Katapult(US:KPLT)2025-11-12 14:00Financial Data and Key Metrics Changes - Gross originations grew 25.3% to $64.2 million, marking 12 consecutive quarters of growth [25][26] - Revenue increased by 22.8% to $74 million, representing the 10th consecutive quarter of year-over-year growth [26][27] - Adjusted EBITDA was $4.4 million, exceeding the outlook range [10][30] - Write-offs as a percentage of revenue were 9.9%, up 60 basis points from Q3 2023, but within the target range of 8-10% [27] Business Line Data and Key Metrics Changes - Total applications increased by 76% year-to-date and 80% in Q3 alone [6][13] - Monthly active users (MAUs) grew nearly 49% year-over-year [8] - KPay originations grew 66% year-over-year, representing 41% of total gross originations [19][20] Market Data and Key Metrics Changes - Gross originations from the top 25 merchants grew 25% during the quarter [26] - Excluding home furnishings and mattress categories, gross originations grew 50% year-over-year [26] - Cross-shopping customers grew about 64% year-over-year, representing 13% of gross originations [17] Company Strategy and Development Direction - The company aims to optimize top-of-funnel growth and pursue strategies for more profitable growth [9] - Focus on enhancing customer engagement through the Katapult App and KPay features [20][21] - The company is navigating a complicated macroeconomic environment while planning for future growth [24][33] Management's Comments on Operating Environment and Future Outlook - Management noted the impact of inflation and market delinquency data on non-prime consumers [24] - A conservative approach is being taken for Q4 expectations, with gross originations projected to grow in the 15%-20% range [33] - For 2026, management anticipates robust growth, projecting at least 20% growth in gross originations for the full year [34] Other Important Information - A $65 million capital investment from Hawthorne Horizon Credit Fund was finalized, allowing for debt repayment and growth investments [4][31] - The company has implemented tighter underwriting standards to improve application quality [15][16] Q&A Session Summary Question: What are the expectations for Q4 2025? - Management expects gross originations to grow in the 15%-20% range, factoring in a headwind from recent tightening [33] Question: How is the company addressing the impact of macroeconomic trends? - The company is closely monitoring macroeconomic indicators and adjusting strategies accordingly, while relying on real-time data for decision-making [24]