Katapult Holdings' Q1 2025: Navigating Contradictions in Margin, Growth, and Demand Recovery

Gross Profit Margin Expectations, Wayfair Gross Origination Performance, Home Furnishings Demand and Recovery Expectations, EBITDA Performance and Growth Expectations are the key contradictions discussed in Katapult Holdings' latest 2025Q1 earnings call.



Strong Financial Performance and Growth:
- Katapult Holdings reported a 15.4% year-over-year growth in gross originations for Q1 2025, exceeding their outlook of 11% growth.
- The growth was driven by a successful execution of their marketplace strategy, which includes a strong consumer engagement and a growing two-sided app marketplace.

Marketplace Engagement and Consumer Loyalty:
- The number of customers with more than one active lease, as of the end of Q1 2025, grew nearly 60% year-over-year, with more than 28% of the customer base having more than one active lease.
- This growth is attributed to a higher LTV from KPay users and app users, indicating a more frequent repeat cycle and increased consumer loyalty.

KPay and App Originations:
- KPay originations increased by 57% during Q1 2025, representing 35% of total gross originations, up from about 26% in Q1 2024.
- The growth was driven by increased consumer engagement with the app marketplace and innovative pricing strategies that encourage more transactions.

Merchant Partnerships and Revenue Growth:
- Revenue grew by 10.6% in Q1 2025, slightly above expectations, due to strong collection trends.
- This growth was supported by strategic pricing promotions, co-branded marketing campaigns, and collaborations with merchants, which helped increase gross originations for the overall marketplace.