Katapult(KPLT)2025-03-28 13:57Financial Data and Key Metrics Changes - Gross originations grew 11.3% to 63 million, reflecting a 9.4% increase, and for the full year, revenue grew approximately 12% [72] - Gross profit for Q4 was approximately 8.9 million in the previous year, while full-year gross profit was 1.1 million, while for the full year, it was approximately 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 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 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]