Katapult Holdings, Inc.

Good day, ladies and gentlemen, and welcome to the Catapult First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star and then zero on your touchtone telephone. A question-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would like to turn the conference over to Mr. Bill Wright, Vice President of Investor Relations. Sir, you may begin.

Thank you and good morning. Welcome to the Catapult's first quarter 2021 earnings conference call. With me today are Orlando Zayas, Chief Executive Officer, Derek Medlin, Chief Operating Officer, and Carissa Capito, Chief Financial Officer. We will be available for Q&A following today's prepared remarks. Before we begin, I would like to remind everyone that this call will contain forward-looking statements. regarding future events and financial performance and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent periodic SEC reports. These statements reflect management's current beliefs, assumptions, and expectations and are subject to a number of factors that may cause actual results to differ material from those statements. Except as required by law, we undertake no obligation to publicly update or revise any of these statements. whether as a result of any new information, future events, or otherwise. During today's discussion of our financial performance, we will provide certain information that constitutes non-GAAP financial measures under SEC rules. These include measures such as adjusted EBITDA and adjusted net income. These non-GAAP financial measures should not be considered replacements for and should be read together with GAAP results. Reconciliations to GAAP measures and certain additional information are also included in today's earnings release, which are available in the investor relations section of our company website at www.ir.catapult.com. Please refer to the investor relations section of our website to obtain a copy of our earnings release, which contains descriptions of our non-GAAP financial measures and reconciliations of non-GAAP measures to the nearest comparable GAAP measure. This call is being recorded and a webcast will be available for a replay on our investor relations website. I would now like to turn the call over to Orlando.

Thanks, Phil. We are thrilled to be hosting our first call as a public company today. This is a major milestone in the history of Catapult. I want to thank the entire Catapult team for their hard work and dedication during our journey to become a public company, as well as our investors, old and new, who have supported us throughout the process. We are thrilled about Catapult's unique position to serve a very large e-commerce market for durable goods purchased by non-prime consumers. Today, we estimate the market to be approximately $40 to $50 billion annually with less than 1% penetration. As a result, we see a significant greenfield opportunity for continued long-term growth. On today's call, we are excited to discuss our first quarter 2021 results, which features strong revenue growth and solid profitability, and also talk about our plans for continued expansion through year-end and beyond. But first, I'd like to kick off the call today by providing a brief overview of Catapult. The Catapult story began in 2012 with a mission to break down financial barriers. We provide disruptive technology that empowers underserved consumers and simplifies the shopping experience to help them secure essential items for their daily lives. Through our proprietary platform, our consumers can shop at the same high-quality retailers as prime consumers, leveling the playing field. Market data tells us that approximately 38% of consumers struggle to get the things they need, like furniture, appliances, and laptops. This lack of access can be due to low credit scores, thin files, or lack of data. Here's where Catapult steps in. As a lease to own for non-prime consumers, we use proprietary underwriting models to approve customers that others decline while they are shopping online. We provide flexible and transparent payment options whereby consumers pay a nominal fee at checkout, followed by recurring lease payments, and at the end of the lease, the consumer owns the item. At any time, the consumer can cancel the lease and return the item or exercise discounted early purchase options. The consumer chooses this option that best fits their budget, and we never charge a late fee, ever. This clear and transparent experience is how we partnered with big-name retailers like Wayfair, Lenovo, Purple Mattress, and others. Our integration with retailers is a key to our success. We have developed partnerships with leading shopping platforms like Magento and Shopify, waterfall partners with select prime credit providers like Affirm, and have the strong capabilities to customize an integration directly with any proprietary platforms. Our goal is to open the market opportunity for merchants and consumers, enabling transactions that would not have happened in the past. Not only do our customers love the ease and transparency of the platform, but our merchants see us as a strong strategic partner because we bring them incremental shoppers and a massive new addressable consumer base that could not effectively access in the e-commerce world. One of our core values is to enhance the lives of our consumers and retail partners by providing transparent, innovative, and empowering financial products. It's also why we're looking at what consumers have to say about us and how we're helping them get the things they want and need. For example, one of our consumers recently told us she had gone four years without sleeping in a bed because she didn't have the ability to afford a large ticket item. She said to us, I would never have been able to buy a mattress outright, so Catapult gave me the opportunity to be able to sleep in a bed again. This is the heart of our mission. We enable underserved consumers to obtain the items that they need. Another satisfied customer wrote, I really needed an air conditioner for my upstairs room. My budget is fixed, and I wasn't able to pay full price for a portable one. Catapult was there for me, and now I can sit in my room comfortably and give this review. Thank you. We received many more testimonials like this, which not only inspires and motivates us, but also validates our mission. Carissa, our CFO, will provide more details on our first quarter performance in a few minutes, but let me give you some first quarter highlights. Total revenue for Q1 2021 was $80.6 million, an increase of 88% year-over-year, driven by strong growth in originations as we continue to add new merchant relationships and expand with our existing merchants. Our adjusted EBITDA in Q1 2021 was 14.7 million, up 122% from 66.6 million in the Q1 2020, reflecting the operating leverage inherent in our business model as revenue growth is outpacing our operating expense growth. And our net income was 8.1 million in Q1, up 120% year over year. In summary, Our first quarter was strong, and what is extraordinary about the business we have built is that we have demonstrated the ability to rapidly grow our top line while at the same time being profitable. We believe that the combination of both high growth and attractive margins is what differentiates Catapult. My vision is that our growth will continue through building more relationships with high-quality retailers, offering new financial solutions in addition to our current lease purchase program, and increasing our customer repeat rate. Financial inclusion of the non-prime consumer drives us to continue innovating and delivering new solutions for this market. Like many of you, we are eager to see the world move post-pandemic and expect the microeconomic environment to be especially dynamic in 2021. As a result, we will be closely monitoring consumer spending trends, government stimulus programs, as well as credit conditions for the balance of the year. We are confident in our strategy to deliver value to our business partners and consumers and excited about the growing interest in Catapult from both merchants, e-commerce platforms, and prime partners. It is important to note that the length it takes for these merchants and partners to onboard and ramp up will impact the timing of originations and revenue. So while there may be some variability, we know that we've created a solid foundation and business model and we anticipate growth will continue. Catapult's focus will remain squarely on financial inclusion, and enabling customers to obtain durable goods that they need through a transparent consumer experience, while at the same time driving shareholder value. With that, I'll turn it over to Derek Medlin, our Chief Operating Officer, to discuss our growth strategy. Derek?