Katapult Holdings Reports 10.6% Revenue Growth but Increased Net Loss in Q1 2025

Katapult Holdings, Inc. reported its financial results for the first quarter of 2025, revealing a total revenue of $71.9 million, a 10.6% increase from $65.1 million in the same period last year. The growth was primarily driven by a rise in rental revenue, which reached $71.1 million, up 10.8% from $64.1 million in Q1 2024. However, the company experienced a net loss of $5.7 million, significantly higher than the $570,000 loss reported in the prior year, resulting in a net loss per share of $1.23 compared to $0.13.

The company's cost of revenue also increased, rising 18.6% to $57.6 million from $48.6 million in the previous year. This increase was attributed to higher gross originations and an expanding property held for lease portfolio. Operating expenses rose by 17.3% to $14.9 million, driven by increased general and administrative costs, particularly related to legal and advisory expenses as the company seeks to refinance its debt. The gross profit margin decreased to 19.9% from 25.3% year-over-year, reflecting the rising costs associated with revenue generation.

Katapult's operational metrics showed a 15.4% increase in gross originations, which totaled $64.2 million for the quarter, compared to $55.6 million in Q1 2024. The company noted that its mobile app, Katapult Pay, contributed significantly to this growth, accounting for 35% of gross originations, up from 26% in the previous year. The company continues to serve a broad customer base across 46 states and the District of Columbia, with Wayfair representing a substantial portion of its gross originations.

In terms of liquidity, Katapult reported cash and cash equivalents of $5.9 million as of March 31, 2025, an increase from $3.5 million at the end of 2024. However, the company faces challenges with its debt obligations, as it has approximately $113.3 million in principal outstanding related to its revolving line of credit and term loan, both maturing in June 2025. Management has expressed concerns about the company's ability to repay these loans at maturity and is actively seeking refinancing options.

Looking ahead, Katapult's management remains focused on addressing its liquidity challenges while continuing to expand its lease-to-own platform. The company anticipates that its revenue will be influenced by seasonal fluctuations and consumer spending patterns, particularly during tax refund season. Despite the current financial pressures, Katapult aims to leverage its technology-driven platform to enhance customer engagement and drive future growth.