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]

Group 1 - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for trending 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, with tools like the Zacks Momentum Style Score aiding in identifying such stocks [2] Group 2 - Katapult Holdings, Inc. (KPLT) is highlighted as a strong candidate for momentum investing, having experienced a four-week price change of 17.5% [3] - KPLT has gained 107.5% over the past 12 weeks, indicating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.64, suggesting it moves 64% more than the market, reflecting its fast-paced momentum [4] Group 3 - KPLT has a Momentum Score of B, indicating a favorable time to invest in the stock to leverage its momentum [5] - The stock has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - KPLT is trading at a low Price-to-Sales ratio of 0.21, suggesting it is undervalued and offers significant upside potential [6] Group 4 - In addition to KPLT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, which can help identify winning stock picks [8]

Core Viewpoint - Katapult Holdings, Inc. is set to release its fourth quarter and full year 2024 financial results on March 28, 2025, before market opening, followed by a conference call 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 financial results 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].

Company Performance - Katapult Holdings, Inc. (KPLT) has shown a year-to-date performance increase of approximately 55.4%, significantly outperforming the average return of 4.4% in the Business Services sector [4] - The Zacks Consensus Estimate for KPLT's full-year earnings has risen by 11% over the past 90 days, indicating improved analyst sentiment and earnings outlook [4] Industry Comparison - Katapult Holdings, Inc. is part of the Technology Services industry, which consists of 151 companies and currently ranks 68 in the Zacks Industry Rank, with an average gain of 4% year-to-date [6] - In contrast, PagSeguro Digital Ltd. operates within the Financial Transaction Services industry, which has 37 stocks and ranks 88, with a year-to-date increase of 5.3% [6] Zacks Rank - Katapult Holdings, Inc. holds a Zacks Rank of 2 (Buy), suggesting it is positioned to outperform the broader market in the near term [3] - PagSeguro Digital Ltd. also has a Zacks Rank of 2 (Buy), indicating strong potential for continued performance [5]

Core Viewpoint - Katapult Holdings, Inc. (KPLT) has experienced a downtrend, losing 17.1% over the past week, but a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging to counteract selling pressure [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, with reduced selling pressure, suggesting that bulls may be regaining control [2][4]. - A hammer pattern forms when there is a small candle body with a long lower wick, indicating that the stock opened lower, made a new low, but closed near or above the opening price, reflecting buying interest [3][4]. - This pattern can occur across various timeframes and is utilized by both short-term and long-term investors [4]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for KPLT, which is a bullish indicator, as it typically leads to price appreciation [6]. - The consensus EPS estimate for KPLT has increased by 11% over the last 30 days, indicating strong agreement among analysts regarding the company's potential for better earnings [7]. - KPLT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which historically outperform the market [8].

Group 1: Momentum Investing Overview - Momentum investing contrasts with the traditional strategy of "buy low and sell high," focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for trending stocks is challenging, as they may lose momentum if future growth does not justify their high valuations [1] Group 2: Investment Strategy - A safer investment approach involves targeting bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [2] - The 'Fast-Paced Momentum at a Bargain' screen is effective in spotting fast-moving stocks that remain attractively priced [2] Group 3: Katapult Holdings, Inc. (KPLT) Analysis - Katapult Holdings, Inc. (KPLT) has shown a 7% price increase over the past four weeks, indicating growing investor interest [3] - KPLT has gained 23.5% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.72, suggesting it moves 72% more than the market in either direction, indicating fast-paced momentum [4] Group 4: Valuation and Earnings Estimates - KPLT has a Momentum Score of B, suggesting it is an opportune time to invest in the stock [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - KPLT is trading at a Price-to-Sales ratio of 0.17, indicating it is relatively cheap at 17 cents for each dollar of sales [6] Group 5: Additional Investment Opportunities - KPLT is not the only stock that meets the criteria of the 'Fast-Paced Momentum at a Bargain' screen, with several other stocks also available for consideration [7] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [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) is highlighted as a strong candidate for momentum investing, with a four-week price change of 37.7% [3] - KPLT has gained 30.7% over the past 12 weeks, indicating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.72, suggesting it moves 72% higher than the market in either direction, reflecting fast-paced momentum [4] Group 3 - KPLT has a Momentum Score of A, indicating a favorable time to invest based on momentum [5] - The stock has a Zacks Rank 2 (Buy), supported by upward revisions in earnings estimates, which attract more investor interest [6] - KPLT is trading at a Price-to-Sales ratio of 0.17, suggesting it is undervalued at 17 cents for each dollar of sales [6] Group 4 - KPLT shows potential for significant growth at a fast pace, and there are other stocks that meet the 'Fast-Paced Momentum at a Bargain' criteria [7] - Various Zacks Premium Screens are available to help identify winning stock picks based on different investing styles [8]