Katapult Holdings, Inc. Q1 FY2025 earnings call

• Strong Q1 results with gross originations and revenue beating outlooks, driven by marketplace strategy.
• Consumer engagement: NPS 66, repeat customer rate 57.4%, LTV up nearly 6%; testing pricing strategies to drive lower-cost lease usage, with leases under $300 increasing to 31% from 24% last year.
• Merchant engagement: Top 25 merchants saw 13% gross originations growth; added ~35 new direct/waterfall merchants/pathways; co-branded marketing campaigns drove sales growth; monitoring top 25 merchants for marketplace health.
• Partnerships: Exploring new partnerships, adding merchants like Ashley Furniture and Bed Bath & Beyond to KPay-enabled list, and working on new waterfall partnerships like with Finti.

Gross originations grew 15.4% year-over-year to $64.2 million, with revenue at $71.9 million, a 10.6% increase. KPay originations were $22.8 million, up approximately 57%, and total app originations grew 42% to $37.9 million, making up ~59% of gross originations. Consumer side: NPS score was 66, repeat customer rate 57.4%, both up YOY, and LTV was up nearly 6% in Q1 2025. Merchant side: Direct and waterfall merchants accounted for ~65% of total gross originations in Q1, with growth excluding home furnishings and mattress category at ~40% YOY.

• Q2 2025: Gross originations growth in range of 25%-30%, revenue growth 17%-20%, approximately breakeven adjusted EBITDA.
• Full year 2025: Reiterating gross originations growth of at least 20%, revenue growth of at least 20%, and at least $10 million in positive adjusted EBITDA.

• Credit facility negotiations: Actively negotiating with existing lenders for maturity extension amendment, with no assurance of consummating new credit facility or lender support.
• Macroeconomic headwinds: Inoculating business against uncertainties like increasing tariffs or rising inflation, working with merchants to create initiatives to react to new economic policies.

Q: Good morning. Trying to work through the math on adjusted EBITDA and Wayfair's performance.

A: Adjusted EBITDA discussion on growth timing and seasonality; Wayfair had $17.2 million of gross originations through waterfall.

Q: Curious about momentum in KPay, repeat customers, and gross originations guidance.

A: KPay users have higher LTV and repeat cycles; Q2 gross originations expected 25%-30% growth, full year gross originations at least 20%