Katapult Holdings’ Earnings Call: Growth Amid Challenges

Katapult Holdings, Inc. ((KPLT)) has held its Q3 earnings call. Read on for the main highlights of the call.

Katapult Holdings’ recent earnings call revealed a generally positive sentiment, underscored by robust growth across various metrics, including applications, customers, revenue, and EBITDA. The company benefited from a substantial capital investment and an expansion in KPay originations. However, challenges such as declining application quality, specific market category issues, and macroeconomic uncertainties have led to a cautious outlook for the fourth quarter.

Significant Capital Investment

Katapult Holdings secured a $65 million investment from Hawthorn Horizon Credit Fund. This capital influx enabled the company to pay off its term loan, reduce its revolving line of credit, and invest in growth opportunities, positioning the company for future expansion.

Strong Application and Customer Growth

The company reported a remarkable 76% increase in applications during the first three quarters of 2025. This surge led to a 35% rise in unique new customers and a 30% growth in the total customer base during the third quarter, highlighting the company’s successful customer acquisition strategies.

Revenue and Gross Originations Growth

Katapult experienced a 22.8% increase in revenue and a 25.3% rise in gross originations in Q3 2025. This marks the tenth consecutive quarter of revenue growth, showcasing the company’s consistent financial performance.

Positive Adjusted EBITDA

The company reported $4.4 million in positive adjusted EBITDA for Q3 2025, exceeding their projected range of $3 million to $3.5 million. This achievement reflects Katapult’s effective cost management and operational efficiency.

Expansion of KPay Originations

KPay originations grew by 66% year-over-year in Q3, accounting for 41% of total gross originations. This significant growth underscores the success of Katapult’s strategic initiatives in expanding its payment solutions.

Decline in Application Quality

Despite overall growth, Katapult observed a slight decline in the credit quality of applications received. This prompted the company to tighten its underwriting decisions to mitigate potential risks.

Challenges in Home Furnishings and Mattress Category

The home furnishings and mattress category posed challenges, impacting overall growth. Excluding this category, gross originations grew by 50%, indicating strong performance in other areas.

Macroeconomic Uncertainties

Katapult faces macroeconomic challenges, including inflation, potential government shutdowns, and financial difficulties among non-prime consumers. These factors contribute to an uncertain economic environment.

Conservative Q4 Outlook

Looking ahead, Katapult has provided a conservative outlook for Q4, with expected gross originations growth in the 15% to 20% range. This cautious approach considers the ongoing macroeconomic challenges.

Forward-Looking Guidance

In their forward-looking guidance, Katapult Holdings anticipates gross originations to grow between 15% and 20% in Q4 2025, with revenue growth projected at 21% to 23% and approximately $2 million in adjusted EBITDA. For the full year 2025, the company expects gross originations to grow 20% to 23%, revenue to increase 18% to 20%, and adjusted EBITDA to be between $8 million and $9 million, indicating substantial year-over-year growth.

In summary, Katapult Holdings’ earnings call highlighted strong growth across several key metrics, supported by a significant capital investment and strategic initiatives. While the company faces challenges in specific market categories and macroeconomic uncertainties, its forward-looking guidance suggests continued growth, albeit with a cautious outlook for the near term.