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)

Q1 2025 Financial Performance - Consolidated revenues reached $684.1 million[5], a 6.6% increase year-over-year[12, 17] - Net earnings totaled $34.7 million[5], with a diluted EPS of $0.83[5] - Adjusted EBITDA amounted to $70.3 million[5], representing 10.3% of consolidated revenues[11] - Non-GAAP diluted EPS was $0.90[5], relatively flat year-over-year[12] Segment Results - Progressive Leasing's GMV was $402.0 million[5], a 4.0% decrease year-over-year[15, 20] - Progressive Leasing's revenue increased 5.0% year-over-year to $651.6 million[15, 20] - Progressive Leasing's write-offs as a percentage of revenue was 7.4%, within the targeted annual range of 6-8%[14, 15] - Four Technologies experienced GMV growth of 145.7% and achieved quarterly positive Adjusted EBITDA[5] 2025 Outlook - The company revised its full-year 2025 revenue outlook to $2.425 billion - $2.5 billion[21] - The company projects Q2 2025 revenues between $575 million and $595 million[24]

Financial Data and Key Metrics Changes - In Q1 2025, consolidated revenue reached $684.1 million, a 6.6% increase year over year, driven by a larger lease portfolio and higher ninety-day purchase activity [10][40] - Adjusted EBITDA was $70.3 million, and non-GAAP EPS was $0.90, both exceeding the high end of the company's outlook [15][40] - The lease portfolio balance increased by 6.1% year over year as of December 31, 2024, compared to a 5.2% decline at the same point in 2023 [14][40] Business Line Data and Key Metrics Changes - Progressive Leasing's GMV for Q1 was $402 million, down 4% from the previous year, primarily due to the bankruptcy of a large retail partner and tighter lease approval rates [34][10] - Revenue for the Progressive Leasing segment grew 5% from $620.6 million to $651.6 million, driven by a larger portfolio size and higher levels of ninety-day early purchase activity [35] - Four Technologies, the BNPL platform, achieved triple-digit revenue growth and its first quarter of positive adjusted EBITDA [17][39] Market Data and Key Metrics Changes - The company observed a decline in consumer confidence due to ongoing economic volatility, impacting discretionary spending, particularly in big-ticket categories [11][18] - Despite the challenges, the company reported low to mid-single-digit GMV growth when excluding the impact of the bankruptcy of a major retail partner [12][34] - The company noted that tax refunds were comparable to the previous year, but financial stress continues to affect many households [11][18] Company Strategy and Development Direction - The company is focused on executing its ecosystem strategy, which includes both leasing and BNPL products, to meet consumer needs and drive cross-sell opportunities [17][28] - Strategic investments in marketing and technology are prioritized to optimize decision-making and manage risk [19][28] - The company aims to maintain a disciplined approach to spending while investing in areas that will have the greatest impact on growth [21][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the deterioration of the macro environment since the initial guidance in February, citing inflation and tariff concerns as significant pressures [18][44] - The company remains confident in its ability to navigate through challenging environments and expects to deliver sustainable profitable growth [20][47] - Revised revenue outlook for 2025 is projected between $2.425 billion and $2.5 billion, reflecting the impact of GMV headwinds and macroeconomic uncertainties [46][45] Other Important Information - The provision for lease merchandise write-offs was 7.4%, with a gross margin of 29.3%, down about 112 basis points from the previous year [36] - The company ended Q1 with $213.3 million in cash and $600 million in gross debt, resulting in a net leverage ratio of 1.42 times trailing twelve months adjusted EBITDA [41] - The company returned capital to shareholders through dividends and share buybacks, repurchasing 936,000 shares at an average price of $27.87 per share [41] Q&A Session Summary Question: What are the observations regarding the trade-down environment? - Management noted that trade-down behavior still exists but is more muted compared to the latter half of 2024, with no significant tightening in approvals observed [55][56] Question: How has the retail softness progressed since February? - Management indicated that while the quarter started encouragingly, a downshift in sentiment was observed, with no significant rebound noted [60] Question: What is the expected impact of the $30 million GMV headwind from the lost customer? - Management confirmed that the $30 million headwind is expected to be consistent across the four quarters of the year [62] Question: How are inflation and tariffs impacting retail partners and customers? - Management explained that modest price increases could be beneficial, but significant price shocks and demand destruction are concerning [71][72] Question: What is the status of legacy Big Lots customers? - Management is actively directing former Big Lots customers to other partners and tracking the success of these efforts [76][77] Question: What changes have been observed in credit performance? - Management confirmed that while approval rates are down 300 to 400 basis points year over year, the portfolio remains healthy, and early indicators are performing as expected [100][88] Question: Can you discuss the pipeline of new retailers? - Management expressed optimism about the pipeline and noted that the current environment is conducive for discussions with potential new partners [95][96]

分组1 - PROG Holdings reported quarterly earnings of $0.90 per share, exceeding the Zacks Consensus Estimate of $0.82 per share, with a year-over-year comparison showing a slight decrease from $0.91 per share [1] - The company achieved revenues of $684.09 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.81% and showing an increase from $641.87 million year-over-year [2] - PROG Holdings has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] 分组2 - The stock has underperformed the market, with a decline of approximately 37.1% since the beginning of the year, compared to the S&P 500's decline of 10.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $623.03 million, while the estimate for the current fiscal year is $3.36 on revenues of $2.56 billion [7] - The Zacks Industry Rank for Financial - Consumer Loans is in the top 26% of over 250 Zacks industries, suggesting a favorable outlook for the industry [8]

Financial Data and Key Metrics Changes - In Q1 2025, consolidated revenue reached $684.1 million, a 6.6% increase year-over-year from $641.9 million [26] - Adjusted EBITDA was $70.3 million, slightly down from $72.6 million in the previous year [26] - Non-GAAP EPS was $0.90, exceeding the high end of the outlook [26] Business Line Data and Key Metrics Changes - Progressive Leasing's GMV was $402 million, down 4% year-over-year, primarily due to the bankruptcy of a large retail partner [22][23] - Excluding the impact of the Big Lots bankruptcy, GMV growth was low to mid-single digits [22][23] - Ford Technologies continued to grow revenues at a triple-digit rate, achieving its first quarter of positive adjusted EBITDA [11][81] Market Data and Key Metrics Changes - The lease portfolio balance as of December 31, 2024, was up 6.1% year-over-year, compared to a 5.2% decline at the same point in 2023 [10] - Write-offs for Q1 came in at 7.4%, slightly better than expected, with a targeted annual write-off range of 6% to 8% [10][24] Company Strategy and Development Direction - The company is focused on executing its ecosystem strategy, which includes both leasing and BNPL products to meet consumer needs [11][19] - Strategic investments will continue in marketing and technology to optimize decision-making and manage risk [12][19] - The company aims to maintain a disciplined approach to spending while prioritizing areas with the greatest impact [14][19] Management's Comments on Operating Environment and Future Outlook - The macro environment has deteriorated, with inflation and tariff concerns impacting consumer confidence and spending [12][28] - Despite challenges, the company remains confident in its ability to grow share and deliver sustainable profitable growth [13][30] - The revised revenue outlook for 2025 reflects the GMV headwinds, with expectations for revenue between $2.425 billion and $2.5 billion [29] Other Important Information - The company returned capital to shareholders through dividends and share repurchases, with a quarterly cash dividend of $0.13 per share [26] - The company has $335.2 million remaining under its $500 million share repurchase program [26] Q&A Session Summary Question: What are the dynamics of the trade-down environment? - Management noted that trade-down behavior still exists but is more muted compared to the latter half of 2024, with no significant tightening observed [36] Question: How has retail softness progressed? - The quarter started encouragingly, but a downshift in consumer sentiment was noted, with no significant rebound observed [40] Question: What is the impact of the Big Lots bankruptcy on GMV? - The $30 million GMV headwind from the lost customer is expected to be consistent across the quarters, with some seasonal variations [41][42] Question: How are inflation and tariffs affecting retail partners? - Management indicated that modest price increases could be beneficial, but significant price shocks and demand destruction are concerning [46] Question: What is the outlook for GMV in Q2 and the rest of the year? - No specific GMV guidance was provided due to uncertainty, but management remains focused on maintaining a healthy portfolio and managing expenses [95][96]

Financial Performance - PROG Holdings reported revenues of $684.1 million for Q1 2025, a 6.6% increase from $641.9 million in Q1 2024, driven by a larger lease portfolio [118]. - Earnings before income taxes rose to $47.2 million in Q1 2025, a 49.6% increase from $31.6 million in Q1 2024, primarily due to lower restructuring costs and increased revenues [128]. - Operating profit for Q1 2025 was $56.3 million, a 41.4% increase from $39.8 million in Q1 2024, indicating improved operational efficiency [128]. - Lease revenues and fees for Progressive Leasing increased by 5.0% to $651.6 million in Q1 2025, attributed to a larger lease portfolio [129]. - Cash provided by operating activities increased by 54.7% to $209.9 million, primarily due to higher cash received from early lease buyouts [143]. Customer Metrics - Active customer count for Progressive Leasing increased to 828, while Vive's active customer count rose to 88, reflecting stable growth in customer engagement [121]. - Gross Merchandise Volume (GMV) for Progressive Leasing decreased by $16.6 million (4.0%) to $401.96 million, while Vive's GMV increased by $4.7 million (14.8%) to $36.27 million in Q1 2025 compared to Q1 2024 [120]. - The total GMV for the Company increased by $59.2 million (11.9%) to $558.1 million in Q1 2025 compared to Q1 2024, driven by growth in the Other segment [120]. Expenses and Costs - Operating expenses decreased by 6.3% to $119.3 million in Q1 2025 from $127.3 million in Q1 2024 [131]. - Personnel costs increased by 1.0% to $45.2 million, while stock-based compensation rose by 19.0% to $7.9 million [131]. - The provision for lease merchandise write-offs increased to 7.4% of lease revenues in Q1 2025, up from 7.0% in Q1 2024, but remained within the targeted annual range of 6% to 8% [116]. - Provision for loan losses increased by 30.0% to $14.4 million, driven by growth in the Four business and macroeconomic uncertainties [134]. Cash Flow and Financing - Cash used in financing activities increased to $88.2 million, primarily for the repayment of $50.0 million drawn on the revolving credit facility [145]. - The company repurchased 935,992 shares for $26.1 million during Q1 2025, with remaining authorization of $335.2 million [148]. - Cash and cash equivalents increased by $117.6 million to $213.3 million as of March 31, 2025 [141]. Tax and Liabilities - The effective income tax rate decreased to 26.5% in Q1 2025 from 30.4% in Q1 2024, primarily due to discrete tax expenses in the prior year [140]. - As of March 31, 2025, the Company had deferred income tax liabilities of $64.4 million, reflecting temporary differences between tax basis and book basis [156]. - The Company made net tax payments of $0.3 million during the three months ended March 31, 2025, and anticipates estimated tax payments of $80.2 million for the next nine months [155]. Debt and Commitments - The Company issued $600 million in Senior Notes with a fixed annual interest rate of 6.0%, maturing on November 15, 2029 [159]. - As of March 31, 2025, the Company had no outstanding borrowings under its Revolving Facility, which is indexed to the Secured Overnight Financing Rate (SOFR) [163]. - Future interest payments on the Company's variable-rate debt are based on a margin of 1.5% to 2.5% over SOFR for revolving loans [158]. - The Company is in compliance with various covenants related to its Senior Notes as of March 31, 2025, and expects to maintain compliance in the future [154]. - The Company had unconditionally cancellable unfunded lending commitments totaling approximately $459.8 million as of March 31, 2025, which do not generate revenues or cash flows [160]. Market Conditions - Inflationary pressures and elevated living costs negatively impacted consumer confidence and demand for lease-to-own offerings, contributing to the decline in GMV for Progressive Leasing [117]. - The Company experienced elevated customer payment delinquencies, prompting a tightening of decisioning posture to maintain a healthy lease portfolio [116]. Operational Commitments - The Company has no long-term commitments to purchase merchandise or significant purchase agreements exceeding expected requirements for three months [159]. - The Company leases management and IT space under operating leases expiring at various times through 2028, with renewal options available [157]. - The Company does not use significant market risk sensitive instruments for hedging or trading purposes [164].

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $684.1 million, a 6.6% increase year over year, driven by a larger lease portfolio and higher purchase activity [9][27] - Adjusted EBITDA was $70.3 million, slightly down from $72.6 million in the previous year [27] - Non-GAAP EPS was $0.90, exceeding the high end of the outlook [10][27] - The lease portfolio balance increased by 6.1% year over year, compared to a 5.2% decline at the same point in 2023 [10] Business Line Data and Key Metrics Changes - Progressive Leasing's GMV for Q1 was $402 million, down 4% from the previous year, primarily due to the bankruptcy of a large retail partner [22][24] - Excluding the impact of the Big Lots bankruptcy, GMV growth was low to mid-single digits [8][24] - Ford Technologies, the BNPL platform, achieved triple-digit revenue growth and positive adjusted EBITDA for the first time [11][80] Market Data and Key Metrics Changes - The macroeconomic environment has deteriorated, with inflation and tariff concerns impacting consumer confidence and spending [12][29] - Consumer behavior has shifted, with many delaying discretionary spending, particularly in big-ticket categories [8][12] Company Strategy and Development Direction - The company is focused on executing its ecosystem strategy, which includes enhancing both leasing and BNPL products to meet consumer needs [11][19] - Strategic investments in marketing and technology are prioritized to drive growth and optimize risk management [12][19] - The company aims to maintain a disciplined approach to spending while making selective capital investments [14][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment but expressed confidence in the company's ability to navigate through it [12][29] - The revised 2025 outlook reflects increased macro uncertainty and a decline in consumer confidence, particularly in key categories [29][30] - Management expects lease portfolio performance to remain within the targeted 6% to 8% annual write-off range [30] Other Important Information - The company returned capital to shareholders through dividends and share repurchases, with a quarterly cash dividend of $0.13 per share [27] - The company has $335.2 million remaining under its $500 million share repurchase program [27] Q&A Session Summary Question: What are the dynamics of the trade-down environment? - Management noted that trade-down behavior still exists but is more muted compared to the latter half of 2024, with no significant tightening observed [36] Question: How has retail softness progressed? - Management indicated that while the quarter started encouragingly, there was a noticeable downshift in consumer sentiment, with no significant rebound observed [40] Question: What is the impact of the Big Lots bankruptcy on GMV? - Management confirmed that the $30 million GMV headwind from the lost customer is expected to be consistent across the quarters [41][42] Question: How are inflation and tariffs impacting retail partners? - Management highlighted that modest price increases could be beneficial, but significant price shocks and demand destruction are concerning [46] Question: What is the status of the American Signature partnership? - Management reported positive progress with American Signature, indicating strong connectivity and training efforts [64] Question: What is the reduction in lease approval rates? - Management stated that lease approval rates are approximately 300 to 400 basis points lower year over year, influenced by tightening actions and a shift in application quality [70]

Financial Performance - Consolidated revenues for Q1 2025 were $684.1 million, a 6.6% increase from Q1 2024[4] - Net earnings for the quarter were $34.7 million, up from $22.0 million in the prior year[4] - Adjusted EBITDA for Q1 2025 was $70.3 million, representing 10.3% of revenues[4] - Net earnings for the three months ended March 31, 2025, increased to $34,718 thousand, up 58% from $21,966 thousand in the same period of 2024[20] - Total revenues for the three months ended March 31, 2025, reached $684,088 thousand, representing a 6.5% increase from $641,870 thousand in the prior year[22] - Cash provided by operating activities rose to $209,929 thousand for the three months ended March 31, 2025, compared to $135,733 thousand in the same period of 2024, an increase of 54.5%[20] - Non-GAAP net earnings for Q1 2025 were $37,665 thousand, compared to $40,641 thousand in Q1 2024, reflecting a decrease of 4.9%[31] - Non-GAAP diluted earnings per share for Q1 2025 were $0.90, slightly down from $0.91 in Q1 2024[31] - For the three months ended March 31, 2025, consolidated total net earnings were $34,718,000, compared to $21,966,000 for the same period in 2024, representing a year-over-year increase of 58%[34]. Market and Operational Metrics - Progressive Leasing's GMV was $402.0 million, down 4.0% compared to Q1 2024[6] - Four Technologies achieved GMV growth of 145.7% and recorded its first quarter of positive adjusted EBITDA[3] - Gross Merchandise Volume (GMV) for Progressive Leasing decreased to $401,962 thousand in Q1 2025 from $418,512 thousand in Q1 2024, a decline of 3.9%[24] Cash and Debt Management - The company ended Q1 2025 with cash of $213.3 million and gross debt of $600.0 million[7] - Cash and cash equivalents increased to $213,301 thousand at the end of Q1 2025, up from $95,655 thousand at the beginning of the period[20] - The company repurchased $26.1 million of its stock during the quarter, leaving $335.2 million of repurchase capacity[7] Outlook and Projections - The updated 2025 revenue outlook is between $2.425 billion and $2.5 billion, reflecting a downward revision due to macroeconomic challenges[9] - The projected diluted EPS for 2025 is revised to a range of $2.62 to $3.01[9] - The projected full year 2025 adjusted EBITDA range is estimated to be between $245,000,000 and $261,000,000, reflecting a strategic focus on growth despite challenges in certain segments[36]. - The projected diluted earnings per share for full year 2025 is estimated to be between $2.90 and $3.30, which includes adjustments for intangible amortization expenses[39]. - The company anticipates a projected net earnings range of $109,000,000 to $125,000,000 for the full year 2025, indicating a positive outlook for profitability[36]. Expenses and Liabilities - The provision for lease merchandise write-offs was 7.4%, within the targeted annual range of 6-8%[6] - Total liabilities decreased from $863,486 thousand as of December 31, 2024, to $815,465 thousand as of March 31, 2025, a reduction of approximately 5.6%[18] - Interest expense, net for the three months ended March 31, 2025, was $9,090,000, compared to $8,250,000 in the prior year, reflecting an increase of 10.2%[34][35]. - The company reported a restructuring expense of $6,000 for the three months ended March 31, 2025, compared to $18,014,000 in the same period of the previous year, showing a significant reduction in restructuring costs[34][35]. - The estimated income tax expense for the full year 2025 is projected to be between $45,000,000 and $49,000,000, which is a critical factor in the overall earnings forecast[36]. Risk Management - The company has reported costs related to a cybersecurity incident, net of insurance recoveries, amounting to $(24,000) for the three months ended March 31, 2025, highlighting ongoing challenges in risk management[34].

Financial Data and Key Metrics Changes - In Q4 2024, consolidated revenues rose 8% to $623.3 million, primarily driven by growth in the Progressive Leasing segment [49] - Adjusted EBITDA increased 7.7% to $65.7 million, reflecting improved profitability from Forre and PRG Ventures [49] - Non-GAAP diluted EPS grew 11.1% to $0.80 per share, at the high end of the outlook provided [15][49] Business Line Data and Key Metrics Changes - Progressive Leasing's GMV grew 9.1% year-over-year in Q4 2024, contributing to a 6.3% revenue increase driven by a larger lease portfolio [12][44] - Gross margin for Progressive Leasing was 31.9%, down 100 basis points from the previous year due to higher delinquencies and increased 90-day purchase options [45] - Write-offs for Q4 2024 were 7.9%, slightly above expectations, attributed to higher delinquencies from new customer acquisitions [13][46] Market Data and Key Metrics Changes - The bankruptcy of Big Lots is expected to impact GMV projections, with Q1 2025 anticipated to be flat year-over-year [17][54] - Excluding Big Lots, GMV growth for the rest of the Progressive Leasing business is expected to be in the high single digits [21][54] Company Strategy and Development Direction - The company aims to expand retail partnerships and enhance direct-to-consumer efforts, with a focus on multichannel growth strategies [21][24] - Investments in marketing and technology are planned to drive customer acquisition and improve operational efficiencies [22][25] - The three-pillar strategy focuses on growing, enhancing, and expanding the business to ensure sustainable long-term growth [16][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing financial pressures on consumers and anticipates challenges in the retail environment, particularly in the furniture and electronics sectors [35][37] - Despite these challenges, the company remains optimistic about achieving GMV growth in 2025 through effective execution and strategic initiatives [16][20] - The capital allocation strategy includes reinvesting in the business, pursuing M&A opportunities, and returning excess capital to shareholders [38][39] Other Important Information - The PROG Marketplace platform nearly tripled in GMV, exceeding the 2024 goal of doubling year-over-year [23] - The company generated $138.5 million in cash from operations in 2024 and actively repurchased shares, with $361.4 million remaining under the share repurchase program [52] Q&A Session Summary Question: Industry evolution and implications for VLTO sector - Management expects demand to be spread across remaining players, with a continued multichannel journey for customers [62][64] Question: Guidance factors and signs of life in verticals - Management noted some optimism among retailers but does not expect significant growth in the near term [67][68] Question: Early buyouts and credit performance during tax refund season - Management anticipates a normal tax season but lacks visibility on its impact for several weeks [72] Question: 2025 revenue guidance and Big Lots impact - Management indicated that Big Lots' bankruptcy will have a significant impact on GMV, but they remain optimistic about overall growth [80][81] Question: Current customer behavior trends - Management observed stress among lower-tier customers, leading to higher delinquencies, while new customer growth is being monitored [86][88] Question: Big Lots assumptions and store performance - Management does not expect significant volume from Big Lots post-bankruptcy and is focusing on retaining repeat customers [95][97] Question: Margin outlook for 2025 - Management expects a decline in margins due to the impact of Big Lots but remains committed to long-term growth initiatives [100][101] Question: GMV contribution from American Signature - Management expects to replace previous GMV levels from American Signature in 2025 [107] Question: Lease approval rates and customer quality - Management reported a decrease in approval rates for new customers, attributed to lower application quality and tightening decisioning [110][113]