Katapult Holdings — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for Q3 2026 were $753.9 million.
• Gross profit was $437.7 million, representing a gross margin of 58.1%.
• Total operating expenses were $412.8 million.
• Operating profit was $24.9 million, impacted by acquisition-related costs and restructuring expenses.
• Net loss was $28.0 million, resulting in a net loss margin of 3.7%.
• Adjusted EBITDA was $110.4 million with an Adjusted EBITDA margin of 14.6%.
• On a combined full-quarter basis, net loss was $44.5 million compared to $30.1 million in Q3 2025.
• On a combined full-quarter basis, Adjusted EBITDA was $131.7 million, up 23% from $106.8 million in Q3 2025, with a margin of 13.1% (up approximately 260 basis points year-over-year).
• Cash provided by operations for the nine months ended September 30, 2026, was $496.8 million.
• Net leverage was 3.5x.
• Approximately two-thirds of debt is asset-backed funding against receivables and lease merchandise.
• Total cash and cash equivalents ended the quarter at $261.0 million; restricted cash was $10.8 million.
• Outstanding debt was $1.95 billion.

Guidance and Future Outlook:

• The Company provided Q4 2026 outlook for its first full quarter as a combined company.
• Q4 2026 Revenue guidance is $975 million to $1,025 million.
• Q4 2026 Adjusted EBITDA guidance is $105 million to $120 million.
• Outlook reflects a cautious view of the consumer due to macroeconomic headwinds impacting customer behavior, resulting in lower average ticket sizes and more selective spending in lease-to-own.
• The outlook assumes these conditions continue through year-end with no improvement.
• Management is maintaining a disciplined approach to underwriting to protect margin rather than chasing volume.
• The Company is focused on optimizing its balance sheet to reduce the cost of funding, which is expected to improve earnings and cash flow.

Business Segments and Product Lines:

• Consumer Finance Segment:
  • Revenues were $448.8 million compared to $443.3 million in Q3 2025.
  • Gross profit was $280.7 million; gross margin was 62.6% compared to 63.2% in Q3 2025.
  • Operating profit was $19.6 million compared to $43.0 million in Q3 2025.
  • Adjusted EBITDA was $78.3 million compared to $74.8 million in Q3 2025; margin was 17.5% compared to 16.9%.
  • Finance receivables at quarter end were approximately $1.0 billion compared to $991.6 million in Q3 2025.
  • Served approximately 1.04 million unique active customers compared to 1.05 million in Q3 2025.
• Lease-to-Own & Retail Segment:
  • Revenues were $305.1 million.
  • Gross profit was $157.0 million; gross margin was 51.4%.
  • Operating profit was $5.3 million.
  • Adjusted EBITDA was $32.1 million; margin was 10.5%.
  • On a combined full-quarter basis, Adjusted EBITDA was $53.4 million, up from $31.9 million in Q3 2025, with a margin of 9.6% (up about 400 basis points year-over-year).
  • Book value of merchandise on lease was $484.8 million as of September 30, 2026.
  • Served approximately 1.08 million unique active customers compared to 1.12 million in Q3 2025.
• E-commerce penetration was 39.6% (leases and loans originated through non-retail channels as a percentage of total originations).

Market and Competitive Landscape:

• The Company serves nonprime consumers seeking greater financial flexibility across lease-to-own, retail, and consumer finance.
• Macroeconomic headwinds are impacting customer behavior, leading to lower average ticket sizes and more selective spending.
• The Company identified approximately $30 million in annualized cost synergies following the merger.
• Revenue synergy opportunities include connecting the customer journey across brands, expanding protection plans to virtual lease-to-own, adding new product categories through merchant partnerships, and growing the virtual lease-to-own merchant pipeline.

Risks and Challenges:

• Financial results for Q3 2026 are not directly comparable to prior periods due to the merger with The Aaron's Company and CCFI.
• Operating profit and net loss were impacted by acquisition-related costs and restructuring expenses.
• Net loss was primarily impacted by interest expense.
• Forward-looking statements are subject to risks including successful integration, realization of synergies, disruption of management attention, adverse changes to relationships, retention of key personnel, capital structure risks, credit performance, delinquency, charge-off trends, and regulatory compliance.

Management Commentary and Tone:

• CEO Cory Miller stated the first quarter with combined operations was defined by "speed of execution" and marked an important milestone.
• Management expressed confidence in building on identified synergies and using technology and data to approve the right customers and lower the cost to serve.
• CFO Russ Falkenstein noted the integration plan is being executed well, with Adjusted EBITDA margin up more than 250 basis points year-over-year on a combined basis.
• Management emphasized a deliberate focus on underwriting and protecting margin rather than chasing volume.
• The tone reflects a focus on transforming the company into a trusted destination for nonprime consumers and creating long-term value.

Other Key Points:

• On August 11, 2026, Katapult Holdings completed its business combination with The Aaron's Company, Inc. and CCF Holdings, LLC.
• Cost synergies identified include combining leadership and support roles, reducing corporate and regional office footprints, consolidating vendors and contracts, and moving finance, accounting, HR, technology, and marketing into shared teams.
• The Company will host a conference call and webcast on November 12, 2026, at 8:00 AM ET.
• CEO Cory Miller and CFO Russ Falkenstein will host a fireside chat at the Stephens Annual Investment Conference on November 17, 2026.
• The merger created a scaled platform serving nonprime consumers across lease-to-own, retail, and consumer finance.