Acquisition and Expansion - Upbound Group, Inc. completed the acquisition of Brigit on January 31, 2025, enhancing its financial health technology offerings[15] - The company emphasizes a strategy focused on expanding partnerships and enhancing financial mobility for underserved consumers through joint ventures and acquisitions[30] - The acquisition of Brigit in 2025 expands the company's focus on technology-driven financial health solutions for underserved consumers[96] - The company has accelerated its virtual lease-to-own growth strategy through acquisitions, including Merchants Preferred and Acima Holdings, to capture large market opportunities[96] - Retaining key personnel from the Brigit acquisition is critical for successful integration; failure to do so may disrupt operations and affect customer relationships[193] Business Segments and Operations - The Acima segment operates primarily in the United States and Puerto Rico, providing lease-to-own solutions through both physical and virtual retail locations[33] - The Rent-A-Center segment includes company-owned and franchise stores, offering lease-to-own durable goods and generating royalties based on franchisees' gross revenues[39] - Acima's operating model allows for minimal capital expenditures due to its agile virtual offerings and partnerships with third-party retailers[37] - The company aims to accelerate e-commerce growth and improve the omni-channel customer experience within the Rent-A-Center segment[35] - The Acima segment offers a suite of financial health products, including Finance Helper and Credit Builder, aimed at improving users' financial well-being[48] Financial Performance and Market Focus - The company reports that substantially all revenues for the past three years originated in the United States, reflecting a strong domestic market focus[32] - Revenue in the lease-to-own business is moderately seasonal, with higher sales typically occurring in the first quarter due to federal income tax refunds[59] - As of December 31, 2025, the company employed a total of 12,050 coworkers, with 10,290 in U.S. operations, 1,050 in Mexico, and 710 at corporate facilities[61] - In 2025, approximately 37% of merchandise purchases were from Ashley Furniture Industries, 11% from LG Electronics, and 10% from Whirlpool[53] Regulatory and Compliance Challenges - The company is facing evolving state regulations regarding Earned Wage Access (EWA) products, with some states considering EWA as loans, which may impose licensing and fee limitations[72] - The Consumer Financial Protection Bureau (CFPB) withdrew a proposed rule that could have classified many EWA products as extensions of credit, indicating that certain EWA products are generally not considered credit under federal laws[73] - The company must maintain compliance with extensive regulations in the EWA industry, and any changes could expose it to additional costs and operational burdens[84] - Regulatory scrutiny on the lease-to-own industry is increasing, with potential new laws that could significantly raise compliance costs and alter business practices, adversely affecting operations[146] - The regulatory environment regarding information security and data privacy is becoming more stringent, potentially leading to significant compliance costs and operational impacts[149] Risks and Challenges - The company has significant indebtedness, which could materially impact its financial condition and operational flexibility[84] - The company is experiencing heightened competition in the e-commerce channel, which may hinder its ability to grow market share and maintain gross margins[112] - The integration of AI technologies presents risks related to technical complexities and potential cybersecurity incidents that could affect business operations and reputation[113][115] - The company faces intense competition in the lease-to-own market, which could impede its ability to maintain and grow transaction volumes[101] - Allegations of product safety issues could harm the company's reputation and lead to increased costs and lost sales[94] Financial Obligations and Debt Management - As of December 31, 2025, the company's total indebtedness was approximately $1.6 billion, with undrawn commitments of $237.6 million under the ABL Credit Facility[172] - Cash interest payments on the company's indebtedness were approximately $105 million for the year ended December 31, 2025, which may fluctuate with changes in interest rates[177] - The company may face significant operational and financial restrictions due to covenants in its debt agreements, which could limit its ability to engage in beneficial long-term actions[179] - A breach of covenants could lead to an event of default, allowing debt holders to accelerate related debt, which may exceed the company's asset value[181] - The company expects to evaluate acquisitions and strategic investments, potentially increasing its indebtedness further[173] Cybersecurity and Data Management - The company has a comprehensive cybersecurity program overseen by a dedicated team, which includes regular assessments and updates to mitigate risks[196] - The company is focused on improving its information management systems to mitigate risks associated with operational disruptions and data security breaches[117][119] - The reliance on third-party data for decisioning models in Brigit may lead to inaccuracies that affect the assessment of customer repayment capabilities[123] - The company relies on third-party data vendors for information, and any inaccuracies or delays could materially affect its business and financial results[80] Legal and Regulatory Proceedings - Legal and regulatory proceedings may result in significant damages, penalties, and legal fees, with estimated legal accruals of $72.0 million for pending matters as of December 31, 2025[143] - The company may face restrictions on business practices due to governmental proceedings, which could adversely affect competitiveness and operational methods[144] - The company faces potential increased costs and legal risks due to the enforceability issues surrounding arbitration agreements and class action waivers, which could lead to higher defense or settlement costs[145] - The FTC's advisory opinion provides some regulatory clarity for EWA products but does not guarantee future compliance or protection from regulatory changes[164] Market and Economic Factors - Macroeconomic factors such as wage inflation and global supply chain disruptions have negatively impacted product availability and costs, affecting the company's financial performance[86] - The current U.S. Presidential Administration's tariffs on imports may lead to increased consumer prices and reduced discretionary income, potentially decreasing consumer spending[87] - Increased costs from suppliers and inflationary pressures could adversely affect the company's profitability if not effectively managed[105] - Changes in tax regulations could result in substantial tax liabilities, adversely affecting the company's financial results[171]

Financial Performance - Consolidated revenues for FY 2025 reached $4.7 billion, an increase of 8.7% year-over-year, driven by higher rentals, fees, and merchandise sales at Acima, along with the acquisition of Brigit[6]. - GAAP operating profit for FY 2025 was $223.3 million, with a margin of 4.8%, down from 6.7% in the prior year[6]. - Net earnings on a GAAP basis for FY 2025 were $73.2 million, a decrease of 40.6% compared to $123.5 million in the prior year, resulting in a net profit margin of 1.6%[6]. - Adjusted EBITDA for FY 2025 increased 7.5% year-over-year to $508.8 million, with an adjusted EBITDA margin of 10.8%, down 20 basis points from the previous year[6]. - For Q4 2025, total revenue was $1,196.4 million, a 10.9% increase year-over-year, with net earnings of $19.7 million, down from $31.0 million in the prior year[2]. - Consolidated revenue for Q4 2025 reached $1,196.4 million, representing a year-over-year increase of 10.9%[15]. - The company's GAAP operating profit for FY 2025 was $223.3 million, down from $291.6 million in FY 2024[18]. - The net profit margin for the consolidated entity in FY 2025 was 1.6%, down from 2.9% in FY 2024[18]. - Free cash flow for FY 2025 was $180.5 million, significantly up from $48.4 million in FY 2024[18]. - The company reported a net loss of $507,356,000 for the year ended December 31, 2025, despite generating $73,242,000 in consolidated earnings[79]. Segment Performance - Acima's GMV from the direct-to-consumer marketplace grew over 60% year-over-year in Q4, representing nearly 10% of total GMV[4]. - The Acima segment generated revenue of $631.0 million in Q4 2025, with an 8.6% year-over-year growth[15]. - The Acima segment's gross merchandise volume (GMV) for FY 2025 was $2,010.1 million, an 8.6% increase year-over-year[18]. - The Rent-A-Center segment reported revenue of $1,897.2 million for FY 2025, a decrease of 4.2% compared to FY 2024[18]. - The Brigit segment reported cash advance volume of $404.7 million in Q4 2025, with paying users increasing to 1,550,718[15]. - The Acima segment generated revenues of $2,512,484 in 2025, up from $2,261,446 in 2024, showing strong growth in this area[29]. Earnings and Shareholder Metrics - Non-GAAP diluted earnings per share for FY 2025 was $4.13, compared to $3.83 in the prior year, while GAAP diluted earnings per share was $1.25, down from $2.21[6]. - GAAP net earnings for the year ended December 31, 2025, were $73,242 thousand, resulting in a diluted earnings per share of $1.25[51]. - Non-GAAP adjusted net earnings for the same period were $242,003 thousand, leading to a diluted earnings per share of $4.13[51]. - For the year ended December 31, 2024, GAAP net earnings were $123,478 thousand, with a diluted earnings per share of $2.21[57]. - Non-GAAP adjusted results for 2024 showed net earnings of $214,176 thousand, translating to a diluted earnings per share of $3.83[57]. Cash Flow and Liquidity - Net cash provided by operating activities for FY 2025 was $305.6 million, with a net leverage ratio of 2.9x as of December 31, 2025[6]. - Cash and cash equivalents increased to $120,528 as of December 31, 2025, compared to $60,860 in 2024, indicating improved liquidity[32]. - Total assets grew to $3,276,081 in 2025, up from $2,649,662 in 2024, reflecting a 23.6% increase[32]. - The net leverage ratio as of Q4 2025 was 2.9x, with outstanding debt of $1.5868 billion and net debt of $1.4663 billion[92]. Legal and Regulatory Matters - The company incurred $19.7 million in legal accruals and $0.9 million in litigation expenses related to regulatory investigations and lawsuits[36]. - Legal matters expenses totaled approximately $76,439,000 for the year, primarily related to regulatory investigations and lawsuits[80]. - The company incurred approximately $45.5 million in amortization related to acquired intangible assets and $15.9 million in incremental depreciation[85]. - The company faced $19.7 million in legal expenses related to regulatory investigations during the same period[64]. Future Outlook - The company expects FY 2026 revenues to be between $4.70 billion and $4.95 billion, with adjusted EBITDA guidance of $500 million to $535 million[8]. - The company expects to integrate Brigit operations following the acquisition on January 31, 2025, which may impact future financial performance[27]. - The company is focusing on enhancing digital capabilities and expanding its product offerings, including new services beyond lease-to-own[27].

Revenue and Financial Performance - Consolidated revenues increased by approximately $257.3 million, or 7.9%, to $3.5 billion for the nine months ended September 30, 2025, compared to the same period in 2024 [165]. - Total revenues for the three months ended September 30, 2025, increased by $95.8 million, or 9.0%, compared to the same period in 2024 [175]. - Total revenue increased by $257.3 million, or 7.9%, to $3,498.6 million for the nine months ended September 30, 2025, from $3,241.3 million for the same period in 2024 [186]. - Revenues for the Rent-A-Center segment decreased by 4.7% to $461.1 million for the three months ended September 30, 2025, and by 5.6% to $1.42 billion for the nine months ended September 30, 2025, primarily due to a 3.6% decline in same store sales [200]. Segment Performance - The Acima segment revenues rose by approximately $201.2 million, driven by an increase in rentals and fees revenues of $150.5 million and merchandise sales of $50.7 million, primarily due to higher GMV [166]. - The Brigit segment generated revenues of $141.4 million and an operating profit of $23.9 million since its acquisition [169]. - Brigit segment revenues reached $57.7 million for the three months ended September 30, 2025, with gross profit as a percentage of revenues at 88.5% [203][204]. - Mexico segment revenues increased by 8.7% to $20.7 million for the three months ended September 30, 2025, while gross profit was $14.7 million, representing 71.2% of revenues [207][208]. Profitability and Expenses - Gross profit increased by $112.9 million, or 7.2%, to $1.7 billion for the nine months ended September 30, 2025 [165]. - Operating profit decreased by approximately $46.4 million, or 21.8%, primarily due to increases in non-labor operating expenses and general and administrative expenses [165]. - Operating profit decreased by $17.3 million, or 24.7%, to $52.8 million for the three months ended September 30, 2025, compared to $70.1 million for the same period in 2024 [184]. - Non-labor operating expenses increased by $46.1 million, or 23.5%, to $242.1 million for the three months ended September 30, 2025, compared to $196.0 million for the same period in 2024 [181]. Cash Flow and Investments - Cash flow from operations was $264.0 million for the nine months ended September 30, 2025, with cash and cash equivalents of $107.0 million and outstanding indebtedness of $1.6 billion [171]. - Operating cash flow increased by $97.3 million to $264.0 million for the nine months ended September 30, 2025, driven by higher net earnings and reduced payments for inventory [211]. - Cash used in investing activities rose to $374.9 million for the nine months ended September 30, 2025, primarily due to the acquisition of Brigit for $275.9 million [212]. Strategic Initiatives - The company aims to leverage data analytics to attract new customers and mitigate risk across business segments [145]. - The company plans to accelerate the shift to e-commerce and improve the omni-channel customer experience at Rent-A-Center, expecting to increase brand awareness and customer loyalty [154]. - The company is committed to developing digital and e-commerce capabilities, including mobile applications, to enhance customer experience [144]. - The company is actively pursuing joint ventures, partnerships, and M&A opportunities to elevate financial mobility for underserved consumers [146]. Economic and Market Conditions - Macroeconomic conditions have significantly impacted the company's operations, including changes in consumer payment behaviors and rising product costs [150]. - A hypothetical 1.0% increase in market interest rates would result in an additional $11.1 million annualized pre-tax charge or credit to the company's financial statements [237]. Debt and Obligations - As of October 23, 2025, the company had outstanding borrowings of $875 million under the Term Loan Facility and $239 million under the ABL Credit Facility [223][237]. - The interest rate on the Term Loan Facility was 6.88% as of October 23, 2025, while the ABL Credit Facility bore interest at 6.23% [221][237]. - The total remaining obligation for existing store lease contracts was approximately $338 million as of September 30, 2025 [226]. Tax and Accounting - The company recorded $0.4 million in uncertain tax positions as of September 30, 2025, representing potential future cash liabilities [229]. - The company is currently assessing the impact of new accounting standards issued by the FASB, including ASU 2024-03 and ASU 2025-05, which will affect future financial reporting [231][232].

Financial Performance - Consolidated revenues for Q3 2025 reached $1,164.7 million, a 9.0% increase year-over-year, primarily driven by the acquisition of Brigit and higher rentals and fees revenue [6]. - Net earnings on a GAAP basis were $13.2 million, down from $30.9 million in the prior year, resulting in a net profit margin of 1.1%, a decrease of 180 basis points year-over-year [6]. - Adjusted EBITDA increased 5.7% year-over-year to $123.6 million, with an adjusted EBITDA margin of 10.6%, down 30 basis points compared to the prior year [6]. - Total revenues for Q3 2025 reached $1,164,717, an increase of 8.97% compared to $1,068,859 in Q3 2024 [28]. - Gross profit for Q3 2025 was $563,076, up from $511,086 in Q3 2024, reflecting a gross margin improvement [28]. - Net earnings for Q3 2025 were $13,221, a decrease of 57.1% from $30,860 in Q3 2024 [28]. - The company reported a total revenue increase of 5% compared to the previous quarter, reflecting strong operational performance [39]. - For the three months ended September 30, 2025, the consolidated net earnings (loss) were $(112,769) thousand, with an adjusted EBITDA of $123,561 thousand [48]. - The operating profit (loss) for the same period was $(73,237) thousand, with a total depreciation and amortization of $12,900 thousand [48]. Segment Performance - Acima's Gross Merchandise Volume (GMV) grew 11.0% year-over-year to $484.0 million, with new merchants and an expanding direct-to-consumer marketplace contributing significantly to this growth [7]. - Brigit segment revenue increased over 40% year-over-year, with paying subscribers rising approximately 27% year-over-year to 1.44 million [7]. - The Rent-A-Center segment reported a revenue decline of 4.7% year-over-year to $461.1 million, with same store sales decreasing 3.6% year-over-year [7]. Guidance and Future Outlook - The company tightened its FY 2025 guidance, maintaining revenue expectations of $4.60 - $4.75 billion while adjusting adjusted EBITDA guidance to $500 - $510 million [10]. - Future guidance suggests an expected revenue growth of 10% for the upcoming quarter, driven by new product launches and market expansion strategies [39]. - The company plans to invest $50 million in R&D for new technology development in the next fiscal year, aiming to enhance competitive advantage [39]. - The acquisition of Brigit is expected to contribute an additional $20 million in revenue over the next year, bolstering overall financial performance [39]. Liquidity and Debt - The company ended the quarter with liquidity of over $360 million and net debt of $1.5 billion, resulting in a net leverage ratio of 2.9x [12]. - Cash and cash equivalents increased to $107,021 in Q3 2025 from $85,054 in Q3 2024, indicating improved liquidity [30]. - The company reported a net leverage ratio of 2.9x, with outstanding debt of $1,564,000,000 and net debt of $1,457,000,000 [76]. - The company’s senior debt increased to $1,102,657 in Q3 2025 from $794,257 in Q3 2024, highlighting a significant rise in leverage [30]. Operational Costs and Expenses - Operating expenses for Q3 2025 totaled $510,323, compared to $441,027 in Q3 2024, indicating a rise in operational costs [28]. - Legal matters incurred expenses of $32.5 million in the three months ended June 30, 2025, significantly affecting the operating profit [39]. - Legal matters incurred expenses of approximately $12,612 thousand, primarily related to regulatory investigations and lawsuits [50]. - The company incurred shutdown and holding expenses related to store closures amounting to $0.4 million [68]. Acquisitions and Intangible Assets - The company acquired Brigit on January 31, 2025, which is expected to enhance its financial service offerings [25]. - The average monthly revenue per user (ARPU) for Brigit increased 11.4% year-over-year to $13.74, driven by higher expedited transfer revenue and deeper engagement with marketplace offers [7]. - The total fair value of acquired intangible assets led to an amortization expense of approximately $10.9 million for the three months ended March 31, 2025 [60]. - The total depreciation and amortization related to Brigit's acquired assets was approximately $4.1 million for the three months ended March 31, 2025 [62]. Special Items and Adjustments - Special items included in the financial results for September 30, 2025, accounted for approximately $78.1 million, impacting net earnings positively [33]. - The company recognized $31.7 million in estimated legal accruals related to ongoing regulatory investigations for the three months ended June 30, 2025 [55]. - The company reported special items including $14,899,000 for Acima acquired assets depreciation and amortization [65].

Acquisition and Expansion - The company completed the acquisition of Brigit on January 31, 2025, enhancing its financial health technology offerings [139]. - The company aims to grow penetration with current Acima third-party retailers and expand direct-to-consumer channels [151]. - The company is evaluating the effects of the One Big Beautiful Bill Act, signed into law on July 4, 2025, on its financial statements [143]. - Cash used in investing activities rose to $304.9 million for the six months ended June 30, 2025, primarily due to the acquisition of Brigit for $275.9 million [202]. Revenue and Profitability - Consolidated revenues increased by approximately $161.4 million, or 7.4%, to $2.33 billion for the six months ended June 30, 2025, compared to $2.17 billion for the same period in 2024 [158]. - The Acima segment revenues rose by approximately $142.1 million, driven by higher rentals and fees revenues and merchandise sales, resulting in an operating profit increase of approximately $33.8 million [159]. - Rent-A-Center segment revenues decreased by approximately $60.8 million, or 3.0%, due to declines in same store sales, leading to an operating profit decrease of approximately $20.3 million [160]. - The Brigit segment generated revenues of $83.8 million and an operating profit of $19.3 million since its acquisition [161]. - Total revenues for the three months ended June 30, 2025, increased by $81.0 million, or 7.5%, to $1.16 billion, primarily due to the Acima and Brigit segments [165]. - Gross profit for the three months ended June 30, 2025, increased by $39.8 million, or 7.5%, to $571.8 million, with a gross profit margin of 49.4% [169]. - Total revenue increased by $161.4 million, or 7.4%, to $2,333.9 million for the six months ended June 30, 2025, compared to $2,172.5 million for the same period in 2024 [177]. - Operating profit decreased by $29.1 million, or 20.4%, to $113.3 million for the six months ended June 30, 2025, with an operating profit margin of 4.9% compared to 6.6% for the same period in 2024 [185]. Cost and Expenses - Operating labor expenses decreased by $7.1 million, or 4.5%, to $149.1 million, representing 12.9% of total revenue for the three months ended June 30, 2025 [170]. - General and administrative expenses increased by $9.8 million, or 18.2%, to $63.4 million, accounting for 5.5% of total revenue for the three months ended June 30, 2025 [172]. - Cost of rentals and fees increased by $44.9 million, or 6.7%, to $710.6 million for the six months ended June 30, 2025, with costs as a percentage of revenue rising to 39.4% from 37.9% [178]. - General and administrative expenses increased by $18.5 million, or 17.0%, to $127.2 million for the six months ended June 30, 2025, representing 5.4% of total revenue [183]. Cash Flow and Financial Position - Cash flow from operations was $145.6 million for the six months ended June 30, 2025, with cash and cash equivalents of $106.8 million and outstanding indebtedness of $1.6 billion [163]. - The company ended the second quarter of 2025 with $106.8 million in cash and cash equivalents and outstanding indebtedness of $1.6 billion [200]. - Operating cash flow increased by $85.1 million to $145.6 million for the six months ended June 30, 2025, compared to $60.5 million in 2024 [201]. Market and Economic Conditions - Macroeconomic conditions have significantly impacted business trends, including changes in consumer payment behaviors and rising product costs [145]. - The company is exposed to foreign exchange rate fluctuations between the Mexican peso and the U.S. dollar, affecting the financial position of its stores in Mexico [225]. - Revenue is moderately seasonal, with the first quarter generally providing higher sales due to federal income tax refunds [220]. Debt and Financing - The company entered into a seven-year $875 million senior secured term loan facility, with the option to add up to $500 million in incremental term loans, subject to certain financial ratios [212]. - As of July 24, 2025, the company had outstanding borrowings of $798.0 million under the Term Loan Facility and available commitments of $159.5 million under the ABL Credit Facility [214]. - The company issued $450 million in senior unsecured notes due February 15, 2029, bearing interest at 6.375% [215]. Tax and Legal Matters - Income tax expense decreased by $5.1 million, or 41.0%, to $7.4 million for the three months ended June 30, 2025, primarily due to lower earnings before income taxes [175]. - The company recorded $0.4 million in uncertain tax positions as of June 30, 2025, representing potential future cash liabilities [219]. - Other gains and charges increased by $57.1 million to $108.8 million for the six months ended June 30, 2025, driven by legal matters and the Brigit acquisition [184].

Financial Performance - Consolidated revenues for Q2 2025 reached $1,157.5 million, a 7.5% increase year-over-year, driven by the acquisition of Brigit and higher rentals and merchandise sales[6] - GAAP net earnings decreased to $15.5 million, down from $33.9 million in the prior year, resulting in a net profit margin of 1.3%, a decrease of 190 basis points year-over-year[6] - Adjusted EBITDA increased by 7.0% year-over-year to $133.2 million, with an adjusted EBITDA margin of 11.5%, a slight decrease of 10 basis points compared to the previous year[6] - Non-GAAP diluted earnings per share for Q2 2025 was $1.12, compared to $1.04 in the prior year, reflecting a 7.7% increase[6] - Operating profit decreased to $50.734 million from $80.655 million year-over-year, highlighting increased operating expenses[28] - Net earnings for Q2 2025 were $15.485 million, a decrease from $33.949 million in Q2 2024, resulting in basic earnings per share of $0.27[28] - The company reported a GAAP net earnings of $7,364,000 for the three months ended June 30, 2025, with a diluted earnings per share of $0.26[34] - Non-GAAP adjusted net earnings for the same period were $65,703,000, resulting in a diluted earnings per share of $1.12[34] - Net earnings for the three months ended June 30, 2025, were $82,003 thousand for Acima, $63,001 thousand for Rent-A-Center, and $10,472 thousand for Brigit, with a consolidated net loss of $141,927 thousand[49] Revenue Growth - Acima segment achieved 16% GMV growth, marking its seventh consecutive quarter of growth, while Brigit's subscriber base grew over 24%[3] - Total revenues for Q2 2025 reached $1,157.536 million, a 7.5% increase from $1,076.510 million in Q2 2024[28] - Gross profit for the same period was $571.825 million, compared to $531.959 million in the previous year, reflecting a gross margin improvement[28] - The Acima segment generated revenues of $618.967 million, up from $552.794 million, indicating strong growth in this area[28] - Cash advance volume increased by 21.1% year-over-year, reaching $356.1 million, with paying subscribers up 24.1%[7] - Average monthly revenue per user (ARPU) increased by 12.5% year-over-year to $13.45, driven by higher engagement and premium tier shifts[7] Guidance and Future Outlook - The company raised the midpoint of its FY 2025 non-GAAP diluted EPS target to a range of $4.05 - $4.40[10] - The company expects to achieve its guidance for FY 2025 while positioning for a strong start in 2026, supported by new e-commerce initiatives[12][13] - The company is tightening its FY 2025 guidance for Adjusted EBITDA to a range of $515 - $535 million[10] - Future guidance indicates potential challenges due to macroeconomic conditions, impacting financial performance and growth strategies[26] - The company plans to continue focusing on market expansion and new product development as part of its growth strategy[49] Assets and Liabilities - Total assets increased to $3,095,440,000 in June 2025, up from $2,620,279,000 in June 2024, representing a growth of approximately 18.1%[30] - Cash and cash equivalents rose to $106,841,000 in June 2025, compared to $82,515,000 in June 2024, marking an increase of about 29.5%[30] - Net receivables increased significantly to $189,894,000 in June 2025, up from $115,150,000 in June 2024, reflecting a growth of approximately 64.8%[30] - Total liabilities increased to $2,409,892,000 in June 2025, compared to $2,023,978,000 in June 2024, indicating a rise of approximately 19.1%[30] - Goodwill increased to $487,050,000 in June 2025, up from $289,750,000 in June 2024, representing a growth of about 68.1%[30] Special Items and Expenses - The company incurred special items totaling $88,311,000 for the three months ended June 30, 2025, which included legal matters and asset depreciation[34] - The company incurred $31.7 million in estimated legal accruals and $0.8 million in litigation expenses related to ongoing regulatory lawsuits[50] - Amortization expenses included approximately $11.0 million related to acquired intangible assets and $3.9 million for acquired software assets[51] - The company reported special items including $32,516 thousand related to legal matters and $14,900 thousand for Acima acquired assets depreciation and amortization[49] Operational Efficiency - The adjusted EBITDA margin for the three months ended June 30, 2025, was significantly higher, reflecting improved operational efficiency[32] - The total depreciation and amortization for the consolidated segment was $12,983 thousand for the three months ended June 30, 2025[49] - The operating profit for the three months ended June 30, 2025, was $50,734 thousand, reflecting a significant improvement from the previous loss[49] Market Presence - The company has approximately 2,300 retail units across the U.S., Mexico, and Puerto Rico, indicating a significant market presence[23] - The acquisition of Brigit is expected to enhance the company's financial solutions offerings, with integration planned for early 2025[26]

Acquisition and Strategic Initiatives - The company completed the acquisition of Brigit on January 31, 2025, enhancing its financial health technology offerings [139]. - The company is committed to executing strategic initiatives that enhance financial mobility for underserved consumers through potential mergers and acquisitions [142]. - The company spent $274.9 million on the acquisition of Brigit and ended the quarter with $107.3 million in cash and cash equivalents, alongside outstanding indebtedness of $1.5 billion [188]. Financial Performance - Total revenues increased by $80.4 million, or 7.3%, to $1,176.4 million for the three months ended March 31, 2025, compared to $1,096.0 million for the same period in 2024 [164]. - The Acima segment revenues increased approximately $75.9 million, driven by higher rentals and fees revenues and merchandise sales [158]. - Rent-A-Center segment revenues decreased approximately $25.0 million, with a same-store sales decline of 2.0% [159]. - Gross profit increased by $21.0 million, or 4.0%, to $550.1 million, with a gross profit margin of 46.8% [167]. - Operating profit increased by $0.8 million, or 1.4%, to $62.6 million, representing 5.3% of total revenue [172]. - Acima segment revenues increased by 13.5% to $637.3 million for the three months ended March 31, 2025, compared to $561.3 million in the same period of 2024 [175]. - Gross profit for the Acima segment rose by 10.1% to $186.5 million, with gross profit as a percentage of revenues decreasing to 29.3% from 30.2% year-over-year [176]. - Operating profit for the Acima segment increased by 42.0% to $73.7 million, with operating profit as a percentage of revenues rising to 11.6% from 9.2% year-over-year [177]. - Rent-A-Center segment revenues decreased by 4.9% to $489.0 million, primarily due to a decrease in corporate-owned store count and a 2.0% decline in same store sales [178]. - Gross profit for the Rent-A-Center segment fell by 6.4% to $322.8 million, with gross profit as a percentage of revenues at 66.0%, down from 67.1% year-over-year [179]. - Operating profit for the Rent-A-Center segment decreased by 15.0% to $66.4 million, with operating profit as a percentage of revenues declining to 13.6% from 15.2% year-over-year [180]. - The Brigit segment generated revenues of $31.9 million and operating profit of $8.8 million since its acquisition [160]. Cash Flow and Financial Position - Cash flow from operations was $137.7 million, with cash and cash equivalents of $107.3 million and outstanding indebtedness of $1.5 billion [162]. - Operating cash flow for the three months ended March 31, 2025, was $137.7 million, an increase of $92.3 million from $45.4 million in the same period of 2024 [189]. - The company has a five-year asset-based revolving credit facility with commitments of $550 million and a letter of credit sublimit of $150 million, which can be increased by up to an additional $125 million [197]. - As of April 24, 2025, the company had outstanding borrowings of $800.1 million under the Term Loan Facility and available commitments of $134.5 million under the ABL Credit Facility [201]. - The company issued $450 million in senior unsecured notes due February 15, 2029, bearing interest at 6.375% [202]. - The total remaining obligation for existing store lease contracts was approximately $329.4 million as of March 31, 2025 [203]. - The company recorded $0.4 million in uncertain tax positions as of March 31, 2025, representing potential future cash liability [207]. Market and Economic Conditions - Macroeconomic conditions have significantly impacted business trends, including changes in consumer payment behaviors and rising product costs [144]. - Revenue is moderately seasonal, with the first quarter generally providing higher sales due to federal income tax refunds [208]. - A hypothetical 1.0% increase or decrease in market interest rates would result in an additional $11.0 million annualized pre-tax charge or credit to the company's financial statements [212]. - The company is exposed to foreign exchange rate fluctuations of the Mexican peso to the U.S. dollar, affecting the financial position and operating results of its stores in Mexico [213]. Operational Insights - The lease portfolio value reflects the expected monthly rental income from active lease agreements, indicating the company's ongoing revenue potential [150]. - The same store lease portfolio value is calculated from stores operated for 13 months or more, providing insights into the stability of revenue streams [151]. - The company aims to grow penetration with current Acima third-party retailers and expand direct-to-consumer channels, enhancing market reach [151]. - The company is focused on leveraging data analytics to attract new customers and mitigate risks across business segments [141]. - The company emphasizes the importance of integrating technology platforms to improve consumer experience and operational efficiency [141]. Dividends - The company announced a quarterly cash dividend of $0.39 per share for Q1 2025, paid on April 22, 2025 [143].

Financial Performance - Consolidated revenues for Q1 2025 were $1,176.4 million, a 7.3% increase year-over-year, driven by higher rentals, fees, and merchandise sales, along with the acquisition of Brigit[6] - Adjusted EBITDA for Q1 2025 increased 15.6% year-over-year to $126.1 million, with an adjusted EBITDA margin of 10.7%, up 70 basis points from the prior year[6] - Net earnings on a GAAP basis were $24.8 million, a decrease of $2.9 million from the prior year, resulting in a net profit margin of 2.1%, down 40 basis points year-over-year[6] - Non-GAAP diluted earnings per share for Q1 2025 was $1.00, compared to $0.79 in the prior year, reflecting a 26.6% increase[11] - Free cash flow for Q1 2025 was $127.2 million, significantly up from $33.6 million in Q1 2024[17] - Operating profit for Q1 2025 was $62,615, slightly up from $61,762 in Q1 2024[29] - GAAP net earnings for the three months ended March 31, 2025, were $24.793 million, with diluted earnings per share of $0.42[34] - Non-GAAP adjusted net earnings for the same period were $58.145 million, resulting in diluted earnings per share of $1.00[34] Segment Performance - The Acima segment experienced GMV growth of nearly 9%, while Brigit's revenue grew over 35% year-over-year following its acquisition[3] - The Acima segment reported a GMV of $454.1 million, reflecting an 8.8% year-over-year increase from $417.6 million in Q1 2024[17] - Revenue from the Acima segment was $637.3 million, a 13.5% increase compared to $561.3 million in Q1 2024[17] - The Brigit segment had a cash advance volume of $218.4 million and 1,230,158 paying users, with an ARPU of $12.88[17] - The Rent-A-Center segment's revenue decreased by 4.9% to $489.0 million from $514.1 million in Q4 2024[17] Guidance and Future Outlook - The company raised its fiscal year 2025 revenue guidance to a range of $4.60 billion to $4.75 billion, up from the previous range of $4.50 billion to $4.75 billion[10] - The company anticipates ongoing challenges due to macroeconomic conditions impacting future performance and growth strategies[26] Debt and Financial Ratios - The company ended Q1 2025 with net debt of $1.4 billion and a net leverage ratio of 2.9x[12] - Outstanding debt as of Q1 2025 is $1,549.1 million[75] - Net debt stands at $1,441.8 million after accounting for cash and cash equivalents of $107.3 million[75] - The company is focusing on maintaining a net leverage ratio below 3.0x to ensure financial stability[75] Asset and Equity Growth - Cash and cash equivalents increased to $107,325 as of March 31, 2025, compared to $84,793 a year earlier[31] - Total assets grew to $3,043,130 as of March 31, 2025, up from $2,626,984 in 2024[31] - The company reported a total stockholders' equity of $679,213 as of March 31, 2025, compared to $578,295 in 2024[31] Special Items and Expenses - Special items included $14.900 million in depreciation and amortization related to Acima acquired assets and $10.645 million in legal matters[34] - The company incurred $6.218 million in transaction costs related to the Brigit acquisition[48] - Legal matters accounted for $10.645 million in expenses, including $10.0 million related to estimated legal accruals[50]

Revenue Segments - Acima segment accounted for approximately 52% of consolidated revenues for the year ended December 31, 2024[35]. - Rent-A-Center segment comprised approximately 43% of consolidated revenues for the year ended December 31, 2024[36]. - The total number of store locations across all segments decreased from 2,410 in 2023 to 2,308 in 2024[40]. Store Operations - As of December 31, 2024, the company operated 1,728 Rent-A-Center stores in the United States and Puerto Rico[36]. - The company operates 132 stores in Mexico as of December 31, 2024[37]. - The company operates 21 Home Choice stores in Minnesota, 84 lease-to-own stores, and 13 Acima staffed locations in North Carolina as of December 31, 2024[64][65]. Acquisitions and Strategic Focus - The company completed the acquisition of Brigit on January 31, 2025, enhancing its financial health technology offerings[17]. - The recent acquisition of Brigit expands the company's strategic focus into technology-driven financial health solutions, such as earned wage access and credit building products[90]. - The company has accelerated its virtual growth strategy through acquisitions, including Merchants Preferred and Acima Holdings, focusing on large market opportunities with third-party retailers[90]. Customer Behavior and Market Trends - The company has experienced negative trends in customer behavior since late 2021, leading to a tightening of underwriting policies and a reduction in active leases, resulting in decreased lease revenue and operating cash flows[81]. - The company reported significant pressure on discretionary income levels of consumers due to the expiration of government stimulus programs and a rise in the U.S. consumer price index[81]. - Revenue is moderately seasonal, with the first quarter typically seeing higher merchandise sales due to federal income tax refunds[58]. Financial Health and Indebtedness - The company has significant indebtedness, which could materially affect its financial condition and operational flexibility[80]. - As of December 31, 2024, the company's total indebtedness was approximately $1.3 billion, with undrawn commitments of $428.3 million under the ABL Credit Facility[175]. - The annual cash interest payments on the company's indebtedness are approximately $109 million, which may fluctuate with changes in interest rates[181]. Regulatory and Compliance Risks - The company is subject to increasing regulatory scrutiny in the lease-to-own industry, which could lead to additional compliance costs and operational burdens[80]. - The company has incurred substantial costs related to compliance with evolving federal and state laws, and may continue to face expenses from government investigations and enforcement actions[153]. - The regulatory environment regarding information security and data privacy is becoming more stringent, potentially leading to increased compliance costs and operational challenges for the company[155]. Competition and Market Position - The company faces intense competition in the lease-to-own industry, which could impede its ability to maintain lease volumes and pricing, adversely affecting operating results[112]. - The recently acquired Brigit business faces significant competition from other providers of financial health technology, which may impact its growth objectives[116]. - The company must compete effectively in the growing e-commerce sector, which has intensified due to COVID-19, to maintain market share and profitability[104]. Technology and Innovation - The company utilizes a proprietary automated decision engine for lease purchase agreement approvals, benefiting both retailers and consumers[33]. - The company’s strategy to grow its third-party retailer business relies on developing robust virtual lease-to-own technology and decisioning programs[103]. - The integration of artificial intelligence in the company's operations presents risks that could adversely affect its business and reputation[77]. Labor and Operational Challenges - The company is facing challenges from a tight labor market and wage inflation, which could further strain its financial performance[82]. - The company must effectively manage inventory to meet customer demand; failure to do so could lead to significant revenue declines and excess inventory markdowns[88]. - Acts of nature and climate change can disrupt operations and adversely impact business continuity, particularly in specific geographic locations[119]. Legal and Litigation Risks - The company is involved in various legal proceedings that could materially impact its financial condition and operations, with ongoing monitoring and assessment of reserves[211]. - Ongoing legal proceedings with the CFPB may result in significant penalties or operational changes that could materially impact the company's financial condition[143]. - Acima is facing ongoing legal challenges, including a multi-state attorneys' general matter and litigation from the New York Attorney General, which could lead to significant financial liabilities and operational changes[150]. Cybersecurity and Data Privacy - The company has a comprehensive cybersecurity program aimed at protecting information systems and mitigating risks, with regular assessments and training for employees[201][203]. - The company is subject to significant risks from cyberattacks, which could disrupt operations and lead to loss of confidential information, potentially harming its financial condition[108]. - The use of AI applications may lead to cybersecurity incidents, potentially harming the company's reputation and operational results[131]. Franchise Operations - The company has 448 franchised stores across 29 states, generating royalties of 3.0% to 6.0% of franchisees' monthly gross revenue[39]. - Franchise agreements require stores to exclusively offer approved brands and maintain an adequate inventory mix as dictated by Franchising policy manuals[52]. - The Franchising segment's success relies on independent third-party franchisees, which poses risks to growth and revenue due to limited control over their operations[126].

Compensation and Benefits - Executive's annual base salary is set at $1,100,000, with the potential for annual increases as determined by the Board[8] - Executive is eligible for an annual cash bonus targeted at 150% of the base salary, payable no later than March 15 of the following year[9] - Executive will receive annual equity-based awards with a target grant date fair value of 450% of the base salary, amounting to $4,950,000 for 2025[10] Termination and Severance - In the event of termination without Cause or for Good Reason, Executive is entitled to receive two times the salary and bonus, payable in equal monthly installments over 24 months[27] - If terminated due to Disability or death, Executive or the beneficiary will receive accrued compensation, a pro-rata bonus, and benefit continuation coverage[28] - The Company may terminate Executive's employment for Cause under specific circumstances, including willful misconduct or failure to perform duties[17] - The Company confirms that Executive's employment is at-will and can be terminated by either party at any time, with or without reason[37] - Executive must execute a general release agreement to receive severance payments or benefits, except for Accrued Compensation[39] Employment Terms - Executive's employment will commence on June 1, 2025, and will continue until terminated as per the Agreement[5] - Executive is required to devote substantially all business time to the Company and cannot serve on outside boards without Board consent[6] - The Company will reimburse Executive for reasonable business expenses incurred during the Employment Period[12] - Executive's place of employment will be at the Company's principal office in Plano, Texas, with reasonable business travel as needed[13] Confidentiality and Non-Compete - Confidential Information includes non-public financial forecasts, historical financial data, and other sensitive business information disclosed to Executive during employment[40] - Executive is prohibited from holding a 5% or greater equity interest in a Competitive Enterprise for two years post-termination[47] - Non-solicitation provisions prevent Executive from soliciting clients or employees of the Company for two years after termination[50] - The Company retains the right to seek injunctive relief in case of breach of the agreement by Executive[54] Legal and Compliance - The agreement includes a clause stating that any invalid provision will not affect the validity of the remaining provisions[60] - Executive's entitlement to payments or benefits is not subject to mitigation[58] - All notices related to the agreement must be in writing and delivered through specified methods[61] - The Company may assign the Agreement to any of its Affiliates or successors without Executive's consent[62] - Executive's beneficiary can be designated in a written beneficiary designation filed with the Company[63] - The Company may withhold federal, state, and local taxes from any amounts payable under the Agreement[74] - The Agreement is intended to comply with Section 409A of the Internal Revenue Code to avoid tax penalties[68] - If Executive is a "specified employee," payments classified as "nonqualified deferred compensation" will be delayed for six months post-separation[69] - The Company will provide Benefit Continuation Coverage for up to 24 months following termination if COBRA is elected[80] - Payments classified as "parachute payments" may be adjusted to avoid excise tax under Section 4999 of the Code[72] - The Agreement supersedes all prior agreements related to the subject matter, except for specific agreements like the Loyalty Agreement[76] - The Agreement allows for arbitration of disputes and waives the right to a jury trial[66] - The Agreement may be executed in multiple counterparts, each considered an original[85]