Significant increase from 2,500 to almost 8,000. That increase is in the number of approvals that we have, expense in gross profit, EBITDA, and operating income. The greatest thing about this business is it's good and bad. When we put into new relationships, it actually has a seasoning. A lot of the revenue is actually going to be deferred. We actually will have tailwind in 2025, even if we add no more partners. Additionally, the way that we account for our lease revenue is actually accrued over the life of the lease. Big originations in December, through the holiday season, that revenue is recognized over 2025. With that, we are still increasing both our store count as well as growing on our marketplace. Financial highlights: net lease revenue was $107 million in 2024 versus $92 million. Overall revenue was $140 million.
Gross profit, 40% growth, adjusted EBITDA, $33 million, highest in the history of our company. As we look at 2025, some key things that we're looking to do: we are expanding our offerings to not just the traditional retailers like a Monro or a Mavis, but actually going to product providers. Direct to manufacturers like an LG or a Samsung and Ashley Furniture, companies that actually supply products that are then distributing to retailers and providing our financing. Our financing caters to that third of the United States that doesn't really have a lot of access to credit. It's a 640 FICO score. As the economy starts to get more challenged and the banks pull back, it actually creates more customer flow into our space, which we're really happy to work with. Another big opportunity that we have is pursuing bank relationships.
With a lease-to-own, you can lease tires, but you can't lease an oil change. It has to be durable goods. With a loan, you can actually provide that same kind of financing with the same sort of economics to a much broader range of products and services. We used to have a bank partnership a couple of years ago. They exited the business, but we're pursuing a couple that, in essence, expands the kinds of products and really kind of increases the TAM that we have available to us. With that, we are projecting another [audio distortion] w ebsite flexshopper.com, where we will source customers through digital marketing. We'll source product through either retailer partnerships. We have a partnership with Best Buy, for example, integrated to be able to do in-store pickup fulfillment, as well as going to manufacturers, wholesalers, and distributors.
We not only make revenue from our lease business, but we also make a retail revenue profit as well. We have a margin of average 20 percentage points on that. On the B2B channel, these are these partnerships where we're at point of sale, where we get new customers in. The best thing about having this marketplace, which is unique to this space, is that a customer who is acquired through our B2B channel, which represents roughly 65% of our new customer originations, will then be marketed to our B2C channel and have repeat customer dynamics. The best thing about a repeat customer from a loss perspective is the payment rates are much better because they've proven that they've made payments with you before. Otherwise, we wouldn't lend to them. Asset light model.
All the products that we have on our B2C marketplace are either drop-shipped or we are fulfilling with partnerships at our distributors, manufacturers, distribution centers. No inventory risk, very low CapEx requirement, and it's as scalable as we can find customers to make purchases. Looking at the average customer, they're lower income, $3,300 median monthly income. They're a little older than you would potentially think. They skew female. Even though it does skew renter, there are a significant number of homeowners. We will get the kind of purchase behavior on furniture, televisions, things to actually furnish a home that these customers really want to buy. Our technology.
We have different portals that we've set up either through integrations with third parties, third-party waterfalls, or we have mobile-friendly technology where a customer can apply for this financing on their own device, scan a QR code at point of sale. The application, unlike the olden days in sales finance where you'd have to go and apply with the desk and the agent, and the agent says, "Sorry, you're declined," the customer can do this in the privacy of his phone. They get approved instantly. They then get a virtual card that is instantly delivered to their phone, and then they use that to check out at point of sale, and the purchase goes right through their Visa MasterCard network at the tire store. The key parts of the economics of this business: one, you want volume. You need to have sales.
Two, with a financing-type product, you can give money away. That's the easier part, but are you actually collecting it? One thing that we've really worked hard on over the past year is improve our bad debt ratio. Our bad debt is 24% in 2024. Now, if you think about this from a credit spread perspective, though, we charge, in essence, 100% on our financing. Again, this is for that subprime customer. We'll lend $1,000 out. We will charge $2,000. We'll get $1,500 back, 25% default rate. From a credit spread perspective, we're making $150 on that $100. That's on our B2B channel. On our B2C channel, where we're getting a retail margin, we sell $1,000, we buy $800, and we're making that $1,500. We're actually having a much stronger IRR because we're buying that $100 paper at $0.80 on the dollar.
Now, a part of this, and this is something that I've been commenting on in some of my one-on-ones, especially on the digital side, fraud is a big, big issue that a lot of our competitors have. We have worked very hard in combining a lot of different disparate data sources to be able to really triangulate on what the fraud components are and be able to prevent both third-party fraud as well as first-party. First-party fraud would be defined as they are who they say they are, but they have no intent to pay you back. What this does is it looks at a bunch of third-party data sets. It looks at the traditional ID verification that you would get from a credit bureau. It looks at the device. Has that device, that IP, been used for nefarious activities in the past?
We're using instant bank verification where we're downloading bank statements on a select customer through a Plaid-type interface. We're looking at what the customer does on our site. So what kind of cart do they want to try to finance? If it's five iPhones, then it probably is a bit more of a dodgy sort of transaction than if somebody's buying a refrigerator. How quickly they interact with our site. If you see that the email was filled in within half a second, they're probably doing a cut and paste towards a bot. So all of that gets triangulated into a machine learning model that our fraud team has developed, which then either puts lots of friction on very questionable customers or fast-tracks to good customers that have very low risk, which has helped in getting that bad debt down from the 30s to the 20s.
I talked a little bit about this model. That initial cost of 10, expected return of 15. This B2C channel, the beauty of it is the repeat dynamic. Nobody else in our space has this kind of marketplace available. If you look at some of our competitors, it'll be Progressive. It will be Acima, which is a part of Upbound, which is owned by the parent of Rent-A-Center, Catapult. None of those companies have a marketplace. Their repeat rates are generally 10%. Our repeat rates are 50%. In fact, if you look at the customers who are eligible, if a customer goes bad, that 25%, we're not going to relent to them. As a percentage of eligible customers, we have a very, very high repeat rate. That liquidity is treated just like you would see on a credit card.
Credit line increases, lowering prices, promo rates, all those types of same sort of portfolio management techniques we use on our spending limits that we offer for future leases. On the B2B side, what we've found is merchants who put in our financing product have a 37% increase in financed orders. It will range depending on the kind of retailer and type of products that they sell. Because that underserved piece are, in essence, sales that are dropping to the floor, especially for retailers that have larger SKUs like a tire or an appliance store, this kind of full financing stack that really covers that lower FICO score is very attractive to these retailers, and it's become much more mainstream. You can walk into a Best Buy. You can walk into a Rooms to Go. You can walk into an Ashley Furniture.
You see this kind of product available to make purchases. The retailers, they want to sell more things, especially now. This kind of offering is really taking a lot of traction as we go and talk to different potential new partners. Looking at some of our growth strategies, we're always looking to grow our total addressable market through different types of payments, different types of technology, getting more efficiency on our website and bringing marketing in on our digital channel. Because it is digital marketing, our CAC is roughly $150. Because it has that repeat, the IRR is very strong. It is expensive, and it takes capital. We're always looking to create more efficiency there. Increase the store count, try to continue that trend on that 250% growth rate that we had on stores in 2024.
If you look at this, this is the typical credit stack. You'll have the prime offering here. This prime promo rates, this will be your Synchrony Finance, your Citibank, private label credit cards. You have to be a healthy credit score to be able to get approved for that. You're going to get a long-term no interest rate, but your go-to rate will probably still be in the 20s when it's all said and done. This secondary piece here is actually significant. If you look at companies like Signet, Signet Jewelers, they have a full credit stack. A lot of their balance of sale doesn't come from this prime piece. It actually comes from the secondary piece. FlexShopper is here. We actually have a current partner that actually sits below us.
Since we have a particular required rate of return, there are other companies that are in our space that want the volume. They do not pay any marketing fees. It is free customers to them, but their rate of return requirements are lower. It helps us because if we can make 20 points of margin on a sale that would normally decline, that is a benefit to us. As we look at trying to enhance this credit stack, get more thickness here, get more thickness here, get more thickness here, what happens is today we will convert roughly 50 basis points of traffic that comes to our website.
If I can increase that to three, four points and look more like a typical e-commerce site, also adding credit cards, then I add that, that, and more of that and make 20 points of retail margin just like I'm a normal e-commerce business. I can be very selective in finding these $1.50 FlexShopper customers that I make on the lease side and be very selective in who I write. This is a big opportunity to continue to grow our TAM and to be a broader range of customer acceptance on our website. I mentioned this earlier, moving that conversion from the low singles to a 300 basis point, it's certainly doable. If you look at the balance of sale for some of these companies that have this kind of credit stack, the lease-to-own piece roughly is 10% of their total business.
That second look is roughly 60% of the business. Getting good coverage there, you can increase sales by 6x. Now, I'm not making the $1.50 on the lease, but I'm making 20 points of instant cash margin just like any other e-commerce. This is a big priority for the company for this year. Talking about the margin. We brought in a merchandising team a couple of years ago to really develop our product set. Again, when the company was founded, we had partnerships with companies like Best Buy, with Lenovo, with Ashley, and they were making all the retail margin. Now our average margin is 20%. We're going directly to these brands. The same sort of pitch that we have to retailers on that underserved credit penetration and getting more sales up is really resonating with the brands because they're seeing the same thing.
They're seeing retailers go out of business like a Big Lots or a Conn's. They're looking to increase sales in what is becoming a more and more challenged environment. We are happy to help. These companies are happy to list with us, and we're buying from them. Again, none of this is taking direct inventory. This is all facilitating directly from their various warehouses where we either use their logistics or we facilitate the logistics ourselves, but take no inventory risk. On the merchant side, Monro, Tire Kingdom, we're very heavy into this automotive space. We actually just started doing business with Pep Boys, with Meineke, again, doing work that is more on the durable good side versus the service side because we don't have this lending program right now.
As we get the lending program, then we can go into the servicing side of the base and do oil changes, do car repairs, actually go into the various auto dealers and be able to then do both service as well as adding tires there. There's been a lot of interest from that side of it. In fact, there's a bit of a FOMO because we are the exclusive financers on subprime for Mavis who are very acquisitive, and they're buying a lot of different companies out there. Monro actually came to us looking for a new partner because they saw how successful Mavis was doing with our particular program. One big thing that we have here, again, is with these merchants, as we acquire customers into the ecosystem, then we are then marketing them to the website where then they get those repeat customers.
We'll approve somebody for $2,000. They'll spend $1,000 at the tire shop. Typically, they're not going to spend the next $1,000 at the tire shop. They're going to come back to the website, use that Open to Buy to make purchases of a PlayStation or a television, a couch, etc. It is a nice ecosystem. This isn't a part of our projections, but this is a bluebird that we have. In 2018, we filed patents that were around the electronic transmission and underwriting of lease-to-own. We are currently suing two of our competitors, Upbound Group, which is the parent of Acima, and Catapult, who is primarily online, who do the Wayfair second look program for violation of these patents. This is being handled on our side by Quinn Emanuel. If you know anything about patent law, these are very highly regarded.
In fact, I think they were rated one of the meanest law firms like five years running. They do not need our business, but they see the merits of this case. One comment typically is, "Okay, well, these can drag on for years." We chose these two companies because they are actually headquartered in the Eastern District of Texas, which is what they call the Rocket Docket. They will speed along these cases quickly. We already have court dates. We expect different resolutions of these cases in the next 12 - 18 months. Again, if any kind of proper successful outcome of this could represent multiples of our current market cap. We are not projecting anything in our guidance, but this is an underlying unreserved asset that we have access to. That is the end of my prepared remarks. Happy to take any questions.
Are there finance releases and loans from your own balance sheet, or is it all third-party things?
We use a credit facility, Waterfall Asset Management, and it's an ABS-type structure on a revolver. There's a question back here.
Yeah.
Like changing the version of the website to run on a 25-base computer set, isn't that like a good task for some device?
It would be normally, but in essence, the reason why customers are not converting on the website is that effective interest rate. So if we're charging $2,000 for a $1,000 product over 12 months, in essence, it's a 100% rate. That second look, the interest rate's going to be more like 36% with longer promotional rates. Our product has a three-month interest free, a 36% month at a 12-month, 18-month interest free. All of a sudden, the conversion is a lot higher because the price that you're charging for the financing is much more in market. And those customers, we see the FICO scores, we see them apply, but then they don't get the kind of pricing that they want.
Getting more folks in our lending tree to be able to handle that, the conversion, just looking at balance of sale of other models, you see a giant increase. We see some of that, but our coverage of that second look is not quite complete yet.
How do you think you'll run it? Are you going to own services or things like that? HVAC coming?
Yes. We will sell personal units. Like HVAC, doing more of a B2B2C HVAC unit, generally the price is higher than what we'd be willing to lend to. Our max credit line is $3,000. There is a space for that. If we handle that second look ourselves, which is something that we're actually considering, all of a sudden that kind of thing comes into scope. It is all about getting the right partnership on selling that out into the marketplace. Okay. I'm getting flashed. Thank you very much.