increased engagement in its app marketplace [3][5][9] - The company is optimistic about achieving its full-year targets for 2025, expecting gross originations to grow at least 20% [9][11] Financial Performance - Gross originations for Q1 2025 reached $64.2 million, a 15.4% increase year-over-year, with total revenue at $71.9 million, up 10.6% [5][31] - The company experienced a net loss of $5.7 million in Q1 2025, compared to a net loss of $0.6 million in Q1 2024, primarily due to higher costs [5][31] - Adjusted EBITDA for Q1 2025 was $2.2 million, down from $5.6 million in Q1 2024, impacted by increased costs associated with rapid growth [5][36] Market Engagement - Approximately 59% of gross originations in Q1 2025 originated from the Katapult app marketplace, marking it as the largest customer referral source [5] - KPay gross originations grew approximately 57% year-over-year, with a unique customer count increase of over 65% [5][11] Business Outlook - The company plans to introduce new merchants to its app marketplace in 2025, aiming to leverage its strategic marketing and strong consumer offerings to drive growth [8][9] - Katapult expects to maintain strong credit quality in its portfolio, supported by enhancements to risk modeling and onboarding high-quality merchants [15] Key Metrics - Customer satisfaction remains high, with a Net Promoter Score of 66 as of March 31, 2025 [5] - Write-offs as a percentage of revenue were 9.0% in Q1 2025, within the company's long-term target range of 8% to 10% [13]

Core Viewpoint - Katapult Holdings, Inc. is set to release its first quarter 2025 financial results on May 15, 2025, before market opening, followed by a conference call at 8:00 AM ET to discuss these results [1]. Company Overview - Katapult is a technology-driven lease-to-own platform that collaborates with omni-channel retailers and e-commerce platforms to facilitate the purchase of durable goods for underserved U.S. non-prime consumers [3]. - The company offers a simple, fast, and transparent process through point-of-sale integrations and its mobile app, Katapult Pay™, enabling consumers who lack access to traditional financing to shop from a growing network of merchant partners [3]. - Katapult emphasizes a business model based on fairness and dignity, aiming to humanize the purchasing experience for underserved consumers [3]. Investor Relations - A live audio webcast of the upcoming conference call will be available on the Katapult Investor Relations website, with a replay accessible after the call [2]. - For further inquiries, Jennifer Kull serves as the VP of Investor Relations and can be contacted via email [5].

Financial Data and Key Metrics Changes - Gross originations grew 11.3% to $75.2 million in Q4 2024, marking nine consecutive quarters of growth [65][66] - Revenue for Q4 was $63 million, reflecting a 9.4% increase, and for the full year, revenue grew approximately 12% [72] - Gross profit for Q4 was approximately $7.4 million, down from $8.9 million in the previous year, while full-year gross profit was $45.8 million, up about 10% [73][74] - Adjusted EBITDA for Q4 was a loss of $1.1 million, while for the full year, it was approximately $4.8 million, a $6.7 million improvement compared to the previous year [81][82] Business Line Data and Key Metrics Changes - Total app originations grew by 32% year-over-year in Q4, with $46 million in gross originations starting in the app [31][32] - KPay originations were approximately $31 million, up 52% year-over-year, representing 41% of total originations [32][33] - Direct and waterfall gross originations grew approximately 44% year-over-year in Q4, excluding home furnishings and mattress categories [48] Market Data and Key Metrics Changes - Approximately 68% of total gross originations in 2024 came from direct and waterfall merchants [47] - The largest merchant, Wayfair, represented 27% of total gross originations in Q4, down from 43% in the previous year [68] Company Strategy and Development Direction - The company aims to enhance consumer engagement through app functionality and marketing campaigns, focusing on driving application growth and repeat leases [26][35] - Plans to introduce new merchants to the Katapult app marketplace throughout 2025 to expand offerings [86] - The strategy includes leveraging partnerships to broaden the application pool and enhance customer engagement [56][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential despite a challenging macro environment, particularly in the home furnishings sector [86] - The company anticipates gross originations growth of at least 20% and revenue growth of at least 20% for 2025 [90] Other Important Information - The company has a disciplined approach to expense management, with total operating expenses decreasing by 37% in Q4 [78] - Cash used in operations for the full year was $32.6 million, compared to $17.4 million in 2023, largely due to growth-related costs [85] Q&A Session Summary Question: Outlook for margin in 2025 given strong growth expectations - Management expects gross profit to remain in the 18% to 20% range for 2025, consistent with previous years [96] Question: Changes in consumer behavior due to tariffs - Management has not observed significant changes in consumer behavior related to tariffs, with stability in delinquencies and consumer sentiment [98][100] Question: Drivers for improved EBITDA margin despite revenue growth - The improvement in EBITDA margin is primarily driven by diligent expense management while investing in growth initiatives [110] Question: Growth in Wayfair originations in Q4 - Wayfair's gross origination growth was not disclosed, but overall business outside of Wayfair grew at 50% [114] Question: Impact of macro uncertainty on merchant acquisition - Management noted that uncertainty can accelerate merchant acquisition as they seek growth opportunities [120]

Katapult (KPLT) Q4 2024 Earnings Call March 28, 2025 08:00 AM ET Company Participants Jennifer Kull - VP & Head - IROrlando Zayas - CEODerek Medlin - President & Chief Growth OfficerNancy Walsh - Chief Financial OfficerKyle Joseph - Managing DirectorAnthony Chukumba - Managing Director Conference Call Participants Scott Buck - Managing Director & Senior Technology Analyst Operator Thank you for standing by, and welcome to the Catapult Holdings Fourth Quarter and Full Year twenty twenty four Earnings Confere ...

Financial Data and Key Metrics Changes - Gross originations grew 11.3% year over year to $75.2 million in Q4, marking nine consecutive quarters of growth [40] - Revenue for Q4 increased by 9.4% to $63 million, representing the seventh consecutive quarter of year-over-year growth [44] - Full year gross originations grew approximately 5%, with Q4 growth exceeding the 6% to 8% outlook [41][44] - Gross profit for Q4 was approximately $7.4 million, down from $8.9 million in the previous year, while full year gross profit was $45.8 million, up about 10% versus 2023 [45][46] Business Line Data and Key Metrics Changes - Approximately $127 million of gross originations in 2024 began in the Catapult app, with K Pay enabling nearly $77 million of those originations [14] - Total app originations grew by 32% year over year in Q4, with K Pay originations up approximately 52% year over year [20] - Direct and waterfall gross originations grew approximately 44% year over year in Q4, excluding home furnishings and mattress categories [31] Market Data and Key Metrics Changes - The largest merchant, Wayfair, represented 27% of total gross originations in Q4, down from 43% in the same quarter of the previous year [42] - Cross shopping activity grew approximately 60% in Q4, indicating a vibrant marketplace [44] Company Strategy and Development Direction - The company has transformed from a single input-driven business to a multi-dimensional growth engine, focusing on consumer engagement, merchant engagement, referral partnerships, and improving unit economics [9][18] - Plans to strategically add features and merchants to the marketplace to enhance consumer engagement and transaction volume [22][36] - The company aims to leverage its app marketplace and targeted marketing campaigns to drive growth and improve customer experience [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver continued growth in 2025, despite a challenging macro environment, particularly in the home furnishings and mattress category [54][55] - The company anticipates gross originations growth of at least 20% for 2025, with revenue growth expected to match this rate [56] Other Important Information - The company reported a Q4 adjusted EBITDA loss of $1.1 million, which was below expectations due to strong top-line growth and lease depreciation costs [51] - Cash used in operations for the full year 2024 was $32.6 million, compared to $17.4 million in 2023, largely driven by growth-related costs [53][54] Q&A Session Summary Question: Outlook for margin in 2025 - Management expects gross profit to remain in the 18% to 20% range for 2025, consistent with previous years [59] Question: Changes in consumer behavior due to tariffs - Management has not observed a direct impact from tariffs on consumer behavior, with delinquencies remaining stable [61][62] Question: Drivers for increased EBITDA margin - The improvement in EBITDA margin is primarily due to diligent expense management while investing in growth initiatives [71] Question: Growth in Wayfair originations - Wayfair's gross origination growth continues to decline, but the business outside of Wayfair remains strong, growing at 50% [72] Question: Merchant acquisition in uncertain macro environments - Management believes that uncertainty can accelerate merchant acquisition as they seek growth opportunities [78]

Financial Performance - The company incurred a net loss of $25.9 million and $36.7 million for the fiscal years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of approximately $148.5 million[105]. - The company received a going concern opinion from auditors, indicating substantial doubt about its ability to continue operations without refinancing its indebtedness[163]. - The company has previously fallen out of compliance with Nasdaq's listing requirements, which could lead to delisting and adversely affect stock liquidity and price[179]. - The company may face reputational risks and potential litigation due to the restatement of financial statements[175]. - Legal proceedings could materially affect financial condition and require significant settlement amounts[185]. Debt and Financing - As of December 31, 2024, the total aggregate indebtedness was approximately $114.5 million, with $82.8 million under the RLOC and $31.8 million under the Term Loan[95][103]. - The company may face challenges in refinancing its indebtedness, which matures on June 4, 2025, potentially impacting its financial condition and operations[98]. - The Credit Agreement includes restrictive covenants that could limit the company's ability to pursue growth strategies, including mergers and acquisitions[99]. - The interest rate on the revolving line of credit (RLOC) increased to 13.1% as of December 31, 2024, following the 15th amendment to the Credit Agreement[288]. - The interest rate on the Term Loan was 18.6% as of December 31, 2024, which includes a 6.0% PIK interest[289]. Market and Competition - The company faces significant competition from various businesses, including e-commerce retailers and virtual lease-to-own companies[86]. - Economic downturns may impact the company's ability to comply with covenants and make payments on its indebtedness[95]. - Inflation has negatively impacted consumer spending and sales of key merchants, but it has not had a material effect on the company's results of operations or financial condition[291]. Technology and Data Security - The company utilizes AI/ML for fraud analysis, credit risk analysis, and product personalization, but faces significant risks related to the performance and ethical implications of these technologies[113]. - Cybersecurity threats, including ransomware and supply-chain attacks, pose significant risks that could disrupt operations and harm reputation[139]. - The company bears the risk of customer fraud in lease-to-own transactions, which could adversely affect financial performance[149]. - The performance and reliability of the company's technology infrastructure are crucial for attracting and retaining merchants and customers[131]. - The company has implemented security measures, but there is no assurance they will be effective against evolving cyber threats[143]. Regulatory and Compliance Risks - The company is subject to extensive federal, state, and local laws and regulations, which may lead to significant compliance costs and potential litigation risks[156]. - In July 2023, the Consumer Financial Protection Bureau filed a case against Snap Finance, indicating increased regulatory scrutiny in the lease-to-own industry[160]. - The company is subject to various data privacy laws, including the TCPA, which can impose significant financial penalties for violations[123]. - Noncompliance with the Payment Card Industry Data Security Standard (PCI DSS) could result in penalties, litigation, and damage to the company's reputation[124]. - Regulatory scrutiny on AI/ML is increasing, with various jurisdictions considering new laws that could impact the company's operations and compliance costs[115]. Operational Challenges - The company must continuously innovate to remain competitive, requiring significant financial and personnel resources[90]. - The company may not be able to effectively manage its growth, which could adversely affect revenue generation and expense control[94]. - The company relies on third-party vendors for critical operations, posing risks as any service interruptions could adversely affect its business[131]. - The company relies on merchant partners to effectively present and integrate its platform, and any failure in this regard could materially affect its business[118]. - The company has identified control deficiencies that constituted material weaknesses, which were remediated, but future weaknesses may still arise[167]. Human Resources and Management - Loss of leadership team members could materially affect business operations and financial condition[191]. - Difficulty in attracting and retaining skilled employees may adversely impact business performance[192]. - Significant costs associated with compliance as a public company could impact financial position[195]. Shareholder Considerations - No plans to pay cash dividends in the foreseeable future, limiting return on investment for shareholders[198]. - The company had outstanding warrants to purchase an aggregate of 673,300 shares of common stock as of December 31, 2024, which could result in dilution for existing stockholders[204]. - The company may issue additional securities in connection with investments or acquisitions, which could lead to dilution for stockholders[203]. - Anti-takeover provisions in the company's organizational documents may delay or prevent a change of control, limiting stockholders' ability to obtain a premium for their shares[207].

Financial Performance - Total revenue for Q4 2024 was $63.0 million, reflecting a 9.4% year-over-year increase[5]. - Total revenue for the year ended December 31, 2024, was $247.194 million, an increase from $221.588 million in 2023, representing a growth of approximately 11.5%[37]. - Gross profit for the year ended December 31, 2024, was $45.771 million, compared to $41.707 million in 2023, reflecting an increase of about 9.9%[37]. - Total revenue for Q4 2024 was $62,963,000, representing a 9.5% increase from $57,558,000 in Q4 2023[46]. - Gross profit for the year ended December 31, 2024, was $45,771,000, up from $41,707,000 in 2023, indicating a growth of 9.9%[46]. Growth Metrics - Gross originations for Q4 2024 were $75.2 million, an increase of 11.3% year-over-year, with a 50% growth excluding the home furnishings and mattress category[5]. - The company achieved a 50% growth in application volume during Q4 2024, driven by new and existing customers[2]. - KPay gross originations grew approximately 52% year-over-year in Q4 2024, accounting for 41% of total gross originations[4]. - The company expects gross originations to grow at least 20% in Q1 2025 and throughout the year[9]. - Gross originations in Q4 2024 reached $75.2 million, an increase from $67.5 million in Q4 2023, marking a growth of 11.6%[48]. Customer Metrics - Approximately 61% of Q4 2024 gross originations started in the Katapult app marketplace, making it the largest customer referral source[3]. - The repeat customer rate was 61.5% for Q4 2024, indicating strong customer retention[3]. Operating Expenses - Total operating expenses in Q4 2024 decreased by 37.4%, with fixed cash operating expenses down approximately 7.1%[5]. - Total operating expenses for the year ended December 31, 2024, were $53.872 million, down from $60.499 million in 2023, showing a reduction of about 11%[37]. - Total operating expenses for the year ended December 31, 2024, were $53,872,000, down from $60,499,000 in 2023, a decrease of 11.9%[44]. Net Loss and Adjusted Metrics - Net loss for Q4 2024 was $9.6 million, an improvement from a net loss of $14.6 million in Q4 2023[5]. - The net loss for the year ended December 31, 2024, was $25.915 million, a decrease from a net loss of $36.666 million in 2023, indicating an improvement of approximately 29.4%[37]. - Adjusted EBITDA for Q4 2024 was $(1,068,000), an improvement from $(327,000) in Q4 2023[43]. - The adjusted net loss for Q4 2024 was $(8,007,000), compared to $(6,309,000) in Q4 2023, indicating a worsening of 26.9%[43]. Balance Sheet Highlights - Cash and cash equivalents at the end of the period were $3.465 million, a significant decrease from $21.408 million at the end of 2023[39]. - The company reported a total of $90.368 million in current assets as of December 31, 2024, down from $97.637 million in 2023[39]. - The total liabilities increased to $139.965 million as of December 31, 2024, compared to $128.854 million in 2023, representing an increase of approximately 8.7%[39]. - The company’s accumulated deficit as of December 31, 2024, was $148.451 million, up from $122.536 million in 2023[39]. - The weighted average common shares outstanding increased to 4.518 million in 2024 from 4.130 million in 2023[37]. Interest and Compensation Expenses - Interest expense and other fees for the year ended December 31, 2024, totaled $18,851,000, compared to $17,822,000 in 2023, an increase of 5.8%[43]. - Stock-based compensation expense for the year ended December 31, 2024, was $5,759,000, down from $7,034,000 in 2023, a decrease of 18.1%[43]. Write-offs - Write-offs as a percentage of revenue were 9.6% in Q4 2024, within the company's long-term target range of 8% to 10%[5].

Core Insights - Katapult Holdings, Inc. reported strong performance in Q4 2024, with significant growth in gross originations and application volume, indicating a successful holiday season and positive momentum heading into 2025 [2][4][6] - The company is transitioning to a two-sided marketplace model, which has resulted in increased customer engagement and repeat business, with 61% of gross originations originating from the Katapult app marketplace [2][4][11] - For 2025, Katapult expects gross originations to grow at least 20%, driven by strategic marketing and the introduction of new merchants to its platform [6][7][11] Financial Performance - In Q4 2024, gross originations reached $75.2 million, an increase of 11.3% year-over-year, while total revenue was $63.0 million, up 9.4% [8][37] - The company achieved a net loss of $9.6 million in Q4 2024, an improvement from a net loss of $14.6 million in Q4 2023 [8][30] - For the full year 2024, total revenue was $247 million, reflecting an 11.6% increase compared to 2023 [8][37] Customer Engagement and Market Strategy - The company reported a 50% year-over-year increase in lease applications during Q4 2024, driven by both new and existing customers [4][8] - Katapult's KPay platform contributed to approximately 52% year-over-year growth in gross originations, with 41% of total gross originations transacted using KPay [4][8] - The company launched new partnerships with merchants, expanding its ecosystem to 33 merchants, and executed co-branded marketing campaigns that significantly boosted originations during the Cyber 5 period [4][8] Outlook and Market Position - Katapult is well-positioned to continue growth in 2025, targeting underserved non-prime consumers, particularly as traditional credit options may become less available [6][11] - The company anticipates maintaining strong credit quality in its portfolio through enhanced risk modeling and onboarding high-quality merchants [15] - The strategic focus on a two-sided marketplace model is expected to allow for scalable revenue growth without a proportional increase in expenses, enhancing profitability [11][15]