Katapult Holdings Reports 22.1% Revenue Growth but Faces Net Loss in Q2 2025

Katapult Holdings, Inc. reported its financial results for the second quarter of 2025, revealing a total revenue of $71.9 million, a 22.1% increase from $58.9 million in the same period last year. The growth was primarily driven by a rise in rental revenue, which reached $70.7 million, up 21.5% from $58.2 million in the prior year. However, the company recorded a net loss of $7.8 million for the quarter, compared to a loss of $6.9 million in Q2 2024, reflecting ongoing challenges in profitability despite revenue growth.

For the first half of 2025, Katapult's total revenue was $143.8 million, a 16.1% increase from $123.9 million in the first half of 2024. The company experienced a significant rise in costs, with total cost of revenue increasing by 21.3% to $118.3 million, leading to a gross profit of $25.5 million, down from $26.4 million in the previous year. The increase in costs was attributed to higher gross originations and depreciation expenses related to property held for lease.

Strategically, Katapult has made significant changes to its financing structure, entering into a Refinancing Agreement that includes a new revolving credit facility of $110 million and a new term loan of $33 million. This agreement, finalized on June 12, 2025, aims to improve liquidity and support the company's operations. The company also issued warrants to purchase up to 486,264 shares of common stock as part of the refinancing, which could lead to substantial dilution for existing shareholders.

Operationally, Katapult reported a gross origination of $72.1 million for the second quarter, a 30.4% increase year-over-year, with the mobile app featuring Katapult Pay contributing significantly to this growth. The company noted that Wayfair, its largest merchant partner, accounted for 27% of gross originations during the quarter. However, the company remains cautious about its future, citing potential risks related to economic conditions, consumer spending, and the concentration of its business with key merchants.

Looking ahead, Katapult's management expressed concerns about its ability to meet financial covenants under the Refinancing Agreement, which could impact its operations. The company is actively working to mitigate these risks and is focused on enhancing its technology capabilities and expanding its merchant partnerships to drive future growth. However, the ongoing challenges in achieving profitability and managing debt obligations raise uncertainties about its financial stability in the coming months.