Q1 2025 Katapult Holdings Inc Earnings Call

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Operator: Hello, and thank you for standing by.

Tiffany: Hello, and thank you for standing by my name is Tiffany and I will be your conference operator today at this time I would like to welcome everyone to the catapult Holdings first quarter 'twenty 25 earnings conference call.

Tiffany: My name is Tiffany, and I will be your conference operator today.

Tiffany: At this time, I would like to welcome everyone to the Katapult Hldg's first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise.

All lines have been placed on mute to prevent any background noise.

Tiffany: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press one again. Thank you.

Speaker Change: After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question during that time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question press. One again. Thank you I would now like to turn the call over to Jennifer Carl Hess.

Jennifer Kull: I would now like to turn the call over to Jennifer Kull, Head of Investor Relations. Please go ahead.

Speaker Change: [noise] of Investor Relations. Please go ahead.

Jennifer Kull: Welcome to Katapult's first quarter 2025 conference call. On the call with me today are Orlando Zayas, Chief Executive Officer, Nancy Walsh, Chief Financial Officer, and Derek Medlin, President and Chief Growth Officer. For your reference, we have posted materials related to today's call on the Investor Relations section of the Katapult website, which can be found at ir.katapulthldings.com. Please keep in mind that our remarks today include forward-looking statements related to our financial guidance, our business, and our operating results, as noted in the earnings release and slide deck posted to our website for your reference. Our actual results may differ materially.

Speaker Change: Welcome to catapult first quarter 'twenty 25 companies.

Speaker Change: On the call with me today are Orlando's highest chief Executive Officer, Nancy Walsh, Chief Financial Officer, and Derek Madeleine President and Chief growth Officer.

Speaker Change: For your reference we have posted materials related to today's call on the Investor Relations section of the catapult website, which can be found at IR Dot catapult holdings dotcom.

Speaker Change: Please keep in mind that our remarks today include forward looking statements related to our financial guidance, our business and our operating results as noted in the earnings release and slide deck posted to our website for your reference.

Speaker Change: Our actual results may differ materially forward looking statements involve risks and uncertainties. Some of which are described in today's earnings release and our most recent Form 10-K, and which will be updated in future periodic reports that we file with SEC any forward looking statements that we make on the call are based on our belief.

Jennifer Kull: Forward-looking statements involve risks and uncertainties, some of which are described in today's earnings release and our most recent Form 10-K, and which will be updated in future periodic reports that we file with the SEC. Any forward-looking statements that we make on the call are based on our beliefs and assumptions today, and we disclaim any obligation to update them. Also during the call, we'll present those GAAP and non-GAAP financial measures. Non-GAAP financial measures should be considered supplemental to, and not replaced since four or superior to, our GAAP results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included with today's earnings release and is available on the Investor Relations section of the company's website.

Speaker Change: <unk> assumptions today, and we disclaim any obligation to update.

Speaker Change: Also during the call we'll present, both GAAP and non-GAAP financial measures non-GAAP financial measures should be considered supplemental to and not replacement for or superior to our GAAP results.

Speaker Change: A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included with today's earnings release and is available on the Investor Relations section of the company's website.

Jennifer Kull: Finally, all comparisons are year-over-year unless stated otherwise.

Orlando: Finally, all comparisons are year over year, unless stated otherwise with that I will turn the call over to Orlando.

Orlando Zayas: With that, I will turn the call over to Orlando. Thank you, Jennifer, and thanks to everyone joining us today. We're excited to give you an update on our first quarter financial results and the operating progress we've made towards achieving our 2025 plan. To start, I'll provide you with a little context for our strong Q1 results before turning it over to Derek, who will walk you through a more detailed summary of the quarter. After that, Nancy will provide an update on our financial results. We had another strong quarter that illustrated the momentum we have in the business.

Orlando: Thank you Jennifer and thanks to everyone joining us today.

Speaker Change: We're excited to give you an update on our first quarter financial results and the operating progress we've made towards achieving our 2025 plan.

Orlando: To start I will provide you with a little context for a strong Q1 results before turning it over to Derek who will walk you through a more detailed summary of the quarter. After that we will provide an update on our financial results.

Orlando: We had another strong quarter that illustrated the momentum we have in the business.

Orlando Zayas: Q1 growth originations grew 15.4% year-over-year, beating our outlook for 11% growth. And first quarter revenue came in slightly above our expectation at $10.6 billion. These great results spring from our successful execution against our marketplace strategy. As we discussed last quarter, following the launch of our app at the end of 2022, we have worked hard to build our two-sided app market . We are a destination where consumers can visit and shop for all of their durable goods needs, as well as a growth partner to merchants, opening up new avenues for expansion. In addition to our continued growth, we see other indications that we have built a healthy and thriving ecosystem.

Orlando: Q1, gross originations grew 15, 4% year over year, turning to our outlook for 11% growth.

Orlando: First quarter revenue came in slightly above our expectation at 10, 6%.

Orlando: These great results spring from our successful execution against our marketplace strategy.

Orlando: As we discussed last quarter following the launch of our App at the end of 2022.

Orlando: It's hard to build our two sided marketplace.

Orlando: We are a destination, where consumers can visit and shop for all of their durable goods needs as well as a growth partner to merchants opening up new avenues for expansion.

Orlando: In addition to our continued growth we see other indications that we have built a healthy and thriving ecosystem.

Orlando Zayas: On the consumer side, shoppers continue to love the Katapult brand. Our NPS score was 66 as of March 31st, and our repeat customer rate was 57.4%, both up year over year. These two positive data points are contributing to our growing lifetime value, which was up nearly 6% in Q125. And as we continue to build our product offering to cover even more of the everyday needs our customers have, we believe we can take LTV even higher. We believe these data points really illustrate that we are doing a good job at delivering the product and service our customers want and deserve.

Orlando: On the consumer side shoppers continue to love the catapult brand. Our NPS score was 66 as of March 31, and our repeat customer rate was 57, 4% both up year over year.

Orlando: These two positive data points are contributing to our growing lifetime value, which was up nearly 6% in Q1 25 and as.

Orlando: As we continue to build our product offering to cover even more of the everyday needs. Our customers have we believe we can take LTV even higher.

Orlando: We believe these data points really illustrate that we are doing a good job of delivering the product and service our customers want and deserve.

Orlando Zayas: For our Merchant and Waterfall partners, we are continuing to innovate new marketing and pricing strategies as we collaborate to drive sales higher. As a result, we're seeing our overall gross originations growth being fueled by activity across our marketplaces. During the first quarter, K-PAY originations were $22.8 million, which was up approximately 57%. And total app originations, which are originations that started in our app, grew 42% to $37.9 million. This means that approximately 59% of our growth originations started in our app marketplace, a testament to our ability to drive results for both our partners and Katapult. We are pleased at our progress towards making the Katapult app marketplace a shopping destination.

Orlando: For our merchant and waterfall partners, we are continuing to innovate new marketing and pricing strategies as we collaborate to drive sales higher as a result, we're seeing our overall gross originations growth being fueled by activity across our marketplace.

Orlando: During the first quarter K pay originations were $22 8 million.

Orlando: Which was up approximately 57%.

Orlando: And total app in originations, which our originations that started in our App grew 42% to $37 9 million. This means that approximately 59% of our gross originations started our app marketplace, a testament to our ability to drive results for both our partners and caterpillar.

Orlando: We are pleased that our progress towards making the catapult app marketplace, a shopping destination, our marketplaces, allowing catapult to connect consumers and merchants seamlessly, enabling commerce whenever and however, the consumer wants to shop.

Orlando Zayas: Our marketplace is allowing Katapult to connect consumers and merchants seamlessly, enabling commerce whenever and however the consumer wants to shop. The macro headwinds are ebbing and flowing. 2025 was off to a great start, and we are confident that we are well positioned to achieve our full year goal. We remain focused on our top initiatives, which are, one, consumer engagement, two, merchant engagement, three, referral partnerships, and four, improving our unit economics and capital structure over time so that we can improve profitability and sustainably generate cash.

Orlando: The macro headwinds are ebbing and flowing 2025 was off to a great start and we are confident that we are well positioned to achieve our full year goals. We remain focused on our top initiatives, which are one consumer engagement.

Orlando: <unk> merchant engagement, three referral partnerships and four improving our unit economics and capital structure over time, we can improve profitability and sustainably generate cash.

Derek Medlin: With that, I'll turn the call over to Derek to discuss our operating progress in more depth, and then Nancy will give you a recap of our Q1 financial results and our outlook for Q2.

Orlando: With that I'll turn the call over to Derek to discuss our operating progress in more depth and then Nancy will give you a recap of our Q1 financial results and our outlook for Q2, We'll then open it up for your questions Derek.

Derek Medlin: Well, then I'll open it up for your questions.

Derek Medlin: Derek? Thanks, Orlando, and good morning to everyone. We have great momentum and are very encouraged by the velocity we are generating in our marketplace. We are connecting more customers to more merchants through our marketplace, and they are choosing the Katapult LTO to get the goods they need. This is great for merchants and great for Katapult.

Derek: Thanks, Orlando and good morning to everyone. We have great momentum and are very encouraged by the velocity, we are generating their own marketplace, we're connecting more customers to more merchants through our marketplace and they're choosing the catapult <unk> to get the goods. They need this is great for <unk>.

Orlando: <unk> and Grace of catapult.

Derek Medlin: So let me start with a few highlights that demonstrate the progress we're making in our consumer engagement. As we shared with you last quarter, our top marketing priorities include driving application growth and increasing the number of customers who take out a second lease with us. To achieve these goals, over the past few quarters, we've leaned heavily into activities that focus on ROI-positive customer acquisition, and these activities are deliberate. We are leveraging our most valuable asset, our app marketplace, to support these efforts and complementing this with highly targeted marketing using other channels such as Google and Facebook.

Orlando: So let me start with a few highlights that demonstrate the progress we're making in our consumer engagement initiatives.

Orlando: As we shared with you last quarter, our top marketing priorities include driving application growth and increasing the number of customers who take out a second lease with us to achieve these goals over the past few quarters, we've leaned heavily into activities that focus on ROI positive customer acquisition and these activities are delivering.

Orlando: We are leveraging our most valuable asset our app marketplace to support these efforts and complementing this with highly targeted marketing using other channels, such as Google and Facebook.

Derek Medlin: This hard work helped us grow applications by approximately 59% and our total lease count by approximately 22%, which included more than 60% growth in cross-shopping activity during the quarter. This means that the number of customers with more than one active lease as of the end of Q1 2025 grew nearly 60% year over year, and the percentage of customers with more than one active lease during the first quarter increased to more than 28% of our customer base, from just under 27% in the first quarter of last year. K-PAY activity continues to fuel a lot of our growth and we are incredibly excited about its potential.

Orlando: This hard work helped us grow applications by approximately 59% and our total lease count by approximately 22%, which included more than 60% growth in cross shopping activity during the quarter.

Orlando: This means that the number of customers with more than one active lease as of the end of Q1 2025 grew nearly 60% year over year.

Orlando: And the percentage of customers with more than one active lease during the first quarter increased more than 28% of our customer base.

Orlando: Just under 27% in the first quarter of last year.

Orlando: K pay activity continues to fuel a lot of our growth and we are incredibly excited about its potential.

Derek Medlin: As Orlando mentioned, KPAY originations grew 57% during Q1, which represented 35% of total gross originations, up from about 26% of our total originations in Q1 of 2024. As a reminder, K-PAY and related activity refers only to those leases that originated using our K-PAY feature to check out. We're also seeing a lot of engagement with our broader app marketplace ecosystem. This refers to activities related to our app in general. So if a customer starts their journey in our app, but completes their lease on one of our merchant partner sites, we are capturing this as app marketplace activity.

Orlando: As Orlando mentioned K pay originations grew 57% during Q1, which represented 35% of total gross originations up from about 26% of our total originations in Q1 of 2024.

Orlando: As a reminder, K pay and related activity refers only to those leases that are originated using our case a feature to checkout.

Orlando: We are also seeing a lot of engagement with our broader app marketplace ecosystem. This refers to activities related to our app in general so.

Orlando: So if a customer starts their journey in our app that completes their lease on one of our merchant partner sites.

Orlando: Capturing this as app marketplace activity.

Derek Medlin: And this activity continues to grow. More consumers are using our app for their shopping needs, which culminated in our app being opened 3.6 million times during Q1, which is 46% higher than Q1 of last year. This engagement also drove our K-PAY unique customer count, which grew by more than 65% year-over-year and was accompanied by a healthy increase in conversion rates. For context, while some of these customers may have entered into multiple leases, this growth only counts each customer one time. All of this activity bodes well for sustaining and growing LTV over time.

Orlando: And this activity continues to grow.

Orlando: More consumers are using our app for their shopping needs, which culminated in our app being opened $3 6 million times during Q1, which is 46% higher than Q1 of last year.

Orlando: This engagement also drove our case, a unique customer count, which grew by more than 65% year over year and was accompanied by healthy increase in conversion rate for.

Orlando: For context, while some of these customers may have entered into multiple leases. This growth only counts each customer one time all of this activity bodes well for sustaining and growing LTV over time.

Derek Medlin: Let me give you a little more insight into our strategy to sustain LTV. We know from our data that there is a strong consumer affinity for our LCO product and our brand. Our goal is to leverage this affinity to increase our share of wallet with our loyal base of customers. while introducing our brand to other like-minded consumers. To do this, we are surgically deploying thoughtful pricing strategies and promotions that are encouraging consumers to do more with them. Practically speaking, what does this look like?

Let me give you a little more insight into our strategy to sustain LTV growth.

Orlando: From our data that there's a strong consumer affinity for our <unk> product and our brand.

Orlando: Our goal is to leverage this affinity to increase our share of wallet with our loyal base of customers, while introducing our brand to other like minded consumers.

Orlando: To do this we are surgically deploying thoughtful pricing strategies and promotions that are encouraging consumers to do more with us practically speaking.

Orlando: Does this look like let me paint a picture on average or typical lease is for about $700.

Derek Medlin: Let me paint a picture. On average, our typical lease is for about $700. But we believe we have an opportunity to provide more leases to consumers who may be looking for goods that are priced lower than this average. In order to capitalize on this theory, we began to test a variety of pricing strategies that would make the idea of leasing a lower cost product more palatable to more consumers. By finding the sweet spot, for example, of an initial payment for a lower-cost item, we believed we could drive more consumers to use our LTO. And while we don't intend to run pricing promotions in perpetuity, we've seen really great results stemming from this strategy.

Orlando: But we believe we have an opportunity to provide more leases to consumers who may be looking for goods that are priced lower than this average.

Orlando: In order to capitalize on this theory, we began to test a variety of pricing strategy that would make the idea of leasing a lower cost product more palatable to more consumers.

Orlando: By finding the sweet spot for example of an initial payment for a lower cost item. We believed we could drive more consumers to use our <unk>.

Orlando: And while we don't intend to run pricing promotions in perpetuity, we've seen really great results stemming from our strategy.

Derek Medlin: During the first quarter, the percentage of leases that were under $300 in value increased to 31%, up from 24% last year. It's worth noting that these lower AOV leases also perform very well from a payment collections perspective. When you add this performance to our growing customer and lease count, the result is overall gross originations growth, increasing LTV and we believe increasing share of wallets.

Orlando: During the first quarter the percentage of leases that were under $300 and value increased to 31% up from 24% last year.

Orlando: It's worth noting that these lower <unk> leases also performed very well from a payment collections perspective when.

Orlando: When you add this performance to our growing customer and lease count. The result is overall gross originations growth, increasing LTV and we believe increasing share of wallet.

Derek Medlin: To sustain this engagement and drive growth, we're continuing to add features, functionality, and merchants to this market. Recently, we added Ashley Furniture and Bed Bath & Beyond to our growing roster of top-tier KPA-enabled merchants. There are now 35 merchants available for checkout via case. This growing roster of KPEI merchants are highly complimentary to the more than 200 shoppable merchants we have waterfall and or direct integrations.

Orlando: To sustain this engagement and drive growth, we're continuing to add features functionality and merchants to this marketplace <unk>.

Orlando: Recently, we added Ashley furniture, and bed Bath <unk> beyond to our growing roster of top tier Kid pay enabled merchants.

Orlando: Now 35 merchants available for checkout via Cape that.

Orlando: This growing roster of Cathay merchants are highly complementary to the more than 200 shuffled merchants, we have waterfall and or direct integrations with.

Derek Medlin: So let's move on to the progress we're making on our merchant engagement. During Q1, we continued to focus on positioning Katapult as a partner of choice, and we believe our continued progress demonstrates the value we bring to retail. Our direct and waterfall merchants accounted for approximately 65% of total gross originations in Q1. and gross originations for this group grew about 1%. If we exclude the home furnishings and mattress category, our direct and waterfowl growth originations grew approximately 40% year over year. Our team continues to execute on the strategic activities that we believe are extending our runway for growth.

Orlando: So let's move on to the progress, we're making on our merchant engagement initiatives.

Orlando: During Q1, we continued to focus on positioning <unk> as a partner of choice and we believe our continued progress demonstrates the value we bring to retailers.

Orlando: Our direct and waterfall merchants accounted for approximately 65% of total gross originations in Q1.

Orlando: Gross originations for this group grew about 1% if we exclude the home furnishings and mattress category are direct and waterfall gross originations grew approximately 40% year over year.

Orlando: Our team continues to execute on our strategic activities that we believe are extending our runway for growth. Let me give you a few examples.

Derek Medlin: Let me give you a few examples. During Q1, we added approximately 35 new direct or waterfall merchants or merchants pathways to our ecosystem. As a reminder, pathways include new or existing merchant partners that launch a new website or an in-store experience that includes Katapult as a direct or waterfall LTO offer. These pathways are tantamount to new go-to-market channels for the Katapult LTO. They provide new ways for consumers to discover and engage with our office. Second, we continue to complement our consumer marketing strategy with a variety of co-branded marketing campaigns with our merchant partners. Throughout the first quarter, we ran a number of pricing and promotional campaigns to drive sales during key seasonal marketing events, including Valentine's Day, President's Day, and even March Madness.

Orlando: During Q1, we added approximately 35, new direct or waterfall merchants, where merchants pathways to our ecosystem. As a reminder, pathways include new or existing merchant partners that launched a new website or an in store experience that includes catapult as a direct or waterfall <unk> offering.

Orlando: These pathways are tantamount to new go to market channels for the catapult LTA.

Orlando: Provide new ways for consumers to discover and engage with our offerings.

Orlando: Second we continue to complement our consumer marketing strategy with a variety of co branded marketing campaign with our merchant partners.

Orlando: The first quarter, we ran a number of pricing and promotional campaigns to drive sales during key seasonal marketing events, including Valentine's Day, Presidents' day, and even March madness.

Derek Medlin: These activities resulted in gross originations growth ranging from 25% to more than 75% when compared to the same period in 2024. In addition, we also supported a targeted tax season promotion that delivered a 7% increase in gross originations when compared to the same period of last year.

Orlando: These activities resulted in gross originations growth ranging from 25% to more than 75% when compared to the same periods in 2024.

Orlando: In addition, we also supported a targeted tax season promotion that delivered a 7% decrease in gross origination when compared to the same period of last year.

Derek Medlin: We are really excited about the partnerships we're building with our merchants. Our collaborative efforts are yielding terrific results and we are leveraging campaign data to demonstrate our incremental value to merchants. Recently, we walked one of our wheel and tire merchant partners through the impact that a short-term strategic pricing promotion, which included merchandising and marketing on our social, email, and website platforms, was having on their sales. They were so motivated by the lift in sales that they requested to continue funding the promotion in its entirety because the return was so compelling. During the first month of the campaign, gross originations grew more than 49% compared with the previous month.

Orlando: We are really excited about the partnerships. We're building with our merchants are collaborative efforts are yielding terrific results and we are leveraging campaign data to demonstrate our incremental value to merchants.

Orlando: Recently, we work one of our wheel entire merchant partners through the impact that a short term strategic pricing promotion, which included merchandising and marketing on our social E Mail and website platforms was having on our sales.

Orlando: We are so motivated by the lift in sales that they requested to continue funding the promotion in its entirety because the return was so compelling.

Orlando: During the first month of the campaign gross originations grew more than 49% compared with the previous month.

Derek Medlin: We're continuing to explore a wide range of opportunities like this to collaborate with merchants to drive incremental sales.

Orlando: We are continuing to explore a wide range of opportunities like this to collaborate with merchants to drive incremental sales growth.

Derek Medlin: As we noted last quarter, we closely monitored the success and health of our top 25 merchants. By monitoring the tip-to-spear performance, we believe we can quickly get a sense of our marketplace health and implement enhancements that unlock growth. During the first quarter, we were pleased to see gross originations growth accelerate for our top 25 merchants to 13%, up from 10% in Q4.

Orlando: As we noted last quarter, we closely monitor the success and health of our top 25 merchants.

Orlando: Entering the tip of spear performance. We believe we can quickly get a sense of our marketplace health and implement enhancements that unlock growth.

Orlando: During the first quarter, we were pleased to see gross originations growth accelerate for our top 25 merchants to 13% up from 10% in Q4.

Derek Medlin: Finally, one other topic that is top of mind for us are potential macroeconomic headwinds. While lease-to-own solutions have historically benefited when prime credit tightens, we have been building scenario plans to focus on inoculating the business against macro uncertainty. such as increasing tariffs or rising inflation to the extent we can. This includes working with our merchants to think outside the box to create initiatives that will allow us to react quickly to challenges stemming from the new economic policies and trends.

Orlando: Finally, one other topic that is top of mind for us are potential macroeconomic headwinds while at lease to own solutions has historically benefited when prime credit tightened we have been building scenario plans to focus on inoculating, our business against the macro uncertainties.

Orlando: Such as increasing tariffs are rising inflation to the extent we can.

Orlando: This includes working with our merchants to think outside the box to create initiatives that will allow us to react quickly to challenges stemming from the new economic policies and trends.

Derek Medlin: As you've heard, we're making tangible and valuable progress against our consumer and merchant initiatives. We're also continuing to make progress on our partnership strategy that is focused on creating pathways that deliver new customers, increase our brand awareness, create new products that consumers want, and leverage our technology in new ways to drive gross originations and revenue growth. This quarter, we continue to build relationships with our existing partners as we lean into new opportunities to monetize our assets as a foundation for new partners. For example, we are exploring ways to help consumers who have been declined for an LTO, growing our affiliate partnership base, and leaning into new strategic marketing partnerships.

Orlando: As you've heard we're making tangible and valuable progress against our consumer and merchant initiatives.

Orlando: We're also continuing to make progress on our partnership strategy that is focused on creating pathways that deliver new customers increase our brand awareness create new products that consumers want and leverage our technology in new ways to drive gross originations and revenue growth.

Orlando: This quarter, we continue to build relationships with our existing partners as we leaned into new opportunities to monetize our assets as the foundation for new partnerships.

Orlando: For example, we are exploring ways to help consumers who have been declined for <unk> growing our affiliate partnership base and leaning into new strategic marketing partnerships.

Derek Medlin: We believe that there are multiple partnership avenues that we can pursue to help expand top-of-the-funnel activity, broaden our application pool, and give our customers more reasons to engage with the Katapult Marketplace.

We believe that there are multiple partnership avenues that we can pursue to help expand top of the funnel activity broadened our application pool and give our customers more reasons to engage with the catapult marketplace.

Derek Medlin: Beyond these efforts, we have continued to build new relationships with waterfall finance platforms while deepening our partnerships with waterfalls we already work with. We are in the process of kicking off a new Waterfall partnership with CINCI, a modern Waterfall financing platform that connects consumers with a curated network of lenders and financing providers. Finci has already introduced us to several new merchants, primarily in the SMB market. Our initial integrations are largely focused on brick and mortar stores, but we also expect to integrate into Finci's online architecture, which should expand our opportunity even further.

Orlando: Beyond these efforts we have continued to build new relationships with waterfall finance platforms, while deepening our partnerships with waterfalls, we already work with.

Orlando: We are in the process of kicking off a new waterfall partnership with <unk>, a modern waterfall financing platform that connects consumers with a curated network of lenders and financing providers.

Orlando: <unk> has already introduced us to several new merchants, primarily in the SMB market. Our initial integrations are largely focused on brick and mortar stores, but we also expect to integrate into <unk> online architecture, which should expand our opportunity even further.

Derek Medlin: 2025 is off to a great start, and we're operating with great momentum. Our team is working hard to deliver on the promise of Katapult, and we believe we are taking the steps necessary to grow our business. We're leveraging unique assets like our app marketplace, as well as our track record for driving incremental merchant sales to open new avenues for growth.

Orlando: 2025 is off to a great start and we're operating with great momentum.

Orlando: Team is working hard to deliver on the promise of catapult and we believe we are taking the steps necessary to grow our business.

Orlando: We're leveraging the unique assets like our app marketplace as well as our track record for driving incremental merchant sale to open new avenues for growth.

Nancy Walsh: With that, I'll turn it over to Nancy, who will give you an update on our financial results and outlooks. Nancy? Thanks, Derek, and hello to everyone joining us this morning. We are excited about the year ahead and believe we are well positioned to deliver on our full year goal. Let's start with a few insights on our top line. We have now grown Gross Originations for 10 consecutive quarters. Gross Originations grew 15.4% to $64.2 million in the first quarter, and on a two-year stack basis, our Gross Originations grew 17.3%. In addition, if we exclude home furnishings and mattress gross originations, Q1 gross originations grew 51% year-over-year.

Orlando: With that I'll turn it over to Nancy who will give you an update on our financial results and outlook Nancy.

Nancy: Thanks, Derrick and Hello to everyone. Joining us. This morning, we're excited about the year ahead and believe we are well positioned to deliver on our full year goals.

Orlando: Let's start with a few insights on our topline performance.

Orlando: We have now grown gross originations for 10 consecutive quarters gross originations grew 15, 4% to $64 2 million in the first quarter and on a two year stack basis, our gross originations grew 17, 3%.

Orlando: In addition, if we exclude home furnishings and mattress gross originations Q1 gross originations grew 51% year over year.

Nancy Walsh: Our gross originations growth came in above our outlook and was driven by a strong second half in March. As Derek mentioned, gross originations for our top 25 merchants grew 13% during the quarter despite the fact that our largest merchant, Wayfair, continues to face category challenges. On the revenue front, we also had another great We delivered $71.9 million, or 10.6% growth in Q1, which was slightly above our outlook and marked the eighth consecutive quarter of year-over-year growth. This growth reflects continued strong collection trend. Gross profit for Q1 was approximately $14.3 million, and gross margin was 19.9%.

Orlando: Our gross originations growth came in above our outlook and was driven by a strong second half in March.

Orlando: As Derek mentioned gross originations for our top 25 merchants grew 13% during the quarter. Despite the fact that our largest merchant waste there continues to face category challenges.

Orlando: On the revenue front, we also had another great quarter, we delivered $71 9 million or 10, 6% growth in Q1, which was slightly above our outlook and marked the eighth consecutive quarter of year over year growth.

Orlando: This growth reflects continued strong collection trends.

Orlando: Gross profit for Q1 was approximately $14 3 million and gross margin was 19, 9%. This compares with gross profit of $16 $5 billion last year as.

Nancy Walsh: This compares with gross profit of $16.5 million last year. As we mentioned in the outlook we provided last quarter, based on our strong Q4 gross originations growth, we expected to have higher lease depreciation costs in this quarter, which would impact gross profits. Because our lease depreciation is front-loaded in times of rapid gross originations growth, such as what we achieved in December 2024, depreciation costs will have a disproportionate impact on gross profit in the quarter. This dynamic played out once again in Q1 2025, given the gross originations strength we saw in the last two weeks of the quarter.

Orlando: As we mentioned in the outlook, we provided last quarter based on our strong Q4 gross originations growth. We expect it to have higher lease depreciation costs in this quarter, which would impact gross profit.

Orlando: Our lease depreciation is frontloaded in times of rapid gross originations growth such as what we achieved in December 2024, depreciation costs will have a disproportionate impact on gross profit in the quarter.

Orlando: This dynamic played out once again in Q1 2025, given the gross originations strength, we saw in the last two weeks of the quarter.

Nancy Walsh: Finally, for comparison purposes, during the first quarter of 2024, we had an exceptionally strong gross profit margin. Our target range for annual gross margin remains 18 to 20. We have continued to effectively manage write-offs as a percent of revenue. During the first quarter, this metric was 9%, an improvement from our Q4 performance and within our 8% to 10% target revenue. Write-offs were up 60 basis points year over year.

Orlando: Finally for comparison purposes during the first quarter of 2024, we had an exceptionally strong gross profit margin our target range for annual gross margin remains 18% to 28%.

Orlando: We have continued to effectively manage write offs as a percentage of revenue.

Orlando: During the first quarter. This metric was 9% an improvement from our Q4 performance and within our 8% to 10% target range.

Orlando: <unk> were up 60 basis points year over year.

Nancy Walsh: Moving on to expenses and profitability. Our disciplined approach to expense management coupled with our top-line growth is at the center of our financial model. This philosophy fuels our decision-making and it is a core component of our long-term growth strategy. This approach allowed us to deliver another quarter of positive adjusted EBITDA. We believe we are well positioned to further improve upon this performance in 2025. Let me walk you through some of the puts and takes that impacted Q1 Adjusted EVAC. We've already talked about our front-loaded lease depreciation and the impact rapid growth has on an in-quarter gross profit.

Orlando: Moving on to expenses and profitability.

Orlando: Our disciplined approach to expense management, coupled with our topline growth is at the center of our financial model. This philosophy fuels, our decision, making and it is a core component of our long term growth strategy.

Orlando: This approach allowed us to deliver another quarter of positive adjusted EBITDA. We believe we are well positioned to further improve upon this performance in 2025.

Orlando: Let me walk you through some of the puts and takes that impacted Q1 adjusted EBITDA.

Orlando: We've already talked about are frontloaded lease depreciation and the impact rapid growth has on an in quarter gross profit.

Nancy Walsh: This non-cash expense drives cost of sales higher. And given the strong growth we saw both at the end of December as well as the end of March 2025, the related depreciation expense was a headwind to our Q1 invested even. Total operating expenses increased by 17% during the quarter. This year-over-year increase was largely driven by increased general and administrative costs that included expenses incurred to date related to efforts to refinance our debt, as well as investments in our initiatives and infrastructure to support our growth. We remain committed to fiscal discipline even as we strategically invest in our growth initiatives.

Orlando: This noncash expense drives cost of sales higher and given the strong growth. We saw both at the end of December as well as the end of March 2025, the related depreciation expense was a headwind to our Q1 adjusted EBITDA.

Orlando: Total operating expenses increased by 17% during the quarter. This year over year increase was largely driven by increased general and administrative costs that included expenses incurred to date related to efforts to refinance our debt as well as investments in our initiatives and infrastructure to support our growth.

Orlando: We remain committed to fiscal discipline, even as we strategically invest in our growth initiatives.

Nancy Walsh: Excluding underwriting fees and servicing costs, which are variable, depreciation and stock-based compensation expense, which are non-cash expenses, and excluding costs related to the settlement of litigation and debt refinancing costs, our Q1 fixed cash operating expenses were $10.4 million, an increase of 10.8% compared to last year. During the first quarter, loss from operations was $500,000 compared to $3.8 million in income from operations for Q1 2024. Our Q1 2025 performance was a significant improvement compared to the $4.8 million loss from operations we reported in Q4 2024. From a year-over-year perspective, our results this quarter reflect lower gross profit, which again was driven by strong gross originations growth during Q1 and Q4, as well as the increase in OPEX related to our investments in our growth initiative.

Orlando: Excluding underwriting fees and servicing costs, which are variable depreciation and stock based compensation expense, which are noncash expenses and excluding costs related to the settlement of litigation and debt refinancing costs. Our Q1 fixed cash operating expenses were $10 4 million, an increase of 10, 8% compared to last year.

Orlando: During the first quarter loss from operations was $500000 compared to $3 $8 million in income from operations for Q1 2024.

Orlando: Our Q1 2025 performance was a significant improvement compared to the $4 $8 million loss from operations, we reported in Q4 2024.

Orlando: From a year over year perspective, our results this quarter reflect lower gross profit, which again was driven by strong gross originations growth during Q1, and Q4 as well as the increase in opex related to our investments in our growth initiatives.

Nancy Walsh: Taken together, these puts and takes resulted in $2.2 million in adjusted EBITDA for Q1, which was below our outlook, but again was primarily driven by the timing of our strong gross originations growth in Q4 and Q1. We are proud of the progress we have made on this front and believe we have the right strategy, initiatives, and discipline in place to deliver continued growth.

Orlando: Taken together these puts and takes resulted in $2 $2 million and adjusted EBITDA for Q1, which was below our outlook, but again was primarily driven by the timing of our strong gross originations growth in Q4 and Q1.

Orlando: We are proud of the progress we have made on this front and believe we have the right strategy initiatives and discipline in place to deliver continued growth.

Nancy Walsh: Turning to the balance sheet and cash flow, as of March 31, 2025, we had total cash and cash equivalents of $14.3 million, which included $8.3 million of restricted cash. As of the end of the first quarter, we also had $77.8 million in outstanding debt on our revolving credit facility. Regarding our outstanding debt, we are actively negotiating with our existing lenders for a comprehensive maturity extension amendment to our credit facility that adjusts the covenants and advance rate to align with the company's business plan. We are working diligently to conclude these negotiations as soon as possible. As part of those discussions, we received a temporary and limited waiver of certain covenant breaches through June 4th, subject to customary terms and conditions.

Orlando: Turning to the balance sheet and cash flow.

Orlando: As of March 31, 2025, we had total cash and cash equivalents of $14 3 million, which included $8 3 million of restricted cash.

Orlando: As at the end of the first quarter. We also had $77 8 million and outstanding debt on our revolving credit facility.

Orlando: Regarding our outstanding debt, we are actively negotiating with our existing lenders for a comprehensive maturity extension amendment to our credit facility that adjusts the covenants and advance rate to align with the company's business plan. We are working diligently to conclude these negotiations as soon as possible.

Orlando: As part of those discussions we received a temporary and limited waiver of certain covenant breaches through June 4th subject to customary terms and conditions.

Nancy Walsh: As part of this ongoing negotiation, we may determine we have other breaches which have not yet been waived. As we advised last quarter, there can be no assurance that we will consummate a new credit facility with either our current lenders or any other lenders, and there can be no assurance that our current lenders will provide a maturity extension grant or grant a waiver of any further breaches. In the 10-Q we plan to file today, we will provide more information regarding the risks and uncertainties surrounding our ability to secure this refinancing or maturity extension and to continue as a going concern.

Orlando: As part of this ongoing negotiation, we may determine we have other breaches, which have not yet been waived as we advised last quarter. There can be no assurance that we will consummate a new credit facility with either our current lenders or any other lenders and there can be no assurance that our current lenders will provide a maturity extension grant or grant a waiver of any further breach it.

Orlando: In the 10-Q, we plan to file today, we will provide more information regarding the risks and uncertainties surrounding our ability to secure this refinancing or maturity extension and to continue as a going concern we will provide a further update when we have something new to report.

Nancy Walsh: We will provide a further update when we have something new to report. Cash generated from operations for Q1 2025 was $3.4 million compared to $2 million of cash generated from operations in Q1 2024. The increase was largely driven by costs related to our growth in Q1, including an increase in property held for lease, partially offset by the change in accrued liabilities and accounts payable balances.

Orlando: Cash generated from operations for Q1, 2025 was $3 4 million compared to $2 million of cash generated from operations in Q1 2024.

Orlando: Increase was largely driven by costs related to our growth in Q1, including an increase in property held for lease partially offset by the change in accrued liabilities and accounts payable balances.

Nancy Walsh: Turning to our Q2 2025 and full year 2025 outlook. Based on quarter-to-date results, we expect the following for the second quarter. Gross originations growth in the range of 25 to 30 percent. Gross originations excluding the home furnishings and mattress category are expected to continue to grow at a much faster pace than our overall gross origination. Revenue growth in the range of 17-20% and approximately break-even adjusted EBITDA.

Orlando: Turning to our Q2 2025 and full year 2025 outlook.

Orlando: Based on quarter to date results, we expect the following for the second quarter.

Orlando: Gross originations growth in the range of 25% to 30%.

Orlando: Gross originations, excluding the home furnishings and mattress category are expected to continue to grow at a much faster pace than our overall gross originations.

Orlando: Revenue growth in the range of 17% to 20% and approximately breakeven adjusted EBITDA.

Nancy Walsh: Based on these dynamics in our operating plan, we are reiterating our 2025 outlook. We continue to expect gross originations growth of at least 20 percent. Gross originations, excluding the home furnishings and mattress category, are also expected to continue to grow at a much faster pace than our overall gross originations during full year 2025. Revenue growth of at least 20% and at least $10 million in positive adjusted EBITDA.

Orlando: Based on these dynamics and our operating plan, we are reiterating our 2025 outlook. We continue to expect gross originations growth of at least 20%.

Orlando: Gross originations, excluding the home furnishings and mattress category are also expected to continue to grow at a much faster pace than our overall gross originations during full year 2025.

Orlando: Revenue growth of at least 20% and at least $10 million in positive adjusted EBITDA.

Nancy Walsh: For added context, neither our Q2 outlook nor our 2025 outlook assumes any impact from potential tariffs or credit tightening or loosening above us. We are very proud of our performance to date and intend to capitalize on our momentum to deliver a great 2025. We look forward to reporting on our success as the year progresses.

Orlando: For added context, neither our Q2 outlook, nor our 2025 outlook assumes any impact from potential tariffs or credit tightening or loosening above us.

Orlando: We are very proud of our performance to date and intend to capitalize on our momentum to deliver a great 2025, we look forward to reporting on our success as the year progresses.

Tiffany: With that, I'll turn it back to the operator for Q&A. Operator? At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster.

Orlando: With that I'll turn it back to the operator for Q&A.

Orlando: Operator.

Orlando: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we will pause for just a moment to compile the Q&A roster.

Anthony Chukumba: Your first question comes from Anthony Chukumba with Loop Capital Markets. Please go ahead. Good morning. Thank you for taking my question. So I'm just trying to kind of work through the math here. As I look at, you know, last year, did a little over 100% of the full year even got in the first quarter. This year, based off of what you just reported, your guidance, that would assume that you only generated about Call it 20% or so in the first quarter, and you're saying you're going to be break-even. So, essentially what it implies is that you're going to generate $8 million of EBITDA in the second half of the year.

Anthony: Your first question comes from Anthony to comeback with loop capital markets. Please go ahead.

Anthony: Good morning. Thank you for taking my question. So I'm just trying to kind of work through the math here as I look at.

Anthony: Last year.

Anthony: A little over 100% of full year EBITDA in the first quarter.

Anthony: This year based off of what you just reported and your guidance that would assume that you only generated about <unk>.

Anthony: Call it 20% or so in the first quarter, and you're and you're saying you're going to be breakeven.

Anthony: It would imply that youre going to generate $8 million EBITDA in the second half of the year and I'm just trying to figure out how we get there, particularly given the fact that you know.

Anthony Chukumba: And I'm just trying to figure out how we get there, particularly given the fact that, you know, on an adjusted basis, you were essentially break-even in terms of EBITDA in the second half of the year.

Anthony: On an adjusted basis Youre essentially breakeven in terms of the EBITDA in the second half of last year.

Nancy Walsh: Thank you, Anthony, for that question. You know, we've talked about adjusted EBITDA in the past. And what happened in 2024, we had much slower growth in the first and the second half until we got to the tail end of Q4 of last year. This year, we are seeing much faster growth in the first quarter. We're providing an outlook that we're going to see strong growth in the second quarter, and we have seasonality in Q4. And with that growth, we are anticipating that despite being break even in Q2, we are still going to be able to make that EBITDA total for $10 million.

Anthony: Thank you Anthony for that question.

Anthony: We've talked about adjusted EBITDA in the past and what happened in 2024, we had much slower growth in the first and the second half until we got to the tail end of Q4 of last year. This year, we are seeing much faster growth in the first quarter.

Anthony: Providing an outlook that we're going to see strong growth in the second quarter and we have seasonality in Q4.

And with that growth, we are anticipating that despite being breakeven in Q2, we are still going to be able to make that EBITDA.

Anthony: Total for $10 million and yes, we understand that that backlog into that a little bit. We also mentioned in Q4 that last years.

Nancy Walsh: And yes, we understand that that backloads that a little bit. We also mentioned in Q4 that last year's Gross profit was exceptionally high, and that was kind of an unusual occurrence. What we're seeing now is more what we would expect in line with our performance.

Anthony: Gross profit was exceptionally high and that was kind of an unusual occurrence. What we're seeing now is more what we would expect in line with our performance.

Anthony Chukumba: Got it. Okay, and then you mentioned that your top, you know, you had a few different stats. I mean, we appreciate all the color, but you mentioned your top 25 merchants growth was 13%, but it sounded like Wayfair continued to be challenged. And I think you typically include this in the queue, but what was the gross originations growth or decline for Wayfair? We did continue to see a challenge with not only Wayfair, but all of the home furnishings and mattress category, and so for Wayfair, we are calling out about 17 million of gross originations, and that excludes what goes through our own marketplace.

Anthony: Got it Okay, and then you mentioned that your top.

Anthony: Few different stats I mean I appreciate all the color of as you mentioned in your top 25.

Anthony: Merchants.

Anthony: This 13%.

Anthony: But it sounded like wafer continue to be challenged I think typically include this in the Q, but.

Anthony: What was the gross originations.

Anthony: Growth or decline for wafer specifically.

Anthony: We did continue to see challenged with not only way fair, but all of the home furnishings and mattress category.

Anthony: And so for waste there we are calling out.

Anthony: About $17 million of gross originations and that excludes what goes through our own marketplace. So this is just the direct waterfall component.

Nancy Walsh: So this is just the direct waterfall component. Okay, so just to be clear, so you had 17 million of originations from waste. Correct. 17.2. Correct. All right.

Anthony: Okay. So just to be clear so you had $17 million of originations from wafer in the first quarter.

Anthony: Correct.

Anthony: Correctly got it.

Anthony: Okay.

Anthony Chukumba: Okay, and then I just wanted to understand, I mean, you know, obviously Craft Facility Maturity is coming up pretty quickly here. So at this point, you know, and I know there's somewhat limited in terms of what you can say, but, you know, so we're looking to, for an extension as opposed to, you know, refinancing it or just getting some of the, you know, some...

Anthony: Okay, and then I just wanted to understand I mean, obviously good.

Anthony: Credit facility maturities coming up pretty quickly here.

Anthony: At this point.

Anthony: There is somewhat limited in terms of what you can say, but.

Anthony: So we're looking to for an extension as opposed to.

Anthony: Refinancing it or just sort of just getting some some I.

Anthony: I guess, some new banks in there.

Nancy Walsh: Thank you for your time. Thank you. I won't comment on the second piece of this. As we said in my prepared comments, we're negotiating with our existing lender, and it's going to be a comprehensive, we're calling it a comprehensive maturity extension amendment. But we are at the same time adjusting our covenants and our advance rates, and that's all to align with the company's business. Got it.

Anthony: I won't comment on the second piece of this as we said in my prepared comments, we're negotiating with our existing lender and it's going to be a comprehensive we're calling it a maturity extension.

Anthony: Comprehensive maturity extension amendment, but we are at the same time, adjusting our covenants and our advance rates and that's all to align with the company's business plan.

Anthony: Got it.

Anthony Chukumba: OK, that was all my questions. Thank you, Anthony.

Anthony: Okay that was all my questions. Thank you.

Speaker Change: Thank you Anthony.

Scott Buck: Your next question comes from Scott Buck with H.C. Wainwright. Please go ahead. Hey, good morning guys. Thanks for taking my question.

Speaker Change: Your next question comes from Scott Buck with H C. Wainwright. Please go ahead.

Scott Buck: Hey, good morning, guys. Thanks for taking my questions.

Scott Buck: I'm curious, all the momentum you're seeing in in K-Pay What do you attribute to, you know, greenfield opportunities versus taking share versus potentially cannibalizing other pieces of your business? Hi, Scott. This is Derek. Thanks for the question. Really, I think what we're seeing here is the greenfield opportunity that there is in this space. The TAM for this marketplace is so large. And when we think about the ways that we're growing, it's really across all of our channels, everything from adding new merchant pathways and new merchants that are bringing us consumers that can shop through with that partner, our direct acquisition activities, like we mentioned, and then getting increased share wallet with our customers and our existing customers.

Speaker Change: I am curious all the momentum youre seeing in K pay.

Speaker Change: What do you attribute to greenfield opportunities versus taking share versus potentially cannibalizing other pieces of your business.

Speaker Change: Yeah.

Speaker Change: Hi, Scott This is Derek thanks for the question.

Derek: I think what we're seeing here is is the greenfield opportunity that there is in this space. The Tam for this this marketplace is so large and when do we think about the ways that we're growing it's really across all of our channels everything from adding new merchant pathways and new merchants that are bringing us consumers.

Derek: That can shop through with that partner.

Derek: Our direct acquisition activities like we mentioned and then getting increased share of wallet with our customers and our existing customers and so what the App does is just.

Derek Medlin: And so what the app does is just facilitates these transactions so much more simply and allows us to control more of the customer experience to make it easy, clear and transparent for these customers to find the things that they're looking for. And so it's really the culmination of all these things together that are working in tandem. And, you know, what I'm really excited about is seeing the response and the reaction of our of our customers as they engage further. And just like I mentioned on the prepared statements, you know, we talked about getting greater share of wallet and getting multiple transactions.

Derek: <unk> facilitates these transactions so much more simply and allows us to control more of the customer experience to make it easy clear and transparent for these.

Derek: Customers define the things that they're looking for and so it's really the culmination of all these things together that are working in tandem.

Derek: And what I'm really excited about is seeing the response and the reaction of our of our customers as they engage further in.

Derek: Just like I mentioned on the prepared statements we talked about.

Derek: Getting greater share of wallet and getting multiple transactions, that's really for me a big validation point that we've really hit the nail on the head in terms of what the opportunities are here.

Derek Medlin: That's really, for me, a big validation point that we've really hit the nail on the head in terms of what the opportunities are here. You know, providing lease limits that are over and above what a customer needs, allowing them to come back, find different high quality goods from high quality retailers. And then having those retailers lean into it and mark it on our behalf has been a fantastic combination where everybody's really winning.

Derek: Providing.

Derek: Lease limits that are over and above what our customer needs, allowing them to come back find different a high quality goods from high quality retailers.

Derek: And then having those retailers lean into it and market on our behalf.

Derek: Has been fantastic.

Derek: Fantastic combination, where everybody is really winning here.

Derek Medlin: Great, that's helpful, Derek. And then a bit of a follow up there. Do you see any difference in the percentage of repeat customers coming through Kpay versus other parts of the business? Great question. So so in general, we see a higher overall LTV from from the Kpay users and from app users. These are consumers that just given the exposure of the different fields offers and transactions, we just see a much more rapid and frequent repeat cycle. And and that's really exciting to us because it allows us to give our retail partners more exposure to this customer base.

Speaker Change: Great. That's helpful. Derek and then a bit of a follow up there do you see any difference in the percentage of repeat customers coming through K pay versus.

Derek: Other parts of the business.

Derek: Great question. So so in general we see a higher overall LTV from from a user's.

Derek: Users and from App users. These are consumers that just given the exposure of the different deals offers and transactions.

Derek: We just see a much more rapid and frequent repeat cycle and that's really exciting to us because.

Derek: It allows us to give our retail partners more exposure to this customer base.

Derek Medlin: And and what's what's also just, I think important to realize performance has been really, really strong in this segment. And so what we see in terms of the pay through and the yield continues to be aligned with our objectives for the year, and we're going to keep pushing it.

Derek: And what's what's also just I think important thriller the performance has been really really strong.

Derek: So.

Derek: What we see in terms of the pay through in the yield.

Derek: Continues to be aligned with our objectives for the year and we're going to keep pushing it.

Scott Buck: Great, and then last one I'm going to add.

Derek: Great and then last one if I can add.

Orlando Zayas: All right, Scott, it's Orlando. How are you? Yeah, good.

Scott Orlando: Sorry, Scott Orlando how are you.

Speaker Change: Yes, I just wanted to add one more.

Orlando Zayas: I just wanted to add one more good one more comment to Derek's, you asked about the repeat rate versus K-Pay versus regular merchants coming in from merchants. I think what's interesting and what we've discovered over the last several years with K-Pay is that if you came in through a wheel manufacturer, a wheel retailer, and you bought 4 wheels for your car, you're only going to buy 4 wheels for your car so often. And so what K-Pay opened that door was to be able to go to Wayfair and buy a sofa or go to Best Buy and buy a TV.

Speaker Change: One more comment Derek.

Speaker Change: You asked about the repeat rate versus <unk> PE versus regular merchants coming in from merchants I think what's interesting and what we've discovered over the last several years okay.

Speaker Change: If you came in through <unk>.

Speaker Change: We'll manufacture.

Speaker Change: Retailer and you bought four wheels for your car, where you're only going to buy four wheels for your car, so often and so what K pay opened that door was to be able to go to wafer and bio sofa or go to best buy and buy a TV and so I think.

Orlando Zayas: And so I think the repeat rate has been driven mostly by K-Pay. We had a pretty decent repeat rate, especially at larger retailers like Wayfair before K-Pay, but K-Pay just really took that into the stratosphere.

Speaker Change: The repeat rate has been.

Speaker Change: Being driven mostly by <unk>, we had a pretty decent repeat rate, especially at larger retailers like wayfarer before.

Speaker Change: Casey just really took that into the stratosphere.

Scott Buck: Great, that makes a makes a lot of sense.

Speaker Change: Great that makes a makes a lot of sense and then last one gross originations were up.

Scott Buck: And then last one, gross originations were up, you know, 15 plus percent in the quarter, the full year expectation is 20 plus. Could you give us an indication of what the second quarter is looks like so far, and maybe what some of those drivers are on the back half of the year to put you over 20%? So I'll start with the numbers. What I had said in my prepared comments is based on year to date, quarter to date, what we've seen thus far, we were providing that 20% gross origination growth for Q2. So we're halfway through the quarter, that's...

Speaker Change: 15, plus percent in the quarter. The full year expectation is 20, plus could you give us an indication of what the second quarter results, So far and maybe what some of those drivers are understanding after the years just to put you over 20%.

Speaker Change: So I'll start with the numbers what I had said in my prepared comments is based on year to date.

Speaker Change: Quarter to date, what we've seen thus far we were providing that 20% gross origination growth for Q2.

Speaker Change: So we're halfway through the quarter Thats great.

Scott Buck: Then you're tracking at 20% in the second quarter. About 25% to 30%, I'm sorry. Okay. And you expect these trends to continue through the back half of the year as well, and that pushes the total over 20. Our fourth quarter is always really strong. But we've given full year, we're not giving Q3 and Q4 at this point, so just full year and Q2. No, just full year. Right.

Speaker Change: And youre dragged down 20%.

Speaker Change: 25% to 30% I'm sorry.

Speaker Change: Okay.

Speaker Change: And you expect these trends to continue through the back half of the year as well.

Speaker Change: As the total over 20.

Speaker Change: We have gen. Our fourth quarter is always really strong.

Speaker Change: Alright.

Speaker Change: Full year, we're not giving Q3 and Q4 at this point. So it's just a full year in Q2, no just full year right. Okay guys.

Scott Buck: Okay, guys. That's all I had. I appreciate the added color.

Speaker Change: That's all I had I appreciate the added color.

Speaker Change: Yeah.

Tiffany: That will conclude our question and answer session.

That will conclude our question and answer session I will now turn the call back over to Orlando for closing remarks.

Orlando Zayas: I will now turn the call back over to Orlando Zayas for closing remarks. And thanks to everyone for joining us today. We're really proud of our progress, and we believe we have set the stage for future success. Our entire team is laser focused on pushing Katapult to reach its goals. And I'm incredibly grateful for their hard work and dedication. Because of their efforts, we're able to offer the best in class LTO product to our consumers and a growth engine to our merchants. Given our growth expectations for the rest of the year, we believe we're well positioned to create value for all of our stakeholders, including our shareholders, and we appreciate your support.

Speaker Change: And thanks to everyone for joining us today, we're really proud of our progress and we believe we have set the stage for future success. Our entire team is laser focused on pushing catapult to reach its goals and I'm incredibly grateful for their hard work and dedication.

Speaker Change: Because of their efforts, we were able to offer the best in class <unk> product to our consumers and our growth engine to our merchants given our growth expectations for the rest of the year. We believe we are well positioned to create value for all of our stakeholders, including our shareholders and we appreciate your support.

Orlando Zayas: We look forward to chatting with our investors as the year progresses.

Speaker Change: We look forward to chatting with our investors as the year progresses, please reach out to Jennifer with any questions or feedback. Thank you very much.

Orlando Zayas: Please reach out to Jennifer with any questions or feedback. Thank you very much.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: Yeah.

Speaker Change: