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Katapult Holdings, Inc. (KPLT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered above-outlook growth: gross originations +30.4% YoY to $72.1M (vs. 25–30% guided), revenue +22.1% YoY to $71.9M (vs. 17–20% guided), and positive adjusted EBITDA of $0.3M vs. breakeven guide .
  • Management raised full-year 2025 gross originations outlook to +20–25% and reiterated “at least 20%” revenue growth and “at least $10M” adjusted EBITDA; Q3 guide: originations +25–30% YoY, revenue +20–25% YoY, adj. EBITDA $3.0–$3.5M .
  • Strategic momentum: app marketplace became the single largest referral source (~60% of originations started in-app), KPay originations +81% YoY (39% of total), unique new customers +~40% YoY, repeat originations 58.4%, NPS 63 .
  • Balance sheet improved via Blue Owl refinancing: revolver liquidity to $110M (+$20M), advance rate raised to 95% (expected 99% in Q4), revolver rate -150 bps, term loan at 18% PIK, warrants issued; net loss widened due to ~$1.0M extinguishment cost added back for non-GAAP .

What Went Well and What Went Wrong

What Went Well

  • App marketplace scaling as core growth engine: “premier shopping destination” strategy drove 56% YoY growth in app-originations; ~60% of Q2 originations started in-app; unique new customers +~40% YoY; NPS 63; repeat share 58.4% .
  • KPay adoption accelerating: KPay originations +81% YoY, 39% of total originations; unique KPay customers +~87% YoY; conversion rate improved; added Sam’s Club, Guitar Center, Pottery Barn (39 merchants in KPay ecosystem) .
  • Above outlook and guidance raise: revenue growth 22.1% vs. 17–20% guide; adj. EBITDA $0.3M vs. breakeven; raised FY originations growth to 20–25%; reiterated ≥20% revenue and ≥$10M adj. EBITDA .

What Went Wrong

  • Gross margin compression: Q2 gross margin 15.5% vs. 16.9% last year, driven by front-loaded lease depreciation from rapid originations growth (non-cash, impacts cost of sales) .
  • Net loss widened to -$7.8M vs. -$6.9M YoY, primarily due to ~$1.0M one-time extinguishment costs from refinancing (added back to adjusted metrics) .
  • Write-offs as % of revenue at 9.8% vs. 9.3% YoY; within 8–10% long-term range but near higher end; management cited typical June seasonality and macro uncertainty (tariffs) .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$58.863 $71.946 $71.886
Gross Profit ($USD Millions)$9.928 $14.349 $11.168
Operating Expenses ($USD Millions)$12.549 $14.885 $12.578
Net Loss ($USD Millions)$(6.888) $(5.688) $(7.835)
Net Loss per Share (Basic & Diluted)$(1.61) $(1.23) $(1.63)
Adjusted EBITDA ($USD Millions)$(0.377) $2.240 $0.322
MarginQ2 2024Q1 2025Q2 2025
Gross Margin (%)16.9% n/a15.5%
Gross Originations & KPIsQ2 2024Q1 2025Q2 2025
Gross Originations ($USD Millions)$55.3 $64.2 $72.1
App Marketplace Start (% of Originations)n/a~59% ~60%
KPay Share (% of Originations)n/a35% 39%
Repeat Customer Rate (%)n/a57.4% 58.4%
NPSn/a66 63
Write-offs (% of Revenue)9.3% 9.0% 9.8%

Segment/channel breakdown (Q2 2025):

  • Direct & waterfall originations: ~61% of total; +11% YoY; excluding home furnishings/mattress: +~56% YoY .
  • App marketplace applications +~39% YoY; total app-originations +56% YoY; KPay originations +~81% YoY .

Non-GAAP context:

  • Adjusted EBITDA reconciliation add-backs include interest expense, depreciation, impairment of leased assets, stock-based comp, litigation costs, and refinancing/ extinguishment costs ($1.145M in Q2) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Originations GrowthQ3 2025n/a+25% to +30% YoY New
Revenue GrowthQ3 2025n/a+20% to +25% YoY New
Adjusted EBITDAQ3 2025n/a$3.0M–$3.5M New
Gross Originations GrowthFY 2025≥20% 20%–25% Raised
Revenue GrowthFY 2025≥20% ≥20% Maintained
Adjusted EBITDAFY 2025≥$10M ≥$10M Maintained

Assumptions: Home furnishings/mattress category does not materially improve vs. 2024; outlook excludes extraordinary impacts from tariff changes or prime-credit tightening/loosening .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Consumer engagement/app marketplaceQ4: ~61% originations started in-app; applications +50% YoY . Q1: ~59% started in-app; applications +~59% YoY; NPS 66 .App-originations +56% YoY; ~60% started in-app; app opened 3.8M times; overall applications +91% YoY .Increasing .
KPay adoptionQ4: KPay originations +52% YoY; 41% share . Q1: +57% YoY; 35% share .+81% YoY; 39% share; unique KPay customers +~87% YoY; conversion improved .Accelerating .
Credit quality (write-offs)Q4: 9.6% (within 8–10% target) . Q1: 9.0% .9.8%; seasonally elevated in June; within 8–10% range .Stable within target .
Macro/tariffs & category mixQ4/Q1: Home furnishings/mattress headwinds; outlook assumes no material improvement .Uncertainty around tariff impacts; outlook assumes no extraordinary tariff effects .Persistent headwind .
Merchant pipeline & partnershipsQ4: 11 new waterfall merchants; Cyber 5 campaigns drove >100% YoY originations growth . Q1: new Finti waterfall partnership; co-branded campaigns .Pipeline “strong” across categories (auto, home, appliances, electronics); new merchant pathways; co-promos drove outsized growth .Expanding .
Profitability driversQ4: Adjusted EBITDA loss driven by front-loaded depreciation amid rapid originations growth . Q1: Adjusted EBITDA $2.2M; higher cost of sales from rapid growth .Adj. EBITDA positive ($0.3M); gross margin compressed by front-loaded depreciation .Improving EBITDA; GM pressured .
Capital structureQ1: working to extend maturity; refinancing plans .Blue Owl refinancing: revolver to $110M, rate -150 bps; term loan 18% PIK; warrants; term loan repay/convert by 6/30/2026 .Strengthened liquidity .

Management Commentary

  • CEO: “We came out of the gate strong in 2025… During the second quarter we achieved 30% gross originations growth… and 22% revenue growth… we grew our unique new customer base by approximately 40% year-over-year… we are well positioned to create value for all of our stakeholders.” .
  • CFO: “We are continuing to grow the top-line without adding substantial ongoing expenses… better-than-expected Adjusted EBITDA for the second quarter… new Refinancing Agreement with Blue Owl is a substantial step… focused on scaling our business profitably.” .
  • President/CGO: “Total Katapult applications… increased more than 91% year over year… cross-shopping customers grew about 74%… we are continuing to strengthen the reach and utility of our app marketplace.” .

Q&A Highlights

  • Credit quality: Write-offs up 50 bps YoY to 9.8%; management expects normalization next quarter, citing June seasonality; maintains 8–10% target range despite tariff uncertainty .
  • Merchant pipeline: Strong across auto, home furnishings, appliances, electronics; Katapult’s marketplace is solving merchants’ footfall/clicks challenges, aiding pipeline expansion .
  • Sales/marketing: Intentional digital marketing and referral strategy boosted top-of-funnel activity; focus on conversion and approval rates to translate applications into originations .
  • Competitive/pricing: Stable competitive environment; Catapult leans into individualized pricing to optimize conversion and repeat rate, supported by clear customer communications .

Estimates Context

  • S&P Global consensus for Q2 2025 EPS and revenue was unavailable; we attempted retrieval and found no estimates for KPLT for Q2 2025 (consensus and # of estimates returned empty). Values retrieved from S&P Global.* [GetEstimates Q2 2025].
  • Given the lack of S&P Global consensus, we benchmarked results against company outlook (revenue and originations exceeded guidance; adjusted EBITDA beat breakeven).
MetricActual (Q2 2025)S&P Global Consensus# of EstimatesBeat/Miss
Revenue ($USD Millions)$71.886 n/a*n/a*n/a*
EPS (Primary) ($USD)$(1.63) n/a*n/a*n/a*

Key Takeaways for Investors

  • Above-outlook quarter and raised FY originations growth (+20–25%) signal accelerating marketplace scale; near-term catalyst: Q3 adj. EBITDA guide of $3.0–$3.5M .
  • App marketplace is now the largest referral source (~60% of originations), with strong repeat (58.4%) and rising KPay penetration (39%); these should support sustained originations growth .
  • Gross margin pressure from front-loaded depreciation is a known byproduct of rapid originations growth; expect margin recovery as leases mature while EBITDA improves with scale .
  • Credit metrics remain within target (write-offs 9.8%), with management attributing Q2 uptick to normal seasonality; watch tariff developments and category mix (home furnishings/mattress) .
  • Balance sheet/liquidity strengthened: revolver increased to $110M, lower revolver rate, higher advance rate; term loan PIK provides cash-interest relief, albeit at higher nominal cost and with warrants/equity conversion risk by 6/30/2026 .
  • Merchant pipeline broadening across categories with co-promoted campaigns and new pathways; continued waterfall integrations should diversify originations beyond challenged categories .
  • With S&P Global consensus unavailable, narrative catalysts (raised FY guide, Q3 EBITDA guide, refinancing) may drive stock reaction; monitor execution on conversion improvements and macro tariff headwinds .
Sources: SEC 8-K and company press releases and Q2 2025 earnings call.

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