Key Financial Highlights

• 13th Consecutive Quarter of Gross Originations Growth: Katapult continues its consistent upward trajectory in gross originations, underscoring robust demand for its products among nonprime consumers.
• Q4 2025 Financial Results:
  • Loss from Operations: \$(1.0) million, a significant improvement from \$(4.8) million in Q4 2024.
  • Net Income: \$19.8 million (Q4 2025) compared to a net loss of \$(9.6) million in Q4 2024. The improvement was primarily driven by a \$19.0 million gain on a derivative liability, a \$6.2 million gain on the extinguishment of the term loan, and a \$4.1 million increase in gross profit.
  • Adjusted Net Loss: \$(0.3) million, improving from \$(8.0) million in Q4 2024.
  • Adjusted EBITDA: \$5.4 million, up from \$(0.6) million in Q4 2024.
• Full Year 2025 Financial Results:
  • Net Income: \$(25.9) million loss for 2025 (improving from a larger prior-year loss).
  • Adjusted Net Loss: \$(10.3) million, compared with \$(16.5) million for 2024.
  • Adjusted EBITDA: \$7.4 million, up from \$2.3 million in 2024.
• Improved Gross Profit: The company saw a \$4.1 million increase in gross profit in Q4 2025 and a \$5.8 million increase year-over-year, indicating enhanced operational efficiency and pricing power.

Pending Merger with The Aaron’s Company and CCF Holdings LLC

Katapult announced a pending all-stock merger transaction with The Aaron’s Company and CCF Holdings LLC. This strategic move is expected to create a premier omnichannel platform to serve nonprime consumers, with the following anticipated synergies:

• Expanded opportunities to serve a broader spectrum of nonprime consumer needs.
• Enhanced underwriting capabilities that can drive growth and yield.
• Technology that amplifies and accelerates product innovation.
• Operating efficiencies across the combined entities.
• Strengthened balance sheet and improved access to capital, supporting accelerated investment in growth opportunities.
• Deep, experienced leadership team with a track record of operational improvements and innovation in the nonprime segment.

The transaction is subject to customary regulatory and shareholder approvals, and the companies are working toward closing in the near term.

Shareholder & Market Sensitive Information

• Potential Price-Moving Events:
  • The announced merger, if completed, may significantly alter Katapult’s market positioning, scale, and financial profile, likely impacting share value upon material developments or closure of the deal.
  • Substantial improvements in profitability metrics, including a turnaround to net income in Q4 and positive adjusted EBITDA, could positively affect investor sentiment and share price.
  • The recognition of large non-core gains (derivative liability and loan extinguishment) contributed to the positive net income, but investors should note these are non-recurring items.
• Capital Structure & Liquidity:
  • As of December 31, 2025, Katapult reported \$6.7 million in cash and cash equivalents.
  • During 2025, the company issued \$65 million in convertible preferred stock and warrants and extinguished its term loan, improving balance sheet flexibility.
  • Series B Convertible Preferred Stock outstanding, with a liquidation preference of \$30.9 million, and accumulated undeclared dividends of \$1.9 million, are worth noting for potential dilution and dividend impacts.
• Risk Factors:
  • The merger is subject to regulatory and shareholder approval, and there can be no assurance regarding its completion or the realization of projected synergies.
  • Forward-looking statements in the report reference the potential financial and business impact of the merger, but actual results may vary due to market, regulatory, and operational risks.

Other Notable Details

• Katapult’s management continues to focus on expanding technology, improving underwriting, and leveraging the mobile app platform (KPay) to drive customer adoption and retention.
• The company’s operational improvements are reflected in reduced operating losses and increased gross profit margins.
• Non-GAAP metrics such as adjusted gross profit, adjusted EBITDA, and adjusted net loss were provided to supplement GAAP results and give a clearer picture of core operating performance, excluding nonrecurring or non-cash items like stock-based compensation, gains on derivative liabilities, and debt extinguishment.

Conclusion

Katapult’s Q4 and full-year 2025 results indicate a company in transition, with improving underlying profit metrics, a transformative pending merger, and strategic initiatives aimed at capturing greater market share among nonprime consumers. Investors should monitor upcoming merger developments, as this transaction, if completed, is likely to be highly price-sensitive and could materially impact the company’s growth trajectory and market valuation.