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]

Revenue Growth - Consolidated revenues increased by approximately $267.0 million for the nine months ended September 30, 2024, compared to the same period in 2023[128]. - Total revenues increased by $89.8 million, or 9.2%, to $1,068.9 million for the three months ended September 30, 2024, compared to the same period in 2023[138]. - Total revenue for the nine months ended September 30, 2024, increased by $267.0 million, or 9.0%, to $3,241.3 million compared to the same period in 2023[149]. - The Acima segment's revenues increased by $256.9 million, or 18.0%, to $1,680.3 million for the nine months ended September 30, 2024, driven by higher rentals and fees revenues[161]. - Revenues in the Rent-A-Center segment increased by approximately $14.6 million for the nine months ended September 30, 2024, driven by a 1.9% increase in same store sales[131]. - Mexico segment revenues increased by 8.9% for the nine months ended September 30, 2024, contributing to a gross profit increase of 10.2%, or $4.0 million[132]. - Revenues for the Mexico segment decreased by $612,000 (3.1%) to $19,642,000 for the three months ended September 30, 2024, while increasing by $4,939,000 (8.9%) to $60,465,000 for the nine months ended September 30, 2024 compared to the same periods in 2023[167]. Profitability - Gross profit rose by approximately $62.5 million during the same period, primarily driven by the Acima segment's performance[128]. - Gross profit increased by $13.9 million, or 2.8%, to $511.1 million for the three months ended September 30, 2024, with a gross profit margin of 47.8%[142]. - Gross profit increased by $62.5 million, or 4.1%, to $1,572.1 million for the nine months ended September 30, 2024, with gross profit as a percentage of total revenue decreasing to 48.5% from 50.8% in the prior year[153]. - Operating profit for the Acima segment increased by approximately $10.8 million, supported by a gross profit increase of $48.6 million[130]. - Operating profit increased by $12.0 million, or 20.7%, to $70.1 million for the three months ended September 30, 2024, with an operating profit margin of 6.6%[147]. - Operating profit increased by $105.5 million to $212.5 million for the nine months ended September 30, 2024, representing an operating profit margin of 6.6%, up from 3.6% in the same period of 2023[158]. - Operating profit for the Mexico segment decreased by $240,000 (21.4%) to $1,124,000 for the three months ended September 30, 2024, while increasing by $722,000 (21.1%) to $4,139,000 for the nine months ended September 30, 2024 compared to the same periods in 2023[170]. Expenses - Non-labor operating expenses increased by $44.5 million, general and administrative expenses by $9.8 million, and operating labor by $6.5 million during the nine months ended September 30, 2024[128]. - Cost of rentals and fees increased by $45.6 million, or 15.4%, to $342.4 million for the three months ended September 30, 2024, representing 39.0% of rentals and fees revenue[139]. - Cost of rentals and fees rose by $122.4 million, or 13.8%, to $1,008.1 million for the nine months ended September 30, 2024, compared to $885.7 million for the same period in 2023[151]. - Non-labor operating expenses rose by $44.5 million, or 7.8%, to $613.8 million for the nine months ended September 30, 2024, with a slight decrease in the percentage of total revenue to 19.4% from 19.7%[155]. - General and administrative expenses increased by $9.8 million, or 6.5%, to $160.2 million for the nine months ended September 30, 2024, with expenses as a percentage of total revenue decreasing to 4.9% from 5.1%[156]. Cash Flow and Investments - Cash flow from operations was $166.7 million for the nine months ended September 30, 2024, with cash and cash equivalents of $85.1 million and outstanding indebtedness of $1.3 billion[134]. - Operating cash flow generated was $166.7 million for the nine months ended September 30, 2024, a decrease of $53.2 million from $219.9 million for the same period in 2023[175]. - Cash used in investing activities decreased to $27.3 million for the nine months ended September 30, 2024, compared to $36.2 million for the same period in 2023[176]. - Capital expenditures increased to $44.2 million for the nine months ended September 30, 2024, compared to $36.2 million for the same period in 2023[180]. Dividends and Shareholder Returns - A quarterly cash dividend of $0.37 per share was approved for the fourth quarter of 2024, paid on October 22, 2024[115]. Market Risks - The company is exposed to market risk from 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[198]. - A hypothetical 1.0% increase or decrease in market interest rates would result in an additional $8.0 million annualized pre-tax charge or credit to the Condensed Consolidated Statements of Operations[197]. - The company has not entered into any interest rate swap agreements as of September 30, 2024[197]. Other Financial Metrics - Merchandise losses in Acima locations due to LCOs were approximately 9.5% for the nine months ended September 30, 2024, compared to 9.1% for the same period in 2023[163]. - Income tax expense increased by $11.3 million to $30.7 million for the nine months ended September 30, 2024, primarily due to increased earnings before income taxes[159]. - Total merchandise losses increased to $86,373,000 for the three months ended September 30, 2024, compared to $75,278,000 for the same period in 2023[180]. - As of September 30, 2024, the company recorded $0.5 million in uncertain tax positions, representing potential future cash liability[192]. - The company had $450 million in senior unsecured notes outstanding at a fixed interest rate of 6.375% as of September 30, 2024[197]. - The company had $804.5 million outstanding under the Term Loan Facility, with interest rates indexed to the Term SOFR rate[197]. - As of September 30, 2024, the total remaining obligation for existing store lease contracts was approximately $321.1 million[189]. - The total remaining minimum obligation for existing Rent-A-Center vehicle lease contracts was approximately $4.2 million as of September 30, 2024[190]. - The total remaining obligation for existing Mexico vehicle lease contracts was approximately $3.7 million as of September 30, 2024[191].

Financial Performance - Consolidated revenue for Q3 2024 was $1,068.9 million, representing a year-over-year increase of 9.2%[13] - Net income for Q3 2024 was $30.9 million, up $26.5 million compared to the previous year, with a net profit margin of 2.9%, an increase of 250 basis points year-over-year[13] - Adjusted EBITDA for Q3 2024 was $116.9 million, reflecting a 10.3% increase year-over-year, with an adjusted EBITDA margin of 10.9%[13] - Free cash flow for Q3 2024 was $88.3 million, compared to $63.2 million in Q3 2023[13] - The company achieved a gross profit of $511.086 million in Q3 2024, compared to $497.166 million in Q3 2023[36][38] - Total revenue for the three months ended September 30, 2024, was $1,068.9 million, an increase from $475.2 million in the previous year[46] - Rentals and fees contributed $877.8 million to total revenue, with Acima generating $442.5 million and Rent-A-Center $417.3 million[46] - Total cost of revenues was $557.8 million, with the cost of rentals and fees at $342.4 million[46] - Operating expenses totaled $441.0 million, with operating labor expenses at $152.6 million and non-labor operating expenses at $196.0 million[46] - The company reported a total of $150.8 million in merchandise sales, with Acima at $123.3 million and Rent-A-Center at $26.7 million[46] - The cost of merchandise sold was $191.9 million, with Acima at $163.1 million and Rent-A-Center at $28.3 million[46] - Installment sales generated $14.4 million, with Rent-A-Center contributing $14.4 million and no sales from Acima[46] Debt Management - The company reduced debt by $81 million in Q3 2024, ending the quarter with a net leverage ratio of 2.6x, down from 2.8x in Q2 2024[27] - Total Debt decreased from $1,335 million in Q2 2024 to $1,254.5 million in Q3 2024[48] - Net Debt reduced from $1,263 million in Q2 2024 to $1,179.3 million in Q3 2024[48] - The company continues to focus on improving its leverage metrics and operational efficiency[48] - Future outlook includes maintaining a strong focus on debt reduction and enhancing EBITDA performance[48] Operational Highlights - Acima's GMV increased by 13.0% year-over-year in Q3 2024, driven by growth in application volume and retailer network expansion[17] - Rent-A-Center reported revenue of $458.7 million, a 1.1% increase year-over-year, with same-store sales up 2.6%[21] - Year-over-year revenue growth observed at both Acima and Rent-A-Center (RAC) with four consecutive quarters of double-digit GMV growth at Acima[33] - RAC net earnings margin improved by 90 basis points year-over-year, while EBITDA margin improved by 130 basis points year-over-year[33] - Adjusted EBITDA for Q3 2024 was $75.275 million for Acima and $74.651 million for RAC, reflecting strong operational performance[40] Strategic Initiatives - The current full-year 2024 guidance for consolidated revenues is projected between $4.20 billion and $4.30 billion[22] - The company plans to enhance digital capabilities and optimize customer experience as part of its strategic priorities for 2024[10] - The company is focused on optimizing store count and expanding franchising stores in the New York area[33] - Targeted refinement in lease charge-offs and delinquency trends at Acima and RAC, responding to tightening from traditional lenders[34] - The company plans to supplement capital expenditures with dividends, debt reduction, and a buyback program[34] - The company is leveraging best practices in risk management to navigate challenging macroeconomic conditions[34] Cash Flow and Capital Expenditures - Free cash flow for Q3 2024 was $88.257 million, up from $63.209 million in Q3 2023, supporting future investments[45] - Capital expenditures for the quarter were $17.9 million, with Acima contributing $0.2 million and Rent-A-Center $10.1 million[46] - Cash (unrestricted) increased slightly from $72 million in Q2 2024 to $75.2 million in Q3 2024[48]