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Katapult Holdings, Inc. (KPLT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $63.0M (+9.4% YoY), and gross originations were $75.2M (+11.3% YoY), benefitting from strong holiday performance and app-driven demand; net loss per share improved to $(2.12) from $(3.54) YoY .
  • Adjusted EBITDA was a loss of $(1.1)M, driven by front‑loaded lease depreciation tied to faster‑than‑expected originations growth; write‑offs were 9.6% of revenue, within the long‑term 8–10% range .
  • Q1 2025 outlook: ~+11% originations, ~+10% revenue, and ~$3M positive adjusted EBITDA; FY 2025 outlook: ≥20% originations growth, ≥20% revenue growth, and ≥$10M adjusted EBITDA .
  • Strategic highlights: ~61% of Q4 gross originations started in the app; KPay represented ~41% of gross originations; Cyber 5 gross originations grew >100% YoY; repeat originations were ~61.5% .
  • Key stock catalysts: strong top‑line trajectory and app/KPay momentum vs. financing overhang and going‑concern risk flagged in the 10‑K; management is working on refinancing, but has nothing additional to share yet .

What Went Well and What Went Wrong

What Went Well

  • App/KPay flywheel scaled: ~61% of Q4 gross originations began in app; KPay originations +~52% YoY and ~41% of Q4 originations, underscoring marketplace velocity and consumer engagement .
  • Holiday execution: Cyber 5 gross originations grew >100% YoY; December originations +24% YoY per call; targeted co‑marketing drove application volume and originations spikes .
  • Strategic narrative: “We had a great fourth quarter… stronger‑than‑expected gross originations growth and 50% growth in application volume” — CEO; CFO highlighted first full year of positive adjusted EBITDA since 2021 and leveraging operating discipline for 2025 flow‑through .

What Went Wrong

  • Margin/EBITDA headwinds: Adjusted EBITDA loss $(1.1)M (vs. $(0.3)M LY) on higher cost of sales from rapid originations and front‑loaded lease depreciation; gross profit fell to $7.4M (vs. $8.9M LY) .
  • Credit costs ticked up: Write‑offs were 9.6% of revenue vs. 8.7% LY (still within 8–10% long‑term target), modestly pressuring unit economics .
  • Financing risk: Management reiterated uncertainty on refinancing and disclosed going‑concern risks in the 10‑K; no timing update was provided beyond continued work with a direct lender .

Financial Results

Quarterly progression (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Total Revenue ($M)$58.863 $60.307 $62.963
Gross Profit ($M)$9.928 $11.949 $7.406
Net Loss ($M)$(6.888) $(8.888) $(9.569)
Net Loss per Share (Basic & Diluted)$(1.61) $(2.05) $(2.12)
Write‑offs (% of Revenue)9.3% 9.5% 9.6%

YoY comparison (Q4 2024 vs Q4 2023)

MetricQ4 2023Q4 2024
Total Revenue ($M)$57.558 $62.963
Net Loss per Share$(3.54) $(2.12)
Gross Originations ($M)$67.5 $75.2

KPIs and operating metrics

KPIQ2 2024Q3 2024Q4 2024
Gross Originations ($M)$55.3 $51.2 $75.2
Repeat Originations (%)59.3% 60.3% ~61.5%
App‑originated Share (%)—>53% ~61%
KPay Share of Originations (%)28% 31% ~41%
Lease Applications YoY——+50%
NPS62 61 58
Write‑offs (% of Revenue)9.3% 9.5% 9.6%

Note: The company does not report formal operating segments; performance is tracked via channels (direct, waterfall, app/KPay) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Gross Originations Growth (%)Q4 2024+6% to +8% +11.3% Raised vs. prior outlook (actual beat)
Revenue Growth (%)Q4 2024+5% to +7% +9.4% Raised vs. prior outlook (actual beat)
Adjusted EBITDA ($M)Q4 2024Breakeven $(1.1) Lower than guide
Gross Originations Growth (%)FY 2024+2% to +4% +4.7% Slightly above
Revenue Growth (%)FY 2024≥10% +11.6% Above
Adjusted EBITDA ($M)FY 2024~+$5.5 +$4.77 Lower than prior guide
Gross Originations Growth (%)Q1 2025N/A~+11% New
Revenue Growth (%)Q1 2025N/A~+10% New
Adjusted EBITDA ($M)Q1 2025N/A~+$3 New
Gross Originations Growth (%)FY 2025N/A≥+20% New
Revenue Growth (%)FY 2025N/A≥+20% New
Adjusted EBITDA ($M)FY 2025N/A≥+$10 New

Earnings Call Themes & Trends

TopicQ2 2024 (Prior‑2)Q3 2024 (Prior‑1)Q4 2024 (Current)Trend
App/KPay scalingKPay +100% YoY; Lowe’s, Costco, Newegg added; NPS 62; repeat 59.3% KPay +86% YoY; Blue Nile, Tire Rack added; app‑originated >53% ~61% of originations began in app; KPay ~41% of originations Strengthening
Merchant/waterfall integrationsPayTomorrow, Synchrony pilots; Meineke; Adorama exclusive 24 merchants live on PayTomorrow; co‑marketing successes 11 new waterfall merchants onboarded; Metro by T‑Mobile/Zales/Rooms to Go added to app Broadening
Home furnishings/WayfairMacro headwinds persist; non‑Wayfair growth ~20% Wayfair concentration reduced; non‑Wayfair +~37% growth; Wayfair apps down Wayfair 27% of Q4 originations (vs. 43% LY) Mix de‑risking
Credit/Write‑offs9.3% (within 8–10% target) 9.5% (flat YoY) 9.6% (within target) Stable within range
Tariffs/macroInflation dampening demand, uncertain rate cuts Macro cautious, holiday focus No direct tariff impact seen; gas prices beneficial; watch pricing/conversion dynamics Monitored risk
Litigation/financingWorking on refinancing alternatives Non‑binding LOI for new facility Going‑concern disclosure; refinancing still in process, no update Key overhang
Tech/productShopify upgrade; price calculator lifts Product‑based search pilot App features expanding; personalized journeys Enhancing stack

Management Commentary

  • Strategic positioning: “We finished the year strong… gross originations grew more than 11% YoY, and revenue was up more than 9%” — CEO; “We have transformed our business… to a multidimensional growth engine” — CEO .
  • Marketplace value: “~61% of fourth quarter gross originations started in the Katapult app marketplace… the single largest customer referral source”; KPay “has become a reliable shopping destination” — CEO .
  • Profit trajectory: “First full year of Adjusted EBITDA profitability since 2021… can meaningfully accelerate Adjusted EBITDA flow‑through” — CFO on 2025 leverage and scaling .
  • Concentration risk improvement: “Wayfair represented 27% of total gross originations in Q4, down from 43% in Q4 2023” — CFO .
  • Margin guardrails: “Gross profit expected to stay in the 18% to 20% range for full year 2025… seasonality Q1 high, Q4 low” — CFO .

Q&A Highlights

  • Margins outlook: Management expects gross profit margin to remain in the 18–20% range for FY25, with typical seasonality; front‑loaded depreciation impacts near‑term gross margin when originations accelerate .
  • Tariffs/consumer behavior: No direct tariff impact observed; consumer delinquencies in line; lower gas prices supportive; tariff effects could alter conversion/AOV, monitored closely with merchants .
  • Write‑offs: Within targeted 8–10% range; YoY fluctuation tied to revenue growth rather than a specific deterioration .
  • EBITDA leverage: FY25 EBITDA expected to outpace revenue growth via operating leverage and disciplined SG&A, focused on technology and marketing ROI .
  • Refinancing timing: No incremental update; ongoing work; going‑concern risks disclosed; update will be provided when available .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS, revenue, and EBITDA was unavailable for KPLT based on our query; as a result, comparisons to Wall Street estimates cannot be made here. Models may need to incorporate: (i) stronger‑than‑guided Q4 top line, (ii) front‑loaded depreciation dynamics reducing near‑term EBITDA and gross margin, and (iii) FY25 guidance of ≥20% revenue and originations with ≥$10M adjusted EBITDA .
  • Consensus data unavailable via S&P Global.*

Key Takeaways for Investors

  • App/KPay flywheel is scaling and de‑risking mix: ~61% of Q4 originations began in app; KPay ~41% of originations; repeat originations ~61.5% — supportive of durable engagement and lower external dependency .
  • Top‑line momentum outpaced company guidance: Q4 originations +11.3% (vs. +6–8% guide) and revenue +9.4% (vs. +5–7% guide), with holiday execution and co‑marketing wins (Cyber 5 >100% YoY) .
  • Near‑term profitability optics: Adjusted EBITDA loss $(1.1)M in Q4 on front‑loaded depreciation tied to growth — expect seasonality and depreciation cadence to weigh on Q1 gross margin before FY25 operating leverage emerges .
  • Concentration risk improving: Wayfair share down to 27% in Q4 (from 43% LY) amid broader merchant waterfall integrations — key for resilience if home furnishings remain soft .
  • Credit quality within guardrails: Write‑offs 9.6% of revenue (target 8–10%), consistent with disciplined underwriting despite faster originations .
  • 2025 setup strong on growth and leverage: Q1 guide (~+11% originations, ~+10% revenue, ~$3M adjusted EBITDA) and FY guide (≥20% originations and revenue; ≥$10M adjusted EBITDA) highlight scalability of two‑sided marketplace .
  • Risk monitor: Refinancing/go‑concern disclosure in 10‑K and debt of $82.8M vs. cash and equivalents of $16.6M (incl. $13.1M restricted) — financing resolution is a pivotal stock driver near term .

Citations:

  • Q4 2024 press release & 8‑K Exhibit 99.1:
  • Duplicate press release (GlobeNewswire):
  • Q4 2024 earnings call transcript:
  • Q3 2024 press release/8‑K:
  • Q2 2024 press release/8‑K:
  • January 16, 2025 Q4 performance update:

Footnote:
*Consensus unavailable via S&P Global.