Executive Summary

Q1 2025 delivered double‑digit growth: gross originations rose 15.4% YoY to $64.2M (above the prior outlook of ~11%) and revenue grew 10.6% YoY to $71.9M; adjusted EBITDA was $2.2M, below the prior ~$3M guide due to front‑loaded lease depreciation tied to rapid originations growth in late Q4 and late March .
Management guides to acceleration in Q2 2025: gross originations +25–30% YoY and revenue +17–20% YoY with approximately breakeven adjusted EBITDA; full‑year 2025 guidance reiterated (≥20% revenue growth, ≥20% originations growth, ≥$10M adjusted EBITDA) .
Marketplace KPIs remain strong: app‑originated activity was ~59% of Q1 originations; KPay originations grew ~57% YoY to $22.8M and represented 35% of originations; NPS reached 66 and repeat customers accounted for 57.4% of originations .
Risk/catalyst: company disclosed ongoing negotiations for a comprehensive maturity extension to its credit facility and a temporary covenant waiver through June 4; successful refinancing would reduce going‑concern risk, while Q2 growth acceleration and reiterated FY guidance are positive stock‑reaction catalysts .

What Went Well and What Went Wrong

What Went Well

“2025 is off to a strong start… we achieved double‑digit gross originations and revenue growth,” with the marketplace “thriving” (CEO) .
KPay momentum: originations +~57% YoY to $22.8M; KPay comprised 35% of Q1 originations; app‑originated activity ~59% of total, and unique KPay customers grew by >65% YoY (President/CFO) .
Consumer/merchant engagement: NPS 66; repeat customer rate 57.4%; direct/waterfall originations ex home furnishings/mattress grew ~40% YoY; top‑25 merchants originations growth accelerated to 13% (President) .

What Went Wrong

Profitability: GAAP net loss widened to $(5.7)M (vs $(0.6)M LY) and loss from operations was $(0.5)M; adjusted EBITDA ($2.2M) came in below prior ~$3M outlook due to front‑loaded depreciation tied to rapid originations growth in late Q4/Q1 (CFO) .
Category headwinds: home furnishings/mattress remained challenged; Wayfair originations were ~$17.2M and under pressure, constraining overall mix (CFO) .
Financing risk: active negotiations to extend credit facility maturity; received a temporary and limited waiver of certain covenant breaches through June 4; management flagged going‑concern risk in the 10‑Q if refinancing is not secured (CFO) .

Financial Results

Core P&L and Profitability

Metric	Q1 2024	Q4 2024	Q1 2025
Total Revenue ($USD Millions)	$65.061	$62.963	$71.946
Net Loss per Share ($)	$(0.13)	$(2.12)	$(1.23)
Gross Profit ($USD Millions)	$16.488	$7.406	$14.349
Gross Margin (%)	25.3% (calc: 16.488/65.061)	11.8% (calc: 7.406/62.963)	19.9%
Adjusted EBITDA ($USD Millions)	$5.630	$(1.068)	$2.240
Adjusted Net Income (Loss) ($USD Millions)	$0.983	$(8.007)	$(3.356)

Notes: Gross margin (%) in Q1 2024 and Q4 2024 is calculated from disclosed revenue and gross profit; Q1 2025 margin cited by management .

Revenue Breakdown

Metric	Q1 2024	Q4 2024	Q1 2025
Rental Revenue ($USD Millions)	$64.142	$62.031	$71.078
Other Revenue ($USD Millions)	$0.919	$0.932	$0.868
Total Revenue ($USD Millions)	$65.061	$62.963	$71.946

KPIs and Operating Metrics

KPI	Q3 2024	Q4 2024	Q1 2025
Gross Originations ($USD Millions)	$51.2	$75.2	$64.2
% Originations Started in App	N/A	~61%	~59%
KPay % of Originations	31%	41%	35%
KPay Originations ($USD Millions)	N/A	N/A	$22.8
App-Originated Originations ($USD Millions)	N/A	N/A	$37.9
Repeat Customer Rate (%)	60.3%	61.5%	57.4%
Net Promoter Score	61	58	66
Write-offs as % of Revenue	9.5%	9.6%	9.0%
Top 25 Merchants Originations Growth	N/A	10% (reference)	13%
Wayfair Gross Originations ($USD Millions)	N/A	N/A	$17.2 (direct/waterfall only)

Discrepancy note: Q4 2024 gross originations corrected to $75.2M (previously presented as $64.2M) in the May 15 “Correcting and Replacing” press release .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance / Actual	Change
Gross Originations YoY	Q1 2025	~+11%	+15.4% (Actual)	Raised/Beat
Revenue YoY	Q1 2025	~+10%	+10.6% (Actual)	Slight Beat
Adjusted EBITDA ($)	Q1 2025	~$3M	$2.24M (Actual)	Lower
Gross Originations YoY	Q2 2025	N/A	+25% to +30%	New
Revenue YoY	Q2 2025	N/A	+17% to +20%	New
Adjusted EBITDA	Q2 2025	N/A	~Breakeven	New
Gross Originations YoY	FY 2025	≥+20%	≥+20% (Reiterated)	Maintained
Revenue YoY	FY 2025	≥+20%	≥+20% (Reiterated)	Maintained
Adjusted EBITDA ($)	FY 2025	≥$10M	≥$10M (Reiterated)	Maintained

Assumptions: Both Q2 and FY 2025 outlooks assume home furnishings/mattress do not improve materially; no material impact from prime creditor tightening/loosening; continued strong credit quality .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
KPay/App Marketplace Adoption	Q3: KPay = 31% of originations; NPS 61; repeat 60.3% . Q4: KPay = 41%; ~61% app‑originated; NPS 58 .	KPay = 35%; app‑originated ~59%; KPay originations $22.8M; unique KPay customers +>65% YoY; app opened 3.6M times (+46% YoY) .	Broadly improving engagement; mix evolving.
Category Mix (Home Furnishings/Mattress)	Persisting headwinds in Q3/Q4; diversified base growing ex‑Wayfair .	Headwinds continue; ex‑home furnishings/mattress direct/waterfall originations +~40% YoY .	Mixed: headwinds persist; ex‑category strong.
Credit Quality / Write‑offs	Q3: 9.5%; Q4: 9.6% (within 8–10% target) .	9.0% (within target) .	Stable/improving.
Profitability Trajectory	Q3: Adj EBITDA $0.6M; Q4: Adj EBITDA $(1.1)M; FY 2024 Adj EBITDA $4.8M .	Q1 Adj EBITDA $2.2M; Q2 guided ~breakeven; FY 2025 ≥$10M; EBITDA back‑half weighted (seasonality, growth timing) .	Improving full‑year outlook; near‑term mixed.
Financing/Refinancing	Q3: LOI for potential credit facility (no assurance) . Q4/FY: debt $82.8M .	Negotiating maturity extension; temporary waiver through June 4; detailed risk disclosure (going‑concern) .	Near‑term risk until resolved.
Waterfall Partnerships	Q3: PayTomorrow live with 24 merchants .	New waterfall partnership with Finti; expanding SMB/brick‑and‑mortar integrations .	Expanding.

Management Commentary

CEO: “2025 is off to a strong start… our marketplace is thriving… we intend to lean into opportunities to accelerate our growth” .
President/Chief Growth Officer: “KPay activity continues to fuel a lot of our growth… app opened 3.6 million times (+46% YoY)… customers with >1 active lease grew nearly 60% YoY” .
CFO: “The first quarter came in stronger than our outlook… we expect to deliver at least $10 million in positive Adjusted EBITDA [for FY 2025]” .
CFO on profitability drivers: “Front‑loaded lease depreciation… was a headwind to Q1 adjusted EBITDA… driven by strong growth at the end of December and end of March” .
CFO on financing: “We are actively negotiating… comprehensive maturity extension… received a temporary and limited waiver of certain covenant breaches through June 4… risks and uncertainties regarding… going concern” .

Q&A Highlights

EBITDA phasing/back‑half weighting: Management expects ≥$10M adjusted EBITDA FY 2025 despite Q2 breakeven, citing faster 1H growth and Q4 seasonality; last year’s unusually strong gross profit in Q1 sets a tough compare .
Wayfair specifics: Q1 Wayfair originations ~$17.2M (direct/waterfall only), with continued category pressure .
Credit facility: Pursuing maturity extension amendment with existing lender; adjusting covenants/advance rates to align with plan; temporary waiver through June 4 .
KPay dynamics: Growth driven by greenfield opportunity, higher LTV and more frequent repeats within KPay/app cohort; KPay expands wallet across categories (e.g., from wheels to sofas/TVs) .
Q2 trajectory: Tracking +25–30% originations growth QTD; revenue +17–20%; reiteration that Q4 is seasonally strong .

Estimates Context

S&P Global consensus estimates for Q1 2025 (EPS, revenue, EBITDA, # of estimates) were unavailable for KPLT in our query; as a result, a formal comparison to Wall Street consensus cannot be provided at this time. Values retrieved from S&P Global.*
Implication: Street models likely require upward revision to originations/revenue run‑rate in Q2, while near‑term EBITDA may be tempered by depreciation timing; FY 2025 adjusted EBITDA ≥$10M guidance implies back‑half margin/flow‑through improvement .

Key Takeaways for Investors

Growth momentum is real: originations and revenue exceeded prior Q1 outlook, and Q2 guides to further acceleration, supported by strong app/KPay engagement metrics .
Profitability cadence will be uneven near term: front‑loaded lease depreciation from rapid originations compresses in‑quarter gross profit; management still targets ≥$10M adjusted EBITDA in FY 2025 .
Mix shift mitigates category headwinds: ex‑home furnishings/mattress growth is robust; marketplace engagement and waterfall integrations broaden the demand base .
Credit facility is a binary catalyst: a successful maturity extension would reduce going‑concern risk and should re‑rate the equity; failure to secure terms is a key downside risk .
Repeat/NPS underpin LTV: high repeat rates (57.4%) and NPS (66) support durable unit economics and lower acquisition intensity over time .
Seasonal upside potential: management reiterates that Q4 is seasonally strong, which, coupled with Q2 acceleration, supports back‑half EBITDA realization .
Discrepancies were corrected: Q4 2024 originations revised to $75.2M in the “Correcting and Replacing” press release—use this in all trend analyses .

Footnote: *Values retrieved from S&P Global.

Katapult Holdings, Inc. (KPLT)·Q1 2025 Earnings Summary