8-K: Katapult Promotes Derek Medlin to President and Chief Growth Officer

Katapult Holdings has promoted Derek Medlin to President and Chief Growth Officer, expanding his responsibilities to drive growth and operational efficiency.

Summary

• Katapult Holdings has promoted Derek Medlin from Chief Operating Officer to the newly created role of President and Chief Growth Officer, effective August 16, 2024.
• In his new role, Mr. Medlin will oversee business development, marketing, and operations, focusing on accelerating gross originations and revenue growth.
• His base salary has increased from $472,500 to $520,000, and his short-term incentive bonus target has increased from 75% to 100%.
• Mr. Medlin has been with Katapult since 2017, previously serving as COO since 2018, and has been instrumental in the company's growth, including the launch of the Katapult app and Katapult Pay feature.
• Katapult's gross originations have grown for the past seven consecutive quarters, and revenue was over $230 million in the last twelve months as of the second quarter of 2024.
• The Katapult Pay feature represented 28% of the company's gross originations in the second quarter of 2024.
• Katapult's customer NPS score was 62, and the customer repeat purchase rate was 59.3% in the second quarter of 2024.
• The company aims to expand its brand reach, enhance merchant offerings, and elevate the customer shopping experience to capture a larger share of its $50 to $60 billion addressable market.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the promotion of a key executive, strong financial performance metrics, and a clear focus on future growth. The company's confidence in its growth trajectory and the positive comments from management contribute to the high sentiment score.

Positives

• Derek Medlin's promotion to President and Chief Growth Officer signals a focus on growth and strategic development.
• The increase in Medlin's compensation demonstrates the company's confidence in his ability to drive growth.
• Katapult has experienced seven consecutive quarters of gross originations growth.
• The company has achieved significant revenue, with over $230 million in the last twelve months.
• The Katapult Pay feature is gaining traction, representing a significant portion of gross originations.
• Customer satisfaction metrics, such as NPS and repeat purchase rate, are strong.

Risks

• The document includes forward-looking statements that are subject to risks and uncertainties.
• Actual results may differ materially from the company's expectations.
• The company's performance is subject to risks detailed in their SEC filings.

Future Outlook

Katapult intends to expand its brand reach, enhance merchant offerings, and elevate the customer shopping experience to capture a larger share of its addressable market. The company aims to build on its growth trajectory by expanding its brand reach with retailers and consumers alike.

Management Comments

• Orlando Zayas, CEO of Katapult, stated that Derek Medlin has been a terrific partner and is excited to expand his role.
• Orlando Zayas believes Derek can help accelerate progress and create benefits for all stakeholders.
• Derek Medlin is excited to take on the new challenge and believes his experiences will help unlock transformative growth opportunities.
• Derek Medlin stated that Katapult is well positioned to build on its growth trajectory.

Industry Context

This announcement reflects a strategic move by Katapult to strengthen its leadership team and focus on growth in the competitive e-commerce financial technology sector. The promotion of a key executive to a growth-focused role indicates the company's commitment to expanding its market share and enhancing its product offerings.

Comparison to Industry Standards

• Katapult's growth in gross originations over seven consecutive quarters is a positive sign, indicating strong market demand for its lease-to-own solutions.
• The company's revenue of over $230 million in the last twelve months places it as a significant player in the fintech space, although specific comparisons to direct competitors would require further analysis.
• The 28% contribution of Katapult Pay to gross originations suggests a successful adoption of its innovative payment solutions, which is a key differentiator in the market.
• Customer satisfaction metrics, such as an NPS of 62 and a repeat purchase rate of 59.3%, are strong and indicate a positive customer experience, which is crucial for long-term growth.
• Companies like Affirm and Klarna also operate in the buy-now-pay-later space, but Katapult's focus on lease-to-own for non-prime consumers provides a unique market niche.

Management Changes

Stakeholder Impact

• Shareholders may view the promotion positively, anticipating increased growth and profitability.
• Employees may be motivated by the company's focus on growth and the promotion of a key executive.
• Merchants may benefit from enhanced offerings and increased sales opportunities.
• Customers may experience an improved shopping experience and greater access to financing options.

Next Steps

• Derek Medlin will lead the business development, marketing, and operations teams.
• The company will focus on accelerating gross originations and revenue growth.
• Katapult will continue to enhance merchant offerings and elevate the customer shopping experience.

Key Dates

Keywords

Katapult, Derek Medlin, President, Chief Growth Officer, e-commerce, lease-to-own, financial technology, gross originations, revenue, Katapult Pay, NPS, customer repeat purchase rate