Core Viewpoint - PROG Holdings, Inc. has announced the sale of its Vive Financial credit card receivables portfolio to Atlanticus Holdings Corporation, aiming to enhance capital efficiency and profitability while continuing to provide credit solutions for near and below-prime consumers [1][2]. Company Overview - PROG Holdings, Inc. is a fintech holding company based in Salt Lake City, UT, that offers transparent payment options and inclusive financial products through its subsidiaries, including Progressive Leasing and Four Technologies [4]. - Atlanticus Holdings Corporation specializes in enabling financial services for bank, retail, and healthcare partners, leveraging over 25 years of experience and servicing more than 20 million customers with $44 billion in consumer loans [5]. Transaction Details - The transaction involves PROG Holdings receiving approximately $150 million in cash, while Atlanticus acquires around $165 million in credit card receivables [2]. - Following the completion of the transition services agreement, Vive Financial will cease its loan servicing activities, and both companies will collaborate to ensure a smooth transition for customers and retail partners [2]. Future Outlook - PROG Holdings plans to provide further details regarding the financial impact of this transaction during its upcoming third quarter earnings call [3].

Group 1: AI Investment Opportunity - Artificial intelligence is considered the greatest investment opportunity of our lifetime, with a strong emphasis on the urgency to invest now [1] - Wall Street is investing hundreds of billions into AI, but there is a critical question regarding the energy supply needed to support this technology [2] - AI data centers consume as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2] Group 2: Company Overview - A specific company, largely overlooked by AI investors, is positioned to benefit from the increasing demand for energy due to AI [3] - This company owns critical energy infrastructure assets and is involved in the U.S. LNG exportation sector, which is expected to grow significantly [7] - The company is debt-free and has a cash reserve equal to nearly one-third of its market cap, making it financially robust [8] Group 3: Market Position and Valuation - The company is trading at less than 7 times earnings, indicating it is undervalued compared to its potential [10] - It has a significant equity stake in another AI-related company, providing indirect exposure to multiple growth engines in the AI sector [9] - Wall Street is beginning to take notice of this company as it benefits from various market trends without the high valuations typical of the sector [8] Group 4: Future Outlook - The future of AI is closely tied to energy infrastructure, and this company is strategically positioned to capitalize on the upcoming energy demands [6][14] - The influx of talent into the AI sector ensures continuous innovation and advancements, further solidifying the importance of investing in AI-related companies [12] - The company is seen as a key player in the intersection of AI, energy, and infrastructure, making it a compelling investment opportunity [6][11]

Core Insights - The article emphasizes the importance of value investing, which focuses on identifying undervalued companies in the market [2] - Zacks has developed a Style Scores system to help investors find stocks with specific traits, particularly in the Value category [3] Company Analysis: Prog Holdings (PRG) - Prog Holdings (PRG) is currently rated with a Zacks Rank of 2 (Buy) and has an A grade for Value [4] - The stock is trading at a P/E ratio of 9.8, which is lower than the industry average P/E of 10.66 [4] - Over the past 12 months, PRG's Forward P/E has fluctuated between a high of 13.68 and a low of 6.82, with a median of 9.79 [4] - The P/S ratio for PRG is 0.56, significantly lower than the industry's average P/S of 1.63, indicating potential undervaluation [5] - These metrics suggest that PRG is likely undervalued and presents an impressive value opportunity based on its earnings outlook [6]

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies. Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so ...

Core Insights - Value investing is a preferred strategy for identifying strong stocks across various market conditions, focusing on key valuation metrics to find undervalued stocks with profit potential [2][3] Company Analysis - Prog Holdings (PRG) is highlighted as a stock to monitor, currently holding a Zacks Rank of 2 (Buy) and an A rating in the Value category, indicating strong value characteristics [4] - PRG has a Forward P/E ratio of 9.77, which is lower than the industry average of 10.32, suggesting it may be undervalued [4] - The stock's Forward P/E has fluctuated between a high of 13.68 and a low of 6.82 over the past year, with a median of 10.97 [4] - The P/S ratio for PRG is 0.52, significantly lower than the industry average of 1.41, reinforcing the notion of undervaluation [5] - Overall, the metrics indicate that Prog Holdings is likely undervalued, and its strong earnings outlook positions it as one of the market's strongest value stocks [6]

Group 1 - PROG Holdings reported quarterly earnings of $1.02 per share, exceeding the Zacks Consensus Estimate of $0.79 per share, and showing an increase from $0.92 per share a year ago, resulting in an earnings surprise of +29.11% [1] - The company achieved revenues of $604.66 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.98% and up from $592.16 million year-over-year [2] - PROG Holdings has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] Group 2 - The stock has underperformed, losing about 32.3% since the beginning of the year, while the S&P 500 has gained 7.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.74 on revenues of $591.04 million, and for the current fiscal year, it is $3.12 on revenues of $2.47 billion [7] - The Financial - Consumer Loans industry, to which PROG Holdings belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, which may impact stock performance [8]

Financial Data and Key Metrics Changes - Non-GAAP EPS for Q2 was $1.02, significantly exceeding the outlook range of $0.75 to $0.85 per share [5][20] - Consolidated revenue reached $604.7 million, reflecting low single-digit growth year-over-year [7][27] - Consolidated adjusted EBITDA was $73.5 million, slightly up from $72.3 million in Q2 of the previous year [8][27] Business Line Data and Key Metrics Changes - Progressive Leasing's GMV was $413.9 million, down 8.9% year-over-year, primarily due to the Big Lots bankruptcy and tightening of approval rates [21][22] - Four Technologies delivered over 200% revenue growth, contributing significantly to overall performance [8][27] - Write-offs for Q2 were 7.5%, which is 20 basis points better than the previous year, indicating effective portfolio management [9][25] Market Data and Key Metrics Changes - E-commerce represented approximately 21% of total leasing GMV, marking an all-time high for Progressive Leasing [10] - Millennials and Gen Z account for about 70% of GMV, highlighting a shift in customer demographics [24] Company Strategy and Development Direction - The company is focused on improving results through pipeline opportunities, online platform expansion, and enhancing customer experiences [5][11] - Strategic pillars include growth, enhancement of technology, and expansion of services, with a commitment to sustainable unit economics [11][13] - The company is exploring strategic M&A opportunities while maintaining a balanced approach to capital returns [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing softness in demand for consumer durable goods but expressed confidence in the ability to gain market share and drive sustainable growth [18][30] - The outlook for 2025 includes consolidated revenues projected between $2.45 billion and $2.5 billion, with adjusted EBITDA between $255 million and $265 million [30][31] Other Important Information - The company ended Q2 with $222 million in cash and $600 million in gross debt, resulting in a net leverage ratio of 1.38x [27][28] - The recent legislative changes are expected to positively impact cash tax outlook by allowing immediate expensing of lease merchandise [28] Q&A Session Summary Question: What is the underlying growth considering the Big Lots bankruptcy and underwriting tightening? - Management indicated that excluding Big Lots, GMV would have been up approximately 1%, and the tightening actions contributed an additional 800 to 900 basis points drag on GMV [34][36] Question: What is the outlook for the pipeline with retailers? - Management noted increased engagement with retailers, including RFIs and RFPs, indicating a positive trend in considering leasing products [44] Question: What factors influenced the guidance update for the second half of the year? - Management highlighted that while write-offs were lower than anticipated, the impact of Big Lots and portfolio size would create headwinds in the back half of the year [60][62] Question: How is the company leveraging its customer database for growth? - Management stated that there are synergies between the leasing business and the four platform, with initiatives in place to drive customer acquisition and engagement [76][78] Question: What is the competitive landscape for the subscription product in the BNPL space? - Management acknowledged strong competition but expressed confidence in the value proposition of their four plus subscription service, which has seen robust adoption [94][95]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2025, show a decrease in total assets to $1.45 billion, driven by lower lease merchandise balances. Net earnings for the first six months increased to $73.2 million from $55.7 million year-over-year, with diluted EPS rising to $1.78 from $1.26. Cash from operations significantly increased to $279.8 million, contributing to a higher cash balance of $222.0 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $1.45 billion, a decrease from $1.51 billion at year-end 2024, primarily due to a reduction in Lease Merchandise. Cash and cash equivalents more than doubled to $222.0 million. Total liabilities decreased to $785.9 million, mainly from debt repayment, while total shareholders' equity increased to $668.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $222,027 | $95,655 | | Lease Merchandise, Net | $526,303 | $680,242 | | Total Assets | $1,454,596 | $1,513,767 | | **Liabilities & Equity** | | | | Debt, Net | $594,212 | $643,563 | | Total Liabilities | $785,923 | $863,486 | | Total Shareholders' Equity | $668,673 | $650,281 | [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) For the second quarter of 2025, the company reported net earnings of $38.5 million, or $0.95 per diluted share, compared to $33.8 million, or $0.77 per diluted share, in Q2 2024. For the six months ended June 30, 2025, net earnings were $73.2 million, a significant increase from $55.7 million in the prior-year period, driven by higher total revenues and controlled expenses Key Earnings Data (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $604,663 | $592,161 | $1,288,751 | $1,234,031 | | Operating Profit | $60,724 | $55,678 | $117,045 | $95,495 | | Net Earnings | $38,483 | $33,774 | $73,201 | $55,740 | | Diluted EPS | $0.95 | $0.77 | $1.78 | $1.26 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, cash provided by operating activities increased to $279.8 million from $191.1 million in the prior year. Cash used in investing activities was $34.8 million, primarily for investments in loans receivable. Financing activities used $118.7 million, mainly for debt repayment ($50.0 million) and share repurchases ($51.8 million). The period ended with a net increase in cash of $126.4 million Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $279,820 | $191,127 | | Cash Used in Investing Activities | ($34,789) | ($17,822) | | Cash Used in Financing Activities | ($118,659) | ($78,587) | | **Increase in Cash and Cash Equivalents** | **$126,372** | **$94,718** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business structure, comprising Progressive Leasing (lease-to-own), Vive Financial (second-look credit), and Four (BNPL). Key disclosures include segment performance, where Progressive Leasing remains the largest contributor to revenue and profit. The company settled a cybersecurity lawsuit for $3.3 million, fully covered by insurance, and is cooperating with an FTC inquiry. A subsequent event notes the enactment of a law making 100% bonus depreciation permanent, which is expected to reduce future cash taxes - The company operates through two main reportable segments: Progressive Leasing (point-of-sale lease-to-own) and Vive Financial (second-look revolving credit). It also includes Four Technologies, a Buy Now, Pay Later (BNPL) company[15](index=15&type=chunk) - For a 2023 cybersecurity incident, the company reached a settlement of **$3.3 million**, which will be fully paid by its cybersecurity insurance[89](index=89&type=chunk) - In Q3 2024, the FTC requested information to evidence compliance with a 2020 settlement. The company is fully cooperating with this request[86](index=86&type=chunk) - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, making **100% bonus depreciation permanent**, which is expected to reduce the company's cash paid for taxes[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a challenging macroeconomic environment, including the impact of the Big Lots bankruptcy and inflationary pressures on consumers. Despite this, Q2 2025 revenues grew 2.1% to $604.7 million. Gross Merchandise Volume (GMV) for the core Progressive Leasing segment declined 8.9%, but this was offset by strong growth in the Vive (+23.0%) and Other (+166.5%) segments. The company improved its cash position significantly, ending the period with $222.0 million in cash after repaying debt, buying back shares, and paying dividends [Business and Macroeconomic Overview](index=24&type=section&id=Business%20and%20Macroeconomic%20Overview) The company operates in a challenging macroeconomic environment marked by inflation and high living costs. The bankruptcy of major POS partner Big Lots in late 2024 negatively impacted Progressive Leasing's GMV. In response to elevated delinquencies, the company tightened its decisioning, which improved portfolio health but constrained GMV growth in the first half of 2025 - The company is facing a challenging macroeconomic environment, with the bankruptcy of Big Lots, a major POS partner, unfavorably impacting GMV, revenue, and earnings in H1 2025[117](index=117&type=chunk) - The company tightened its decisioning posture in early 2025 to manage elevated customer delinquencies, which benefited portfolio performance but had an unfavorable impact on GMV[118](index=118&type=chunk) [Key Operating Metrics](index=26&type=section&id=Key%20Operating%20Metrics) In Q2 2025, total Gross Merchandise Volume (GMV) increased 11.2% year-over-year to $607.5 million. This was driven by a 23.0% increase in Vive's GMV and a 166.5% surge in the 'Other' category (primarily Four), which offset an 8.9% decline in the Progressive Leasing segment. The active customer count for Progressive Leasing decreased, while Vive and 'Other' saw increases Gross Merchandise Volume (GMV) - Q2 (in thousands) | Segment | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Progressive Leasing | $413,872 | $454,508 | (8.9)% | | Vive | $43,990 | $35,757 | 23.0% | | Other | $149,632 | $56,139 | 166.5% | | **Total GMV** | **$607,494** | **$546,404** | **11.2%** | Active Customer Count (in thousands) | Segment | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Progressive Leasing | 802 | 834 | | Vive | 93 | 85 | | Other | 271 | 127 | [Results of Operations](index=28&type=section&id=Results%20of%20Operations) For Q2 2025, total revenues increased 2.1% to $604.7 million, and net earnings rose 13.9% to $38.5 million. For the first six months, revenues grew 4.4% to $1.29 billion, and net earnings increased 31.3% to $73.2 million. The growth was driven by the Vive and Other segments. A key factor in improved profitability was the absence of restructuring expenses, which totaled $20.9 million in the first half of 2024 Consolidated Results - Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $1,288,751 | $1,234,031 | 4.4% | | Operating Profit | $117,045 | $95,495 | 22.6% | | Net Earnings | $73,201 | $55,740 | 31.3% | - Restructuring expenses were **zero in H1 2025**, compared to **$20.9 million in H1 2024**, significantly contributing to the increase in operating profit[149](index=149&type=chunk) - The provision for loan losses increased by **$8.7 million in H1 2025** compared to H1 2024, primarily due to the growth of the Four (BNPL) and Vive businesses[147](index=147&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's financial position strengthened, with cash increasing by $126.3 million to $222.0 million in the first half of 2025. This was supported by strong operating cash flow of $279.8 million. Capital was deployed for a $50.0 million repayment on the revolving facility, $51.8 million in share repurchases, and $10.4 million in dividends. As of June 30, 2025, the company had $350.0 million available under its revolving credit facility and was in compliance with all debt covenants - Cash and cash equivalents increased by **$126.3 million** during the first six months of 2025, reaching **$222.0 million**[155](index=155&type=chunk) - During H1 2025, the company used cash for a **$50.0 million repayment** of its revolving facility, **$51.8 million for share repurchases**, and **$10.4 million for dividends**[159](index=159&type=chunk) - As of June 30, 2025, the company had **$600.0 million in gross indebtedness** from Senior Notes and **$350.0 million of availability** under its undrawn Revolving Facility[156](index=156&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports minimal market risk. As of June 30, 2025, there were no outstanding borrowings under its variable-rate Revolving Facility, thus a hypothetical 1.0% change in interest rates would not affect interest expense. The company does not use significant market risk sensitive instruments for hedging purposes - As of June 30, 2025, the company had no outstanding borrowings under its variable-rate Revolving Facility, exposing it to minimal interest rate risk[177](index=177&type=chunk) - The company does not use any significant market risk sensitive instruments for hedging or speculative purposes[178](index=178&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. The company has begun a multi-phase implementation of a new enterprise resource planning (ERP) system, which has led to modifications and the implementation of new internal controls over financial reporting. No other material changes to internal controls were reported for the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[181](index=181&type=chunk) - The company is implementing a new enterprise resource planning (ERP) system, which has resulted in changes to its internal control over financial reporting[182](index=182&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to various legal proceedings arising in the ordinary course of business. It does not believe any outstanding proceedings will have a material adverse impact. Further details are provided in Note 4 of the financial statements - The company does not currently believe that any outstanding legal proceedings will have a material adverse impact on its business, financial position, or results of operations. For more details, see Note 4[184](index=184&type=chunk) [Risk Factors](index=39&type=page&id=Item%201A.%20Risk%20Factors) There are no updates to the company's risk factors from those previously disclosed in the 2024 Annual Report on Form 10-K - The company reported no updates to its risk factors from the 2024 Annual Report[185](index=185&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company repurchased 899,800 shares of its common stock at an average price that can be inferred from the monthly data. As of June 30, 2025, approximately $309.6 million remained available for future repurchases under the board's authorization Share Repurchase Activity - Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 100,000 | $25.87 | | May 2025 | 525,000 | $28.57 | | June 2025 | 274,800 | $29.36 | | **Total** | **899,800** | **N/A** | - As of June 30, 2025, the maximum dollar value of shares that may yet be purchased under the plan is **$309,573,987**[186](index=186&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, no directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans or any other non-Rule 10b5-1 trading arrangements - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1(c) trading plans during the three months ended June 30, 2025[189](index=189&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer as required by the Sarbanes-Oxley Act, and the XBRL data files - Filed exhibits include CEO and CFO certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act, as well as XBRL data files[190](index=190&type=chunk)

Q2 2025 Financial Performance - Consolidated revenues reached $604.7 million [6], a 2.1% increase year-over-year [13] - Net earnings amounted to $38.5 million [6] - Adjusted EBITDA stood at $73.5 million [6], with an increase due to Four Technologies' contribution [13] - Diluted EPS was $0.95, while Non-GAAP Diluted EPS reached $1.02, a 10.9% increase year-over-year [6, 13] Progressive Leasing Segment - Progressive Leasing GMV totaled $413.9 million [6], down 8.9% year-over-year [16] - Revenue was essentially flat year-over-year [16] - Write-offs as a percentage of revenue were 7.5%, 20 bps lower than the same period last year [16] Four Technologies - Four Technologies experienced a 166.5% growth in GMV [6] - Four Technologies delivered over 200% revenue growth [7] 2025 Outlook - The company revised its full-year 2025 total revenue outlook to $2.45 billion - $2.5 billion [22] - The company revised its full-year 2025 adjusted EBITDA outlook to $255 million - $265 million [22] - The company expects Q3 2025 total revenues of $580 million - $595 million [25]

[Q2 2025 Performance Overview](index=1&type=section&id=PROG%20Holdings%20Reports%20Second%20Quarter%202025%20Results) This section provides an overview of PROG Holdings' Q2 2025 performance, highlighting management commentary and key financial results [Management Commentary](index=1&type=section&id=Management%20Commentary) Management reports resilient Q2 2025 results, outperforming guidance despite headwinds, with strong Progressive Leasing execution and Four Technologies' growth - The company demonstrated **resilience** and **outperformed guidance** despite the loss of a major retail partner and macroeconomic uncertainty[2](index=2&type=chunk) - Four Technologies achieved **over 200% revenue growth** and **continued profitability**, enhancing the company's ecosystem through cross-selling opportunities[2](index=2&type=chunk) - Progressive Leasing is deploying **AI-powered tools** and optimizing its digital platforms to improve customer experience and engagement, while strategically moderating GMV growth to maintain portfolio health[2](index=2&type=chunk) [Q2 2025 Key Financial Highlights](index=1&type=section&id=Q2%202025%20Key%20Financial%20Highlights) Q2 2025 saw consolidated revenues of $604.7 million, net earnings of $38.5 million, and strong 166.5% GMV growth in Four Technologies Q2 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Consolidated Revenues | $604.7 million | | Net Earnings | $38.5 million | | Adjusted EBITDA | $73.5 million | | Diluted EPS | $0.95 | | Non-GAAP Diluted EPS | $1.02 | | Progressive Leasing GMV | $413.9 million | | Four Technologies GMV Growth | 166.5% | [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) This section provides a detailed breakdown of PROG Holdings' consolidated financial performance, segment-specific results, and liquidity position for Q2 2025 [Consolidated Results](index=2&type=section&id=Consolidated%20Results) Consolidated revenues increased 2.1% to $604.7 million, with net earnings up 13.9% to $38.5 million and diluted EPS rising 23.4% to $0.95 Q2 2025 Consolidated Financial Performance (YoY) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Revenues | $604.7M | $592.2M (approx) | +2.1% | | Net Earnings | $38.5M | $33.8M | +13.9% | | Adjusted EBITDA | $73.5M | $72.3M | +1.7% | | Diluted EPS | $0.95 | $0.77 | +23.4% | | Non-GAAP Diluted EPS | $1.02 | $0.92 | +10.9% | - The increase in earnings per share was supported by a **7.2% year-over-year reduction** in the company's diluted weighted average shares outstanding[5](index=5&type=chunk) [Progressive Leasing Results](index=2&type=section&id=Progressive%20Leasing%20Results) Progressive Leasing's GMV declined 8.9% to $413.9 million, while lease merchandise write-offs remained within the 6-8% target range - Progressive Leasing's GMV decreased by **8.9%** to **$413.9 million** compared to the same period in 2024[6](index=6&type=chunk) - The provision for lease merchandise write-offs was **7.5%** of leasing revenues, which is within the company's target range of **6-8%**[6](index=6&type=chunk) [Liquidity and Capital Allocation](index=2&type=section&id=Liquidity%20and%20Capital%20Allocation) PROG Holdings maintained strong liquidity with $222.0 million cash, $600.0 million gross debt, and continued capital returns through stock repurchases and dividends Q2 2025 Liquidity & Capital Allocation Summary | Metric | Value | | :--- | :--- | | Cash | $222.0 million | | Gross Debt | $600.0 million | | Stock Repurchased in Q2 | $25.7 million | | Remaining Repurchase Capacity | $309.6 million | | Quarterly Dividend per Share | $0.13 | [Financial Outlook](index=3&type=section&id=2025%20Outlook) This section outlines PROG Holdings' updated financial guidance for the full year 2025 and the upcoming third quarter [Updated Full Year 2025 Outlook](index=3&type=section&id=Updated%20Full%20Year%202025%20Outlook) PROG Holdings updated its full-year 2025 outlook, raising the lower end of revenue and earnings guidance despite an anticipated challenging operating environment - The company **raised the low end** of its full-year 2025 guidance for revenues and earnings metrics, reflecting confidence despite a difficult operating environment[8](index=8&type=chunk) Revised Full Year 2025 Outlook | Metric (PROG Holdings) | Revised Low | Revised High | Previous Low | Previous High | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $2,450M | $2,500M | $2,425M | $2,500M | | Net Earnings | $120M | $125M | $109M | $125M | | Adjusted EBITDA | $255M | $265M | $245M | $265M | | Diluted EPS | $2.91 | $3.06 | $2.62 | $3.01 | | Diluted Non-GAAP EPS | $3.20 | $3.35 | $2.90 | $3.30 | [Third Quarter 2025 Outlook](index=3&type=section&id=Third%20Quarter%202025%20Outlook) The company projects Q3 2025 total revenues between $580 million and $595 million, with non-GAAP diluted EPS between $0.70 and $0.75 Q3 2025 Outlook | Metric (PROG Holdings) | Low | High | | :--- | :--- | :--- | | Total Revenues | $580M | $595M | | Net Earnings | $26M | $28M | | Adjusted EBITDA | $57M | $62M | | Diluted EPS | $0.63 | $0.68 | | Diluted Non-GAAP EPS | $0.70 | $0.75 | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents PROG Holdings' consolidated statements of earnings, balance sheets, and cash flows for the reported periods [Consolidated Statements of Earnings](index=6&type=section&id=Consolidated%20Statements%20of%20Earnings) For H1 2025, total revenues grew to $1.29 billion, operating profit increased to $117.0 million, and net earnings rose to $73.2 million Six Months Ended June 30 (YoY Comparison) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $1,288,751 | $1,234,031 | | Operating Profit | $117,045 | $95,495 | | Net Earnings | $73,201 | $55,740 | | Diluted EPS | $1.78 | $1.26 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $1.45 billion, with cash increasing to $222.0 million and total liabilities decreasing to $785.9 million Balance Sheet Highlights (vs. Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $222,027 | $95,655 | | Lease Merchandise, Net | $526,303 | $680,242 | | Total Assets | $1,454,596 | $1,513,767 | | Debt, Net | $594,212 | $643,563 | | Total Liabilities | $785,923 | $863,486 | | Total Shareholders' Equity | $668,673 | $650,281 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow was $279.8 million, leading to a net cash increase of $126.4 million after investing and financing activities Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash from Operating Activities | $279,820 | $191,127 | | Cash Used in Investing Activities | $(34,789) | $(17,822) | | Cash Used in Financing Activities | $(118,659) | $(78,587) | | **Increase in Cash** | **$126,372** | **$94,718** | [Segment Data](index=9&type=section&id=Segment%20Data) This section provides a detailed breakdown of PROG Holdings' segment-specific revenues and Gross Merchandise Volume (GMV) [Segment Revenues](index=9&type=section&id=Segment%20Revenues) Q2 2025 Progressive Leasing revenue was flat at $569.7 million, while the 'Other' segment, including Four Technologies, saw a 202.5% revenue increase Q2 Revenues by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Progressive Leasing | $569,674 | $570,516 | -0.1% | | Vive | $16,160 | $15,421 | +4.8% | | Other | $18,829 | $6,224 | +202.5% | Six Month Revenues by Segment (in thousands) | Segment | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Progressive Leasing | $1,221,231 | $1,191,066 | +2.5% | | Vive | $31,820 | $31,471 | +1.1% | | Other | $35,700 | $11,494 | +210.6% | [Segment Gross Merchandise Volume (GMV)](index=11&type=section&id=Segment%20Gross%20Merchandise%20Volume%20%28GMV%29) Q2 2025 total GMV increased to $607.5 million, driven by significant growth in the 'Other' and Vive segments, offsetting a decline in Progressive Leasing Q2 GMV by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Progressive Leasing | $413,872 | $454,508 | -8.9% | | Vive | $43,990 | $35,757 | +23.0% | | Other | $149,632 | $56,139 | +166.5% | | **Total GMV** | **$607,494** | **$546,404** | **+11.2%** | [Non-GAAP Financial Measures and Reconciliations](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents [Explanation of Non-GAAP Measures](index=12&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures like adjusted EBITDA and non-GAAP EPS to provide a clearer view of core operational performance by excluding non-recurring items - Management uses non-GAAP measures to assess performance by excluding one-time or variable items like **intangible amortization**, **restructuring costs**, and **stock-based compensation**[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - These measures are intended to provide investors with a clearer view of the underlying operating performance and are used for **strategic planning**, **forecasting**, and **creditworthiness evaluation**[32](index=32&type=chunk) [GAAP to Non-GAAP Reconciliations](index=14&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) Detailed reconciliations are provided, showing Q2 2025 GAAP Net Earnings of $38.5 million adjusted to Non-GAAP Net Earnings of $41.5 million, and similar adjustments for EPS and outlook Q2 2025 Reconciliation of Net Earnings and Diluted EPS | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Net Earnings | $38.5M | +$3.0M | $41.5M | | Diluted EPS | $0.95 | +$0.07 | $1.02 | - Detailed reconciliations are provided for **Adjusted EBITDA by segment** for quarterly and six-month periods[35](index=35&type=chunk)[38](index=38&type=chunk) - The company provides full reconciliations for its **revised full-year 2025** and **new Q3 2025 outlook** for both Adjusted EBITDA and Non-GAAP Diluted EPS[41](index=41&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)