10-Q · May 8, 2026
Katapult Holdings reported its Q1 2026 earnings with total revenue of $79 million, which fell short of $84.15 million estimates, representing a 9.8% year-over-year increase. However, the company maintained a positive…
Earnings analysis · 10-Q
KPLT earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Katapult delivered 4.0% year-over-year revenue growth to $74.761 million and narrowed its net loss to $4.388 million, but Q2 revenue, gross margin and EPS all deteriorated sequentially from Q1 2026. GAAP EPS of negative…
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Katapult delivered 4.0% year-over-year revenue growth to $74.761 million and narrowed its net loss to $4.388 million, but Q2 revenue, gross margin and EPS all deteriorated sequentially from Q1 2026. GAAP EPS of negative $1.41 improved from negative $1.63 a year ago but missed the provided consensus estimate of negative $1.22. The central investment issue is liquidity: $74.1 million of revolving-facility principal matures on December 4, 2026, and management says standalone liquidity is insufficient absent a refinancing, extension, replacement or completion of the expected August 2026 mergers.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Reported figures
- Earnings per share
- $-1.41
What stood out
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Revenue grew 4% year over year
Q2 revenue increased 4.0% year over year to $74.761 million, supported by 4.7% gross-originations growth to $75.494 million and healthy collections. Sequentially, however, revenue declined 5.4% from Q1 2026 revenue of $79 million.
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Loss narrowed and adjusted EBITDA improved
Net loss narrowed to $4.388 million from $7.835 million a year earlier, while adjusted EBITDA improved to $1.221 million from $0.322 million. Interest expense and other fees declined 40.8% to $3.173 million following the November 2025 term-loan extinguishment.
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Gross profit rose but sequential margin reset
Gross profit rose 3.0% to $11.508 million, but gross margin was effectively flat year over year at 15.4% versus 15.5%. Margin declined sharply from 23.0% in Q1 2026, reflecting the quarterly revenue and cost-of-revenue mix.
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KPay continues to gain mix
KPay represented 40% of Q2 gross originations, up from 39% a year earlier, while gross originations from direct merchants contributed to overall originations growth. KPay accounted for 41% of first-half originations.
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First-half operating cash flow improved
Six-month operating cash flow turned positive at $6.133 million versus a $3.196 million outflow a year earlier. Capitalized-software additions were $0.754 million, implying a modest 12.3% of operating-cash-flow investment intensity for the first half.
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Wayfair concentration declined
Revenue concentration moderated: Wayfair was 17% of Q2 gross originations versus 27% a year ago, while the top ten direct merchants were 44% versus 49%. This reduces, but does not eliminate, merchant concentration exposure.
What to watch
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Refinancing risk remains critical
Management states it does not have sufficient standalone liquidity to repay the revolving facility at its December 4, 2026 maturity. Principal outstanding was approximately $74.1 million at June 30, 2026, versus $24.088 million of cash, cash equivalents and restricted cash combined.
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Merger execution and dilution risk
The pending mergers remain conditional and could fail or be delayed; the merger agreement can generally be terminated if transactions are not completed by September 30, 2026, subject to a possible 90-day extension. Katapult stockholders are expected to hold only approximately 6.0% of the combined company immediately after closing.
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Preferred dividends drive dilution
A newly emphasized preferred-stock risk is the 19% annual dividend rate, compounded weekly, if the Hawthorn preferred-stock exchange is not consummated and approval is not obtained. The preferred dividends reduced Q2 income available to common holders by $3.329 million, producing a $7.717 million common-stockholder loss despite a $4.388 million company net loss.
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Payment processing and credit-performance risk
American Express recently notified Katapult that it will no longer serve as a processor. Separately, write-offs were 9.7% of Q2 revenue, within the 8% to 10% target range but exposing results to deterioration in non-prime customer payment behavior.
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Merchant concentration persists
Wayfair remained a meaningful customer concentration despite improvement, representing 17% of Q2 gross originations. Loss of this relationship or reduced waterfall placement could materially affect volume, particularly because total Q2 gross originations were only $75.494 million.
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High floating-rate debt and covenant exposure
The revolving facility carried an 11.2% interest rate at June 30, 2026, and a 100-basis-point rate change would alter annual interest expense by approximately $0.7 million. The facility also requires at least $5.0 million of unrestricted cash and cash equivalents at each calendar week's last business day.
Management's outlook
Katapult is not providing a standalone business outlook while the CCFI and Aaron’s mergers are pending. Management expects the mergers to close in August 2026, subject to approvals and customary conditions; it also intends to refinance, extend or replace its revolving facility before its December 4, 2026 maturity.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.