$KPLT Reports YoY Growth in Gross Originations and Expansion of Merchant Base
Mar 9th 2023, 12:11 pm
Analyst Summary: Katapult Holdings, a financial technology company that specializes in lease purchase agreements, reported financial results for the fourth quarter of 2022. Despite a challenging macro backdrop, the company saw a return to growth in gross originations at 1.1% year-over-year. The company added 7 merchants to its mobile app feature called Katapult PayTM, including Home Depot and Wayfair, bringing the total to 18 merchants for the full year. Impairment charges as a percentage of gross originations improved sequentially from 10.8% to 8.6%. The company reported a positive inflection in gross profit and a decrease in total operating expenses, attributable to cost-cutting measures, including headcount reductions. The company expects to see year-over-year gross originations growth continue into 2023, despite ongoing macroeconomic headwinds. The company continues to navigate uncertainty in the macro-environment, and as such, is not providing financial guidance at this time. Katapult continues to invest in enhancing its mobile app, with a new feature called Katapult PayTM, and it is passionate about creating relationships with more customers and deepening engagement to drive top-line growth and profitability. The company believes that the credit quality of its portfolio should continue to improve based on the advancement and ongoing development of its risk modeling. The company regularly reviews its key performance metrics, such as gross originations, total revenue, unearned revenue, and gross profit, as well as non-GAAP and other measures of financial performance, including adjusted gross profit, adjusted EBITDA, and adjusted net loss. However, investors should note that the use of non-GAAP financial measures should not be considered in isolation or as alternatives to GAAP measures. Quoting the CEO: "As we look forward into 2023, we remain passionate about creating relationships with more customers and deepening our engagement by introducing new access points like our mobile app to drive top-line growth and profitability." However, the company is not providing financial guidance at this time, given ongoing macroeconomic headwinds. Forward-looking statements include discussion of macroeconomic headwinds, which the company expects to persist in 2023, and the momentum it is building in volume opportunities in its addressable market through its mobile app featuring Katapult PayTM.