8-K/A: Katapult Holdings Reports Strong Q1 2025 Results, Driven by App Marketplace Growth

Katapult Holdings, Inc. announced a 15.4% increase in gross originations and a 10.6% increase in revenue for the first quarter of 2025, exceeding expectations and driven by growth in the Katapult app marketplace.

Summary

• Katapult Holdings, Inc. reported its financial results for the first quarter ended March 31, 2025.
• Gross originations increased by 15.4% to $64.2 million.
• Excluding the home furnishings and mattress category, gross originations grew 51% year-over-year.
• Total revenue increased by 10.6% to $71.9 million.
• The company experienced a net loss of $5.7 million, compared to a net loss of $0.6 million in the first quarter of 2024.
• Adjusted EBITDA was $2.2 million, down from $5.6 million in the same period last year.
• The company expects a 25% to 30% year-over-year increase in gross originations and a 17% to 20% year-over-year increase in revenue for the second quarter of 2025.
• Katapult is reiterating its full year 2025 guidance, expecting at least 20% growth in gross originations and revenue, and at least $10 million in positive Adjusted EBITDA.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook, highlighting strong growth in key metrics and reiterating full-year guidance. However, the decrease in Adjusted EBITDA and the net loss temper the overall sentiment.

Positives

• The Katapult app marketplace is thriving, driving significant growth in originations.
• Customer satisfaction remains high, as indicated by the Net Promoter Score of 66.
• Repeat customers accounted for 57.4% of gross originations in the first quarter of 2025.
• The company is successfully growing its top-line without significantly increasing its expense base.
• The company is expanding its waterfall partnerships, including a new partnership with Finti.

Negatives

• The company reported a net loss of $5.7 million for the first quarter of 2025, compared to a net loss of $0.6 million in the first quarter of 2024.
• Adjusted EBITDA decreased from $5.6 million in the first quarter of 2024 to $2.2 million in the first quarter of 2025.
• The higher net loss was mainly due to higher cost of sales and higher operating expenses.

Risks

• The company is navigating a challenging macro environment, particularly within the home furnishings category.
• The company's outlook does not include any material impact from prime creditors tightening or loosening above them.
• The outlook assumes that the gross originations for the home furnishings and mattress category do not improve materially from the 2024 performance.
• The company's ability to refinance its indebtedness and continue as a going concern is a risk.

Future Outlook

Katapult expects a 25% to 30% year-over-year increase in gross originations and a 17% to 20% year-over-year increase in revenue for the second quarter of 2025, with approximately breakeven Adjusted EBITDA. The company reiterates its full year 2025 guidance, expecting at least 20% growth in gross originations and revenue, and at least $10 million in positive Adjusted EBITDA.

Management Comments

• Orlando Zayas, CEO of Katapult, stated that 2025 is off to a strong start and the company is well positioned to achieve its full year targets.
• Nancy Walsh, CFO of Katapult, noted that the first quarter came in stronger than the company's outlook and they are continuing to successfully grow their top-line without meaningfully increasing their expense base.

Industry Context

Katapult operates in the lease-to-own (LTO) industry, serving non-prime consumers. The company believes that LTO solutions historically benefit when prime credit options become less available. The company's focus on e-commerce and its app marketplace positions it to capitalize on the growing trend of online shopping.

Comparison to Industry Standards

• Katapult's growth in gross originations and revenue is comparable to other fintech companies focused on underserved markets.
• Companies like Affirm and Upstart also target non-prime consumers with alternative financing solutions.
• Katapult's Net Promoter Score of 66 indicates strong customer satisfaction, which is a key metric for success in the LTO industry.
• Compared to traditional lenders, Katapult's write-off rate of 9.0% is within the expected range for its target market.

Stakeholder Impact

• Shareholders can expect continued growth in gross originations and revenue.
• Employees can anticipate opportunities for growth and development within the company.
• Customers will benefit from the expanding merchant network and innovative features in the Katapult app.
• Merchants will gain access to a wider customer base and a growth engine for their businesses.

Next Steps

• The company will continue to execute on its consumer and merchant initiatives.
• Katapult plans to introduce new merchants to the Katapult App Marketplace during 2025.
• The company will host a conference call and webcast to discuss the financial results.

Key Dates

Keywords

Katapult, lease-to-own, e-commerce, financial technology, gross originations, revenue, Adjusted EBITDA, KPay, app marketplace, non-prime consumers