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PLANO, Texas - Katapult Holdings, Inc. (NASDAQ: KPLT), a financial technology company specializing in e-commerce leasing solutions, reported an 11.3% increase in gross originations for the fourth quarter ended December 31, 2024, surpassing the company's previously forecasted growth range. The $75.2 million in gross originations marked the second-highest volume in the company's history and the ninth consecutive quarter of year-over-year growth. With a market capitalization of approximately $31 million, the company has shown strong revenue growth of 15% over the last twelve months, according to InvestingPro data.
This performance exceeds the 6-8% growth outlook provided by the company on November 6, 2024. A significant factor in the quarter's success was a 50% increase in lease application volume, including both new and existing customers. Repeat customers, who contributed 61.5% to the quarter's gross originations, along with strong adoption of the company's Katapult Pay® (KPay) service, which saw a 52% year-over-year increase, were key growth drivers. InvestingPro analysis indicates the company faces challenges with cash burn and short-term obligations, highlighting the importance of maintaining strong operational metrics.
CEO Orlando Zayas attributed the robust quarter to the company's strategic focus on enhancing the Katapult ecosystem, which led to increased consumer engagement and incremental sales for merchant partners during the holiday season. Zayas expressed confidence in the company's direction and its positioning for the year ahead, highlighting the impact of the Katapult app and KPay launched in late 2022 as transformative elements in their market approach. Based on InvestingPro's Fair Value analysis, the stock currently appears undervalued, though investors should note that analysts don't expect profitability this year.
Katapult operates a lease-to-own platform that provides underserved non-prime U.S. consumers with access to everyday durable goods through point-of-sale integrations with omnichannel retailers and e-commerce platforms. The company emphasizes a simple, fast, and transparent process, aiming to offer payment solutions with fairness and dignity. For a deeper understanding of Katapult's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable insights.
The information in this article is based on a press release statement from Katapult Holdings, Inc. The company is expected to discuss its final financial results in early March. As with all forward-looking statements, they reflect the company's current expectations and are not guarantees of future performance. The actual results may vary due to a variety of factors.
In other recent news, Katapult Holdings has expanded its credit facility from $75 million to $100 million, enhancing its financial flexibility. This move is in addition to an intent to secure a new revolving line of credit and term loan, as disclosed in the company's third-quarter earnings release. The lenders have agreed to waive the original issue discount typically payable with such credit expansions.
Katapult Holdings also reported an eighth consecutive quarter of growth in gross originations in its third-quarter earnings. The company's gross originations increased by 3.3% to $51.2 million, with revenue growing by 10% to $60.3 million. Adjusted EBITDA was positive at $600,000, with a year-to-date total of $5.8 million.
Loop Capital has adjusted its outlook on Katapult Holdings, decreasing the price target from $15.00 to $9.00, while maintaining a Hold rating. This revision follows Katapult's third-quarter performance, which did not meet expectations. Loop Capital expressed concerns over Katapult's business growth trajectory and skepticism about the company's earlier forecasts.
Among other developments, Katapult Holdings is addressing a patent infringement lawsuit and has recorded a reserve for a DCA settlement. The company has also shown strong growth in the automotive category, increasing over 25% in Q3. These are the recent developments pertaining to Katapult Holdings.
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