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]