PROG (PRG) - 2025 Q2 - Quarterly Results

Q2 2025 Performance Overview This section provides an overview of PROG Holdings' Q2 2025 performance, highlighting management commentary and key financial results Management Commentary Management reports resilient Q2 2025 results, outperforming guidance despite headwinds, with strong Progressive Leasing execution and Four Technologies' growth - The company demonstrated resilience and outperformed guidance despite the loss of a major retail partner and macroeconomic uncertainty[2] - Four Technologies achieved over 200% revenue growth and continued profitability, enhancing the company's ecosystem through cross-selling opportunities[2] - Progressive Leasing is deploying AI-powered tools and optimizing its digital platforms to improve customer experience and engagement, while strategically moderating GMV growth to maintain portfolio health[2] Q2 2025 Key Financial Highlights Q2 2025 saw consolidated revenues of $604.7 million, net earnings of $38.5 million, and strong 166.5% GMV growth in Four Technologies Q2 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Consolidated Revenues | $604.7 million | | Net Earnings | $38.5 million | | Adjusted EBITDA | $73.5 million | | Diluted EPS | $0.95 | | Non-GAAP Diluted EPS | $1.02 | | Progressive Leasing GMV | $413.9 million | | Four Technologies GMV Growth | 166.5% | Detailed Financial Results This section provides a detailed breakdown of PROG Holdings' consolidated financial performance, segment-specific results, and liquidity position for Q2 2025 Consolidated Results Consolidated revenues increased 2.1% to $604.7 million, with net earnings up 13.9% to $38.5 million and diluted EPS rising 23.4% to $0.95 Q2 2025 Consolidated Financial Performance (YoY) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Revenues | $604.7M | $592.2M (approx) | +2.1% | | Net Earnings | $38.5M | $33.8M | +13.9% | | Adjusted EBITDA | $73.5M | $72.3M | +1.7% | | Diluted EPS | $0.95 | $0.77 | +23.4% | | Non-GAAP Diluted EPS | $1.02 | $0.92 | +10.9% | - The increase in earnings per share was supported by a 7.2% year-over-year reduction in the company's diluted weighted average shares outstanding[5] Progressive Leasing Results Progressive Leasing's GMV declined 8.9% to $413.9 million, while lease merchandise write-offs remained within the 6-8% target range - Progressive Leasing's GMV decreased by 8.9% to $413.9 million compared to the same period in 2024[6] - The provision for lease merchandise write-offs was 7.5% of leasing revenues, which is within the company's target range of 6-8%[6] Liquidity and Capital Allocation PROG Holdings maintained strong liquidity with $222.0 million cash, $600.0 million gross debt, and continued capital returns through stock repurchases and dividends Q2 2025 Liquidity & Capital Allocation Summary | Metric | Value | | :--- | :--- | | Cash | $222.0 million | | Gross Debt | $600.0 million | | Stock Repurchased in Q2 | $25.7 million | | Remaining Repurchase Capacity | $309.6 million | | Quarterly Dividend per Share | $0.13 | Financial Outlook This section outlines PROG Holdings' updated financial guidance for the full year 2025 and the upcoming third quarter Updated Full Year 2025 Outlook PROG Holdings updated its full-year 2025 outlook, raising the lower end of revenue and earnings guidance despite an anticipated challenging operating environment - The company raised the low end of its full-year 2025 guidance for revenues and earnings metrics, reflecting confidence despite a difficult operating environment[8] Revised Full Year 2025 Outlook | Metric (PROG Holdings) | Revised Low | Revised High | Previous Low | Previous High | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $2,450M | $2,500M | $2,425M | $2,500M | | Net Earnings | $120M | $125M | $109M | $125M | | Adjusted EBITDA | $255M | $265M | $245M | $265M | | Diluted EPS | $2.91 | $3.06 | $2.62 | $3.01 | | Diluted Non-GAAP EPS | $3.20 | $3.35 | $2.90 | $3.30 | Third Quarter 2025 Outlook The company projects Q3 2025 total revenues between $580 million and $595 million, with non-GAAP diluted EPS between $0.70 and $0.75 Q3 2025 Outlook | Metric (PROG Holdings) | Low | High | | :--- | :--- | :--- | | Total Revenues | $580M | $595M | | Net Earnings | $26M | $28M | | Adjusted EBITDA | $57M | $62M | | Diluted EPS | $0.63 | $0.68 | | Diluted Non-GAAP EPS | $0.70 | $0.75 | Consolidated Financial Statements This section presents PROG Holdings' consolidated statements of earnings, balance sheets, and cash flows for the reported periods Consolidated Statements of Earnings For H1 2025, total revenues grew to $1.29 billion, operating profit increased to $117.0 million, and net earnings rose to $73.2 million Six Months Ended June 30 (YoY Comparison) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $1,288,751 | $1,234,031 | | Operating Profit | $117,045 | $95,495 | | Net Earnings | $73,201 | $55,740 | | Diluted EPS | $1.78 | $1.26 | Consolidated Balance Sheets As of June 30, 2025, total assets were $1.45 billion, with cash increasing to $222.0 million and total liabilities decreasing to $785.9 million Balance Sheet Highlights (vs. Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $222,027 | $95,655 | | Lease Merchandise, Net | $526,303 | $680,242 | | Total Assets | $1,454,596 | $1,513,767 | | Debt, Net | $594,212 | $643,563 | | Total Liabilities | $785,923 | $863,486 | | Total Shareholders' Equity | $668,673 | $650,281 | Consolidated Statements of Cash Flows H1 2025 operating cash flow was $279.8 million, leading to a net cash increase of $126.4 million after investing and financing activities Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash from Operating Activities | $279,820 | $191,127 | | Cash Used in Investing Activities | $(34,789) | $(17,822) | | Cash Used in Financing Activities | $(118,659) | $(78,587) | | Increase in Cash | $126,372 | $94,718 | Segment Data This section provides a detailed breakdown of PROG Holdings' segment-specific revenues and Gross Merchandise Volume (GMV) Segment Revenues Q2 2025 Progressive Leasing revenue was flat at $569.7 million, while the 'Other' segment, including Four Technologies, saw a 202.5% revenue increase Q2 Revenues by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Progressive Leasing | $569,674 | $570,516 | -0.1% | | Vive | $16,160 | $15,421 | +4.8% | | Other | $18,829 | $6,224 | +202.5% | Six Month Revenues by Segment (in thousands) | Segment | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Progressive Leasing | $1,221,231 | $1,191,066 | +2.5% | | Vive | $31,820 | $31,471 | +1.1% | | Other | $35,700 | $11,494 | +210.6% | Segment Gross Merchandise Volume (GMV) Q2 2025 total GMV increased to $607.5 million, driven by significant growth in the 'Other' and Vive segments, offsetting a decline in Progressive Leasing Q2 GMV by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Progressive Leasing | $413,872 | $454,508 | -8.9% | | Vive | $43,990 | $35,757 | +23.0% | | Other | $149,632 | $56,139 | +166.5% | | Total GMV | $607,494 | $546,404 | +11.2% | Non-GAAP Financial Measures and Reconciliations This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents Explanation of Non-GAAP Measures The company uses non-GAAP measures like adjusted EBITDA and non-GAAP EPS to provide a clearer view of core operational performance by excluding non-recurring items - Management uses non-GAAP measures to assess performance by excluding one-time or variable items like intangible amortization, restructuring costs, and stock-based compensation[27][29][30] - These measures are intended to provide investors with a clearer view of the underlying operating performance and are used for strategic planning, forecasting, and creditworthiness evaluation[32] GAAP to Non-GAAP Reconciliations Detailed reconciliations are provided, showing Q2 2025 GAAP Net Earnings of $38.5 million adjusted to Non-GAAP Net Earnings of $41.5 million, and similar adjustments for EPS and outlook Q2 2025 Reconciliation of Net Earnings and Diluted EPS | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Net Earnings | $38.5M | +$3.0M | $41.5M | | Diluted EPS | $0.95 | +$0.07 | $1.02 | - Detailed reconciliations are provided for Adjusted EBITDA by segment for quarterly and six-month periods[35][38] - The company provides full reconciliations for its revised full-year 2025 and new Q3 2025 outlook for both Adjusted EBITDA and Non-GAAP Diluted EPS[41][44][45]