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Yahoo
16-05-2025
- Business
- Yahoo
Q1 2025 Katapult Holdings Inc Earnings Call
Orlando Zayas; Chief Executive Officer; Katapult Group Inc Derek Medlin; Chief Operating Officer; Katapult Group Inc Nancy Walsh; Chief Financial Officer; Katapult Group Inc Operator Hello and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Katapult Holdings first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press one again. Thank you. I would now like to turn the call over to Jennifer Kull, Head of Investor Relations. Please go ahead. Welcome to Katapult's first quarter 2025 conference call. On the policy today are Orlando Zayas, Chief Executive Officer, Nancy Walsh, Chief Financial Officer, and Derek Medlin, President and Chief Growth Officer. For your reference, we have posted materials related to today's call on the Investor Relations section of the Catapult website, which can be found at Please keep in mind that our remarks today include forward-looking statements related to our financial guidance, our business, and our operating results as noted in the earnings relief and slide deck posted to our website for your reference. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties, some of which are described in today's earnings release in our most recent Form 10-k, and which will be updated in future periodic reports that we file with the SEC. Any forward-looking statements that we make on the call are based on our beliefs and assumptions today, and we disclaim any obligation to update them. Also during the call, we'll present those GAAP and non-GAAP financial measures. Non-GAAP financial measures should be considered supplemental to and not replacements for or superior to our GAAP results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included with today's earnings release and is available on the Investor Relations section of the company's website. Finally, all comparisons are year over year unless stated otherwise. With that, I will turn the call over to Orlando. Orlando Zayas Thank you, Jennifer, and thanks to everyone joining us today. We're excited to give you an update on our first quarter financial results and the operating progress we've made towards achieving our 2025 plan. To start, I'll provide you with a little context for our strong Q1 results before turning it over to Derek, who will walk you through a more detailed summary of the quarter. After that, Nancy will provide an update on our financial results. We had another strong quarter that illustrated the momentum we have in the business. Q1 gross originations grew 15.4% year over year, being our outlook for 11% growth. And first quarter revenue came in slightly above our expectation at 10.6%. These great results spring from our successful execution against our marketplace strategy. As we discussed last quarter following the launch of our app at the end of 2022, we have worked hard to build our two-sided app marketplace. We are a destination where consumers can visit and shop for all of their durable goods needs, as well as a growth partner to merchants, opening up new avenues for expansion. In addition to our continued growth, we see other indications that we have built a healthy and thriving ecosystem. On the consumer side, shoppers continue to love the Catapult brand. Our NPS score was 66% as of March 31, and our repeat customer rate was 57.4%, both up year over year. These two positive data points are contributing to our growing lifetime value, which was up nearly 6% in Q1 '25. And as we continue to build our product offering to cover even more of the everyday needs our customers have, we believe we can take LTV even higher. We believe these data points really illustrate that we are doing a good job of delivering the product and service our customers want and deserve. For our merchant and waterfall partners, we are continuing to innovate new marketing and pricing strategies as we collaborate to drive sales higher. As a result, we're seeing our overall gross originations growth being fueled by activity across our marketplace. During the first quarter, KPay originations were $22.8 million which was up approximately 57%. And total app originations, which are originations that started in our app, grew 42% to $37.9 million. This means that approximately 59% of our gross originations started in our app marketplace, a testament to our ability to drive results for both our partners and catapults. We are pleased that our progress towards making the catapult at marketplace a shopping destination. Our marketplace is allowing Katapult to connect consumers and merchants seamlessly, enabling commerce whenever and however the consumer wants to shop. Though macro headwinds are ebbing and flowing, 2025 was off to a great start, and we are confident that we are well positioned to achieve our full year goals. We remain focused on our top initiatives, which are one, consumer engagement, two, merchant engagement, three, referral partnerships, and four, improving our unit economics and capital structure over time so that we can improve profitability and sustainably generate cash. With that, I'll turn the call over to Derek to discuss our operating progress in more depth, and then Nancy will give you a recap of our Q1 financial results and our outlook for Q2. Well then, I'd up for your questions, Derek. Derek Medlin Thanks Orlando and good morning to everyone. We have great momentum and are very encouraged by the velocity we are generating in our marketplace. We are connecting more customers to more merchants through our marketplace, and they're choosing the Katapult LTO to get the goods they need. This is great for merchants and great for Katapult. So let me start with a few highlights that demonstrate the progress we're making in our consumer engagement initiative. As we shared with you last quarter, our top marketing priorities include driving application growth and increasing the number of customers who take out a second lease with us. To achieve these goals over the past few quarters, we've leaned heavily into activities that focus on ROI positive customer acquisition, and these activities are delivering. We are leveraging our most valuable asset, our app marketplace, to support these efforts and complementing this with highly targeted marketing using other channels such as Google and Facebook. This hard work helped us grow applications by approximately 59% and our total lease count by approximately 22%, which included more than 60% growth in cross shopping activity during the quarter. This means that the number of customers with more than one active lease as of the end of Q1 2025 grew nearly 60% year over year. And the percentage of customers with more than one active lease during the first quarter increased to more than 28% of our customer base from just under 27% in the first quarter of last year. Kpay activity continues to fuel a lot of our growth, and we are incredibly excited about its potential. As Orlando mentioned, Kpay originations grew 57% during Q1, which represented 35% of total gross originations, up from about 26% of our total originations in Q1 of 2024. As a reminder, Kpay and related activity refers only to those leases that originated using our Kpay feature to check out. We're also seeing a lot of engagement with our broader app marketplace ecosystem. This refers to activities related to our app in general. So if a customer starts their journey in our app but completes their lease on one of our merchant partner sites, we are capturing this as app marketplace activity. And this activity continues to grow. More consumers are using our app for their shopping needs, which culminated in our app being opened 3.6 million times during Q1, which is 46% higher than Q1 of last year. This engagement also drove our Kpay unique customer count, which grew by more than 65% year over year and was accompanied by a healthy increase in conversion rate. For context, while some of these customers may have entered into multiple leases, this growth only counts each customer one time. All of this activity bodes well for sustaining and growing LTV over time. Let me give you a little more insight into our strategy to sustain LTV growth. We know from our data that there is a strong consumer affinity for our LTO products and our brand. Our goal is to leverage this affinity to increase our share of wallet with our loyal base of customers while introducing our brand to other like-minded consumers. To do this, we are surgically deploying thoughtful pricing strategies and promotions that are encouraging consumers to do more with us. Practically speaking, what does this look like? Let me paint a picture. On average, our typical lease is for about $700 but we believe we have an opportunity to provide more leases to consumers who may be looking for goods that are priced lower than the average. In order to capitalize on this theory, we began to test a variety of pricing strategies that would make the idea of leasing a lower cost product more palatable to more consumers. By finding the sweet spot, we, for example, of an initial payment for a lower cost item, we believed we could drive more consumers to use our LTO. And while we don't intend to run pricing promotions in perpetuity, we've seen really great results stemming from the strategy. During the first quarter, the percentage of leases that were under $300 in value increased to 31%, up from 24% last year. It's worth noting that these lower AO leases also perform very well from a payment collections perspective. When you add this performance to our growing customer at least count, the result is overall gross originations growth, increasing LTV and we believe increasing share of wallets. To sustain this engagement and drive growth, we're continuing to add features, functionality, and merchants to this marketplace. Recently we added Ashley Furniture and Bed Bath and Beyond to our growing roster of top tier cappa enabled merchants. There are now 35 merchants available for checkout via Kpay. This growing roster of Kpay merchants are highly complementary to the more than 200 shoppable merchants we have waterfall and or direct integrations with. So let's move on to the progress we're making on our merchant engagement initiatives. During Q1, we continued to focus on positioning catapult as a partner of choice, and we believe our continued progress demonstrates the value we bring to retailers. Our direct and waterfall merchants accounted for approximately 65% of total gross originations in Q1. And gross originations for this group grew about 1%. If we exclude the home furnishings and mattress category, our direct and waterfall gross originations grew approximately 40% year over year. Our team continues to execute on the strategic activities that we believe are extending our runway for growth. Let me give you a few examples. During Q1, we added approximately 35 new direct or waterfall merchants or merchants' pathways to our ecosystem. As a reminder, pathways include new or existing merchant partners that launch a new website or an in-store experience that includes catapult as a direct or waterfall LTO offering. These pathways are tantamount to new go to market channels for the Katapult LTO. They provide new ways for consumers to discover and engage with our offerings. Second, we continue to complement our consumer marketing strategy with a variety of [cocreed] marketing campaigns with our merchant partners. Throughout the first quarter, we ran a number of pricing and promotional campaigns to drive sales during key seasonal marketing events, including Valentine's Day, President's Day, and even March Madness. These activities resulted in gross originations growth ranging from 25% to more than 75% when compared to the same period in 2024. In addition, we also supported a targeted tax season promotion that delivered a 7% increase in gross originations when compared to the same period of last year. We are really excited about the partnerships we're building with our merchants. Our collaborative efforts are yielding terrific results, and we are leveraging campaign data to demonstrate our incremental value to merchants. Recently, we walked one of our wheel and tire merchant partners through the impact that a short-term strategic pricing promotion, which included merchandizing and marketing on our social, email, and website platforms was having on their sales. They were so motivated by the lift in sales that they requested to continue funding the promotion in its entirety because the return was so compelling. During the first month of the campaign, gross originations grew more than 49% compared with the previous month. We're continuing to explore a wide range of opportunities like this to collaborate with merchants to drive incremental sales growth. As we noted last quarter, we closely monitored the success and health of our TOP25 merchants. By monitoring the tip to spear performance, we believe we can quickly get a sense of our marketplace health and implement enhancements that unlock growth. During the first quarter, we were pleased to see gross originations growth accelerate for our TOP25 merchants to 13%, up from 10% in Q4. Finally, one other topic that is top of mind for us are potential macroeconomic headwinds. While lease to owned solutions have historically benefited when prime credit tightens, we have been building scenario plans that focus on inoculating the business against macro uncertainties, such as increasing tariffs or rising inflation to the extent we can. This includes working with our merchants to think outside the box to create initiatives that will allow us to react quickly to challenges stemming from the new economic policies and trends. As you've heard, we're making tangible and valuable progress against our consumer and merchant initiatives. We're also continuing to make progress on our partnership strategy that is focused on creating pathways that deliver new customers, increase our brand awareness, create new products that consumers want, and leverage our technology in new ways to drive gross originations and revenue growth. This quarter we continue to build relationships with our existing partners as we lean into new opportunities to monetize our assets as the foundation for new partnerships. For example, we are exploring ways to help consumers who have been declined for an LTO, growing our affiliate partnership base and leaning into new strategic marketing partnerships. We believe that there are multiple partnership avenues that we can pursue to help expand top of the funnel activity, broaden our application pool, and give our customers more reasons to engage with the Katapult marketplace. Beyond these efforts, we have continued to build new relationships with waterfall finance platforms while deepening our partnerships with waterfalls we already work with, we are in the process of kicking off a new waterfall partnership with Finti, a modern waterfall financing platform that connects consumers with a curated network of lenders and financing providers. Finti has already introduced us to several new merchants, primarily in the SMB market. Our initial integrations are largely focused on brick-and-mortar stores, but we also expect to integrate into Finti's online architecture, which should expand our opportunity even further. 2025 is off to a great start, and we're operating with great momentum. Our team is working hard to deliver on the promise of Katapult, and we believe we are taking the steps necessary to grow our business. We're leveraging unique assets like our app marketplace as well as our track record for driving incremental merchant sales to open new avenues for growth. With that, I'll turn it over to Nancy who will give you an update on our financial results and outlook. Nancy. Nancy Walsh Thanks, Derek, and hello to everyone joining us this morning. We are excited about the year ahead and believe we are well positioned to deliver on our full year goals. Let's start with a few insights on our top line performance. We have now grown gross originations for 10 consecutive quarters. Gross originations grew 15.4% to $64.2 million in the first quarter, and on a two year stack basis, our gross originations grew 17.3%. In addition, if we exclude home furnishings and mattress gross originations, Q1 gross originations grew 51% year over year. Our gross originations growth came in above our outlook and was driven by a strong second half in March. As Derek mentioned, gross originations for our TOP25 merchants grew 13% during the quarter, despite the fact that our largest merchant, Wayfair, continues to face category challenges. On the revenue front, we also had another great quarter. We delivered $71.9 million or 10.6% growth in Q1, which was slightly above our outlook and marked the eighth consecutive quarter of year over year growth. This growth reflects continued strong collection trends. Gross profit for Q1 was approximately $14.3 million and gross margin was 19.9%. This compares with gross profit of $16.5 million last year. As we mentioned in the outlook we provided last quarter. Based on our strong Q4 gross originations growth, we expected to have higher lease depreciation costs in this quarter, which would impact gross profit. Because our least depreciation is front loaded in times of rapid gross originations growth such as what we achieved in December 2024, depreciation costs will have a disproportionate impact on gross profit in the quarter. This dynamic played out once again in Q1 2025, given the gross origination strength we saw in the last two weeks of the quarter. Finally, for comparison purposes, during the first quarter of 2024, we had an exceptionally strong gross profit margin. Our target range for annual gross margin remains 18% to 20%. We have continued to effectively manage write-offs as a percent of revenue. During the first quarter of this metric was 9%, an improvement from our Q4 performance and within our 8% to 10% target range. Write-offs were up 60 basis points year over year. Moving on to expenses and profitability. Our disciplined approach to expense management coupled with our top line growth is at the center of our financial model. This philosophy fuels our decision making, and it is a core component of our long term growth strategy. This approach allowed us to deliver another quarter of positive adjusted EBITDA. We believe we are well positioned to further improve upon this performance in 2025. Let me walk you through some of the puts and takes that impacted Q1 adjusted EBITDA. We've already talked about our front loaded least depreciation and the impact rapid growth has on an in quarter gross profit. This non-cash expense drives cost of sales higher, and given the strong growth we saw both at the end of December as well as the end of March 2025, the related depreciation expense was a headwind to our Q1 adjusted EBITDA. Total operating expenses increased by 17% during the quarter. This year over year increase was largely driven by increased general and administrative costs that included expenses incurred to date related to efforts to refinance our debt, as well as investments in our initiatives and infrastructure to support our growth. We remain committed to fiscal discipline even as we strategically invest in our growth initiatives. Excluding underwriting fees and servicing costs, which are variable, depreciation and stock-based compensation expense, which are non-cash expenses, and excluding costs related to the settlement of litigation and debt refinancing costs, our Q1 fixed cash operating expenses were $10.4 million an increase of 10.8% compared to last year. During the first quarter, loss from operations was $500,000 compared to $3.8 million in income from operations for Q1 2024. Our Q1 2025 performance was a significant improvement compared to the $4.8 million loss from operations we reported in Q4 2024. From a year over year perspective, our results of this quarter reflect lower gross profit, which again was driven by strong gross originations growth during Q1 and Q4, as well as the increase in OpEx related to our investments in our growth initiatives. Taken together, these puts and takes resulted in $2.2 million in adjusted EBITDA for Q1, which was below our outlook but again was primarily driven by the timing of our strong gross originations' growth in Q4 and Q1. We are proud of the progress we have made on this front and believe we have the right strategy, initiatives, and discipline in place to deliver continued growth. Turning to the balance sheet and cash flow. As of March 31, 2025, we had total cash and cash equivalent of $14.3 million which included $8.3 million of restricted cash. As of the end of the first quarter, we also had $77.8 million in outstanding debt on our revolving credit facility. Regarding our outstanding debt, we are actively negotiating with our existing lenders for a comprehensive maturity extension amendment to our credit facility that adjusts the covenants and advance rate to align with the company's business plan. We are working diligently to conclude these negotiations as soon as possible. As part of those discussions, we received a temporary and limited waiver of certain covenant breaches through June 4, subject to customary terms and conditions. As part of this ongoing negotiation, we may determine we have other breaches which have not yet been waived. As we advised last quarter, there can be no assurance that we will consummate a new credit facility with either our current lenders or any other lenders, and there can be no assurance that our current lenders will provide a maturity extension grant or grant a waiver of any further breaches. In the 10-Q we plan to file today, we will provide more information regarding the risks and uncertainties surrounding our ability to secure this refinancing or maturity extension and to continue as a going concern. We will provide a further update when we have something new to report. Cash generated from operations for Q1 2025 was $3.4 million compared to $2 million of cash generated from operations in Q1 2024. The increase was largely driven by costs related to our growth in Q1, including an increase in property held for lease, partially offset by the change in accrued liabilities and accounts payable balances. Turning to our Q2 2025 and full year 2025 outlook, based on quarter to date results, we expect the following for the second quarter gross originations growth in the range of 25% to 30%. Gross originations excluding the home furnishings and mattress category are expected to continue to grow at a much faster pace than our overall gross originations. Revenue growth in the range of 17% to 20% and approximately breakeven adjusted EBITDA. Based on these dynamics and our operating plan, we are reiterating our 2025 outlook. We continue to expect gross originations growth of at least 20%. Gross originations excluding the home furnishings and mattress category are also expected to continue to grow at a much faster pace than our overall gross originations during full year 2025. Revenue growth of at least 20% and at least $10 million in positive adjusted EBITDA. For added context, neither our Q2 outlook nor our 2025 outlook assumes any impact from potential tariffs or credit tightening or loosening above us. We are very proud of our performance to date and intend to capitalize on our momentum to deliver a great 2025. We look forward to reporting on our success as the year progresses. With that, I'll turn it back to the operator for Q&A operator. Operator (Operator Instructions) Your first question comes from Anthony Chukumba with Loop Capital Markets. Please go ahead. Good morning. Thank you for taking my question. So I'm just trying to kind of work through the math here, as I look at, last year, did a little over 100% your full year even got in the first quarter, this year based off of what you just reported and your, guidance that would assume that you only generated. About, call it 20% or so in the first quarter and you're and you're saying you're going to be break even. So essentially what it implies that you're going to generate $8 million of EBITDA in the second half of the year and I'm just trying to figure out how we get there, particularly given the fact that, on an adjusted basis you're, you were essentially break even, in terms of EBITDA in the second half of last year. Nancy Walsh Thank you, Anthony, for that question. We've talked about adjusted EBITDA in the past and what happened in 2024. We had much slower growth in the first and the second half until we got to the tail end of Q4 of last year. This year we are seeing much faster growth in the first quarter. We're providing an outlook that we're going to see strong growth in the second quarter, and we have seasonality in Q4. And with that growth we are anticipating that despite being break even in Q2 we are still going to be able to make that EBITDA total for $10 million and yes, we understand that that backloads that a little bit. We also mentioned in Q4 that last year's Gross profit was exceptionally high, and that was kind of an unusual occurrence. What we're seeing now is more what we would expect in line with our performance. Got it. Okay. And then you mentioned that your top, you had a few different stats. I mean, we appreciate all the color, but you mentioned your TOP25, merchants, growth is 13%, but it sounds like Wayfair continued to be challenged and I think you typically include this in the queue, but, what was the gross originations, growth or decline for Wayfair specifically? Nancy Walsh We did continue to see a challenge with not only Wayfair, but all of the home furnishings and mattress category. And so for Wayfair, we are calling out about $17 million of gross originations, and that excludes what goes through our own marketplace. So this is just the direct waterfall component. Okay, so just to be clear, so you had $17 million of originations from Wayfair in the first quarter. Nancy Walsh So you're correct. Got it. Okay, and then I just wanted to understand, I mean, obviously the credit facility maturity is coming up pretty quickly here, so at this point, and I know there's somewhat limited in terms of what you can say, but so we're looking to for an extension as opposed to, refinancing it or just or just getting some, so, I guess, some new banks in there. Nancy Walsh I won't comment on the second piece of this. As we said in my prepared comments, we're negotiating with our existing lender, and it's going to be a comprehensive, we're calling it a maturity, a comprehensive maturity extension amendment, but we are at the same time adjusting our covenants and our advance rates, and that's all to align with the company's business plan. Got it. Okay, that's all my questions. Thank you. Nancy Walsh Thank you, Anthony. Operator Your next question comes from Scott Buck with H.C. Wainwright. Please go ahead. Hey, good morning, guys. Thanks for taking my questions. I'm curious, all the momentum you're seeing in Kpay. What do you attribute to, greenfield opportunities versus taking share versus potentially cannibalizing other pieces of your business? Derek Medlin Hi Scott, this is Derek. Thanks for the question. Really, I think what we're seeing here is the greenfield opportunity that there is in this space. The TAM for this marketplace is so large and when we think about the ways that we're growing, it's really across all of our channels, everything from adding new merchant pathways and new merchants that are bringing us consumers, that can shop through with that partner our direct acquisition activities like we mentioned. And then getting increased share of wallet with our customers and our existing customers. And so what the app does is just facilitates these transactions so much more simply and allows us to control more of the customer experience to make it easy, clear and transparent for these customers to find the things that they're looking for. And so it's really the culmination of all these things together that are working in tandem. And you know what I'm really excited about is seeing the response and the reaction of our customers as they engage further. And just like I mentioned on the prepared statements, we talked about getting greater share of wallet and getting multiple transactions. That's really for me a big validation point that we've really hit the nail on the head in terms of what the opportunities are here. Providing lease limits that are over and above what the customer needs, allowing them to come back, find different high-quality goods from high-quality retailers. And then having those retailers lean into it and market on our behalf has been a fan fantastic combination where everybody's really winning here. Great, that's helpful, Derek, and then a bit of a follow up there. Do you see any difference in the percentage of repeat customers coming through Kpa versus other parts of the business? Derek Medlin Great question. So, in general, we see a higher overall LTV from the Katapult users and from app users. These are consumers that just given the exposure of the different deals, offers, and transactions, we just see a much more rapid and frequent repeat cycle, and that's really exciting to us because, it allows us to give our retail partners more exposure to this customer base. And what's also just, I think important to realize is the performance has been really strong in this segment and so what we see in terms of the pay through and the yield, continues to be aligned with our objectives for the year and we're going to keep pushing it. Great and then last one. Orlando Zayas Sorry, Scott, it's Orlando. How are you? I just wanted to add one more comment to Derek's, you asked about the repeat rate versus Kpay versus regular, merchants coming in from merchants. I think what's interesting and what we've discovered over the last several years with Kpay is that if you came in through, a wheel manufacturer a wheel retailer and you bought four wheels for your car, well you're only going to four wheels for your car so often. And so what Kpay opened that door was to be able to go to Wayfair and buy a sofa or go to Best Buy and buy a TV. And so I think, the repeat rate has, being driven mostly by Kpay. We had a pretty decent repeat rate, especially at larger retailers like Wayfair before Kpay, but Kaya just really took that into the stratosphere. Right, that makes a lot of sense. And then last one, gross originations were up, 15% in the quarter. The full year expectation is 20 plus. Could you give us an indication of what the second quarters looks like so far and maybe what some of those drivers are on the back half of the year to put you over 20%? Nancy Walsh So I'll start with the numbers. What I had said in my prepared comments is based on year-to-date, quarter to date what we've seen thus far, we were providing that 20% gross origination growth for Q2. So we're halfway through the quarter that's. And you're tracking at 20% 25%? Nancy Walsh To 30%. I'm sorry. Okay, and you expect these terms to continue through the back half of the year as well, and that pushes the total over 20. Nancy Walsh We have just. Orlando Zayas Our fourth quarters always really strong. Nancy Walsh But we've given full year we're not giving Q3 and Q4 at this point, so just full year and Q2. No, just full year, right? Okay guys, that's all I had. I appreciate the added color. Operator That will conclude our question-and-answer session. I will now turn the call back over to Orlando Zayas for closing remarks. Orlando Zayas And thanks to everyone for joining us today. We're really proud of our progress and we believe we have set the stage for future success. Our entire team is laser focused on pushing Katapult to reach its goals, and I'm incredibly grateful for their hard work and dedication. Because of their efforts, we are able to offer the best in class LTO product to our consumers and a growth engine to our merchants. Given our growth expectations for the rest of the year, we believe we're well positioned to great value for all of our stakeholders, including our shareholders, and we appreciate your support. We look forward to chatting with our investors as the year progresses. Please reach out to Jennifer with any questions or feedback. Thank you very much. Operator Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. 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Yahoo
15-05-2025
- Business
- Yahoo
CORRECTING AND REPLACING - Katapult Delivers 15.4% Gross Originations and 10.6% Revenue Growth in the First Quarter, Above Outlook
Expects Growth to Accelerate In Second QuarterReiterates 2025 Guidance PLANO, Texas, May 15, 2025 (GLOBE NEWSWIRE) -- In the press release issued by Katapult Holdings, Inc. on May 15, 2025, in the gross originations by quarter table, Q4 in FY 2024 should be $75.2 million instead of $64.2 million. The updated release reads: Katapult Holdings, Inc. ('Katapult' or the 'Company') (NASDAQ: KPLT), an e-commerce-focused financial technology company, today reported its financial results for the first quarter ended March 31, 2025. '2025 is off to a strong start and we are well positioned to achieve our full year targets,' said Orlando Zayas, CEO of Katapult. 'We achieved double-digit gross originations and revenue growth, driven by increasing engagement with the Katapult app marketplace, including 57% growth in KPay originations. Our marketplace is thriving - from application growth to repeat purchase rates, to high Net Promoter scores and beyond, we believe we have all the hallmarks of a healthy ecosystem and we intend to lean into opportunities to accelerate our growth. We are excited about the future and as we continue to execute on our consumer and merchant initiatives, we feel confident that we can create value for all of our stakeholders.' Operating Progress: Recent Highlights Increased activity within the Katapult app marketplace ~59% of first quarter gross originations started in the Katapult app marketplace, making it the single largest customer referral source. Total app originations grew 42% year-over-year. Applications grew ~59% year-over-year in the first quarter Customer satisfaction remained high and Katapult had a Net Promoter Score of 66 as of March 31, 2025 57.4% of gross originations for the first quarter of 2025 came from repeat customers1 Grew consumer engagement by adding app functionality and features and executing targeted marketing campaigns KPay conversion rate increased during the first quarter leading to unique customer count growth of more than 65% year-over-year KPay gross originations grew approximately 57% year-over-year in the first quarter; 35% of total gross originations were transacted using KPay Launched Ashley and Bed Bath & Beyond in the Katapult app marketplace, bringing the total number of merchants in our KPay ecosystem to 35 Made strong progress against merchant engagement initiatives Direct and waterfall gross originations, which represented 65% of total first quarter originations, grew approximately 40%, excluding the home furnishings and mattress category Continued to expand our waterfall partnerships by kicking off a new partnership with Finti, a modern waterfall financing platform that connects consumers with a curated network of lenders and financing providers Together with several merchant-partners, we launched targeted co-branded, co-promoted marketing campaigns that delivered year-over-year gross originations growth ranging from 7% to more than 75% depending on the campaign First Quarter 2025 Financial Highlights (All comparisons are year-over-year unless stated otherwise.) Gross originations were $64.2 million, an increase of 15.4%. Excluding the home furnishings and mattress category, gross originations grew 51% year-over-year. Total revenue was $71.9 million, an increase of 10.6% Total operating expenses in the first quarter increased 17.3%. Our fixed cash operating expenses2, which exclude litigation settlement and other non-cash and variable expenses, increased approximately 10.8%. Net loss was $5.7 million for the first quarter of 2025 compared with net loss of $0.6 million reported for the first quarter of 2024. The higher net loss was mainly due to higher cost of sales and higher operating expenses. Adjusted net loss2 was $3.4 million for the first quarter of 2025 compared to adjusted net income of $1.0 million reported for the first quarter of 2024 Adjusted EBITDA2 was $2.2 million for the first quarter of 2025 compared to Adjusted EBITDA2 of $5.6 million in the first quarter of 2024. The year-over-year performance was impacted by higher cost of sales related to rapid, faster-than-expected gross originations growth during the first quarter of 2025 and the end of the fourth quarter of 2024. Katapult ended the quarter with total cash and cash equivalents of $14.3 million, which includes $8.3 million of restricted cash. The Company ended the quarter with $77.8 million of outstanding debt on its credit facility. Write-offs as a percentage of revenue were 9.0% in the first quarter of 2025 and are within the Company's 8% to 10% long-term target range. This compares with 8.4% in the first quarter of 2024. [1] Repeat customer rate is defined as the percentage of in-quarter originations from existing customers. [2] Please refer to the 'Reconciliation of Non-GAAP Measure and Certain Other Data' section and the GAAP to non-GAAP reconciliation tables below for more information. Second Quarter and Full Year 2025 Business Outlook The Company is continuing to navigate a challenging macro environment particularly within the home furnishings category. Given the current breadth of our merchant selection as well as our plans to introduce new merchants to the Katapult App Marketplace during 2025, our strategic marketing and our strong consumer offering, we believe we are well positioned to deliver continued growth in 2025. We continue to believe that we have a large addressable market of underserved, non-prime consumers, and it's important to note that lease-to-own solutions have historically benefited when prime credit options become less available. Given our quarter-to-date progress, Katapult expects the following results for the second quarter of 2025: 25% to 30% year-over-year increase in gross originations 17% to 20% year-over-year increase in revenue Approximately breakeven Adjusted EBITDA Based on the macroeconomic assumptions above and the operating plan in place for the full year 2025, Katapult is reiterating its expectations for full year 2025: We expect gross originations to grow at least 20% This outlook does not include any material impact from prime creditors tightening or loosening above us and assumes that there are no significant changes to the macro environment. Both our second quarter and full year outlooks assume that the gross originations for the home furnishings and mattress category do not improve materially from our 2024 performance. We also expect to maintain strong credit quality in our portfolio. This will be driven by ongoing enhancements to our risk modeling, onboarding high quality new merchants through integrations, and repeat customers engaging with Katapult Pay Revenue growth is expected to be at least 20% Finally, with the continued execution of our disciplined expense management strategy combined with our growing top-line, we expect to deliver at least $10 million in positive Adjusted EBITDA "The first quarter came in stronger than our outlook, and we are continuing to successfully grow our top-line without meaningfully increasing our expense base,' said Nancy Walsh, CFO of Katapult. 'The second quarter is off to a great start and we believe we can continue to scale our business by offering a transparent and fair LTO product to consumers and a growth engine to our partners. Our team's hard work and agile execution is fueling our growth and we are looking forward to a great 2025.' Conference Call and Webcast The Company will host a conference call and webcast at 8:00 AM ET on Thursday, May 15, 2025, to discuss the Company's financial results. Related presentation materials will be available before the call on the Company's Investor Relations page at The conference call will be broadcast live in listen-only mode and an archive of the webcast will be available for one year. About Katapult Katapult is a technology driven lease-to-own platform that integrates with omnichannel retailers and e-commerce platforms to power the purchasing of everyday durable goods for underserved U.S. non-prime consumers. Through our point-of-sale (POS) integrations and innovative mobile app featuring Katapult Pay(R), consumers who may be unable to access traditional financing can shop a growing network of merchant partners. Our process is simple, fast, and transparent. We believe that seeing the good in people is good for business, humanizing the way underserved consumers get the things they need with payment solutions based on fairness and dignity. Contact Jennifer Kull VP of Investor Relations ir@ Forward-Looking Statements Certain statements included in this Press Release and on our quarterly earnings call that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements may be identified by words such as 'anticipate,' 'assume,' 'believe,' 'continue,' 'could,' 'design,' 'estimate,' 'expect,' 'intend,' 'may,' 'plan,' 'potentially,' 'predict,' 'should,' 'will,' 'would,' or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to: in this Press Release and on our associated earnings call, statements regarding our second quarter of 2025 and full year 2025 business outlook and underlying expectations and assumptions and statements regarding our ability to obtain a comprehensive maturity extension amendment to our credit facility. These statements are based on various assumptions, whether or not identified in this Press Release, and on the current expectations of our management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond our control. These forward-looking statements are subject to a number of risks and uncertainties, including, among others, our ability to refinance our indebtedness and continue as a going concern, the execution of our business strategy and expanding information and technology capabilities; our market opportunity and our ability to acquire new customers and retain existing customers; adoption and success of our mobile application featuring Katapult Pay; the timing and impact of our growth initiatives on our future financial performance; anticipated occurrence and timing of prime lending tightening and impact on our results of operations; general economic conditions in the markets where we operate, the cyclical nature of customer spending, and seasonal sales and spending patterns of customers; risks relating to factors affecting consumer spending that are not under our control, including, among others, levels of employment, disposable consumer income, inflation, prevailing interest rates, consumer debt and availability of credit, consumer confidence in future economic conditions, political conditions, and consumer perceptions of personal well-being and security and willingness and ability of customers to pay for the goods they lease through us when due; risks relating to uncertainty of our estimates of market opportunity and forecasts of market growth; risks related to the concentration of a significant portion of our transaction volume with a single merchant partner, or type of merchant or industry; the effects of competition on our future business; meet future liquidity requirements and complying with restrictive covenants related to our long-term indebtedness; the impact of unstable market and economic conditions such as rising inflation and interest rates; reliability of our platform and effectiveness of our risk model; data security breaches or other information technology incidents or disruptions, including cyber-attacks, and the protection of confidential, proprietary, personal and other information, including personal data of customers; ability to attract and retain employees, executive officers or directors; effectively respond to general economic and business conditions; obtain additional capital, including equity or debt financing and servicing our indebtedness; enhance future operating and financial results; anticipate rapid technological changes, including generative artificial intelligence and other new technologies; comply with laws and regulations applicable to our business, including laws and regulations related to rental purchase transactions; stay abreast of modified or new laws and regulations applying to our business, including with respect to rental purchase transactions and privacy regulations; maintain and grow relationships with merchants and partners; respond to uncertainties associated with product and service developments and market acceptance; the impacts of new U.S. federal income tax laws; material weaknesses in our internal control over financial reporting which, if not identified and remediated, could affect the reliability of our financial statements; successfully defend litigation; litigation, regulatory matters, complaints, adverse publicity and/or misconduct by employees, vendors and/or service providers; and other events or factors, including those resulting from civil unrest, war, foreign invasions (including the conflict involving Russia and Ukraine and the Israel-Hamas conflict), terrorism, public health crises and pandemics (such as COVID-19), trade wars, or responses to such events; our ability to meet the minimum requirements for continued listing on the Nasdaq Global Market; and those factors discussed in greater detail in the section entitled 'Risk Factors' in our periodic reports filed with the Securities and Exchange Commission ('SEC'), including the Annual Report on Form 10-K for the year ended December 31, 2024 that we filed with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that we do not presently know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Undue reliance should not be placed on the forward-looking statements in this Press Release or on our quarterly earnings call. All forward-looking statements contained herein or expressed on our quarterly earnings call are based on information available to us as of the date hereof, and we do not assume any obligation to update these statements as a result of new information or future events, except as required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. Key Performance Metrics Katapult regularly reviews several metrics, including the following key metrics, to evaluate its business, measure its performance, identify trends affecting our business, formulate financial projections and make strategic decisions, which may also be useful to an investor: gross originations, total revenue, gross profit, adjusted gross profit and adjusted EBITDA. Gross originations are defined as the retail price of the merchandise associated with lease-purchase agreements entered into during the period through the Katapult platform. Gross originations do not represent revenue earned. However, we believe this is a useful operating metric for both Katapult's management and investors to use in assessing the volume of transactions that take place on Katapult's platform. Total revenue represents the summation of rental revenue and other revenue. Katapult measures this metric to assess the total view of pay through performance of its customers. Management believes looking at these components is useful to an investor as it helps to understand the total payment performance of customers. Gross profit represents total revenue less cost of revenue, and is a measure presented in accordance with generally accepted accounting principles in the United States ("GAAP"). See the 'Non-GAAP Financial Measures' section below for a description and presentation of adjusted gross profit and adjusted EBITDA, which are non-GAAP measures utilized by management. Non-GAAP Financial Measures To supplement the financial measures presented in this press release and related conference call or webcast in accordance with GAAP, the Company also presents the following non-GAAP and other measures of financial performance: adjusted gross profit, adjusted EBITDA, adjusted net income/(loss) and fixed cash operating expenses. The Company believes that for management and investors to more effectively compare core performance from period to period, the non-GAAP measures should exclude items that are not indicative of our results from ongoing business Company urges investors to consider non-GAAP measures only in conjunction with its GAAP financials and to review the reconciliation of the Company's non-GAAP financial measures to its comparable GAAP financial measures, which are included in this press release. Adjusted gross profit represents gross profit less variable operating expenses, which are servicing costs, and underwriting fees. Management believes that adjusted gross profit provides a meaningful understanding of one aspect of its performance specifically attributable to total revenue and the variable costs associated with total revenue. Adjusted EBITDA is a non-GAAP measure that is defined as net loss before interest expense and other fees, interest income, change in fair value of warrants and loss on issuance of shares, provision for income taxes, depreciation and amortization on property and equipment and capitalized software, provision of impairment of leased assets, loss on partial extinguishment of debt, stock-based compensation expense, litigation settlement and other related expenses, and debt refinancing costs. Adjusted net income (loss) is a non-GAAP measure that is defined as net loss before change in fair value of warrants and loss on issuance of shares, stock-based compensation expense and litigation settlement and other related expenses and debt refinancing costs. Fixed cash operating expenses is a non-GAAP measure that is defined as operating expenses less depreciation and amortization on property and equipment and capitalized software, stock-based compensation expense, litigation settlement and other related expenses, debt refinancing costs, and variable lease costs such as servicing costs and underwriting fees. Management believes that fixed cash operating expenses provides a meaningful understanding of non-variable ongoing expenses. Adjusted gross profit, adjusted EBITDA and adjusted net loss are useful to an investor in evaluating the Company's performance because these measures: Are widely used to measure a company's operating performance; Are financial measurements that are used by rating agencies, lenders and other parties to evaluate the Company's credit worthiness; and Are used by the Company's management for various purposes, including as measures of performance and as a basis for strategic planning and forecasting. Management believes that the use of non-GAAP financial measures, as a supplement to GAAP measures, is useful to investors in that they eliminate items that are not part of our core operations, highly variable or do not require a cash outlay, such as stock-based compensation expense. Management uses these non-GAAP financial measures when evaluating operating performance and for internal planning and forecasting purposes. Management believes that these non-GAAP financial measures help indicate underlying trends in the business, are important in comparing current results with prior period results and are useful to investors and financial analysts in assessing operating performance. However, these non-GAAP measures exclude items that are significant in understanding and assessing Katapult's financial results. Therefore, these measures should not be considered in isolation or as alternatives to revenue, net loss, gross profit, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Katapult's presentation of these measures may not be comparable to similarly titled measures used by other companies. KATAPULT HOLDINGS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(amounts in thousands, except per share data) Three Months Ended March 31, 2025 2024 Revenue Rental revenue $ 71,078 $ 64,142 Other revenue 868 919 Total revenue 71,946 65,061 Cost of revenue 57,597 48,573 Gross profit 14,349 16,488 Operating expenses 14,885 12,688 Income (loss) from operations (536 ) 3,800 Interest expense and other fees (5,144 ) (4,527 ) Interest income 57 324 Change in fair value of warrant liability (36 ) (162 ) Loss before income taxes (5,659 ) (565 ) Provision for income taxes (29 ) (5 ) Net loss $ (5,688 ) $ (570 ) Weighted average common shares outstanding - basic and diluted 4,618 4,242 Net loss per common share - basic and diluted $ (1.23 ) $ (0.13 ) KATAPULT HOLDINGS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(dollars in thousands, except per share data) March 31, December 31, 2025 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 5,965 $ 3,465 Restricted cash 8,346 13,087 Property held for lease, net of accumulated depreciation and impairment 66,913 67,085 Prepaid expenses and other current assets 4,445 6,731 Total current assets 85,669 90,368 Property and equipment, net 244 253 Capitalized software and intangible assets, net 2,155 2,076 Right-of-use assets, non-current 376 383 Security deposits 91 91 Total assets $ 88,535 $ 93,171 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 3,040 $ 1,491 Accrued liabilities 18,945 17,372 Accrued litigation settlement 2,199 2,199 Unearned revenue 5,711 4,823 Revolving line of credit, net 77,663 82,582 Term loan, net, current 31,490 30,047 Lease liabilities 129 179 Total current liabilities 139,177 138,693 Lease liabilities, non-current 431 444 Other liabilities 614 828 Total liabilities 140,222 139,965 STOCKHOLDERS' DEFICIT Common stock, $.0001 par value-- 250,000,000 shares authorized; 4,483,544 and 4,446,540 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively — — Additional paid-in capital 102,452 101,657 Accumulated deficit (154,139 ) (148,451 ) Total stockholders' deficit (51,687 ) (46,794 ) Total liabilities and stockholders' deficit $ 88,535 $ 93,171 KATAPULT HOLDINGS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(dollars in thousands) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ (5,688 ) $ (570 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 39,392 34,026 Depreciation for early lease purchase options (buyouts) 9,664 7,613 Depreciation for impaired leases 6,632 5,636 Change in fair value of warrants and other non-cash items 36 162 Stock-based compensation 1,066 1,391 Amortization of debt discount 963 669 Amortization of debt issuance costs, net 88 66 Accrued PIK interest expense 480 347 Amortization of right-of-use assets 76 76 Changes in operating assets and liabilities: Property held for lease (55,185 ) (45,249 ) Prepaid expenses and other current assets 2,217 1,029 Accounts payable 1,549 754 Accrued liabilities 1,573 (4,123 ) Accrued litigation (250 ) — Lease liabilities (63 ) (55 ) Unearned revenues 888 208 Net cash provided by operating activities 3,438 1,980 Cash flows from investing activities: Purchases of property and equipment (24 ) — Additions to capitalized software (377 ) (126 ) Net cash used in investing activities (401 ) (126 ) Cash flows from financing activities: Proceeds from revolving line of credit 5,128 10,058 Principal repayments on revolving line of credit (10,135 ) (2,840 ) Repurchases of restricted stock (271 ) (312 ) Net cash (used in) provided by financing activities (5,278 ) 6,906 Net (decrease) increase in cash, cash equivalents and restricted cash (2,241 ) 8,760 Cash and cash equivalents and restricted cash at beginning of period 16,552 28,811 Cash and cash equivalents and restricted cash at end of period $ 14,311 $ 37,571 Supplemental disclosure of cash flow information: Cash paid for interest $ 3,661 $ 3,382 Cash paid for income taxes $ — $ 112 Cash paid for operating leases $ 111 $ 82 KATAPULT HOLDINGS, OF NON-GAAP MEASURES AND CERTAIN OTHER DATA (UNAUDITED)(amounts in thousands) Three Months Ended March 31, 2025 2024 Net loss $ (5,688 ) $ (570 ) Add back: Interest expense and other fees 5,144 4,527 Interest income (57 ) (324 ) Change in fair value of warrants 36 162 Provision for income taxes 29 5 Depreciation and amortization on property and equipment and capitalized software 330 266 Provision for impairment of leased assets 150 173 Stock-based compensation expense 1,066 1,391 Litigation settlement and other related expenses 259 $ — Debt refinancing costs $ 971 — Adjusted EBITDA $ 2,240 $ 5,630 Three Months Ended March 31, 2025 2024 Net loss $ (5,688 ) $ (570 ) Add back: Change in fair value of warrants 36 162 Stock-based compensation expense 1,066 1,391 Litigation settlement and other related expenses 259 — Debt refinancing costs 971 — Adjusted net income (loss) $ (3,356 ) $ 983 Three Months Ended March 31, 2025 2024 Operating expenses $ 14,885 $ 12,688 Less: Depreciation and amortization on property and equipment and capitalized software 330 266 Stock-based compensation expense 1,066 1,391 Servicing costs 1,085 1,132 Underwriting fees 772 509 Litigation settlement and other related expenses 259 — Debt refinancing costs 971 $ — Fixed cash operating expenses $ 10,402 $ 9,390 (in thousands) Three Months Ended March 31, 2025 2024 Total revenue $ 71,946 $ 65,061 Cost of revenue 57,597 48,573 Gross profit 14,349 16,488 Less: Servicing costs 1,085 1,132 Underwriting fees 772 509 Adjusted gross profit $ 12,492 $ 14,847 CERTAIN KEY PERFORMANCE METRICS (in thousands) Three Months Ended March 31, 2025 2024 Total revenue $ 71,946 $ 65,061 KATAPULT HOLDINGS, ORIGINATIONS BY QUARTER Gross Originations by Quarter ($ millions) Q1 Q2 Q3 Q4 FY 2025 $ 64.2 $ — $ — $ — FY 2024 $ 55.6 $ 55.3 $ 51.2 $ 75.2 FY 2023 $ 54.7 $ 54.7 $ 49.6 $ 67.5 FY 2022 $ 46.7 $ 46.4 $ 44.1 $ 59.8 FY 2021 $ 63.8 $ 64.4 $ 61.0 $ 58.9
Globe and Mail
15-05-2025
- Business
- Globe and Mail
Katapult Delivers 15.4% Gross Originations and 10.6% Revenue Growth in the First Quarter, Above Outlook
Expects Growth to Accelerate In Second Quarter Reiterates 2025 Guidance PLANO, Texas, May 15, 2025 (GLOBE NEWSWIRE) -- Katapult Holdings, Inc. ('Katapult' or the 'Company') (NASDAQ: KPLT), an e-commerce-focused financial technology company, today reported its financial results for the first quarter ended March 31, 2025. '2025 is off to a strong start and we are well positioned to achieve our full year targets,' said Orlando Zayas, CEO of Katapult. 'We achieved double-digit gross originations and revenue growth, driven by increasing engagement with the Katapult app marketplace, including 57% growth in KPay originations. Our marketplace is thriving - from application growth to repeat purchase rates, to high Net Promoter scores and beyond, we believe we have all the hallmarks of a healthy ecosystem and we intend to lean into opportunities to accelerate our growth. We are excited about the future and as we continue to execute on our consumer and merchant initiatives, we feel confident that we can create value for all of our stakeholders.' Operating Progress: Recent Highlights Increased activity within the Katapult app marketplace ~59% of first quarter gross originations started in the Katapult app marketplace, making it the single largest customer referral source. Total app originations grew 42% year-over-year. Applications grew ~59% year-over-year in the first quarter Customer satisfaction remained high and Katapult had a Net Promoter Score of 66 as of March 31, 2025 57.4% of gross originations for the first quarter of 2025 came from repeat customers 1 Grew consumer engagement by adding app functionality and features and executing targeted marketing campaigns KPay conversion rate increased during the first quarter leading to unique customer count growth of more than 65% year-over-year KPay gross originations grew approximately 57% year-over-year in the first quarter; 35% of total gross originations were transacted using KPay Launched Ashley and Bed Bath & Beyond in the Katapult app marketplace, bringing the total number of merchants in our KPay ecosystem to 35 Made strong progress against merchant engagement initiatives Direct and waterfall gross originations, which represented 65% of total first quarter originations, grew approximately 40%, excluding the home furnishings and mattress category Continued to expand our waterfall partnerships by kicking off a new partnership with Finti, a modern waterfall financing platform that connects consumers with a curated network of lenders and financing providers Together with several merchant-partners, we launched targeted co-branded, co-promoted marketing campaigns that delivered year-over-year gross originations growth ranging from 7% to more than 75% depending on the campaign First Quarter 2025 Financial Highlights (All comparisons are year-over-year unless stated otherwise.) Gross originations were $64.2 million, an increase of 15.4%. Excluding the home furnishings and mattress category, gross originations grew 51% year-over-year. Total revenue was $71.9 million, an increase of 10.6% Total operating expenses in the first quarter increased 17.3%. Our fixed cash operating expenses 2, which exclude litigation settlement and other non-cash and variable expenses, increased approximately 10.8%. Net loss was $5.7 million for the first quarter of 2025 compared with net loss of $0.6 million reported for the first quarter of 2024. The higher net loss was mainly due to higher cost of sales and higher operating expenses. Adjusted net loss 2 was $3.4 million for the first quarter of 2025 compared to adjusted net income of $1.0 million reported for the first quarter of 2024 Adjusted EBITDA 2 was $2.2 million for the first quarter of 2025 compared to Adjusted EBITDA 2 of $5.6 million in the first quarter of 2024. The year-over-year performance was impacted by higher cost of sales related to rapid, faster-than-expected gross originations growth during the first quarter of 2025 and the end of the fourth quarter of 2024. Katapult ended the quarter with total cash and cash equivalents of $14.3 million, which includes $8.3 million of restricted cash. The Company ended the quarter with $77.8 million of outstanding debt on its credit facility. Write-offs as a percentage of revenue were 9.0% in the first quarter of 2025 and are within the Company's 8% to 10% long-term target range. This compares with 8.4% in the first quarter of 2024. [1] Repeat customer rate is defined as the percentage of in-quarter originations from existing customers. [2] Please refer to the 'Reconciliation of Non-GAAP Measure and Certain Other Data' section and the GAAP to non-GAAP reconciliation tables below for more information. Second Quarter and Full Year 2025 Business Outlook The Company is continuing to navigate a challenging macro environment particularly within the home furnishings category. Given the current breadth of our merchant selection as well as our plans to introduce new merchants to the Katapult App Marketplace during 2025, our strategic marketing and our strong consumer offering, we believe we are well positioned to deliver continued growth in 2025. We continue to believe that we have a large addressable market of underserved, non-prime consumers, and it's important to note that lease-to-own solutions have historically benefited when prime credit options become less available. Given our quarter-to-date progress, Katapult expects the following results for the second quarter of 2025: 25% to 30% year-over-year increase in gross originations 17% to 20% year-over-year increase in revenue Approximately breakeven Adjusted EBITDA Based on the macroeconomic assumptions above and the operating plan in place for the full year 2025, Katapult is reiterating its expectations for full year 2025: We expect gross originations to grow at least 20% This outlook does not include any material impact from prime creditors tightening or loosening above us and assumes that there are no significant changes to the macro environment. Both our second quarter and full year outlooks assume that the gross originations for the home furnishings and mattress category do not improve materially from our 2024 performance. We also expect to maintain strong credit quality in our portfolio. This will be driven by ongoing enhancements to our risk modeling, onboarding high quality new merchants through integrations, and repeat customers engaging with Katapult Pay Revenue growth is expected to be at least 20% Finally, with the continued execution of our disciplined expense management strategy combined with our growing top-line, we expect to deliver at least $10 million in positive Adjusted EBITDA "The first quarter came in stronger than our outlook, and we are continuing to successfully grow our top-line without meaningfully increasing our expense base,' said Nancy Walsh, CFO of Katapult. 'The second quarter is off to a great start and we believe we can continue to scale our business by offering a transparent and fair LTO product to consumers and a growth engine to our partners. Our team's hard work and agile execution is fueling our growth and we are looking forward to a great 2025.' Conference Call and Webcast The Company will host a conference call and webcast at 8:00 AM ET on Thursday, May 15, 2025, to discuss the Company's financial results. Related presentation materials will be available before the call on the Company's Investor Relations page at The conference call will be broadcast live in listen-only mode and an archive of the webcast will be available for one year. About Katapult Katapult is a technology driven lease-to-own platform that integrates with omnichannel retailers and e-commerce platforms to power the purchasing of everyday durable goods for underserved U.S. non-prime consumers. Through our point-of-sale (POS) integrations and innovative mobile app featuring Katapult Pay(R), consumers who may be unable to access traditional financing can shop a growing network of merchant partners. Our process is simple, fast, and transparent. We believe that seeing the good in people is good for business, humanizing the way underserved consumers get the things they need with payment solutions based on fairness and dignity. Contact Jennifer Kull VP of Investor Relations ir@ Forward-Looking Statements Certain statements included in this Press Release and on our quarterly earnings call that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements may be identified by words such as 'anticipate,' 'assume,' 'believe,' 'continue,' 'could,' 'design,' 'estimate,' 'expect,' 'intend,' 'may,' 'plan,' 'potentially,' 'predict,' 'should,' 'will,' 'would,' or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to: in this Press Release and on our associated earnings call, statements regarding our second quarter of 2025 and full year 2025 business outlook and underlying expectations and assumptions and statements regarding our ability to obtain a comprehensive maturity extension amendment to our credit facility. These statements are based on various assumptions, whether or not identified in this Press Release, and on the current expectations of our management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond our control. These forward-looking statements are subject to a number of risks and uncertainties, including, among others, our ability to refinance our indebtedness and continue as a going concern, the execution of our business strategy and expanding information and technology capabilities; our market opportunity and our ability to acquire new customers and retain existing customers; adoption and success of our mobile application featuring Katapult Pay; the timing and impact of our growth initiatives on our future financial performance; anticipated occurrence and timing of prime lending tightening and impact on our results of operations; general economic conditions in the markets where we operate, the cyclical nature of customer spending, and seasonal sales and spending patterns of customers; risks relating to factors affecting consumer spending that are not under our control, including, among others, levels of employment, disposable consumer income, inflation, prevailing interest rates, consumer debt and availability of credit, consumer confidence in future economic conditions, political conditions, and consumer perceptions of personal well-being and security and willingness and ability of customers to pay for the goods they lease through us when due; risks relating to uncertainty of our estimates of market opportunity and forecasts of market growth; risks related to the concentration of a significant portion of our transaction volume with a single merchant partner, or type of merchant or industry; the effects of competition on our future business; meet future liquidity requirements and complying with restrictive covenants related to our long-term indebtedness; the impact of unstable market and economic conditions such as rising inflation and interest rates; reliability of our platform and effectiveness of our risk model; data security breaches or other information technology incidents or disruptions, including cyber-attacks, and the protection of confidential, proprietary, personal and other information, including personal data of customers; ability to attract and retain employees, executive officers or directors; effectively respond to general economic and business conditions; obtain additional capital, including equity or debt financing and servicing our indebtedness; enhance future operating and financial results; anticipate rapid technological changes, including generative artificial intelligence and other new technologies; comply with laws and regulations applicable to our business, including laws and regulations related to rental purchase transactions; stay abreast of modified or new laws and regulations applying to our business, including with respect to rental purchase transactions and privacy regulations; maintain and grow relationships with merchants and partners; respond to uncertainties associated with product and service developments and market acceptance; the impacts of new U.S. federal income tax laws; material weaknesses in our internal control over financial reporting which, if not identified and remediated, could affect the reliability of our financial statements; successfully defend litigation; litigation, regulatory matters, complaints, adverse publicity and/or misconduct by employees, vendors and/or service providers; and other events or factors, including those resulting from civil unrest, war, foreign invasions (including the conflict involving Russia and Ukraine and the Israel-Hamas conflict), terrorism, public health crises and pandemics (such as COVID-19), trade wars, or responses to such events; our ability to meet the minimum requirements for continued listing on the Nasdaq Global Market; and those factors discussed in greater detail in the section entitled 'Risk Factors' in our periodic reports filed with the Securities and Exchange Commission ('SEC'), including the Annual Report on Form 10-K for the year ended December 31, 2024 that we filed with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that we do not presently know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Undue reliance should not be placed on the forward-looking statements in this Press Release or on our quarterly earnings call. All forward-looking statements contained herein or expressed on our quarterly earnings call are based on information available to us as of the date hereof, and we do not assume any obligation to update these statements as a result of new information or future events, except as required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. Key Performance Metrics Katapult regularly reviews several metrics, including the following key metrics, to evaluate its business, measure its performance, identify trends affecting our business, formulate financial projections and make strategic decisions, which may also be useful to an investor: gross originations, total revenue, gross profit, adjusted gross profit and adjusted EBITDA. Gross originations are defined as the retail price of the merchandise associated with lease-purchase agreements entered into during the period through the Katapult platform. Gross originations do not represent revenue earned. However, we believe this is a useful operating metric for both Katapult's management and investors to use in assessing the volume of transactions that take place on Katapult's platform. Total revenue represents the summation of rental revenue and other revenue. Katapult measures this metric to assess the total view of pay through performance of its customers. Management believes looking at these components is useful to an investor as it helps to understand the total payment performance of customers. Gross profit represents total revenue less cost of revenue, and is a measure presented in accordance with generally accepted accounting principles in the United States ("GAAP"). See the 'Non-GAAP Financial Measures' section below for a description and presentation of adjusted gross profit and adjusted EBITDA, which are non-GAAP measures utilized by management. Non-GAAP Financial Measures To supplement the financial measures presented in this press release and related conference call or webcast in accordance with GAAP, the Company also presents the following non-GAAP and other measures of financial performance: adjusted gross profit, adjusted EBITDA, adjusted net income/(loss) and fixed cash operating expenses. The Company believes that for management and investors to more effectively compare core performance from period to period, the non-GAAP measures should exclude items that are not indicative of our results from ongoing business Company urges investors to consider non-GAAP measures only in conjunction with its GAAP financials and to review the reconciliation of the Company's non-GAAP financial measures to its comparable GAAP financial measures, which are included in this press release. Adjusted gross profit represents gross profit less variable operating expenses, which are servicing costs, and underwriting fees. Management believes that adjusted gross profit provides a meaningful understanding of one aspect of its performance specifically attributable to total revenue and the variable costs associated with total revenue. Adjusted EBITDA is a non-GAAP measure that is defined as net loss before interest expense and other fees, interest income, change in fair value of warrants and loss on issuance of shares, provision for income taxes, depreciation and amortization on property and equipment and capitalized software, provision of impairment of leased assets, loss on partial extinguishment of debt, stock-based compensation expense, litigation settlement and other related expenses, and debt refinancing costs. Adjusted net income (loss) is a non-GAAP measure that is defined as net loss before change in fair value of warrants and loss on issuance of shares, stock-based compensation expense and litigation settlement and other related expenses and debt refinancing costs. Fixed cash operating expenses is a non-GAAP measure that is defined as operating expenses less depreciation and amortization on property and equipment and capitalized software, stock-based compensation expense, litigation settlement and other related expenses, debt refinancing costs, and variable lease costs such as servicing costs and underwriting fees. Management believes that fixed cash operating expenses provides a meaningful understanding of non-variable ongoing expenses. Adjusted gross profit, adjusted EBITDA and adjusted net loss are useful to an investor in evaluating the Company's performance because these measures: Are widely used to measure a company's operating performance; Are financial measurements that are used by rating agencies, lenders and other parties to evaluate the Company's credit worthiness; and Are used by the Company's management for various purposes, including as measures of performance and as a basis for strategic planning and forecasting. Management believes that the use of non-GAAP financial measures, as a supplement to GAAP measures, is useful to investors in that they eliminate items that are not part of our core operations, highly variable or do not require a cash outlay, such as stock-based compensation expense. Management uses these non-GAAP financial measures when evaluating operating performance and for internal planning and forecasting purposes. Management believes that these non-GAAP financial measures help indicate underlying trends in the business, are important in comparing current results with prior period results and are useful to investors and financial analysts in assessing operating performance. However, these non-GAAP measures exclude items that are significant in understanding and assessing Katapult's financial results. Therefore, these measures should not be considered in isolation or as alternatives to revenue, net loss, gross profit, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Katapult's presentation of these measures may not be comparable to similarly titled measures used by other companies. KATAPULT HOLDINGS, INC. AND SUBSIDIARIES (dollars in thousands, except per share data) March 31, December 31, 2025 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 5,965 $ 3,465 Restricted cash 8,346 13,087 Property held for lease, net of accumulated depreciation and impairment 66,913 67,085 Prepaid expenses and other current assets 4,445 6,731 Total current assets 85,669 90,368 Property and equipment, net 244 253 Capitalized software and intangible assets, net 2,155 2,076 Right-of-use assets, non-current 376 383 Security deposits 91 91 Total assets $ 88,535 $ 93,171 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 3,040 $ 1,491 Accrued liabilities 18,945 17,372 Accrued litigation settlement 2,199 2,199 Unearned revenue 5,711 4,823 Revolving line of credit, net 77,663 82,582 Term loan, net, current 31,490 30,047 Lease liabilities 129 179 Total current liabilities 139,177 138,693 Lease liabilities, non-current 431 444 Other liabilities 614 828 Total liabilities 140,222 139,965 STOCKHOLDERS' DEFICIT Common stock, $.0001 par value-- 250,000,000 shares authorized; 4,483,544 and 4,446,540 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively — — Additional paid-in capital 102,452 101,657 Accumulated deficit (154,139) (148,451) Total stockholders' deficit (51,687) (46,794) Total liabilities and stockholders' deficit $ 88,535 $ 93,171 KATAPULT HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (dollars in thousands) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ (5,688) $ (570) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 39,392 34,026 Depreciation for early lease purchase options (buyouts) 9,664 7,613 Depreciation for impaired leases 6,632 5,636 Change in fair value of warrants and other non-cash items 36 162 Stock-based compensation 1,066 1,391 Amortization of debt discount 963 669 Amortization of debt issuance costs, net 88 66 Accrued PIK interest expense 480 347 Amortization of right-of-use assets 76 76 Changes in operating assets and liabilities: Property held for lease (55,185) (45,249) Prepaid expenses and other current assets 2,217 1,029 Accounts payable 1,549 754 Accrued liabilities 1,573 (4,123) Accrued litigation (250) — Lease liabilities (63) (55) Unearned revenues 888 208 Net cash provided by operating activities 3,438 1,980 Cash flows from investing activities: Purchases of property and equipment (24) — Additions to capitalized software (377) (126) Net cash used in investing activities (401) (126) Cash flows from financing activities: Proceeds from revolving line of credit 5,128 10,058 Principal repayments on revolving line of credit (10,135) (2,840) Repurchases of restricted stock (271) (312) Net cash (used in) provided by financing activities (5,278) 6,906 Net (decrease) increase in cash, cash equivalents and restricted cash (2,241) 8,760 Cash and cash equivalents and restricted cash at beginning of period 16,552 28,811 Cash and cash equivalents and restricted cash at end of period $ 14,311 $ 37,571 Supplemental disclosure of cash flow information: Cash paid for interest $ 3,661 $ 3,382 Cash paid for income taxes $ — $ 112 Cash paid for operating leases $ 111 $ 82 Three Months Ended March 31, 2025 2024 Net loss $ (5,688) $ (570) Add back: Change in fair value of warrants 36 162 Stock-based compensation expense 1,066 1,391 Litigation settlement and other related expenses 259 — Debt refinancing costs 971 — Adjusted net income (loss) $ (3,356) $ 983 Three Months Ended March 31, 2025 2024 Operating expenses $ 14,885 $ 12,688 Less: Depreciation and amortization on property and equipment and capitalized software 330 266 Stock-based compensation expense 1,066 1,391 Servicing costs 1,085 1,132 Underwriting fees 772 509 Litigation settlement and other related expenses 259 — Debt refinancing costs 971 $ — Fixed cash operating expenses $ 10,402 $ 9,390 (in thousands) Three Months Ended March 31, 2025 2024 Total revenue $ 71,946 $ 65,061 Cost of revenue 57,597 48,573 Gross profit 14,349 16,488 Less: Servicing costs 1,085 1,132 Underwriting fees 772 509 Adjusted gross profit $ 12,492 $ 14,847 CERTAIN KEY PERFORMANCE METRICS (in thousands) Three Months Ended March 31, 2025 2024 Total revenue $ 71,946 $ 65,061 KATAPULT HOLDINGS, INC. GROSS ORIGINATIONS BY QUARTER Gross Originations by Quarter ($ millions) Q1 Q2 Q3 Q4 FY 2025 $ 64.2 $ — $ — $ — FY 2024 $ 55.6 $ 55.3 $ 51.2 $ 64.2 FY 2023 $ 54.7 $ 54.7 $ 49.6 $ 67.5 FY 2022 $ 46.7 $ 46.4 $ 44.1 $ 59.8 FY 2021 $ 63.8 $ 64.4 $ 61.0 $ 58.9
BBC News
13-04-2025
- Entertainment
- BBC News
Universal theme park Bedford: What can we expect it to look like?
A new Universal theme park near Bedford - the first in Europe - was announced to much fanfare earlier this to open in 2031, construction is to begin at the 476-acre site, where attractions are likely to feature James Bond, Paddington and The Lord of the Rings. But from deciding how many loops to include on a coaster, to making sure even the trees blend in seamlessly with an area's design, building a dream world is a painstaking task. To find out what planning lies behind the thrills, and what sort of things we could expect when the new Universal park finally arrives, BBC News spoke to some real-life rollercoaster experts. Building an iconic rollercoaster Of course, any good theme park needs some good rides - but maybe it's an understatement to say that's a tall order. While "at least two or three iconic rides" are needed, these need not necessarily be the fastest, tallest or most innovative to stand out, explains Andy Sinclair-Harris, creative director at Katapult, which has designed attractions for the likes of Legoland and Alton Towers."What is more important is the depth of storytelling," he says, so that you're fully immersed in the experience of the ride.A good example, he says, is a Harry-Potter-themed rollercoaster called Hagrid's Magical Creatures Motorbike Adventure, located at The Wizarding World of Harry Potter in Universal's Orlando resort. Riders sit in replicas of Hagrid's motorbike and zoom through recreations of settings from the popular film series."There's nothing particularly brand new or absolutely amazing about that ride, other than it tells a story amazingly well," he adds. If the rumours that there's going to be a Back to the Future ride at Universal's UK venture are true, those behind it will be ensuring that the DeLorean time machine is included, he the brainstorming part of building a resort, rides are often "developed as storytelling tools" in a "specific genre or world," says Joseph Bright, CEO at Scruffy Dog, which provides creative project management for theme an iconic ride might help to "anchor" a zone of a park, "it's never developed in isolation" - rather "cohesion is critical [and] every serve the wider guest story". Dennis Speigel, founder of International Theme Park Services, says meticulous planning goes into the most immersive adds that the size of a rollercoaster is partly dictated by the number of guests its designers hope to get on board - "between 1,500 and 2,000 an hour" at popular that means a coaster that is over 3,000ft (914m) long, with the first dip "somewhere in the 150ft (45m) range".Mr Speigel says that while an upcoming coaster at Six Flags Qiddiya in Saudi Arabia is set to break records when it sends riders speeding at over 150mph around the tracks, most coasters today reach between 70-90mph on their first drop. Once the larger rides are planned out, theme park designers then consider what he describes as "flat rides", which cater to less thrill-seeking crowds."Those are your smaller rides that take people around and around, like a merry-go-round or a monster," he says. "[They're] rides that can often be bought off the shelf from a manufacturer". Your route to the ride is key When you step foot in a theme park, you're probably thinking about the rides you'll be going on - but you might think less about how you get the design phase, you have to let your imagination run wild, says Mr Sinclair-Harris. "Budget is a thing, but when you have those first initial discussions, you shouldn't be tempered by anything," he "story" of your park is crucial, he adds. "It's knowing the story, the characters and being true to that world."Of course, discussions about details like potential ride dimensions and manufacturers soon follow, as well as a masterplan, which configures how attractions, pathways and amenities would all fit into the space - and often determines how long people will end up queuing artist's conception of the Universal UK park depicts a huge lake in middle of what appears to be different themed areas. Far from just looking pretty, it can allow crowds to fan out to multiple rides without congestion forming around one. At Alton Towers, theme park vlogger and fanatic Charlotte Branford - known as Diary of a RollerCoaster Girl - believes it means other visitors often choose to go left around the lake (to the Wicker Man ride), or right around it (towards the Smiler), so she heads to the back of the park to try to avoid the here at the back of parks designed in this way, that you'll often find a show with set times "to try and stop people running around to the back of the park to get to some big attraction," says Justin Garvanovic, founder of the European Coaster Club, who has been involved in rollercoaster designs."Without realising it, they're trying to make you do roughly what they want you to do when you're in the park."Another tried and tested layout is the "hub and spoke" often seen at Disneyland resorts, says Robbie Jones, insights director at Katapult."In a sense you've got that central gathering the castle in the Magic different lands like spokes on a wheel, radiating out."Universal's new Epic Universe theme park in Orlando will follow a version of this - allowing you to venture into different lands through portals. The finer details So the stories behind the rollercoasters are intertwined with the story of the theme park layout come the finishing touches - to maintain your sense of being in a futuristic or fantasy world while you're artificial rock or even other buildings are often used to obscure unsightly but necessary objects, Mr Sinclair-Harris says. "If you're in an amazing world with castles and dragons, seeing a telephone pole removes you from that story".Even the audio playing out, scent of a park and queue lines are considered because they "play a role in that illusion," says Mr Mr Garvanovic puts it, "there's tons of subtle stuff going on in the background" in a well thought-out theme sign of success, perhaps, is when you barely even notice it.
Yahoo
03-04-2025
- Business
- Yahoo
Q4 2024 Katapult Holdings Inc Earnings Call
Jennifer Kull; Vice President and Head of Investor Relations; Katapult Holdings Inc Orlando Zayas; Chief Executive Officer; Katapult Holdings Inc Derek Medlin; President and Chief Growth Officer; Katapult Holdings Inc Nancy Walsh; Chief Financial Officer; Katapult Holdings Inc Kyle Joseph; Analyst; Stephens Inc Anthony Chukumba; Analyst; Loop Capital Scott Buck; Analyst; H.C. Wainwright & Co, LLC Operator Thank you for standing by and welcome to the Katapult Holdings fourth-quarter and full-year 2024 earnings conference call. (Operator Instructions) Thank you. I'd now like to turn the call over to Jennifer Kull, Vice President and Head of Investor Relations. You may begin. Jennifer Kull Welcome to Katapult's fourth-quarter 2024 conference call. On the call with me today are Orlando Zayas, Chief Executive Officer; Nancy Walsh, Chief Financial Officer; and Derek Medlin, President and Chief Growth Officer. For your reference, we have posted materials related to today's call on the Investor Relations section of the Katapult website, which can be found at Please keep in mind that our remarks today include forward-looking statements related to our financial guidance, our business, and our operating results as noted in the earnings release and slide deck posted to our website for your reference. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties, some of which are described in today's earnings release in our most recent Form 10-K, and which will be updated in future periodic reports that we file with the SEC. Any forward-looking statements that we make on this call are based on our beliefs and assumptions today, and we disclaim any obligation to update them. Also during the call, we'll present both GAAP and non-GAAP financial measures. Non-GAAP financial measures should be considered supplemental to and not replacements for or superior to our GAAP results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included with today's earnings release and is available on the Investor Relations section of the company's website. Any comparisons to 2023 financial results are referencing our restated financials included in our Form 10-K for the year ended December 31, 2023, filed with the SEC on April 24, 2024. Finally, all comparisons are year-over-year unless stated otherwise. With that, I will turn the call over to Orlando. Orlando Zayas Thank you, Jennifer, and thanks to everyone joining us today. We're excited to give you an update on our Q4 results and our plans for 2025. If we had to land on one headline this quarter, it would be we finished the year strong. Q4 gross originations grew more than 11% year-over-year, and fourth quarter revenue was up more than 9%. With this strong performance, we have now grown our gross originations consistently for more than two years, and we expect our revenue growth track record to hit this two-year milestone after we report to Q1 in May. These results showcase the enhancements we've made across the board. From our go-to market strategy to operations, we believe we have executed well and transformed our business model, setting Katapult up for continued success. I could not be more prouder of our team here. Their dedication and hard work are the main ingredients in our success, and I'd like to give a big thank you to everyone here at Katapult. Before we dive further into our results, I want to take a quick step back to summarize and review the progress we've made over the past few years. We have transformed our business from single input-driven business to a multi-dimensional growth engine in a very short period of time. We believe this is an important context as you evaluate where we are today and where we believe we can go over the next year and beyond. If you recall, just two short years ago, we launched our Katapult app, which included a groundbreaking feature we call Katapult Pay or KPay. Up until this launch, nearly 100% of our focus had been on a merchant engagement opportunities. Before our app existed, our business model relied completely on merchants to refer consumer traffic to us, either through direct integration, which offered a Katapult lease as a checkout option, or through a waterfall finance platform, which would offer our LTO if we were the best option for its consumers. We developed a great reputation for converting this traffic into transactions, which were incremental sales for our merchants. This strategy allowed us to build relationships with merchants that partnered with us. Our partnerships were supported by data and insights that show the incremental sales that the Katapult LTO option brings when added to merchant payment ecosystems. And today, we are confident that we have a superior LTO product that gives nonprime consumers the choice, transparency, and pricing terms they need. This is a driver of our consistently high repeat rates and our strong NPS and Trustpilot scores. We are proud of the product we built and the way we serve our community of consumers. When we launched our app, our goal was to create a destination where consumers could go for all their durable goods shopping needs. Simply put, we wanted to create an ecosystem that allowed Katapult to connect consumers to merchant partners, enabling commerce whenever and however the consumer wanted to shop. We believe we can turn our app into a marketplace where consumers would choose to start their shopping journey because they trusted Katapult. To do this, we needed to create vibrancy in our marketplace. So in addition to the hundreds of direct and waterfall merchant websites that consumers could link to and shop from within our app, we began to methodically add merchants with whom we didn't have a direct or waterfall relationship in our app marketplace. We also added KPay functionality that allows consumers to seamlessly check out using our proprietary virtual credit card technology, allowing them to check out with these merchants in our marketplace. Our technology lets customers start and finish their shopping journey on our app. Practically speaking, we give consumers more choice. They could shop our app and check out on a merchant website or check out on our app with KPay. And as our customers enjoy a better experience, Katapult can gather behavioral insights that allow us to create a more personalized customer journey that encourages repeat shopping. With the launch of our app, we also took control of our destiny because it allows us for the first time to include merchants with whom we didn't have a direct or waterfall relationship in our marketplace. This meant that we could service consumer demand at our own discretion, and we could be the source of traffic to our merchants. This dynamic creates an even more compelling reason for merchants to want to partner with Katapult. Since our app launched, we have added more than 30 KPay-enabled merchants to our marketplace, which again, are in addition to the hundreds of other direct and waterfall merchant customers can reach through our marketplace. The impact of our marketplace has been phenomenal. For 2024, approximately $127 million of gross originations actually began in our app, and our market leading KPay feature enabled nearly $77 million of those gross originations last year alone. This is a significant change from our original go-to market strategy. Before we launched our app, we were 100% reliant on merchants to send us this traffic. In just two years, 54% of our 2024 originations are now being driven by our own efforts, starting in our ecosystem. We have created a two-sided marketplace that benefits consumers and merchants alike. It's self-generative and highly complementary to our merchant and waterfall-driven traffic. Our two-sided marketplace is growing because we offer benefits to all market participants. We send merchants incremental sales with great economics, and our customers have a reliable shopping destination that offers straightforward and fair pricing for durable goods. We are a destination where they know they'll be treated with dignity, and they will be able to acquire the items they need and want whenever and however they want to shop. This virtuous ecosystem means that customer success leads to merchant success and vice versa. And when this happens, Katapult is also successful. We've gone from simply being a payment method to being a growth partner to our merchants and a destination for consumers, and this 2.0 transformation has happened in less than two years. We believe merchants are beginning to understand the power of our marketplace and the strength of our LTO offering because they are now reaching out to Katapult with requests to be featured in our ecosystem. We know how to convert traffic into transactions, and we believe this will encourage our merchant and waterfall partners to send us even more traffic in the future. To unlock more of our marketplace potential, we need to drive additional top of the funnel activity. In short, we need more applications that we can convert into customers and we will come back to Katapult for their durable goods and needs again and again. To do this, we have focused our top initiatives in four core areas: one, consumer engagement; two, merchant engagement; three, referral partnerships; and four, improving our unit economics and capital structure over time so that we can improve profitability and sustainably generate cash. We're incredibly excited about the future of our marketplace. I'd now like to turn the call over to Derek, who will provide you with an overview of our Q4 successes, which we intend to build upon to drive growth in 2025. After this, Nancy will give you a recap of our Q4 and 2024 financial results, as well as some expectations for our first quarter and full year 2025. We'll then open it up for your questions. Derek. Derek Medlin Thanks, Orlando, and good morning to, everyone. You've just heard Orlando describe how we've transformed our business over the past two years. When we launched our app in late 2022, we saw the opportunity to create a growth driver that would allow Katapult to gain more control over its destiny. Since that time, we've been executing against strategic initiatives we believe will support our continued progress. But we've already begun to see our strategy deliver, we believe we are still in the very early stages of a new phase of growth. We now have evidence that we can bring value to merchants and consumers alike, so our focus is on finding opportunities to move faster than we ever have before. So let's start with the progress we're making in our consumer engagement initiative. Within our consumer initiative, our overarching priority is engagement. In support of this, we're expanding our app functionality and footprint as we continue to test and learn with a variety of marketing campaigns. We believe our success in these efforts will allow us to leverage our app marketplace to drive consumer engagement, gross originations, and profitable revenue growth. During the fourth quarter, $46 million in gross originations started in our app. For easy reference going forward, we will refer to this data point as total app originations. Year-over-year, total app originations grew by 32% in Q4. This means that we were our own referral source for approximately 61% of the gross originations we generated in the fourth quarter. And roughly $31 million of our gross originations were transacted using KPay, which was up approximately 52% year-over-year. Going forward, we will continue to refer to this data point as KPay originations. This means that roughly 41% of our originations went through KPay. Both these data points show that we are increasing the engagement and velocity in our marketplace, and that activity is leading to growth. Since the start of 2024, we added eight merchants to our marketplace based on customer feedback. These merchants include Metro by T-Mobile, Zales, and Rooms To Go, which we launched in December 2024 and early 2025, respectively. During 2025, we will continue to strategically add features, functionality, and merchants to our marketplace that we believe will encourage consumers to engage and transact with Katapult for more of their shopping needs. We intend to leverage data and insights to personalize the shopping journey for our customers, which we believe will lead to higher conversion rates. Now, let's turn to marketing, which is our other high priority consumer engagement initiative. Throughout 2024, we increased our marketing activity with a focus on getting the Katapult product in front of more eyeballs. We expect to continue to improve the return on ad spend over time, and we feel comfortable with our customer acquisition costs and our continued investment in our multi-channel marketing strategy. For 2025, our top marketing priorities are to drive application growth, so we have more activity at the top of our funnel and to both increase the number of customers who take out a second lease with us and shorten the timeline between the origination of their first and second leases. Multiple leases are an obvious driver of lifetime value growth and permitting customers to have more than one lease with us at a time distinguishes Katapult LTO from many of our competitors. Let me give you a few examples of how we're leveraging marketing to deliver growth. We're thoughtfully engaging with consumers more regularly. In fact, our life cycle team increased their volume of communications by nearly 200% in 2024. Touch points included emails, SMS, and push, whose timing was tied to inflection points in the customer journey and experience. We also launch strategies within new customer acquisition channels including Google paid ad search. We are seeing a strong ROI, and we expect to invest further in this channel as it continues to perform. Finally, we also launched marketing strategies related to organic social, paid social, video ads, and direct mail, and we believe we have a lot of potential growth to tap into related to these channels. We will continue to scale our marketing efforts by testing and learning in a variety of campaigns throughout 2025. We believe our hard work is paying off, and we are seeing strength and opportunities across the spectrum of KPIs we're using to measure the health of our marketplace. Let me highlight a few Q4 data points that illustrate our progress. Given top of funnel activity is our biggest near-term priority, I'll start with application volume, which grew approximately 50% during the fourth quarter, driven in equal parts by new and returning customers. Feeding our application volume, both app downloads and MAUs for monthly active users grew during 2024. We now have nearly 1 million cumulative app downloads. Traveling down the funnel, let's talk briefly about our conversion rate. The team has done a great job of improving the customer journey, which led to a 72-basis-point improvement in global conversion rate during the full-year 2024. We continue to sustain what we believe is a market leading customer repeat rate, which was 61.5% in the fourth quarter. We came in above 55% for all of 2024. In fact, as of the end of the year, nearly 30% of our active customers have been entered into four or more leases with Katapult during their time with us. We believe this data point demonstrates the value we bring to customers, and given the demographic and psychographic similarities across our customer base, we believe we can drive that 30% much higher over time. We believe this repeat rate is fueled by the positive experiences our customers have with the Katapult marketplace. We have a customer-centric philosophy, which means we never charge late fees, and we give consumers the transparent and affordable LTO options they deserve. Our approach has consistently resonated with our customers. Our NPS was 58 as of the end of Q4, up from 52 in Q4 of 2023. This strong score is a testament to our customer service obsession. All of these data points drive LTV, which is one of the more important hallmarks of our healthy marketplace. During 2024, our customer LTV grew approximately 9% compared with 2023. We believe that these stats are giving merchants a better understanding of the incremental sales our LTO delivers and the consumer demand for our product. These merchants are seeing us as a growth partner and our relationships have become even more collaborative. That's a great segue to a conversation about our merchant engagement initiatives. Within merchant engagement, we are focusing on positioning Katapult as a partner of choice for all merchants and waterfall finance platforms. No matter how merchants are participating in our marketplace, we want them to recognize and value the incremental sales that Katapult is delivering. Our direct and waterfall merchants accounted for approximately 68% of total gross originations in 2024. We have remained focused on bringing new merchants to our marketplace and growing our market share with our anchor merchants. This focus led to success. During the fourth quarter. If we exclude the home furnishings and mattress category, our direct and waterfall gross originations grew approximately 44% year-over-year. For full year 2024, this metric was up 16%. This growth was driven by several factors. Let me highlight two. First, we added more than 30 new direct or waterfall merchants or merchant pathways to our ecosystem. As a reminder, pathways include new or existing merchant partners that launch a new website or an in-store experience that includes Katapult as a direct or waterfall LTO offering. These merchants span a variety of categories, most notably, automotive and durable medical devices, and collectively, we believe they will begin to contribute to the vibrancy of our marketplace and gross originations over time. Second, in the fourth quarter, we leaned into co-branded marketing campaigns with our merchant partners. Their support led to very strong growth during the Cyber 5 holiday period and the rest of the holiday season. With their partnership, we grew gross originations by 24% in the month of December and approximately 100% during the Cyber 5 period compared with 2023. Let me give you a few examples of the types of co-marketing and other activities we're engaging in and the results they're creating. First, during a two-week promotion, we partnered with a gaming product merchant that led to a 200% increase in applications and more than 180% increase in gross originations compared with the same period last year. Second, with one of our leading tire and auto merchants, we co-sponsored a one week promotion that led to applications increasing 65% year-over-year during that week, and gross originations growth of nearly 35%. We also worked with one of our leading electronics merchants to refresh their product detail pages to include a financing widget to help consumers find Katapult LTO option more easily. This led to an approximate 38% increase in average daily gross originations through the end of the quarter compared with last year. Finally, for another leading tire and auto merchant, we added our innovative price calculator, and we're included in both our email newsletters and abandoned card emails. Following these updates, we saw a 42% increase in average daily gross originations. We will look for new opportunities to partner even more closely with our merchants as we test and learn in 2025 and continue to build affinity within our Katapult community. And while we're watching the performance of our entire merchant base, we closely monitor the success and health of our top 25 merchants. By monitoring the tip of the spear of performance, we believe we can quickly get a sense of our marketplace health and implement enhancements that unlock growth. During the fourth quarter, application volume grew approximately 30% for our top 25 merchants when compared to the top 25 last year, which led to nearly 10% gross origination growth for this cohort of merchants. And perhaps most importantly, the Katapult marketplace drove about $43 million in gross originations to our top 25 merchants. We are executing well on the consumer and merchant fronts, and we believe that our partnership initiatives can accelerate our progress even more. We want to enter partnerships that can deliver new customers, increase brand awareness, create new products that customers want, and leverage our technology in new ways to drive gross originations and revenue growth. Given our focus on building top of funnel activity, our partnership efforts in 2025 will lean into building new relationships that broaden our application pool and give our customers more reason to engage with the Katapult marketplace. We've recently kicked off new partnerships that align with these goals. In addition, we have multiple new executed contracts and are entering the launch phase with several others. Recent partnerships include [SELF], financial technology company with a mission to help people build credit, particularly those who are new to credit or might not have access to traditional financial products. Through this partnership, we believe we can monetize our declined applications, and as these consumers improve their credit profiles, they can reapply with Katapult, which will help us grow application volume and help our customers improve their financial health. We also have a new partnership with the global market leader that delivers discounts and benefits to employees of larger enterprises. This relationship is focused on exploring the benefits of their digital platform as an economical referral source for Katapult. Finally, we have also launched a partnership with the fintech that offers banking, investing, and borrowing products with a focus on consumers with limited credit. During the first two months following the launch, we expanded our reach to 50,000 consumers. We believe this partnership will also create an ROI positive opportunity to expand our brand reach, getting the Katapult name in front of customers who can benefit from our offerings. Beyond these efforts, we have continued to build new relationships with waterfall finance platforms while deepening our partnerships with waterfalls we already work with. For example, of the more than 30 new direct or waterfall merchants we onboarded during Q4, 11 came to us through one waterfall partnership. eight of these merchants are new to our platform, and three already had a direct integration with us. We have created multiple opportunities for merchants to participate in our marketplace, from direct, to waterfall, to KPay, to our app marketplace. We believe that allowing customers to connect to merchants whenever and however they want will drive growth for our merchants and Katapult. We are very excited about our progress, and our team is executing well across our key initiatives, and the hard work is translating into continued gross origination and revenue growth, as well as unlocking our path to profitability. With that, I'll turn it over to Nancy, who will give you an update on our financial results and outlook. Nancy. Nancy Walsh Thanks, Derek, and hello to everyone joining us this morning. As you have heard, we had a great quarter, and we believe we are well positioned to accelerate our momentum. Let's start with a few insights on our top line performance. We have now grown gross originations for nine consecutive quarters. Gross originations grew 11.3% to $75.2 million in the fourth quarter, and on a two-year stack basis, our gross originations grew 25.7%. In addition, if we exclude home furnishings and mattress gross originations from the direct and waterfall channel, Q4 gross originations grew more than 50% year-over-year. For the full year 2024, total gross originations grew approximately 5%. Q4 gross originations grew faster than our 6% to 8% outlook, and this was driven in large part by an exceptional holiday sales season. We saw growth accelerate throughout the quarter, culminating in December growing 24% year-over-year. We are leveraging our technology, underwriting, and go to market know-how to scale our two-sided marketplace, and I'm proud of the results we're delivering. We are also successfully diversifying our gross originations footprint. As Derek mentioned, gross originations for our top 25 merchants grew 10% during the quarter, and we reduced our merchant concentration. To add further context to our top 25 merchants, our largest merchant, Wayfair, represented 27% of our total gross originations in Q4, down from 43% of our total in Q4 2023. From a financial model perspective, I am very excited about how accelerated top line growth can positively impact profitability and cash flow. Since we are a two-sided marketplace, we can rapidly grow the top line without having to rapidly grow our expense base. Given where we are in our growth cycle, we are prioritizing those initiatives that can accelerate gross originations but that do not add meaningfully to our fixed cost expenses. And we are executing on these priorities as fast as we can. And our execution is creating value for all marketplace participants. We are referring valuable traffic to our merchant partners and creating a safe and productive shopping experience for our customers. This is delivering a virtuous cycle of benefits for our marketplace participants, which we believe can continue to grow. As we lean into growing applications, we are also closely watching cross shopping activity. Not only does cross shopping create new avenues for growth for merchants, it also provides tangible proof of the vibrancy of our marketplace. Cross shoppers during the fourth quarter grew approximately 60%, and for the full year, they grew approximately 46%. On the revenue front, we also had a great quarter and a terrific year. We delivered $63 million or 9.4% growth in Q4, which was above our outlook and marked the seventh consecutive quarter of year-over-year growth. This growth reflects continued improvements in productivity and efficiencies, as well as strong collection trends. For the full year 2024, we delivered approximately 12%, also above our outlook. Gross profit for Q4 was approximately $7.4 million. This compares with gross profit of $8.9 million last year. As a reminder, we front load least depreciation, which impacts gross profit, and this depreciation is not an add back to adjusted EBITDA. This means that in times of rapid gross originations growth, such as what we achieved in December, depreciation costs will have a disproportionate impact on gross profit in the quarter. For the full year, gross profit was $45.8 million up about 10% versus 2023. Gross margin for full year 2024 was 18.5% within our target range of 18% to 20%. We have continued to effectively manage write-offs as a percent of revenue. During the fourth quarter, this metric was 9.6%, fairly in line with our Q3 rate of 9.5%, and up from 8.7% in the fourth quarter of 2023. Moving on to expenses and profitability. Our disciplined approach to expense management coupled with our top line growth is at the center of our financial model. This philosophy fuels our decision making, and it is a core component of our long-term growth strategy. This approach allowed us to increase adjusted EBITDA by nearly $7 million in 2024 and report the first full year of positive adjusted EBITDA since 2021. We believe we are well positioned to further improve upon this performance in 2025. Let me walk you through some of the puts and takes that impacted Q4 adjusted EBITDA. We've already talked about our front-loaded lease depreciation and the impact rapid growth has on in quarter gross profit. Similarly, because lease depreciation is not an ad back, this non-cash expense drives cost of sales higher without a commensurate add back to adjusted EBITDA. This was a headwind to our Q4 adjusted EBITDA. Total operating expenses decreased by 37% during the quarter. The year-over-year decrease was primarily driven by lower litigation expense this quarter compared to Q4 2023. Full year OpEx decreased 11%. Excluding underwriting fees and servicing costs, which are variable, depreciation and stock-based compensation expense, which are non-cash expenses, and excluding litigation settlement, our Q4 fixed cash operating expenses were $8.4 million a decrease of 6.9% compared to last year, reflecting our ongoing commitment to expense control. For the full year, fixed cash operating expenses decreased 7.1%. During the fourth quarter, our loss from operations was $4.8 million, a significant improvement compared with the $10.6 million loss from operations we reported for Q4 2023. For the full year excluding litigation expense we recognized in Q3, our loss from operations was approximately $4.4 million, down from $11.8 million in full year 2023. Taken together, these puts and takes resulted in a Q4 adjusted EBITDA loss of $1.1 million, which was below our outlook. Again, this performance was primarily driven by stronger than expected top line growth and the least depreciation costs associated with this growth. For full year 2024, we delivered approximately $4.8 million of adjusted EBITDA, a $6.7 million improvement compared to the same period of last year. We are proud of the progress we have made on this front and believe we have the right strategy, initiatives, and discipline in place to deliver continued growth. Turning to the balance sheet and cash flow, as of December 31, 2024, we had total cash and cash equivalents of $16.6 million, which included $13.1 million of restricted cash. Our restricted cash balance was unusually high due to the timing of the New Year's holiday, which impacted our cash collection flow. In early January, we returned to our normal collection flow, and as of January 31, total cash and cash equivalents were $20 million, including approximately $5 million of restricted cash. As of the end of the fourth quarter, we also had $82.8 million in outstanding debt on our revolving credit facility. Last quarter, we disclosed that we signed a non-binding letter of intent in October with a direct lender with respect to a new credit facility. As we advised previously, there can be no assurance we will consummate this or any other credit facility with this or any other lender. While we are continuing to work on a refinancing, we do not have anything additional to share today. In the 10-K we filed this morning, we provided more information regarding the risks and uncertainties surrounding our ability to secure this refinancing and to continue as a going concern. We will provide an update when we have something to report. Cash used in operations for the full-year 2024 was $32.6 million compared to $17.4 million in cash used in operations in 2023. The increase was largely driven by costs related to our growth in Q4, specifically an increase in property held for lease, as well as a decrease in accrued liabilities and the costs related to the litigation settlements we finalized in Q3 2024. Excluding the costs related to accrued liabilities and litigation, cash used in operations in 2024 would have been approximately $20 million. Turning to our Q1 2025 and full year 2025 outlook. We are continuing to navigate a challenging macro environment, particularly surrounding the home furnishings and mattress category. That said, given the current breadth of our merchant selection, as well as our plans to introduce new merchants to the Katapult app marketplace throughout 2025, our strategic marketing and our strong consumer offering, we believe we are well positioned to deliver continued growth in 2025. From a big picture perspective, we believe we have a large addressable market of underserved nonprime consumers, and that we will benefit if prime credit options become less available. From a Katapult-specific perspective, we plan to leverage the many direct and waterfall merchant relationships we have that provide our customers with access to just about any durable good they want and unleash the power of the Katapult app marketplace and our targeted marketing campaigns to give consumers the shopping experience they need to keep coming back to Katapult again and again. Based on quarter-to-date results, we expect the following for the first quarter. Gross originations growth of approximately 11%. Gross originations excluding the home furnishings and mattress category are expected to continue to grow at a much faster pace than our overall gross originations. Revenue growth of approximately 10%. And approximately $3 million in positive adjusted EBITDA. For year models, our Q1 adjusted EBITDA will be impacted by the strong gross originations growth we achieved in Q4 2024. This high growth means that we expect to have higher lease depreciation costs in Q1 2025, which will impact gross margin. As a reminder, during the first quarter of 2024, we had an exceptionally strong gross profit margin. Based on these dynamics and our operating plan, we expect to deliver the following for 2025. Gross originations growth of at least 20%. Gross originations excluding the home furnishings and mattress category are also expected to continue to grow at a much faster pace than our overall gross originations during full year 2025. Revenue growth of at least 20%. And at least $10 million in positive adjusted EBITDA. We are very excited about the year ahead and really proud of the hard work and results we delivered in 2024. We look forward to reporting on our success as the year progresses. With that, I'll turn it back to the operator for Q&A operator. Operator (Operator Instructions) Kyle Joseph, Stephens. Kyle Joseph Just wanted to dive into the model a little bit. I know you talked about the margin being impacted by growth in the fourth quarter and potentially back weighted growth, but obviously, your guidance for 2025 calls for strong growth again. So just want to get a sense for the outlook for the margins. I know you talked about it in the first quarter year-over-year but the margin for '25, given the outlook for originations growth, would you anticipate that drifting back towards historical levels? Or given growth, should we anticipate that being a little bit lower than historically? Nancy Walsh What we've talked about consistently is that for the full year gross profit is expected to stay in that 18% to 20% range, and that would be consistent in 2025. We do see seasonality, obviously, in Q1 and then in Q4, Q1 being high and Q4 being low, but that 18% to 20% range still holds for 2025. Kyle Joseph Got it. And then just one follow up for me. Given all the headlines on tariffs and everything, obviously, I mean you're expecting strong growth, and I think you mentioned potential for trade down the fact is, as you see, traditional providers of credit. But have you seen any changes in consumer behavior as a result of all the headlines recently, either a greater demand for credit or a change in purchase activity? Orlando Zayas Hey Kyle, this is Orlando. Yeah, I think we haven't seen a direct impact yet to tariffs and the consumer, when we look at our consumer and how they're behaving, we haven't seen much of a change. And actually, the delinquencies are in line with what we expect. When we've looked at this in the past, the thing that really drives our consumer is gas prices and as you know, gas prices are down, so I think that's some of them feel good about it. But we're working closely with our merchants, and I'll let Derek talk more about it. We're working closely with our merchants around how does the tariff affect their pricing and how do we look at that and how do we build that in. Derek Medlin Like Orlando mentioned, we really haven't seen any incremental increase in trade down conversations since mid-2023 when we first saw it. Again, it hasn't been accelerating. It's been fairly stable for us. And like you mentioned, looking across things like taxes and tariffs, just there's been a lot of stability and resiliency in our base. I think when we think about the impact of tariffs, obviously, that could impact prices, which might decrease conversion, but it could also increase gross origination amounts and average order values. So we're just going to be watching very closely and understanding where there's opportunity for us to partner with our retailers to deliver meaningful offers that help to stabilize options for the customer. Kyle Joseph Got it. Very helpful. Thanks for taking my questions. Operator Anthony Chukumba, Loop Capital Markets. Anthony Chukumba I guess my first question was on lease merchandise write-offs. I know it was within your targeted range, but it was up year-over-year, and I guess, just wondering what was the driver for that. Nancy Walsh They fluctuate, Anthony. That's why we provide the range, so there really was no significant reason for the change. It is a function of the revenue growth as well, but we're very comfortable with where the range stands consistently and also, compared to some of our competitors. So very happy with that range. Anthony Chukumba Got it. Fair enough. So second thing, in terms of your guidance, you're assuming 20% revenue growth, EBITDA essentially doubling. So that would imply the EBITDA margin, obviously, improves significantly. What's the driver of that? I mean, is that just sense of like corporate overhead leverage or what's driving that? Nancy Walsh That is predominantly what we're seeing, we continue to manage our expenses very diligently. But we are focused on growth, so we're making sure that we're investing in the right places to drive that growth, technology, marketing, things that we've talked about in the past. So that's the main driver, but we're always looking for opportunities to continue to improve the profitability. Very thrilled with our first year of profitability or positive adjusted EBITDA this year and looking to continue to grow that as we get into 2025 and beyond. Anthony Chukumba Got it. And then, and maybe this is in your 10-K, but what was the growth in, specifically, Wayfair originations in the fourth quarter specifically? Nancy Walsh Wayfair gross origination growth, we don't typically, I think, give that out, but it was a continued theme of what we had seen throughout the year. The application flow continues to be down, we've signaled that as we've given our guidance, but the business outside of Wayfair continues to be very strong, growing at 50%. So as we talked about next year, we're hoping to see that trend improve as we go through the year, but we're remaining very conservative on Wayfair and home furnishing sector in general. Anthony Chukumba Got it. That's all very helpful. Thank you. Operator Scott Buck, H.C. Wainwright. Scott Buck I'm curious, does an environment, macroenvironment, where there's more uncertainty can that actually help accelerate merchant acquisition as they look for every edge possible? Derek Medlin Listen, I think across the board what we're finding is that merchants are looking for avenues of growth, whether that be helping them in their checkout experience or also bringing new customers to their door. And when things are stressed, certainly, I think that makes the conversation more relevant and more timely. And what we've done with the app and being able to not only bring our community of users together but then to distribute them out to merchants has really been resonating. So I think it's the combination of the desire for growth, especially in segments that have been under pressure like home furnishings, but also the fact that we can deliver value that's measurable and specific and targeted for them, with very little lift, if any, to help support their business. So yes, I think in general, there is some concern of growth opportunities in different retail segments. But even when there's not, if someone can help bring you foot traffic and or click traffic that's a really attractive proposition that's really resonating in the marketplace. Scott Buck Great. That's helpful. And then I apologize if I missed this, but first quarter seasonality around tax season, has that been consistent with previous years, or are you seeing any changes there? Nancy Walsh No, it was consistent with prior years. We were very pleased with how that contributed to the first quarter. Scott Buck Okay. Perfect. And then last one, Nancy, '25 anywhere in the OpEx that you need to play catch up or expect to see increased investment in 2025? Nancy Walsh The only place, as we've talked about that we really expect to see any increases in SG&A relate to our investments in technology, investments in marketing, which we've talked about quite a bit. Those are the two predominant ones, and that's to drive the growth. But we're looking always for places to offset that and to continue to optimize and make our business more efficient from an expense category and making sure all of those expenses have an appropriate ROI. Scott Buck Okay. And then you brought it up in the comments, but timing around the refinancing of the line, what are we thinking there? Nancy Walsh Other than the prepared remarks, it really -- we have nothing new to add right now, but as soon as we do, we will, obviously, share it with everyone. Scott Buck Okay. Well, I appreciate it guys. Thanks for the time. Operator And that does conclude our question-and-answer session. I will now turn the call back over to Orlando for closing remarks. Orlando Zayas Thanks, operator, and thanks to everyone tuning in today. We believe we have a differentiated offering that provides benefits for both consumers and merchants. For consumers, we provide a fair and transparent LTO that allows them to acquire the durable goods they need from merchants they trust. For merchants, we provide a growth partnership that gives them access to nonprime customers who may not have been able to purchase their goods without our LTO. These benefits are the foundation for the Katapult app marketplace, and we believe we are well positioned for continued growth. We look forward to chatting with you and then other investors as the year progresses. Please reach out to Jennifer if you have any questions or feedback. Thank you. Operator This concludes today's conference call. Thank you for your participation. You may now disconnect.
