UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38047 Upbound Group, Inc. (Exact name of registrant as specified in its charter) (972) 801-1100 (Registrant's telephone number, ...

Group 1 - Upbound Group, Inc. (NASDAQ: UPBD), formerly known as Rent-A-Center, is undergoing a transformation to focus on new operations [1] - The company is being monitored for its potential investment opportunities, particularly in the context of its cash flow and intrinsic value assessment [1] - The investment strategy employed involves a combination of Benjamin Graham's philosophy and a contrarian market approach [1]

Core Insights - Upbound Group, Inc. (UPBD) reported strong first-quarter 2025 results, with revenues and earnings exceeding the Zacks Consensus Estimate, leading to an upward revision of its 2025 guidance [1][3][13] Financial Performance - Adjusted earnings per share were $1.00, surpassing the Zacks Consensus Estimate of 94 cents, and increased from 79 cents in the same quarter last year [3] - Total revenues reached $1,176.4 million, exceeding the consensus estimate of $1,119 million, marking a 7.3% year-over-year increase driven by growth in rentals, fees, and merchandise sales [3] - Adjusted EBITDA was $126.1 million, up 15.6% year over year, with a margin increase of 70 basis points to 10.7% [4] Segment Performance - Rent-A-Center segment revenues decreased 4.9% year over year to $489 million, attributed to fewer company-owned stores and disciplined underwriting [5] - Acima segment revenues rose 13.5% year over year to $637.3 million, with GMV growth of 8.8% driven by increased retailer locations and application volume [7][9] - Brigit generated revenues of $31.9 million for February and March 2025, reflecting a 35.4% increase from the same period in 2024 [10] 2025 Outlook - The company expects 2025 revenues to be between $4.60 billion and $4.75 billion, with adjusted EBITDA projected between $510 million and $540 million [13] - For Q2 2025, revenues are anticipated to be between $1.05 billion and $1.15 billion, with adjusted EBITDA of $125 million to $135 million [14] Financial Health - As of March 31, 2025, the company had cash and cash equivalents of $107.3 million, net senior debt of $1.09 billion, and stockholders' equity of $679.2 million [12]

Financial Data and Key Metrics Changes - First quarter revenue reached nearly $1,200,000,000, a 7.3% increase year over year, driven by the strength of Asima and the addition of Bridget [16][17] - Adjusted EBITDA was $126,000,000, reflecting a 16% increase compared to Q1 2024, with adjusted EBITDA margins at 10.7%, up 70 basis points from the previous year [16][17] - Non-GAAP diluted EPS was $1, representing a 27% increase from the same quarter last year [16][17] - Free cash flow generated was $127,000,000, nearly four times larger than the previous year's first quarter result [16][17] Business Line Data and Key Metrics Changes - Asima achieved GMV growth of nearly 9% year over year, with improved lease charge-offs by 70 basis points, leading to a 170 basis point increase in adjusted EBITDA margin [11][12] - Rent A Center reported a 2% decline in same-store sales, attributed to tightened underwriting and the removal of higher loss products [13][14] - Bridget experienced mid-twenty percent growth in both subscribers and cash advances, with revenue for the full quarter up 38% year over year [15][31] Market Data and Key Metrics Changes - Asima's GMV growth was driven by a diversified lineup of merchant relationships, with the top 10 merchants representing about 30% of total GMV [12][28] - Rent A Center's revenue was down 4.9% year over year due to fewer company-owned stores, with same-store sales reflecting fewer deliveries [33] - The average tax refund was slightly ahead of the prior two years, providing a boost to consumer spending power [17][18] Company Strategy and Development Direction - The company aims to become a holistic financial platform that improves customers' financial lives, focusing on underserved populations [6][9] - Expansion plans include launching a pilot in the Mexican market for Asima, leveraging existing Rent A Center infrastructure [21][22] - Digital investments are prioritized to enhance customer experience and drive growth across segments [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic conditions present both challenges and opportunities, with a focus on maintaining customer trust and loyalty [10][18] - The company expects to see low double-digit GMV growth across the year, building on last year's 17% growth [12][44] - Management expressed confidence in achieving the revised guidance for 2025, citing strong first-quarter performance [44][47] Other Important Information - The company successfully resolved a long-standing regulatory matter with the CFPB, which had no changes to its business or financial penalties [48] - The Bridget acquisition is expected to enhance customer acquisition and mitigate losses through data collaboration [63][64] Q&A Session Summary Question: Can you provide more details on tariff exposure and price increases? - Management indicated no current price changes from suppliers, with some categories even seeing price reductions. They emphasized their ability to adjust pricing flexibly if needed [54][55][57] Question: What is the outlook for Bridget's integration and synergies? - Management confirmed good progress in integrating Bridget, with plans for marketing collaboration and data sharing to enhance customer approvals and mitigate losses [63][64] Question: Can you elaborate on the expansion of Asima in Mexico? - Management expressed excitement about the expansion, leveraging existing Rent A Center infrastructure to mitigate risks associated with entering a new market [76][78]

Core Viewpoint - Upbound Group reported quarterly earnings of $1 per share, exceeding the Zacks Consensus Estimate of $0.94 per share, and showing an increase from $0.79 per share a year ago [1] Financial Performance - The company achieved revenues of $1.18 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.09% and up from $1.1 billion year-over-year [3] - Upbound Group has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2][3] Stock Performance - The stock has experienced a decline of approximately 31.8% since the beginning of the year, compared to a 5.3% decline in the S&P 500 [4] - The current Zacks Rank for Upbound Group is 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.03 on revenues of $1.14 billion, and for the current fiscal year, it is $4.10 on revenues of $4.6 billion [8] - The trend of estimate revisions for Upbound Group is mixed, which may change following the recent earnings report [7] Industry Context - The Financial - Leasing Companies industry, to which Upbound Group belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Financial Data and Key Metrics Changes - First quarter revenue reached nearly $1,200,000,000, a 7.3% increase year over year, driven by the strength of Asima and the addition of two months of Bridget [15][16] - Adjusted EBITDA was $126,000,000, reflecting a 16% increase compared to Q1 of 2024, with adjusted EBITDA margins rising to 10.7%, up 70 basis points from the previous year [16][17] - Non-GAAP diluted EPS was $1, representing a 27% increase from the same quarter last year [16] - Free cash flow generated was $127,000,000, nearly four times larger than the previous year's first quarter result [16][37] Business Line Data and Key Metrics Changes - Asima achieved GMV growth of nearly 9% year over year, with improved lease charge-offs by 70 basis points, leading to a 170 basis point increase in adjusted EBITDA margin [10][11] - Rent A Center reported a 2% decline in same-store sales, primarily due to tightened underwriting and the removal of higher loss products [12][13] - Bridget recorded a 38% year-over-year revenue increase on a pro forma basis, with subscriber growth of over 26% [14][31] Market Data and Key Metrics Changes - Asima's GMV growth was driven by a diversified lineup of merchant relationships, with the top 10 merchants representing about 30% of total GMV [11][28] - Rent A Center's revenue was down 4.9% year over year, attributed to fewer company-owned stores and a decline in deliveries [34] - The average tax refund was ahead of the prior two years, providing a boost to consumer spending power [17] Company Strategy and Development Direction - The company aims to become a holistic financial platform that enhances financial opportunities for underserved consumers [6][50] - Expansion plans include launching Asima in the Mexican market, leveraging existing Rent A Center infrastructure [20][22] - Digital investments are a priority, with initiatives to enhance customer experience and integrate services across segments [19][23] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic conditions present both challenges and opportunities, with a focus on maintaining customer trust and loyalty [9][18] - The company expects to see low double-digit GMV growth across the year, building on last year's 17% growth [12] - Management expressed confidence in achieving the revised guidance for 2025, citing strong first-quarter performance [45][48] Other Important Information - The company successfully resolved a long-standing regulatory matter with the CFPB, which had no impact on business operations [49] - The net leverage ratio was approximately 2.9 times, reflecting the closure of the Bridget transaction [38] Q&A Session Summary Question: Can you provide more details on tariff impacts and price increases? - Management indicated no current price increases from suppliers, with some categories even seeing price reductions [55][56] - They emphasized the ability to adjust pricing through weekly payment modifications if necessary [56][60] Question: What is the integration plan for Bridget across the business? - Management confirmed that marketing collaboration has begun, with plans for data sharing to enhance customer approvals and mitigate losses [64][65] Question: Can you elaborate on Bridget's seasonality and growth plans? - Management noted that Q1 typically has the highest margin profile, with expectations for subscriber growth in Q2 and Q3 [73][76] Question: What are the risks associated with expanding Asima into Mexico? - Management expressed confidence in the expansion due to existing Rent A Center operations in Mexico, which provide valuable market insights [77][79]

Financial Performance - Consolidated revenue reached $1.2 billion, a 7.3% year-over-year increase[17] - Net income was $24.8 million, a decrease of $2.9 million year-over-year[17] - Adjusted EBITDA increased by 15.6% year-over-year to $126.1 million[17] - Non-GAAP diluted EPS increased by $0.21 year-over-year to $1.00[17] - Net cash provided by operating activities increased by $92.3 million year-over-year to $137.7 million[17] Segment Highlights - Acima experienced an 8.8% year-over-year growth in GMV[14] - Brigit saw a 26.1% year-over-year growth in paying subscribers[14] - Rent-A-Center experienced a 2% year-over-year decrease in same-store sales and a 4.5% reduction in store count[14] Guidance - The company raised the midpoint of its full-year 2025 revenue guidance to $4.60 - $4.75 billion[39] - Full-year adjusted EBITDA guidance is $510 - $540 million[39] - Full-year non-GAAP diluted earnings per share guidance is $4.00 - $4.40[39] - Free cash flow guidance for the full year is $150 - $200 million[39]

upbound " Upbound Group, Inc. Earnings Release May 1, 2025 First Quarter 2025 Results & Key Metrics 25M $1.00 $1 176M $0.42 126M Adjusted Non-GAAP Total GAAP Net Earnings EBITDA® Revenue Diluted EPS Diluted EPS1 Strong Volume Growth at Acima and Brigit; Exceeds Q1 Targets and Raises Midpoint for Revenue, Net Cash Provided by Operating Activities of $138M Adjusted EBITDA, and Non-GAAP Diluted EPS First Quarter Consolidated Results CEO Commentary "We delivered strong results in the first quarter, which exceed ...

Company Overview - Upbound Group (UPBD) shares increased by 8.8% to close at $22.38, following a notable trading volume compared to typical sessions, despite a previous 18.2% loss over the past four weeks [1] - The company operates a virtual lease-to-own (LTO) business, which is a significant growth driver, indicating strong business model performance and rising consumer adoption [2] Financial Performance - Upbound Group is expected to report quarterly earnings of $0.94 per share, reflecting a year-over-year increase of 19% [3] - Revenue projections stand at $1.12 billion, marking a 2.2% increase from the same quarter last year [3] Market Trends - The consensus EPS estimate for Upbound Group has remained stable over the last 30 days, suggesting that stock price movements may not sustain without earnings estimate revisions [5] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [5] Industry Context - Upbound Group is part of the Zacks Financial - Leasing Companies industry, where another company, McGrath (MGRC), saw a 5.7% increase in its stock price, closing at $107.22, despite a -8.6% return over the past month [5] - McGrath's consensus EPS estimate has also remained unchanged at $1.02, representing a year-over-year change of +9.7%, with a Zacks Rank of 4 (Sell) [6]

Company Overview - Upbound Group (UPBD) is headquartered in Plano and operates in the Finance sector, specifically in leasing furniture and appliances with an option to buy [3] - The stock has experienced a price decline of 24.72% since the beginning of the year [3] Dividend Information - Upbound Group currently pays a dividend of $0.39 per share, resulting in a dividend yield of 7.1%, which is significantly higher than the Financial - Leasing Companies industry's yield of 4.45% and the S&P 500's yield of 1.76% [3] - The company's annualized dividend of $1.56 has increased by 4% from the previous year, with an average annual increase of 5.93% over the last five years [4] - The current payout ratio for Upbound Group is 41%, indicating that it pays out 41% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate projects earnings of $4.10 per share, reflecting a year-over-year earnings growth rate of 7.05% [5] Investment Considerations - Upbound Group is considered a compelling investment opportunity due to its strong dividend yield and growth potential, despite the general challenges faced by high-yielding stocks during periods of rising interest rates [7]