Upbound (US:UPBD)2025-10-30 11:48Financial 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 merchandise sales [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 $1,164.7 million, a 8.9% increase from $1,068.9 million in Q3 2024 [28]. - Gross profit for Q3 2025 was $563.1 million, compared to $511.1 million in Q3 2024, reflecting a gross margin improvement [28]. - The company reported a net earnings of $13.2 million for Q3 2025, down from $30.9 million in Q3 2024, resulting in a diluted earnings per share of $0.22 [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, resulting in an operating profit (loss) of $(73,237) thousand [48]. - Adjusted EBITDA for the same period was $123,561 thousand, with Acima contributing $75,002 thousand and Rent-A-Center contributing $74,709 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]. - The Acima segment generated revenues of $625.3 million in Q3 2025, up from $566.2 million in Q3 2024 [28]. 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 indicates an expected revenue growth of 10% for the upcoming quarter, driven by new product launches and market expansion strategies [39]. - The company is committed to responsible growth as it enters 2026, reflecting its updated FY 2025 guidance [13]. Liquidity and Debt - The company ended the quarter with liquidity of over $360 million and a net leverage ratio of 2.9x, down from 3.0x in the previous quarter [12]. - Cash and cash equivalents increased to $107.0 million as of September 30, 2025, up from $85.1 million a year earlier [30]. - The company’s senior debt increased to $1,102.7 million as of September 30, 2025, from $794.3 million a year earlier [30]. - The net leverage ratio as of Q3 2025 was 2.9x, with outstanding debt of $1,564,000,000 and net debt of $1,457,000,000 [76]. Expenses and Legal Matters - Operating expenses increased to $510.3 million in Q3 2025, compared to $441.0 million in Q3 2024, primarily due to higher non-labor operating expenses [28]. - Legal matters incurred expenses of $32.5 million in the three months ended June 30, 2025, significantly affecting the operating profit [39]. - The company recognized $10.0 million in legal accruals and $0.6 million in litigation expenses related to regulatory lawsuits [61]. - Legal matters expenses totaled $12,612 thousand, primarily related to regulatory investigations and lawsuits [50]. Acquisitions - The company acquired Brigit on January 31, 2025, which is expected to enhance its financial service offerings [25]. - The acquisition of Brigit is expected to contribute an additional $20 million in revenue over the next year, enhancing market presence [39]. - The company reported $6,218 thousand in transaction costs associated with the Brigit acquisition [64]. - The company incurred $3,656,000 in transaction fees related to the Brigit acquisition [67].