KPLT — Katapult Holdings, Inc.

Katapult Holdings Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Gross Originations: Grew by 25.3% to $64.2 million, marking 12 consecutive quarters of growth.
• Revenue: Increased by 22.8% to $74 million, achieving the tenth consecutive quarter of year-over-year growth.
• Adjusted EBITDA: Positive adjusted EBITDA of $4.4 million, exceeding the outlook range of $3 million to $3.5 million.
• Gross Profit: Approximately $14.6 million, a 21.8% increase year-over-year, with a gross margin of 19.7%.
• Write-offs: Increased to 9.9% of revenue, up 60 basis points from Q3 2024, but within the target range of 8% to 10%.
• Cash Position: Total cash and cash equivalents of $9 million, including $5.6 million of restricted cash.

2. Strategic Updates and Business Highlights:

• Capital Investment: Secured a $65 million investment from Hawthorn Horizon Credit Fund, which facilitated the repayment of term loans and reduced revolving credit debt.
• Customer Growth: Unique new customers increased by 35% year-over-year, with a 47% growth in Q3 alone. Monthly active users (MAUs) grew nearly 49%.
• KPay Performance: KPay originations grew 66% year-over-year, now accounting for 41% of total gross originations.
• Merchant Partnerships: Added 46 new direct or waterfall merchants, with gross originations from top 25 merchants growing 25% in Q3.

3. Forward Guidance and Outlook:

• Q4 2025 Expectations: Gross originations projected to grow by 15% to 20%, with revenue growth anticipated in the range of 21% to 23%. Adjusted EBITDA expected to be approximately $2 million.
• Full Year 2025 Outlook: Adjusted down to gross originations growth of 20% to 23%, revenue growth of 18% to 20%, and adjusted EBITDA of $8 million to $9 million, representing 60% to 80% year-over-year growth.

4. Bad News, Challenges, or Points of Concern:

• Application Quality: Noted a slight decline in application quality, prompting tighter underwriting measures, which may impact future growth.
• Macroeconomic Factors: Concerns regarding inflation and market delinquency data affecting non-prime consumers, potentially impacting future performance.
• Home Furnishings and Mattress Category: This segment has been a headwind to growth, with originations in this category underperforming.

5. Notable Q&A Insights:

• Management emphasized that while they are tightening underwriting standards, they are also implementing strategies to enhance conversion rates and customer engagement.
• The team is closely monitoring macroeconomic trends and their potential impact on consumer behavior, indicating readiness to adapt strategies as necessary.
• There was a focus on the importance of maintaining fiscal discipline while investing in growth initiatives, highlighting a balanced approach to managing expenses and driving revenue.

Overall, Katapult Holdings demonstrated strong growth metrics in Q3 2025, but faces challenges related to application quality and macroeconomic pressures that could impact future performance. The company remains optimistic about its growth trajectory and strategic initiatives moving forward.