On November 6, 2024, Katapult Holdings Inc (KPLT, Financial) released its 8-K filing for the third quarter of 2024, showcasing a 10% increase in revenue, surpassing the analyst estimate of $58 million with actual revenue of $60.3 million. Despite this growth, the company reported a net loss of $8.9 million, which is a significant increase from the $4.1 million loss in the same quarter last year.
Company Overview
Katapult Holdings Inc (KPLT, Financial) is a technology-driven lease-to-own platform that partners with omni-channel retailers and e-commerce platforms. It provides lease-purchase solutions for underserved U.S. non-prime consumers, facilitating essential transactions at the point of sale. The company is associated with hundreds of retailers across the United States.
Performance and Challenges
Katapult Holdings Inc (KPLT, Financial) has demonstrated consistent growth in key financial metrics, including gross originations and revenue. The company has diversified its gross originations base, with significant growth in areas excluding its major partner, Wayfair. However, the increase in net loss highlights ongoing challenges, particularly in managing operating expenses, which rose by 37.7% year-over-year. This increase was partly due to litigation settlement expenses.
Financial Achievements
The company's revenue growth is crucial in the competitive fintech industry, where scaling operations and expanding market reach are vital for long-term success. Katapult's ability to grow its revenue by 10% year-over-year indicates strong demand for its lease-to-own solutions, especially as traditional credit options become less accessible.
Key Financial Metrics
Katapult Holdings Inc (KPLT, Financial) reported gross originations of $51.2 million, a 3.3% increase from the previous year. The company's adjusted EBITDA was $0.6 million, down from $0.9 million in the third quarter of 2023. The adjusted net loss was $4.1 million, compared to $3.1 million in the same period last year. These metrics are critical as they reflect the company's operational efficiency and ability to generate cash flow.
“We are continuing to grow across key financial and operating metrics including gross originations and revenue, and we believe we are laying the foundation for the long-term success of Katapult,” said Orlando Zayas, CEO of Katapult.
Financial Statements Overview
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $60.3 million | $54.8 million |
| Net Loss | $8.9 million | $4.1 million |
| Adjusted EBITDA | $0.6 million | $0.9 million |
Analysis and Outlook
Katapult Holdings Inc (KPLT, Financial) is navigating a challenging macroeconomic environment, particularly within the home furnishings category. Despite these challenges, the company is optimistic about the upcoming holiday season, expecting a 6-8% increase in gross originations and a 5-7% increase in revenue for the fourth quarter. The company's strategic focus on expanding its customer base and maintaining strong credit quality positions it well for future growth.
Katapult's ongoing efforts to diversify its merchant base and enhance its product offerings, such as the Katapult Pay platform, are expected to drive further growth. However, the company must continue to manage its operating expenses effectively to achieve profitability.
Explore the complete 8-K earnings release (here) from Katapult Holdings Inc for further details.
