Katapult Holdings, Inc. · NASDAQ:KPLT
Katapult — Investor Presentation (June 2023)
32 slides from Katapult's investor presentation, Jun 8, 2023
Slide 1: June 2023 Investor Presentation
June 2023 Investor Presentation
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements Certain statements included in this presentation that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generall
Slide 3: Who We Are
Who We AreKatapult is an e-commerce focused FinTech company offering an innovative lease financing solution to consumers and enabling essential transactions at the merchant point of sale C U S TO M E R SAT I S FA C T I O N Net Promoter Score of 63 S P E E D & C O N V E N I E N C E Decisioning in 5 s
Slide 4: Mission Statement
Mission Statement Katapult’s mission is to enable consumers to get the durable goods they need when they need them and connect retailers with a growing base of engaged and loyal consumers | 4
Slide 5: Overlooked consumers. Outsized opportunity.
Overlooked consumers. Outsized opportunity. average household income $75K generation Y or Z 53% have children 58% homeowners 55% married 64% Source: Experian, Katapult Consumer Data mobile device centric lifestyle 75% | 5
Slide 6: Katapult provides underserved nonprime consumers access to durable goods
1 May 2019 Federal Reserve System Board of Governors Report on the Economic Well-Being of U.S. Households in 2018 2 Calculated by multiplying ~$180 billion market for online retail across electronics, furniture, appliances and other durables (Wall Street research, June 2020) by 30% of the US subprim
Slide 7: A Positive Consumer Experience
4.4 63 "It was an easy and quick experience. Everything was spelled out up front and simple to understand. Customer service was great in answering all my questions and very professional. I'd recommend Katapult. Five stars!" - Elisa "The payment options were clearly defined (no hidden fees or anythin
Slide 8: Key Investment Highlights
could not cover $400 of emergence expenses without assistance Experienced Management Team Leadership team with over 100 combined total years in the financial services and retail sectors Scalable Omnichannel Solution Opportunity to expand <1% market share of a $40-50 Billion total addressable market
Slide 9: Our proprietary tech solution creates a deeper cycle of engagement
Our proprietary tech solution creates a deeper cycle of engagement between consumers and merchants Our platform solves critical consumer pain points that drive higher conversion for merchants We are transforming the way nonprime consumers shop and how merchants access this underserved segment C O N
Slide 10: Sophisticated Underwriting Process
Sophisticated Underwriting Process Advanced behavioral learning mitigates credit and fraud risks Utilizes behavioral biometrics, device and location recognition 5 seconds or less approval decision using AI inspired machine learning Lease History Shopping Behavior Mobile Device Product Attributes Sel
Slide 11: Driving higher sales without driving higher prices
a Includes $45 origination fee and 5% fee b Assumes 2.0x multiple on original $639 price and $45 origination fee c Cash price listed on LTO competitor website for comparable refrigerator, unlike Katapult that sources directly from retailers d Assumes credit card balance is paid off e Assumes interes
Slide 12: Flexible & Transparent Payment Options Drive Consumer Loyalty
F I R S T 9 0 D AY S During the first 90 days an option is available to buyout for the cash price plus 5% fee P O S T 9 0 D AY S An early purchase option is available anytime after the initial 90 days allowing consumer to purchase for significantly less than the full-term cost to own F U L L T E R M
Slide 13: Clear and Compelling Value to Integrated Merchants
S E L E C T M E R C H A N T PA R T N E R S 160+ total merchants Clear and Compelling Value to Integrated Merchants Access to new shoppers drives incremental sales and lowers consumer acquisition cost Higher repeat purchase rates (47% as of Q1 2023) No recourse from consumer defaults Katapult covers
Slide 14: Katapult Pay
More data, more insight Platform opens Katapult’s ability to engage with consumers in a new way, increasing our retention, repeat rates, and satisfactory ratings Smarter transactions, fast approval AI evaluates carts, shopping behavior, among other characteristics, to determine lease pre-approval li
Slide 15: Select Marketplace Merchants
S E L E C T M A R K E T P L A C E M E R C H A N T S 20+ total merchants Instant Financing for Mobile Consumers featuring | 15
Slide 16: Merchant partner testimonials
“We are excited to partner with Katapult to further enable our customers to more readily attain the technology that comes with purchasing a new PC.” Jeffrey Cheng, Senior Director of Marketing and Sales, iBUYPOWER “With Katapult’s help, more people, particularly those who may not have been able to s
Slide 17: Strategic Roadmap for Growth
Grow Merchant base New Consumers Increase Repeat Rates Innovate Technology Through deepening relationships with existing, directly integrated merchants, adding to the direct integration pipeline, and expanding merchants on Katapult Pay By increasing the adoption and usage of Katapult Pay, launching
Slide 18: Executive team from industry-leading firms
Executive team from industry-leading firms Orlando Zayas CEO Nancy Walsh CFO Derek Medlin COO Chandan Chopra CTO Reid Bork CRO Eric Harmon Strategy Jorge Diaz CPO | 18
Slide 19: Q1 2023 Financial Results
Q1 2023 Financial Results | 19
Slide 20: Q1 2023 Financial Highlights
Gross Originations $46.7 $54.7 Q1 2022 Q1 2023 +17.3% Revenue (7.0)% ($4.2) $0.6 Q1 2022 Q1 2023 Adjusted EBITDAFixed Cash Operating Expenses1 $13.7 $12.0 Q1 2022 Q1 2023 (12.1)% Gross Originations • Growth in originations is driven by directly integrated merchants as well as the continued expansion
Slide 21: Write-offs as Percent of Revenue
6.3% 6.4% 8.1% 9.7% 8.4% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Write-offs as Percent of Revenue | 21 Highlights • Write-offs as a percent of lease revenue declined sequentially to 8.4% from 9.7% in Q4 2022. Q1 2022 write-offs as a percentage of lease revenue was 6.3%, reflecting the positive impac
Slide 22: Financial results commentary
Gross Originations • Growth in originations was driven by higher wallet capture during tax season through our directly integrated merchants as well as the continued expansion of merchants on the mobile app marketplace featuring Katapult Pay Revenue • Revenue decreased 7% YoY which continued to refle
Slide 23: Strategic Financial Priorities
| 23 Drive Revenue Growth • Disciplined growth with strict underwriting and risk controls • New and deepened enterprise relationships that offer a consistent funnel of new consumers with minimal acquisition cost • Efficient marketing spend to drive B2C volumes Execute Path to Profitability • Leverag
Slide 24: Appendix
Appendix | 24
Slide 25: Gross Originations and Operating Expenses (2019-2023)
1Q 2022 202320212020 1Q 2Q 3Q 4Q 2019 Gross Originations (2019-2023) Gross Originations Our business model is compelling; gross origination trends are a leading indicator of future revenue streams as new merchants are onboarded and leases are initiated. The new Katapult Pay feature on our mobile app
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations | 26
Slide 27: Disclaimer: Non-GAAP Financial Measures
Disclaimer Non-GAAP Financial Measures Adjusted gross profit represents gross profit less variable operating expenses, which are servicing costs and underwriting fees. Management believes that adjusted gross profit provides a meaningful understanding of one aspect of its performance specifically att
Slide 28: Non-GAAP Reconciliations: Adjusted Gross Profit
Non-GAAP Reconciliations Adjusted Gross Profit (in thousands) Three Months Ended March 31, 2023 2022 Total Revenue $ 55,676 $ 59,877 Cost of revenue 42,173 48,113 Gross profit 13,503 11,764 Less: Servicing costs 990 1,207 Underwriting fees 468 488 Adjusted Gross Profit $ 12,045 $ 10,069 | 28
Slide 29: Non-GAAP Reconciliations: Fixed Cash Operating Expenses
Non-GAAP Reconciliations (cont’d) Fixed Cash Operating Expenses (in thousands) Three Months Ended March 31, 2023 2022 Total Operating Expenses $ 15,769 $ 16,575 Less: Servicing costs 990 1,207 Underwriting costs 468 488 Stock-based compensation expense 2,090 1,089 Depreciation and amortization on pr
Slide 30: Non-GAAP Reconciliations: Adjusted EBITDA
Non-GAAP Reconciliations (cont’d) Adjusted EBITDA (in thousands) Three Months Ended March 31, 2023 2022 Net Loss $ (9,114) $ (6,039) Add back: Interest expense and other fees 5,189 4,282 Interest income (620) — Change in fair value of warrant liability (132) (3,089) Loss on partial extinguishment of
Slide 31: Non-GAAP Reconciliations: Adjusted Net Loss
Non-GAAP Reconciliations (cont’d) Adjusted Net Loss (in thousands) Three Months Ended March 31, 2023 2022 Net loss $ (9,114) $ (6,039) Add back: Change in fair value of warrant liability (132) (3,089) Stock-based compensation expense 2,090 1,089 Adjusted Net Loss $ (7,156) $ (8,039) | 31
Slide 32: Katapult
Katapult,
Katapult Holdings — Investor Presentation (June 2023) on 6ix