[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Q3 2025 Overview](index=1&type=section&id=Q3%202025%20Overview) PROG Holdings reported Q3 2025 consolidated revenues of $595.1 million and net earnings of $33.1 million - **PROG Holdings, Inc. (NYSE:PRG)** announced financial results for the third quarter ended September 30, 2025[2](index=2&type=chunk) Q3 2025 Consolidated Financial Snapshot | Metric | Value | | :-------------------- | :------------ | | Consolidated Revenues | $595.1 million | | Net Earnings | $33.1 million | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Steve Michaels highlighted strong Progressive Leasing earnings, Four Technologies' triple-digit growth, and Vive's strategic sale for capital efficiency - Delivered strong earnings and expanded margins in the Progressive Leasing segment despite modest revenue headwinds[3](index=3&type=chunk) - Four Technologies achieved its **eighth consecutive quarter of triple-digit GMV and revenue growth**, validating its BNPL platform[3](index=3&type=chunk) - **The sale of Vive improves capital efficiency** and supports the capital allocation strategy[3](index=3&type=chunk) - **Strategic focus on a three-pillar strategy: Grow, Enhance, and Expand**, with investments in Progressive Leasing, PROG Marketplace, and Four Technologies[3](index=3&type=chunk) [Key Financial Highlights (Q3 2025)](index=1&type=section&id=Key%20Financial%20Highlights%20%28Q3%202025%29) Q3 2025 key consolidated metrics included revenues of $595.1 million, net earnings of $33.1 million, and Adjusted EBITDA of $67.0 million Q3 2025 Key Financial Highlights | Metric | Value | | :-------------------------------- | :---------------- | | Consolidated Revenues | $595.1 million | | Net Earnings | $33.1 million | | Adjusted EBITDA | $67.0 million | | Diluted EPS | $0.82 | | Non-GAAP Diluted EPS | $0.90 | | Progressive Leasing GMV | $410.9 million | | Four Technologies GMV Growth | 162.8% | | Four Technologies Adjusted EBITDA | Positive (3rd consecutive quarter) | [Third Quarter 2025 Financial Results](index=2&type=section&id=Third%20Quarter%202025%20Financial%20Results) [Consolidated Results](index=2&type=section&id=Consolidated%20Results) Q3 2025 consolidated revenues decreased to $595.1 million, net earnings dropped to $33.1 million, while Adjusted EBITDA increased to $67.0 million Consolidated Financial Performance (Q3 2025 vs Q3 2024) | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Revenues | $595.1M | $606.1M | -1.8% | | Net Earnings | $33.1M | $84.0M | -60.6% | | Adjusted EBITDA | $67.0M | $63.5M | +5.5% | | Adjusted EBITDA % of Rev | 11.3% | 10.5% | +0.8 pp | | Diluted EPS | $0.82 | $1.94 | -57.7% | | Non-GAAP Diluted EPS | $0.90 | $0.77 | +16.9% | - The year-ago consolidated net earnings included a **$53.6 million non-cash, net tax benefit**[6](index=6&type=chunk) - The Company's diluted weighted average shares outstanding in the third quarter were **6.2% lower year-over-year**[7](index=7&type=chunk) [Progressive Leasing Results](index=2&type=section&id=Progressive%20Leasing%20Results) Progressive Leasing's Q3 2025 GMV was $410.9 million, a 10.0% decrease, with write-offs at 7.4% of leasing revenues Progressive Leasing Q3 2025 Performance | Metric | Value | | :-------------------------------- | :------------ | | GMV | $410.9 million | | YoY GMV Change | -10.0% | | Provision for Lease Merchandise Write-offs | 7.4% of leasing revenues (within 6-8% target) | [Liquidity and Capital Allocation](index=2&type=section&id=Liquidity%20and%20Capital%20Allocation) PROG Holdings maintained a strong financial position with $292.6 million in cash and $600.0 million in gross debt as of Q3 2025 Liquidity and Capital Allocation (Q3 2025 End) | Metric | Value | | :-------------------------- | :------------ | | Cash | $292.6 million | | Gross Debt | $600.0 million | | Share Repurchase Capacity | $309.6 million (under $500M program) | | Quarterly Cash Dividend | $0.13 per share | [2025 Outlook](index=3&type=section&id=2025%20Outlook) [Overview and Assumptions](index=3&type=section&id=Overview%20and%20Assumptions) PROG Holdings provided Q4 and full-year 2025 outlook, excluding Vive, assuming a challenging operating environment and 27% tax rate - **Vive segment excluded from outlook** and will be presented as **discontinued operations beginning in Q4 2025** due to the sale of its credit card portfolio[10](index=10&type=chunk) - Outlook assumes a **difficult operating environment with soft demand for consumer durable goods**[10](index=10&type=chunk) - Assumes **no material changes in the Company's current decisioning posture** and an **effective tax rate for Non-GAAP EPS of approximately 27%**[10](index=10&type=chunk) [Full Year and Fourth Quarter 2025 Outlook Metrics](index=3&type=section&id=Full%20Year%20and%20Fourth%20Quarter%202025%20Outlook%20Metrics) Full-year 2025 outlook revised with lower revenue but higher net earnings; Q4 projects $575-590 million in revenues Revised vs. Previous Full Year 2025 Outlook (Continuing Operations) | Metric | Revised Low | Revised High | Previous Low | Previous High | | :------------------------------------ | :---------- | :----------- | :----------- | :------------ | | Total Revenues | $2,410,000 | $2,435,000 | $2,450,000 | $2,500,000 | | Net Earnings from Continuing Operations | $124,300 | $128,800 | $120,000 | $125,000 | | Adjusted EBITDA | $258,000 | $265,000 | $255,000 | $265,000 | | Diluted EPS from Continuing Operations | $3.06 | $3.16 | $2.91 | $3.06 | | Diluted Non-GAAP EPS from Continuing Operations | $3.35 | $3.45 | $3.20 | $3.35 | Three Months Ended December 31, 2025 Outlook (Continuing Operations) | Metric | Low | High | | :------------------------------------ | :-------- | :-------- | | Total Revenues | $575,000 | $590,000 | | Net Earnings from Continuing Operations | $17,000 | $24,000 | | Adjusted EBITDA | $47,000 | $54,000 | | Diluted EPS from Continuing Operations | $0.47 | $0.57 | | Diluted Non-GAAP EPS from Continuing Operations | $0.55 | $0.65 | [Company Information](index=4&type=section&id=Company%20Information) [About PROG Holdings, Inc.](index=4&type=section&id=About%20PROG%20Holdings%2C%20Inc.) PROG Holdings, Inc. is a Salt Lake City-based fintech holding company offering lease-to-own, BNPL, and credit building products - **PROG Holdings, Inc. (NYSE:PRG)** is a **fintech holding company headquartered in Salt Lake City, UT**[13](index=13&type=chunk) - The Company owns **Progressive Leasing (lease-to-own)**, **Four Technologies (Buy Now, Pay Later)**, and **Build (personal credit building products)**[13](index=13&type=chunk) [Conference Call and Webcast](index=4&type=section&id=Conference%20Call%20and%20Webcast) A webcast and conference call was scheduled for October 22, 2025, at 8:30 A.M. ET to discuss Q3 2025 financial results - A live webcast and conference call was scheduled for **Wednesday, October 22, 2025, at 8:30 A.M. ET** to discuss Q3 2025 financial results[12](index=12&type=chunk) - The webcast can be accessed on the **Events and Presentations page of the Company's Investor Relations website**[12](index=12&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Forward-looking statements involve risks including macroeconomic volatility, consumer demand, retail partner reliance, and regulatory compliance - Statements, estimates, and projections in this press release are **'forward-looking statements' subject to risks and uncertainties**[14](index=14&type=chunk) - Risks include **continued volatility in the macroeconomic environment**, **impact on consumer demand and disposable income**, **reliance on key retail partners**, and the **inability to attract new retail partners or customers**[14](index=14&type=chunk) - Further risks involve **business model differences for Vive and Four**, **modernization of IT systems**, **intense competition**, **maintaining consumer satisfaction**, **extensive federal/state/local laws and regulations**, **negative characterization of transactions**, **cybersecurity incidents**, and the **effectiveness of capital allocation strategy**[14](index=14&type=chunk)[15](index=15&type=chunk) [Investor Relations Contact](index=5&type=section&id=Investor%20Relations%20Contact) John A. Baugh, CFA, Vice President of Investor Relations, is the contact for investor inquiries - Investor Contact: **John A. Baugh, CFA, Vice President, Investor Relations**[16](index=16&type=chunk) [Financial Statements (GAAP)](index=6&type=section&id=Financial%20Statements%20%28GAAP%29) [Consolidated Statements of Earnings](index=6&type=section&id=Consolidated%20Statements%20of%20Earnings) Consolidated statements of earnings show Q3 2025 revenues of $595.1 million and net earnings of $33.1 million Consolidated Statements of Earnings (Three Months Ended September 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Lease Revenues and Fees | $556,583 | $582,551 | | Interest and Fees on Loans Receivable | $38,525 | $23,594 | | Total Revenues | $595,108 | $606,145 | | Operating Profit | $53,529 | $49,231 | | Net Earnings | $33,121 | $83,962 | | Diluted EPS | $0.82 | $1.94 | Consolidated Statements of Earnings (Nine Months Ended September 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Lease Revenues and Fees | $1,777,814 | $1,773,617 | | Interest and Fees on Loans Receivable | $106,045 | $66,559 | | Total Revenues | $1,883,859 | $1,840,176 | | Operating Profit | $170,574 | $144,726 | | Net Earnings | $106,322 | $139,702 | | Diluted EPS | $2.60 | $3.19 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show total assets increased to $1,546.6 million, with higher cash and equity, and lower liabilities Consolidated Balance Sheet (September 30, 2025 vs. December 31, 2024) | Metric | Sep 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :------------------------------------ | :-------------------------- | :-------------------------- | | Cash and Cash Equivalents | $292,610 | $95,655 | | Lease Merchandise (net) | $501,152 | $680,242 | | Loans Receivable (net) | $160,350 | $146,985 | | Total Assets | $1,546,601 | $1,513,767 | | Debt, Net | $594,537 | $643,563 | | Total Liabilities | $843,044 | $863,486 | | Total Shareholders' Equity | $703,557 | $650,281 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash provided by operating activities significantly increased to $389.9 million for the nine months ended September 30, 2025 Consolidated Statements of Cash Flows (Nine Months Ended September 30) | Activity | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Cash Provided by Operating Activities | $389,865 | $223,013 | | Cash Used in Investing Activities | $(69,041) | $(35,648) | | Cash Used in Financing Activities | $(123,869) | $(121,055) | | Increase in Cash and Cash Equivalents | $196,955 | $66,310 | | Cash and Cash Equivalents at End of Period | $292,610 | $221,726 | [Segment Performance (GAAP)](index=9&type=section&id=Segment%20Performance%20%28GAAP%29) [Quarterly Revenues by Segment](index=9&type=section&id=Quarterly%20Revenues%20by%20Segment) Q3 2025 consolidated revenue was $595.1 million, with Progressive Leasing contributing $556.6 million, a slight decrease from Q3 2024 Quarterly Revenues by Segment (Three Months Ended September 30, 2025) | Segment | Lease Revenues and Fees (in thousands) | Interest and Fees on Loans Receivable (in thousands) | Total Revenues (in thousands) | | :------------------ | :----------------------------------- | :------------------------------------------------- | :---------------------------- | | Progressive Leasing | $556,583 | — | $556,583 | | Vive | — | $17,402 | $17,402 | | Other | — | $21,123 | $21,123 | | **Consolidated Total** | **$556,583** | **$38,525** | **$595,108** | Quarterly Revenues by Segment (Three Months Ended September 30, 2024) | Segment | Lease Revenues and Fees (in thousands) | Interest and Fees on Loans Receivable (in thousands) | Total Revenues (in thousands) | | :------------------ | :----------------------------------- | :------------------------------------------------- | :---------------------------- | | Progressive Leasing | $582,551 | — | $582,551 | | Vive | — | $16,000 | $16,000 | | Other | — | $7,594 | $7,594 | | **Consolidated Total** | **$582,551** | **$23,594** | **$606,145** | [Nine Month Revenues by Segment](index=10&type=section&id=Nine%20Month%20Revenues%20by%20Segment) Nine-month consolidated revenues reached $1,883.9 million, driven by Progressive Leasing, Vive, and Other segments Nine Month Revenues by Segment (Nine Months Ended September 30, 2025) | Segment | Lease Revenues and Fees (in thousands) | Interest and Fees on Loans Receivable (in thousands) | Total Revenues (in thousands) | | :------------------ | :----------------------------------- | :------------------------------------------------- | :---------------------------- | | Progressive Leasing | $1,777,814 | — | $1,777,814 | | Vive | — | $49,221 | $49,221 | | Other | — | $56,824 | $56,824 | | **Consolidated Total** | **$1,777,814** | **$106,045** | **$1,883,859** | Nine Month Revenues by Segment (Nine Months Ended September 30, 2024) | Segment | Lease Revenues and Fees (in thousands) | Interest and Fees on Loans Receivable (in thousands) | Total Revenues (in thousands) | | :------------------ | :----------------------------------- | :------------------------------------------------- | :---------------------------- | | Progressive Leasing | $1,773,617 | — | $1,773,617 | | Vive | — | $47,471 | $47,471 | | Other | — | $19,088 | $19,088 | | **Consolidated Total** | **$1,773,617** | **$66,559** | **$1,840,176** | [Quarterly Gross Merchandise Volume by Segment](index=11&type=section&id=Quarterly%20Gross%20Merchandise%20Volume%20by%20Segment) Q3 2025 total GMV increased to $620.3 million, primarily due to growth in Vive and Other segments, offsetting Progressive Leasing's decline Quarterly Gross Merchandise Volume by Segment (Three Months Ended September 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | | :------------------ | :------------------ | :------------------ | | Progressive Leasing | $410,943 | $456,651 | | Vive | $46,308 | $38,755 | | Other | $163,086 | $62,058 | | **Total GMV** | **$620,337** | **$557,464** | [Non-GAAP Financial Measures](index=12&type=section&id=Non-GAAP%20Financial%20Measures) [Use and Definition of Non-GAAP Financial Information](index=12&type=section&id=Use%20and%20Definition%20of%20Non-GAAP%20Financial%20Information) PROG Holdings uses Non-GAAP measures like Adjusted EBITDA and diluted EPS, excluding specific items, for supplemental performance insights - Non-GAAP net earnings, diluted EPS, and Adjusted EBITDA are supplemental measures not calculated in accordance with GAAP[29](index=29&type=chunk) - Exclusions for Non-GAAP outlook include **Vive operations** and gain on sale of its credit card portfolio[29](index=29&type=chunk)[30](index=30&type=chunk) - Historical Non-GAAP adjustments include intangible amortization, transaction costs, restructuring expenses, cybersecurity incident costs, and certain tax benefits/accrued interest[29](index=29&type=chunk)[30](index=30&type=chunk) - Management believes these measures provide relevant and useful information for assessing performance and are widely used by analysts, investors, and competitors[31](index=31&type=chunk)[32](index=32&type=chunk) - Non-GAAP measures should not be used as a substitute for GAAP measures and may not be comparable to similar measures disclosed by other companies[33](index=33&type=chunk) [Reconciliation of Net Earnings and Diluted EPS to Non-GAAP](index=14&type=section&id=Reconciliation%20of%20Net%20Earnings%20and%20Diluted%20EPS%20to%20Non-GAAP) Reconciliation details GAAP to Non-GAAP net earnings and diluted EPS, adjusting for amortization, transaction costs, and other items Reconciliation of Net Earnings to Non-GAAP Net Earnings (Three Months Ended September 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------ | :------------------ | :------------------ | | Net Earnings (GAAP) | $33,121 | $83,962 | | Add: Intangible Amortization Expense | $3,999 | $4,000 | | Add: Transaction Costs | $200 | — | | Add: Restructuring Expense | — | $6 | | Add: Costs Related to Cybersecurity Incident | $58 | $114 | | Less: Tax Impact of Adjustments | $(1,107) | $(1,071) | | Less: Reversal of Uncertain Tax Position | — | $(53,599) | | **Non-GAAP Net Earnings** | **$36,271** | **$33,412** | Reconciliation of Diluted EPS to Non-GAAP Diluted EPS (Three Months Ended September 30) | Metric | 2025 | 2024 | | :------------------------------------ | :--- | :--- | | Diluted EPS (GAAP) | $0.82 | $1.94 | | Add: Intangible Amortization Expense | $0.10 | $0.09 | | Add: Transaction Costs | — | — | | Add: Restructuring Expense | — | — | | Add: Costs Related to Cybersecurity Incident | — | — | | Less: Tax Impact of Adjustments | $(0.03) | $(0.02) | | Less: Reversal of Uncertain Tax Position | — | $(1.24) | | **Non-GAAP Diluted EPS** | **$0.90** | **$0.77** | [Quarterly Segment Adjusted EBITDA](index=15&type=section&id=Quarterly%20Segment%20Adjusted%20EBITDA) Quarterly segment Adjusted EBITDA reconciliation shows consolidated Adjusted EBITDA of $67.0 million in Q3 2025, up from $63.5 million Quarterly Segment Adjusted EBITDA (Three Months Ended September 30, 2025) | Segment | Progressive Leasing (in thousands) | Vive (in thousands) | Other (in thousands) | Consolidated Total (in thousands) | | :------------------------------------ | :------------------------------- | :------------------ | :------------------- | :-------------------------------- | | Earnings (Loss) Before Income Tax | $46,738 | $(74) | $(1,017) | $45,647 | | EBITDA | $57,775 | $333 | $1,563 | $59,671 | | Stock-Based Compensation | $6,638 | $47 | $412 | $7,097 | | Costs Related to Cybersecurity Incident | $58 | — | — | $58 | | Transaction Costs | — | $200 | — | $200 | | **Adjusted EBITDA** | **$64,471** | **$580** | **$1,975** | **$67,026** | Quarterly Segment Adjusted EBITDA (Three Months Ended September 30, 2024) | Segment | Progressive Leasing (in thousands) | Vive (in thousands) | Other (in thousands) | Consolidated Total (in thousands) | | :------------------------------------ | :------------------------------- | :------------------ | :------------------- | :-------------------------------- | | Earnings (Loss) Before Income Tax | $47,177 | $(1,441) | $(3,889) | $41,847 | | EBITDA | $60,267 | $(1,286) | $(3,485) | $55,496 | | Stock-Based Compensation | $6,059 | $354 | $1,438 | $7,851 | | Restructuring Expense | $6 | — | — | $6 | | Costs Related to Cybersecurity Incident | $114 | — | — | $114 | | **Adjusted EBITDA** | **$66,446** | **$(932)** | **$(2,047)** | **$63,467** | [Nine Month Segment Adjusted EBITDA](index=16&type=section&id=Nine%20Month%20Segment%20Adjusted%20EBITDA) Nine-month segment Adjusted EBITDA reconciliation shows consolidated Adjusted EBITDA of $210.8 million, an increase from prior year Nine Month Segment Adjusted EBITDA (Nine Months Ended September 30, 2025) | Segment | Progressive Leasing (in thousands) | Vive (in thousands) | Other (in thousands) | Consolidated Total (in thousands) | | :------------------------------------ | :------------------------------- | :------------------ | :------------------- | :-------------------------------- | | Earnings (Loss) Before Income Tax | $146,909 | $(398) | $(1,058) | $145,453 | | EBITDA | $181,733 | $660 | $6,434 | $188,827 | | Stock-Based Compensation | $19,510 | $253 | $1,870 | $21,633 | | Costs Related to Cybersecurity Incident | $167 | — | — | $167 | | Transaction Costs | — | $200 | — | $200 | | **Adjusted EBITDA** | **$201,410** | **$1,113** | **$8,304** | **$210,827** | Nine Month Segment Adjusted EBITDA (Nine Months Ended September 30, 2024) | Segment | Progressive Leasing (in thousands) | Vive (in thousands) | Other (in thousands) | Consolidated Total (in thousands) | | :------------------------------------ | :------------------------------- | :------------------ | :------------------- | :-------------------------------- | | Earnings (Loss) Before Income Tax | $136,596 | $108 | $(14,951) | $121,753 | | EBITDA | $178,799 | $595 | $(13,888) | $165,506 | | Stock-Based Compensation | $16,905 | $1,052 | $3,631 | $21,588 | | Restructuring Expense | $18,278 | — | $2,628 | $20,906 | | Costs Related to Cybersecurity Incident | $346 | — | — | $346 | | **Adjusted EBITDA** | **$214,328** | **$1,647** | **$(7,629)** | **$208,346** | [Non-GAAP Outlook Reconciliations](index=17&type=section&id=Non-GAAP%20Outlook%20Reconciliations) [Full Year 2025 Outlook for Adjusted EBITDA](index=17&type=section&id=Full%20Year%202025%20Outlook%20for%20Adjusted%20EBITDA) Revised full-year 2025 Adjusted EBITDA outlook is $258.0 million to $265.0 million, reconciling net earnings with various adjustments Revised Fiscal Year 2025 Outlook for Adjusted EBITDA (Continuing Operations) | Metric | Progressive Leasing (in thousands) | Other (in thousands) | Consolidated Total (in thousands) | | :------------------------------------ | :------------------------------- | :------------------- | :-------------------------------- | | Estimated Net Earnings from Continuing Operations | | | $124,300 - $128,800 | | Projected Adjusted EBITDA | $256,000 - $261,000 | $2,000 - $4,000 | $258,000 - $265,000 | Previous Fiscal Year 2025 Outlook for Adjusted EBITDA | Metric | Progressive Leasing (in thousands) | Vive (in thousands) | Other (in thousands) | Consolidated Total (in thousands) | | :------------------------------------ | :------------------------------- | :------------------ | :------------------- | :-------------------------------- | | Estimated Net Earnings | | | | $120,000 - $125,000 | | Projected Adjusted EBITDA | $255,000 - $261,000 | $(2,500) - $(1,000) | $2,500 - $5,000 | $255,000 - $265,000 | [Fourth Quarter 2025 Outlook for Adjusted EBITDA](index=18&type=section&id=Fourth%20Quarter%202025%20Outlook%20for%20Adjusted%20EBITDA) Q4 2025 outlook projects consolidated Adjusted EBITDA between $47.0 million and $54.0 million, based on estimated net earnings Three Months Ended December 31, 2025 Outlook for Adjusted EBITDA (Consolidated Total) | Metric | Low (in thousands) | High (in thousands) | | :------------------------------------ | :----------------- | :----------------- | | Estimated Net Earnings from Continuing Operations | $17,000 | $24,000 | | Projected Adjusted EBITDA | $47,000 | $54,000 | [Full Year 2025 Outlook for Diluted EPS](index=19&type=section&id=Full%20Year%202025%20Outlook%20for%20Diluted%20EPS) Revised full-year 2025 Non-GAAP diluted EPS outlook is $3.35 to $3.45, adjusting GAAP EPS for amortization and tax effects Revised Full Year 2025 Outlook for Diluted EPS to Non-GAAP Diluted EPS (Continuing Operations) | Metric | Low | High | | :------------------------------------------------------ | :--- | :--- | | Projected Diluted Earnings Per Share from Continuing Operations (GAAP) | $3.06 | $3.16 | | Add: Projected Intangible Amortization Expense | $0.39 | $0.39 | | Subtract: Tax Effect on Non-GAAP Adjustments | $(0.10) | $(0.10) | | **Projected Non-GAAP Diluted Earnings Per Share from Continuing Operations** | **$3.35** | **$3.45** | Previous Full Year 2025 Outlook for Diluted EPS to Non-GAAP Diluted EPS | Metric | Low | High | | :------------------------------------ | :--- | :--- | | Projected Diluted Earnings Per Share (GAAP) | $2.91 | $3.06 | | Add: Projected Intangible Amortization Expense | $0.39 | $0.39 | | Subtract: Tax Effect on Non-GAAP Adjustments | $(0.10) | $(0.10) | | **Projected Non-GAAP Diluted Earnings Per Share** | **$3.20** | **$3.35** | [Fourth Quarter 2025 Outlook for Diluted EPS](index=20&type=section&id=Fourth%20Quarter%202025%20Outlook%20for%20Diluted%20EPS) Q4 2025 Non-GAAP diluted EPS outlook is $0.55 to $0.65, adjusting GAAP EPS for amortization and tax effects Three Months Ended December 31, 2025 Outlook for Diluted EPS to Non-GAAP Diluted EPS (Continuing Operations) | Metric | Low | High | | :------------------------------------------------------ | :--- | :--- | | Projected Diluted Earnings Per Share from Continuing Operations (GAAP) | $0.47 | $0.57 | | Add: Projected Intangible Amortization Expense | $0.10 | $0.10 | | Subtract: Tax Effect on Non-GAAP Adjustments | $(0.03) | $(0.03) | | **Projected Non-GAAP Diluted Earnings Per Share from Continuing Operations** | **$0.55** | **$0.65** |

Group 1 - The article does not provide any specific content related to a company or industry [1]

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]

Core Insights - The article emphasizes the importance of value investing as a preferred strategy for identifying strong stocks in various market conditions [2][4]. Company Analysis - Prog Holdings (PRG) is highlighted as a potential investment opportunity, currently holding a Zacks Rank of 2 (Buy) and an A for Value [4]. - PRG has a P/E ratio of 8.95, which is lower than the industry average of 9.95, indicating potential undervaluation [4]. - The Forward P/E ratio for PRG has fluctuated between 6.82 and 13.68 over the past year, with a median of 10.89, suggesting variability in market perception [4]. - The P/S ratio for PRG stands at 0.51, significantly lower than the industry average of 1.48, reinforcing the notion of undervaluation [5]. - Overall, PRG's strong Value grade and positive earnings outlook position it as an attractive value stock at this time [6].

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)