Katapult misses Q4 revenue estimates amid consumer stress
Adjusted EBITDA turns positive despite 'financial fatigue' among nonprime consumers
Katapult Holdings reported its fourth-quarter and full-year 2025 financial results before the market opened on Wednesday, revealing a mixed performance as the lease-to-own payment platform navigates economic pressures on its core customer base.
The company posted revenue of $73.9 million for the quarter, representing a 17.3% increase year-over-year but falling short of analyst expectations of $76.35 million, according to market data. Gross originations increased 3.7% to $77.9 million. Notably, adjusted EBITDA swung to a positive $5.4 million compared to a loss of $1.1 million in the same quarter last year.
CEO Orlando Zayas acknowledged that customers began to show signs of stress during the quarter, with the holiday season underperforming expectations. The company observed a notable slowdown in year-over-year growth in November compared to October, with only a modest pickup in December.
Zayas attributed the softer performance to economic headwinds including persistently high inflation and a challenging labor market. He also noted a notable pullback in spending for nonprime consumers and tightening access to credit, a condition the company described as “financial fatigue” among its target demographic.
The company did not provide forward guidance due to its pending merger with The Aaron’s Company and CCF Holdings, a transaction expected to close in the second quarter of 2026 subject to stockholder and regulatory approvals. Katapult also decided not to host an earnings conference call, citing the pending transaction.
Katapult shares have declined approximately 13% from their February highs as investors weigh the mixed earnings results against the potential strategic benefits of the Aaron’s combination. The stock currently trades at $5.92, down 2.3% on the day.
According to a press release outlining the merger terms, the combined company is expected to generate more than $4 billion in pro forma revenue and approximately $450 million in pro forma adjusted EBITDA for the twelve months ended September 30, 2025. Katapult stockholders are expected to own approximately 6% of the combined company on a fully diluted basis.
Katapult indicated it is launching initiatives to offset consumer challenges and believes the current headwinds are transient. The company’s lease-to-own platform is positioned to remain an important resource for nonprime consumers who face limited access to traditional credit options.
The company’s analyst consensus remains a “Hold” with a median price target of $6.75, according to market data, reflecting cautious optimism as the merger progresses. The pending combination with Aaron’s could provide significant scale benefits, though near-term execution risks and consumer stress remain focal points for investors monitoring the situation.