Core Insights - Katapult Holdings, Inc. reported strong financial results for Q1 2025, with gross originations of $64.2 million, representing a year-over-year increase of 15.4% [5][40] - The company achieved a total revenue of $71.9 million, up 10.6% from the previous year [5][39] - CEO Orlando Zayas expressed confidence in the company's growth trajectory, highlighting a 57% increase in KPay originations and strong engagement within the Katapult app marketplace [3][5] Financial Performance - Gross originations for Q1 2025 were $64.2 million, a 15.4% increase compared to Q1 2024 [5][40] - Total revenue reached $71.9 million, marking a 10.6% increase year-over-year [5][39] - Operating expenses rose by 17.3%, leading to a net loss of $5.7 million for Q1 2025, compared to a net loss of $0.6 million in Q1 2024 [5][12] Customer Engagement and Market Position - Approximately 59% of gross originations in Q1 2025 originated from the Katapult app marketplace, which is the largest customer referral source [5] - The repeat customer rate was 57.4%, indicating strong customer loyalty [5] - KPay gross originations grew by approximately 57% year-over-year, with 35% of total gross originations transacted using KPay [5] Business Outlook - Katapult expects gross originations to grow at least 20% for the full year 2025, reiterating its guidance despite challenges in the home furnishings category [8][7] - The company plans to introduce new merchants to the Katapult App Marketplace throughout 2025, aiming to capture a larger share of the underserved non-prime consumer market [7][8] - The outlook assumes no significant changes in the macroeconomic environment and does not account for potential impacts from prime creditors [8][9]

Financial Data and Key Metrics Changes - Gross originations grew 15.4% year over year to $64.2 million in Q1 2025, marking the tenth consecutive quarter of growth [26][27] - Revenue for Q1 2025 was $71.9 million, reflecting a 10.6% increase year over year, and this was the eighth consecutive quarter of year-over-year growth [27] - Gross profit for Q1 was approximately $14.3 million, with a gross margin of 19.9%, down from $16.5 million the previous year [28][29] - Write-offs as a percentage of revenue were 9%, an improvement from Q4 performance and within the target range of 8% to 10% [29] Business Line Data and Key Metrics Changes - KPay originations increased by approximately 57% to $22.8 million, representing 35% of total gross originations [12][9] - Total app originations grew 42% to $37.9 million, with 59% of gross originations starting in the app marketplace [9][7] - The number of customers with more than one active lease grew nearly 60% year over year, with over 28% of the customer base having multiple leases [11] Market Data and Key Metrics Changes - Gross originations for the top 25 merchants grew 13% in Q1 2025, despite challenges faced by the largest merchant, Wayfair, which reported $17 million in gross originations [22][44] - Excluding home furnishings and mattress categories, gross originations grew 51% year over year [27] Company Strategy and Development Direction - The company is focused on four top initiatives: consumer engagement, merchant engagement, referral partnerships, and improving unit economics and capital structure [7] - New partnerships and marketing strategies are being developed to drive sales and enhance the customer experience [24][19] - The company is exploring new pathways for partnerships to expand customer engagement and brand awareness [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year goals despite macroeconomic headwinds, emphasizing strong Q1 results and positive growth momentum [6][23] - The company anticipates gross originations growth of at least 20% for the full year 2025, with revenue growth expected to be at least 20% as well [38][37] Other Important Information - The company is actively negotiating a maturity extension amendment for its credit facility, with a temporary waiver of certain covenant breaches in place [35][36] - Cash generated from operations for Q1 2025 was $3.4 million, an increase from $2 million in Q1 2024 [36] Q&A Session Summary Question: Clarification on EBITDA expectations - Management explained that despite breakeven expectations in Q2, they anticipate strong growth in the second half of the year, leading to a total of $10 million in EBITDA [40][42] Question: Performance of Wayfair - Management confirmed that Wayfair faced challenges, reporting $17 million in gross originations for Q1 2025 [44][45] Question: Credit facility maturity - Management stated they are negotiating with existing lenders for a comprehensive maturity extension amendment [47] Question: KPay growth and customer engagement - Management highlighted that KPay is driving significant growth and customer engagement, with higher lifetime value from KPay users [51][54] Question: Second quarter performance expectations - Management indicated that they expect gross originations growth in Q2 to be between 25% to 30% [60][61]

Financial Data and Key Metrics Changes - Q1 gross originations grew 15.4% year over year to $64.2 million, exceeding the outlook of 11% growth [6][28] - First quarter revenue increased by 10.6% to $71.9 million, slightly above expectations, marking the eighth consecutive quarter of year-over-year growth [28] - Gross profit for Q1 was approximately $14.3 million, with a gross margin of 19.9%, down from $16.5 million the previous year [29][30] - Write-offs as a percentage of revenue were 9%, an improvement from Q4 performance and within the target range of 8% to 10% [30] Business Line Data and Key Metrics Changes - KPay originations increased by approximately 57% to $22.8 million, representing 35% of total gross originations [12][28] - Total app originations grew 42% to $37.9 million, with 59% of gross originations starting in the app marketplace [9][12] - The percentage of leases under $300 in value increased to 31%, up from 24% the previous year [17] Market Data and Key Metrics Changes - Gross originations for the top 25 merchants grew 13% during the quarter, despite challenges faced by the largest merchant, Wayfair [28][45] - Excluding home furnishings and mattress categories, Q1 gross originations grew 51% year over year [28] Company Strategy and Development Direction - The company is focused on four top initiatives: consumer engagement, merchant engagement, referral partnerships, and improving unit economics and capital structure [9] - New partnerships with merchants like Ashley Furniture and Bed Bath and Beyond were established, expanding the KPay enabled merchant roster to 35 [18] - The company is exploring new partnership avenues to expand customer engagement and broaden the application pool [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year goals despite macroeconomic headwinds, emphasizing a strong start to 2025 [9][23] - The company anticipates gross originations growth of at least 20% for the full year, with Q2 expectations of 25% to 30% growth [38][39] - Management is actively negotiating a maturity extension amendment for their credit facility to align with the business plan [36][49] Other Important Information - Total cash and cash equivalents as of March 31, 2025, were $14.3 million, including $8.3 million of restricted cash [36] - Cash generated from operations for Q1 2025 was $3.4 million, an increase from $2 million in Q1 2024 [37] Q&A Session Summary Question: Clarification on EBITDA expectations - Management explained that despite breakeven expectations in Q2, they anticipate strong growth in the second half of the year to achieve $10 million in EBITDA [42][44] Question: Gross originations growth for Wayfair - Management confirmed that Wayfair had $17 million in gross originations for Q1, facing challenges in the home furnishings category [45][46] Question: Credit facility maturity and refinancing plans - Management stated they are negotiating with existing lenders for a comprehensive maturity extension amendment to align with the company's business plan [48][49] Question: KPay growth and market share - Management attributed KPay's growth to a large total addressable market and effective customer engagement strategies [53][54] Question: Repeat customer rates through KPay - Management noted that KPay users exhibit a higher lifetime value and repeat purchase rates compared to other segments [56][60] Question: Q2 growth expectations - Management indicated that they are tracking at 20% growth in Q2 and expect trends to continue into the back half of the year [62][64]

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]

Financial Data and Key Metrics Changes - Q4 gross originations grew 11.3% year over year to $75.2 million, with a two-year stack growth of 25.7% [37] - Q4 revenue increased by 9.4% to $63 million, marking the seventh consecutive quarter of year-over-year growth [41] - Full year 2024 gross profit was approximately $45.8 million, up about 10% compared to 2023, with a gross margin of 18.5% [43][44] Business Line Data and Key Metrics Changes - For Q4, gross originations from the top 25 merchants grew 10%, while excluding home furnishings and mattress categories, gross originations grew over 50% year over year [40][38] - Approximately 68% of total gross originations in 2024 came from direct and waterfall merchants [27] Market 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 [12] - Total app originations grew by 32% year over year in Q4, with K Pay originations up approximately 52% year over year [18] Company Strategy and Development Direction - The company has transformed from a single input-driven business to a multi-dimensional growth engine, focusing on consumer and merchant engagement [7][16] - Plans for 2025 include driving additional top-of-funnel activity, enhancing consumer engagement, and improving unit economics [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth despite a challenging macro environment, particularly in the home furnishings and mattress category [51][52] - The company anticipates gross originations growth of at least 20% and revenue growth of at least 20% for 2025 [53] 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 [47] - As of December 31, 2024, total cash and cash equivalents were $16.6 million, with $82.8 million in outstanding debt on the revolving credit facility [49] 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 [56] Question: Changes in consumer behavior due to tariffs - Management has not observed significant changes in consumer behavior related to tariffs, with delinquencies remaining stable [58][59] Question: Drivers for improved EBITDA margin - The improvement in EBITDA margin is primarily due to diligent expense management and investments in technology and marketing [67] Question: Growth in Wayfair originations - Wayfair's gross origination growth continues to be down, but the business outside of Wayfair remains strong, growing at 50% [68][69] Question: Merchant acquisition in uncertain macro environments - Management believes that uncertainty can accelerate merchant acquisition as they seek growth opportunities [74][75]

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]