Katapult(US:KPLT)2025-03-28 12:00Financial 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]