Katapult (KPLT) Q3 2026 Earnings Call Transcript

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DATE

Thursday, Nov. 12, 2026

CALL PARTICIPANTS

• Head of Investor Relations - Jennifer Cohn
• Chief Executive Officer - Cory Miller
• Chief Financial Officer - Russell Falkenstein
• President - Bill Baker

TAKEAWAYS

• Revenue -- $753.9 million reported for the third quarter, while combined revenue for the same period was approximately $1 billion.
• Adjusted EBITDA -- $110.4 million reported, with combined Adjusted EBITDA reaching $131.7 million, representing a 23% increase.
• Net Loss -- $28.0 million reported, primarily impacted by interest expense and merger-related costs.
• Combined Adjusted EBITDA Margin -- 13.1%, representing an expansion of more than 250 basis points over the prior year.
• Fourth Quarter Revenue Guidance -- $975 million to $1.025 billion, based on management's cautious view of consumer spending.
• Fourth Quarter Adjusted EBITDA Guidance -- $105 million to $120 million, reflecting seasonal patterns and the upfront recording of credit provisions.
• Cost Synergies -- $30 million in annualized savings identified to date, driven by organizational efficiencies and real estate consolidation.
• Debt -- $1.95 billion total debt as of Sept. 30, with approximately two-thirds of the balance consisting of asset-backed funding.
• Cash and Equivalents -- $261.0 million, supplemented by $10.8 million in restricted cash.
• Consumer Finance Revenue -- $448.8 million, up 1% as finance receivable revenue growth offset a 2% decline in credit service fees.
• Consumer Finance Adjusted EBITDA -- $78.3 million, up 5% with a margin of 17.5% due to lower personnel costs.
• Lease-to-Own and Retail Combined Revenue -- $557 million, reflecting a 3% decline as customers prioritized essential goods over home furnishings.
• Lease-to-Own and Retail Combined Adjusted EBITDA -- $53.4 million, with a margin of 9.6% that expanded 400 basis points.
• E-commerce Penetration -- 39.6% of total originations, reflecting a shift in how customers engage with the company's lease and loan products.
• Net Leverage -- 3.5x as of the end of the quarter, calculated against trailing 12-month combined Adjusted EBITDA.
• Proprietary Data Set -- 65 million consumer records utilized to inform underwriting models and risk-based pricing.
• Finance Receivables -- $1 billion for the Consumer Finance segment at the end of the quarter, compared with $991.6 million in the prior year.
• Active Customers -- 1.04 million unique active customers in Consumer Finance and 1.08 million in Lease-to-Own and Retail.
• Virtual LTO Merchant Locations -- 2,000 locations currently offering the digital lease-to-own solution, with a growing pipeline of new merchant partners.
• Legacy Katapult Metrics -- 60% repeat customer rate and approximately 150,000 monthly active app users reported.
• Potential Interest Savings -- $20 million in annual pretax cash flow for every 100 basis point reduction in the cost of debt.
• Marketing Synergies -- Three distinct groups consolidated into a single team, with several channels moved in-house to reduce agency fees.

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RISKS

• Miller stated, "Our customers are dealing with persistent inflation, higher fuel prices and other budget pressures, and they're prioritizing the essentials," noting that consumers are trading down to lower-priced items.
• Falkenstein noted that the fourth quarter "is typically our lightest at roughly 20%" of annual adjusted EBITDA because holiday lending requires upfront credit provisions.

SUMMARY

Katapult Holdings, Inc. (NASDAQ:KPLT) reported its first quarterly results following the merger of Katapult, Aaron's, and CCFI, a transaction that closed on Aug. 11, 2026. Management reported that the integration process has identified $30 million in annualized cost synergies, primarily through consolidated leadership, vendor rationalization, and shared corporate platforms. The company stated that it operates two primary segments: Consumer Finance and Lease-to-Own & Retail, serving a combined customer base of more than 2.1 million active users. Financial results for the quarter were influenced by merger-related costs and a higher interest expense environment. The company indicated that its strategic focus is centered on optimizing its proprietary data set for underwriting and simplifying its complex capital structure to reduce funding costs.

• Management reported that e-commerce has become a significant growth driver for traditional lease-to-own agreements, with appliances being the strongest product category.
• Chief Executive Officer Miller stated, "Our virtual lease-to-own pipeline is growing," noting that the company's increased scale has restarted conversations with major merchant partners.
• The company has consolidated its HR functions and expects to have a single, streamlined system operational by Jan. 1.
• Chief Financial Officer Falkenstein noted the complexity of the current capital structure, stating, "Our debt sits in 18 credit facilities across the businesses... That's more complexity than we need."
• Management indicated that they are using artificial intelligence tools to build a unified technology platform for all three businesses to lower information technology costs.
• The company plans to refinance the $110 million legacy Katapult revolving credit facility prior to its Dec. 4 maturity date.

INDUSTRY GLOSSARY

• LTO: Lease-to-own, a transaction where a consumer pays for the use of goods with an option to purchase them.
• CCFI: Community Choice Financial, the subsidiary brand representing the company's Consumer Finance segment.
• Adjusted EBITDA: A non-GAAP financial measure representing earnings before interest, taxes, depreciation, and amortization, excluding non-recurring items like merger costs.
• KPay app: The mobile application used by Katapult customers for shopping, transactions, and account management.
• Net leverage: The ratio of total debt minus cash to the trailing 12-month adjusted EBITDA.
• BrandsMart: A consumer electronics and appliance retail division within the company's Lease-to-Own & Retail segment.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us, and welcome to the Katapult Holdings Q3 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Jennifer Cohn, Head of Investor Relations. Jennifer, please go ahead.

Jennifer Kull: Welcome to the Katapult Holdings Third Quarter 2026 Conference Call. On the call with me today are Cory Miller, Chief Executive Officer; and Russ Falkenstein, Chief Financial Officer. Bill Baker, our President, will also join us for our Q&A session after the prepared remarks. For your reference, we have posted materials related to today's call on the Investor Relations section of the Katapult website, which can be found at ir.katapultholdings.com.

Please keep in mind that our remarks today include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to our financial guidance, our business and our operating results as noted in our earnings release and slide deck posted to our Investor Relations website for your reference. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties, some of which are described in today's earnings release, our most recent annual report on Form 10-K and quarterly report on Form 10-Q and our Form S-4 registration statement filed in connection with our mergers and which will be updated in future periodic reports that we file with the SEC.

Any forward-looking statements that we make on this call are based on our beliefs and assumptions as of today, and we undertake no obligation to update them, except as required by law. Also, during the call, we'll present both GAAP and non-GAAP financial measures, which we believe can be useful in evaluating our performance. Non-GAAP financial measures should be considered supplemental to and not replacements for or superior to our GAAP results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included with today's earnings release and is available on the Investor Relations section of the company's website.

We'll also present combined figures during the call that reflect the sum of the results of CCFI, Aaron's and Katapult for the third fiscal quarters of 2026 and 2025, including periods before the closing of the mergers on August 11, 2026, and the 2025 fiscal year. This combined financial information is not pro forma information prepared in connection with Article 11 of Regulation S-X, does not reflect synergies or purchase accounting or other pro forma adjustments, and is not necessarily indicative of our results that would have been achieved had the mergers been completed earlier or of future results.

This combined information is provided for illustrative purposes only and should not be considered in isolation from or as a substitute for our financial statements. With that, I will turn the call over to Cory.

Cory Miller: Thank you, Jennifer, and welcome to everyone joining us this morning. By way of introduction, I was appointed CEO of Aaron's in 2024 and became CEO of Katapult Holdings when the mergers closed in August. I'm especially pleased with the team we've assembled, which brings together the best of Aaron's, Katapult and CCFI, and I'm proud of the progress we've made in a short period of time. Today is our first earnings call as a combined company. Katapult Holdings is now a scaled technology and data-driven finance platform for nonprime consumers. We provide lease-to-own and loan products online through our merchant partners and in our stores.

On a combined basis, in 2025, we would have evaluated more than 11 million lease and loan applications, processed more than 145 million transactions, and generated more than $4 billion in revenue. In the third quarter, nearly 40% of our leases and loans originated through digital channels. And across our businesses, we serve one core nonprime customer whose needs span lease-to-own, retail and Consumer Finance. Since some of you are new to the parts of our business, let me briefly walk through each segment and how they complement each other. We report in 2 segments: lease-to-own and retail, which includes Aaron's, Legacy Katapult and BrandsMart, and Consumer Finance, which includes the CCFI family of brands.

In lease-to-own and retail, Aaron's brings a national omnichannel footprint, deep customer relationships and a long record of disciplined underwriting that protects our margins. Legacy Katapult brings technology, flexible pricing and a growing online marketplace with a repeat rate above 60% and about 150,000 monthly active app users. In Consumer Finance, CCFI brings a profitable scaled lending platform with a portfolio of short- and medium-term loans and other financial services offered online and through a broad national footprint. This is a powerful combination, and here's why. Together, we can improve the customer experience and our economics in ways none of these businesses could on their own.

Aaron's high-touch service model can lift approvals, conversion and unit economics across our lease-to-own brands. Legacy Katapult's technology brings a digital customer experience and broader category coverage to every brand. And CCFI's customer reach delivers referrals across segments and adds to the data behind our underwriting. One of our biggest advantages is data. We have a proprietary data set with more than 65 million consumer records, and every application, payment and transaction across our businesses adds to it. Our technology lets us put that data to work. It shapes who we approve, how we price for the risk and how we lower our cost to serve these customers.

We're applying our data advantage across the company from marketing to new products to merchant relationships. Over time, we believe using our data this way will deepen our customer relationships, lower our underwriting and acquisition costs and drive incremental revenue. We also have a significant opportunity in our cost of funding. The interest we pay today can be reduced. We are laser-focused on lowering it, and every dollar we save should improve cash flow. And once we improve our capital structure, we'll be in a position to put our balance sheet to work creating value. Bottom line, we believe the strategic value of this combination is greater than the sum of the parts.

More products, more channels, a larger proprietary data set and that scale is what we believe unlocks meaningful cost and revenue synergies. On the integration front, we're moving quickly. Our plan has 4 priorities: one, maintaining continuity while we grow each business; two, delivering cost synergies; three, driving revenue synergies; and four, lowering our cost of funding, which I just mentioned. To date, we've identified approximately $30 million in annualized cost synergies, and we've already acted on most of these. We expect that number to grow as the integration progresses, and we're building on it with revenue opportunities across the business.

Because our teams worked closely together before the close of the mergers, we hit the ground running, and I'm grateful for their hard work. On the cost side, the identified savings span organizational efficiency, rationalizing our corporate real estate, creating marketing efficiencies and reducing duplicate technology, data and other costs. Much of the work to achieve these savings is already underway. Starting with technology and engineering, we're building one technology team and consolidating our systems and data while protecting operating continuity. We're also using AI tools to help build a single platform for all 3 businesses, which we expect will lower our IT costs and strengthen security.

In marketing, we're bringing our teams together, moving channels in-house and shifting all 3 businesses to a common marketing platform. That shared view of the customer also supports the revenue synergies I'll get to in a moment. In risk and underwriting, we're combining our credit teams, processes and data vendors. Over time, we expect to run fewer decisioning engines and apply our combined data and expertise to approvals and pricing. In the back office, we're moving quickly to integrate our corporate functions. HR is the furthest along and is on track to have one system in place by January 1. Finally, we've also consolidated our corporate and regional real estate footprint.

Our team has a strong track record of integrating acquisitions, and we're bringing that same experience to this business combination. On the revenue side, we're pursuing a number of opportunities. I'll highlight 4. One, connected customer journey. Cross-brand referrals are now live and support expanding our reach. For example, we launched technology that embeds the lease-to-own application into the Consumer Finance loan flow, giving every application more chances to become a customer relationship. Two, value-added services. We brought our protection plans already proven with the Aaron's customer to virtual lease-to-own. We've also revamped our club program for those customers. Three, broader product reach. Through merchant partnerships, we're adding product categories we don't carry today.

So we earn the economics without carrying the inventory. Our digital kiosks position us to roll these out quickly. And four, merchant relationships. Our greater scale and financial strength are reopening doors. Since the close, we've restarted conversations with merchant partners and our virtual lease-to-own pipeline is growing. Our goal is a connected, efficient platform where customers grow their relationships with us beyond their first loan or lease. Before I turn to segment performance, I'll share a few thoughts on the customer. Our customers are dealing with persistent inflation, higher fuel prices and other budget pressures, and they're prioritizing the essentials. Demand is holding up well in needs-based categories, but customers are trading down to lower-priced items.

This is a customer we know well, and with lease-to-own and Consumer Finance under one roof, we can meet more of their needs. At the same time, we're being disciplined, managing the approval amounts and selectively tightening as we tune our risk models heading into the holiday season. We're focused on growth and execution in the fourth quarter, and we're monitoring the inputs that drive customer behavior. Where we see risks that we don't like, we're walking away from that volume. That positions us to protect our unit economics and profitability. So let me turn to the segments where you can see that discipline at work, starting with Consumer Finance.

Demand in the quarter was healthy and in line with our expectations. We're meeting that demand responsibly, approving customers using decisioning engines that draw on external market data, our own performance history and customer scoring. And we're looking for new ways to serve those customers more fully, including evaluating co-location opportunities so a single visit can meet more of the customers' needs. Over the next several quarters, our focus is on growing the products where we earn the best return for the risk, keeping underwriting disciplined and in line with macro conditions and expanding online. That's in addition to the cross-brand referrals I mentioned earlier. We're taking the same approach in lease-to-own and retail, growing where the returns justify it.

We want to grow our lease portfolio across every channel, e-commerce, virtual lease-to-own, merchant point of sale and in our stores. To give you the full picture of this quarter's drivers, my comments on lease-to-own and retail reflect the entire quarter, not just the period since we closed on August 11. In our traditional lease-to-own business, applications and agreement deliveries continued to improve with much of the growth coming from e-commerce. Appliances was our strongest category. Electronics was roughly flat and home furnishings was modestly lower. We also observed a dip in our average ticket size. We're watching collections closely, but believe our payment and product return options give customers the flexibility they need to stay current.

In virtual lease-to-own, volume was roughly flat with some pressure at the top of the funnel and in our take rate, especially among new customers. We're particularly pleased with the merchants we've added over the past year, and we expect those relationships to contribute more over time. Our virtual lease-to-own offering is now available in about 2,000 merchant locations. As we look to the holiday season ahead of us, both segments are well prepared. Our teams are trained, our promotional calendars are set and our marketing can shift across channels as demand develops. In Consumer Finance, that means focusing on our most productive media and disciplined credit limit increases for existing customers with strong payment histories.

In lease-to-own and retail, we're meeting customers where they shop with a particular focus on finding new ways to convert more of our website traffic. To sum it up, we're building Katapult Holdings into a technology and data-driven Consumer Finance platform for a large underserved market. With our integration well underway, we've identified approximately $30 million in cost synergies, and we're putting legacy Katapult's technology to work across every business, and we're already working to lower our cost of funding, so more of every dollar turns into cash flow. With that, I'll turn it over to Russ to walk you through our results, how we look at the business and our outlook. Russ?

Russell Falkenstein: Thanks, Cory, and good morning, everyone. A quick note on how our results are presented. CCFI was the accounting acquirer in the mergers, so our results before the transaction closed reflect CCFI only. And because the merger closed on August 11, our reported third quarter includes only 51 days of LTO and retail. Both will affect reported year-over-year comparisons through the third quarter of 2027. To assist with the comparability between periods, our investor deck shows combined results as if LTO and retail had been part of the company since January 1, 2025. I'll refer to those combined figures as I go.

On a reported basis, consolidated revenue was approximately $754 million and gross profit was $438 million on a margin of 58.1%. Operating profit was $25 million and net loss was $28 million. Reported adjusted EBITDA was $110 million. On a combined basis, revenue would have been about $1 billion, down 1% from last year, with Consumer Finance up a little more than 1% and LTO and retail down 3%. Combined adjusted EBITDA would have been $132 million on a margin of 13.1%, up more than 250 basis points from last year. Since this is our first call as a combined company, I want to spend a minute on how we look at this business.

This is how I'd encourage you to look at it, too. Across both segments, we manage a portfolio of nearly $1.5 billion of loans and leases. We're focused on 3 levers that determine how much cash that portfolio generates, and that's what we believe will drive value for shareholders. First, earn a good return for the risk we take on our assets; second, use our technology to lower our cost to serve and surgically manage our losses; and third, reduce our cost of funding. When all 3 levers are working together, more of every dollar we earn converts to cash. I'll walk through the quarter the same way, starting with what we earn in each segment.

In Consumer Finance, both periods include a full quarter, so the comparison to prior year is apples-to-apples. Revenue for the segment was $449 million, up 1%. Finance receivable revenue grew 3% to $293.5 million and credit service fees were $125 million, down 2%. Gross profit, which is what we earn after credit losses, was $281 million on average receivables of $990 million. That compares to $280 million on $981 million a year ago. Gross margin was 62.6% compared with 63.2% last year. Adjusted EBITDA was $78 million, up 5%. Margin was 17.5%, up 60 basis points. The year-over-year improvement was driven by lower personnel costs, which more than offset higher credit costs and our investments in marketing.

And we served approximately 1 million unique active customers in this segment, essentially flat with last year. Turning to LTO and retail. Reported revenue was $305 million. For the full quarter, combined revenue would have been $557 million, down 3%. Revenue tells part of the story, but what we're focused on is the return we get for the risk we take. In this segment, we don't run the business to a loss rate. We run it to gross margin because this metric captures pricing, approvals and losses in one number. When we approve more of the right customers and price for the risk, write-offs can tick up even as we earn more.

Gross margin is a better indicator of whether we're earning a good return for the risk we take. On a combined basis, gross profit was $271 million and gross margin was 48.6%. Reported gross profit was $157 million with a gross margin of 51.4%. Going forward, we'd expect gross margin to run closer to the levels we saw earlier in the year, which you can find in our investor presentation. Reported adjusted EBITDA was $32 million. On a combined basis, it would have been $53 million, a margin of 9.6%. That's 400 basis points better than last year as both gross margin and operating costs improved.

We served approximately 1.1 million unique active customers in this segment compared with about the same last year. So that covers the first lever, earning a good return for the risk we take. The second lever we are focused on is what it costs us to serve our customers and manage losses, and that's where technology comes in. Cory already walked through the $30 million in cost synergies we've identified. Legacy Katapult technology is how we take that further. We're putting its digital application, real-time decisioning and checkout to work across the business. This will allow us to make better credit decisions and serve more customers more efficiently.

The third lever we're focused on is what it costs us to fund the portfolio, and that's our biggest near-term opportunity. We ended the quarter with $1.95 billion of debt, about 2/3 of it asset-backed and $261 million of cash. Net leverage was about 3.5x. Our debt sits in 18 credit facilities across the businesses, a result of the transactions that brought these companies together over the years. That's more complexity than we need and it cost us more than it needs to. We're well into the work to simplify the structure and lower interest expense, and we expect to make significant progress in 2027. The opportunity is meaningful.

Every 100 basis points we take out of our cost of debt is about $20 million a year in pretax cash flow. In the meantime, we expect to refinance the $110 million legacy Katapult revolving credit facility ahead of its December 4 maturity. Now to our outlook. For the fourth quarter, our first full quarter as a combined company, we expect revenue to be between $975 million and $1.025 billion and adjusted EBITDA to be between $105 million and $120 million. Our outlook reflects a cautious view of the consumer. As Cory described, our customers are dealing with persistent inflation, higher fuel prices and other budget pressures. We're seeing this in lower average tickets and more selective spending in lease-to-own.

Our outlook assumes these conditions continue through year-end. Given that backdrop, we're staying disciplined on underwriting and protecting margin rather than chasing volume. Our fourth quarter range also reflects the seasonal pattern of the combined business. Since this is our first quarter reporting as a combined company, it's worth walking through how we expect a typical year to play out. The first quarter has historically been our strongest for both of our segments at roughly 30% of full year adjusted EBITDA as tax refunds drive higher recoveries and lower losses, particularly in Consumer Finance.

The second and third quarters are each in the mid-20s, and the fourth quarter is typically our lightest at roughly 20% as holiday lending builds the loan book and we take credit provisions upfront. As you look ahead to 2027, we believe the right starting point is our combined full year 2026 results, including today's fourth quarter outlook. The combined quarterly history in our investor presentation should help you as you build your models. Stepping back, this is our first quarter together, and our success comes down to the same 3 levers I mentioned earlier.

First, earn a good return for the risk we take on our portfolio; second, use our technology to lower our cost to serve and manage losses; and third, substantially reduce our cost of funding. When we do these 3 things well, more of every dollar we earn should turn into cash, and that's what should drive value for our shareholders. With that, I'll turn it back to the operator for Q&A. Operator?

Operator: [Operator Instructions] Your first question comes from the line of Kyle Joseph with Stephens.

Kyle Joseph: Congrats on getting the merger closed. I know you guys have been very busy. To start off, Cory, I'd love to pick your brain and just kind of hear how the Aaron's business has been doing since you took over as CEO, given it was private, but, kind of get an update there in terms of any strategies you maintained, any strategies you shifted and where, call it, same-store sales have been trending? Yes, just a quick update there, if you don't mind.

Cory Miller: Kyle, thank you for the question. Obviously, since the merger was finalized, we're not breaking out Aaron's on its own. But leading up to the merger, Aaron's was in a strong place. The focus areas that we had over the past couple of years was really around meeting the customer where they're at. And I think that if you look back over time, the Aaron's company was, kind of, being run as a retailer.

And when I came in, I wanted to shift that focus back to Consumer Finance, meet the customer where they're at, lean into some of the new products that we put in place, those being Aaron's Protection+ and a revamped club program that allowed us to meet more of the customers' needs and then meet them either in our stores or online and focus on the new way that, that customer was coming to us, which was more and more online every year.

So a lot of the things that we focused on at Aaron's leading up to the merger, we're continuing on, obviously, in a short period of time since we finalized the merger, and we'll focus on that going forward.

Russell Falkenstein: And Kyle, this is Russ. I'd say Aaron's is the biggest part of the lease-to-own and retail segment. And so when you look at the lease-to-own and retail segment results for the third quarter, you'll see margin expansion and significant EBITDA growth. And so we're obviously happy with the whole segment, but Aaron's is going to be the biggest part of that segment.

Kyle Joseph: Got it. Really helpful. And then I wanted to pivot to the debt refi opportunity. I think you guys had $1.95 million -- or sorry, [$1.95 billion] of debt. Can you give us a sense for what the cost of funds is on that? And then kind of any sort of timing milestones or any -- if we lap any maturities or prepayment areas? I know you guys want to make a lot of progress there in '27, and I also recognize you guys just closed the merger. So -- but I just want to hear about how you're thinking about that.

Russell Falkenstein: Yes, Kyle. This is Russ. It's a great question. Obviously, as I mentioned, our cost of funds and the complexity of our debt is a huge focus for us. If you think about, kind of, the basis for it, it really comes from how these companies have been formed over the years, really aggregation platforms. And so the debt we have today doesn't reflect what we think Katapult Holdings as a new entity should have. So we're hard at work, really focused on simplifying our debt structure and lowering our cost of funds. As we think about the gap between our current structure and what the market is, we think it's significant.

And so we're hopeful to make significant progress on that in '27. From a sizing perspective, it's probably too early to give numbers. But if you look at a little bit under $2 billion of debt we have out there, every 100 basis points is roughly $20 million a year in pretax cash flow. And so the opportunity for our shareholders is meaningful. And as I mentioned, it's one of our top priorities going into next year.

Kyle Joseph: Got it. And then last question for me. I appreciate the color you guys gave on the cost synergies. As we think about the revenue side of things, any more color you can give us in terms of timing and magnitude of the synergies there? I appreciate the color you gave in terms of walking us through how you're envisioning rolling them out. But yes, any more color you can give us there? And that's it for me.

Cory Miller: Thanks, Kyle. Another good one. As we look at the revenue, like I said, it's early on, but we are focused on referring customers back and forth, putting a referral program in place that allows every application that comes in another shot at converting into a customer and a lease or a loan agreement with those customers. Early days, like I said, but a new referral program that we put in has already given us 4,000 new lease agreements. Within revenue synergies, I talked on the last question about the protection plan that we put in place at Aaron's and a club program that was revamped.

We also have converted that over to our virtual lease-to-own platform at this point as well. So we kind of view that as a synergy. We took a learning from Aaron's [lease-to-own] platform, and we're driving a lot of good results with that so far. In the other area where we're focused as we're referring these customers back and forth, we're really leaning on the technology that Katapult brought to this merger. It was a valuable technology aspect of that business, and we want to make sure we're utilizing that across our business as much as possible [indiscernible] that customer wherever they want to shop, whether it's online, on the KPay app, in-store and through our merchant partners.

So different things that we're pulling from each of the businesses to collectively get to an approach on revenue that should ramp up our ability to grow revenue over the coming years.

Operator: Your next question comes from the line of Casey Coates with Loop Capital Markets.

Casey Coates: Congratulations on merger and everything. My first question, I really wanted to kind of go back and learn more. So now the companies are operating together for about 3 months now. So speaking of integration, what initiatives so far have been progressing the fastest? And where are you seeing like the earliest tangible benefits? And then that's all there.

Cory Miller: Okay. Yes. So far, 90 days in, we've identified $30 million of cost synergies, and most of that's been actioned. So we're really working hard to identify, act upon it, so we can start seeing those results hit the P&L as soon as possible, which we think is going to build over the fourth quarter and largely be included in the run rate by mid-2027. The areas where we focus to get those synergies so far have been organization changes, consolidating corporate regional offices. The back-office functions that we operate, is an area where we're looking at to get into one operational footprint across the new combined business to capture those synergies.

I'll say -- I'll give an example that HR is the furthest along. We've moved HR to a single team. We have a new system that we're going to put in place January 1, and we're all kind of set up to hit the ground running January 1 with that new streamlined structure. Another area we focused on is our marketing groups. Before, we had 3 distinct marketing groups all focused on the customer that came into their silos. What we've done so far is we brought those 3 silos into one marketing team. We have in-sourced some of the work that we had passed out to agencies in the past, driving more cost savings.

And then as that work is coming into a single silo, we can be flexible across the business to meet the demand where we see that demand being generated with the most impact to our revenue. So those are some examples. We think there's more than the $30 million to come, and we're going to continue pushing it because, like you said, it's early days, and we're not done capturing synergies, but that's the number we're at today.

Casey Coates: Understood. One more for me. Speaking on CCFI, looking at that business, it's been relatively stable year-over-year revenue receivables. Looking at that, is it going -- like what are the primary drivers that could reaccelerate growth for that business considering I know now there's a lot of more online and virtual competitors that are competing against. So looking at that business, what could be the next step for them?

William Baker: Casey, it's Bill Baker. Thanks for the question. We're excited about all of the businesses. But with respect to CCFI, there's a couple of things that I think give us a real advantage in the marketplace. And the first is really our call click or come in platform. Cory talked about meeting the customer where they are, and that's exactly what we do at CCFI. Obviously, it's a challenging macroeconomic environment out there, but that also creates a lot of top-of-funnel demand for CCFI and I think with the robust underwriting and decision engines that we have, we can really manage that demand to improve margin, to really manage that business for margin.

So I think having brick-and-mortar locations is an asset, having robust digital properties is an asset. And quite frankly, having a really experienced management team, both in the field, in our contact centers and online to understand the customer allow us to be more proactive than reactive. So I think there's a lot of bright sky ahead for CCFI, particularly as we look to innovate new products and new platforms and again, taking full advantage of the data that's available through the merger and through the revenue synergies and upside that we have through the other businesses.

Operator: There are no further questions at this time. I will now turn the call back to Cory Miller for closing remarks.

Cory Miller: Thank you, operator. Before we close, I want to thank our teams at Aaron's, Katapult and CCFI. Bringing 3 companies together took well over a year of hard work, and our people kept running the business the whole time. I also want to thank Russ and Bill, who are in the room with me today; and Kyle Hanson, our Executive Chairman. This combination was Kyle's vision, and he has been behind it every step of the way. We're excited about the future. We believe we're well positioned to build the new Katapult Holdings into a true destination for nonprime consumers, a place where they can get the goods and financial services they need in their everyday lives.

None of the 3 companies could have built that on their own. We look forward to continuing our dialogue with the Street. We hope you'll join our fireside chat at the Stephens Investment Conference on November 17. A live webcast and replay will be on our Investor Relations website. If you have any questions or feedback, please reach out to Jennifer. Thank you.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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