Katapult Holdings, Inc.

What they do

Katapult provides a technology-driven lease-to-own (LTO) platform integrated with omnichannel retailers and e-commerce sites, allowing underserved U.S. nonprime consumers to acquire durable goods such as home furnishings, electronics, and appliances. Customers make flexible payments (weekly, bi-weekly, semi-monthly, or monthly) with no long-term obligation and no late or NSF fees. The platform is accessed via direct integrations, waterfall integrations, a mobile app featuring KPay, and text-to-checkout, and it operates in 46 states and the District of Columbia.

Revenue drivers

• Lease-to-own platform — Primary revenue from rental revenue recognized under lease agreements over an average 7-month period; gross originations were $75.5 million in Q2 2026.
• KPay mobile app — Channel for gross originations, representing 40% of gross originations in Q2 2026 and 41% in the first half of 2026.
• Merchant integrations (e.g., Wayfair) — Direct integrations with retailers, with Wayfair representing 17% of gross originations in Q2 2026 (down from 27% in Q2 2025), excluding KPay transactions.

Recent performance

In Q2 2026, gross originations were $75.5 million, up 4.7% year-over-year, and total revenue was $74.8 million, up 4.0%. Net loss improved 44% to $(4.4) million from $(7.8) million in Q2 2025, driven partly by a $2.2 million decrease in interest expense. Adjusted EBITDA was $1.2 million, up from $0.3 million in Q2 2025. For the six months ended June 30, 2026, cash provided by operations was $6.1 million, compared to cash used of $3.2 million in the prior-year period. Full-year 2025 net income was $1.4 million, a turnaround from a $(25.9) million net loss in 2024.

Strategy

Katapult is executing a pending merger with Aaron's and CCF Holdings, expected to close in August 2026, to create a scaled omni-channel platform for nonprime consumers. Management emphasizes growth in gross originations, which have increased for 15 consecutive quarters, and highlights expansion in the KPay channel. The company is focused on maintaining write-offs within its 8% to 10% long-term target range (9.7% in Q2 2026) and growing revenue while controlling fixed cash operating expenses, which decreased 1.0% year-over-year in Q2 2026. No new business outlook is provided during the pending merger.

Risks

• Merger completion risk — The merger with Aaron's and CCF Holdings may not close as scheduled or at all, subject to stockholder and regulatory approvals and other closing conditions.
• Dilution to existing stockholders — Upon completion of the merger, existing Katapult stockholders are expected to hold only approximately 6.0% of the combined company, with CCFI holding 79.9% and Aaron's 14.1%.
• Preferred stock conversion risk — If the Preferred Stock Investment Stockholder Approval is obtained, the Katapult Convertible Preferred Stock would be convertible in full and allow holders to become majority owners, causing further dilution.
• Indebtedness risk — The company has a revolving credit facility with $74.1 million outstanding as of Q2 2026, and an event of default under the Loan Agreement would accelerate obligations and have a material adverse effect.

Outlook

Management expects the pending merger with Aaron's and CCF Holdings to close in August 2026, subject to stockholder and regulatory approvals. The combined company is intended to be a premier omni-channel platform serving nonprime consumers with a broader suite of financial solutions. Katapult is not providing a business outlook or hosting a conference call in light of the pending transaction. The company continues to target write-offs as a percentage of revenue in the 8% to 10% range.