Katapult Holdings' Q2 2025 Earnings Call: Discrepancies in Merchant Strategy, Customer Acquisition, and Tariff Impact

Merchant partnership strategy and growth, customer acquisition and marketing strategy, lease merchandise charge-off rate trends, impact of tariffs on consumer behavior are the key contradictions discussed in Katapult Holdings' latest 2025Q2 earnings call.



Strong Financial Performance:
- Katapult Holdings reported gross originations of $72.1 million in Q2 2025, growing 30.4% year-over-year, and exceeded its outlook for 25% to 30% growth.
- The growth was driven by strong customer engagement, increased repeat customers, and successful marketing efforts.

App Marketplace and KPay Expansion:
- App marketplace originations grew 56% year-over-year, with 60% of gross originations starting in the app, up from 48% in Q2 2024.
- KPay originations increased by 81% year-over-year, contributing to 39% of total gross originations.
- This expansion is attributed to enhanced app features, new merchant partnerships, and increased customer engagement.

Adjusted EBITDA and Financial Discipline:
- Katapult achieved positive adjusted EBITDA of $0.3 million, surpassing its breakeven expectation.
- The company managed to improve its financial performance through disciplined expense control, effectively managing write-offs, and maintaining gross margins despite strong originations growth.

Debt Refinancing and Balance Sheet Strengthening:
- Katapult completed a debt refinancing, increasing its revolving credit facility to $110 million and reducing the interest rate by 150 basis points.
- The refinancing extended the maturity date, improved the advance rate, and included a payment-in-kind loan structure, enhancing Katapult's financial flexibility.

Merchant Engagement and Partnership Strategy:
- Direct and waterfall merchants accounted for 61% of total gross originations, with gross originations from this group growing 11% year-over-year.
- The company added 48 new merchants or pathways in Q2, and gross originations for the top 25 merchants grew 28%, driven by strategic partnerships and marketing campaigns.