Katapult Holdings (KPLT) Q4 2022 earnings summary

Executive summary

• FY22 revenue fell 30.0% YoY to $212.1M; net loss was $37.9M versus net income of $21.2M in FY21, amid lower originations, tighter underwriting and weaker consumer spending.

• Cost reductions began in Q4 2022; headcount declined from 120 at year-end to 99 by Feb. 28, 2023, while the March 2023 debt amendment extended maturities to June 2025.

Financial highlights

• Gross originations decreased 20.6% YoY to $196.9M; FY22 revenue was $212.1M, down 30.0% reported, or 23.6% against FY21 revenue restated illustratively for ASC 842.

• Gross profit declined 53.9% to $41.0M; Adjusted gross profit was $34.8M, down 35.6% YoY.

• Operating loss was $25.1M versus operating income of $1.7M; net loss was $37.9M and diluted EPS was $(0.39), versus $0.26 in FY21.

• Adjusted EBITDA was $(16.7)M versus $17.3M; adjusted net loss was $(37.9)M versus adjusted net income of $1.5M.

Outlook and guidance

• Challenging macro conditions were expected to continue into 2023; underwriting remained tighter in response to weaker customer payment capacity and fewer approvals.

• Q4 2022 cost-saving initiatives were expected to significantly reduce near-term operating expenses after Q1 2023 severance costs.

• Management believed $65.4M of unrestricted cash at Dec. 31, 2022, together with available financing, was sufficient for liquidity needs over the next 12 months.