Upbound Group (UPBD) Q3 2025 Earnings Transcript

Core Insights - The company has strengthened its executive team with the appointment of Hal Koury as Chief Financial Officer and Rebecca Wooters as Chief Growth Officer, both bringing extensive experience in financial services and digital transformation [1][5][51] - The company reported strong financial results for the quarter, with revenue increasing by 9% year-over-year to $1.16 billion and adjusted EBITDA rising by 5.7% to $123.6 million [6][20] - Asima achieved its eighth consecutive quarter of GMV growth, up 11% year-over-year, while Bridget experienced significant growth with a 40% increase in revenue and a 27% rise in subscribers [6][17][31] Executive Appointments - Hal Koury, previously CFO at Goeasy, brings relevant experience in non-prime lending and retail banking [1] - Rebecca Wooters, former Chief Digital Officer at Signet Jewelers, has a track record of transforming businesses into digital omnichannel retailers [1][5] Financial Performance - Revenue for the quarter reached $1.16 billion, a 9% increase from the previous year, driven by growth in Asima and the addition of Bridget [20] - Adjusted EBITDA was $123.6 million, reflecting a 5.7% year-over-year increase, with an adjusted EBITDA margin of 10.6% [20] - Non-GAAP diluted EPS was $1, up 5.3% from the year-ago quarter [20] Segment Performance - Asima's GMV grew by 11% year-over-year, with a focus on adding new merchants and enhancing customer experience [31][32] - Bridget's revenue increased by 40% year-over-year, with a significant rise in active subscribers and a strong average revenue per user (ARPU) [35][37] - Rent-A-Center reported a revenue of $461 million, down 4.7% year-over-year, but showed improvement in same-store sales, which were down 3.6% [39][40] Market Dynamics - The consumer environment is characterized by economic uncertainty, impacting spending priorities and payment behavior [8][59] - The company anticipates that these conditions may lead to increased demand for low weekly payments for durable goods [9] - Asima's underwriting has tightened in response to macroeconomic pressures, which may impact GMV growth in the near term [10][47] Strategic Initiatives - Asima activated its 100,000th merchant location, enhancing its merchant portfolio and customer experience [22] - Bridget is testing new financial products and marketing strategies to drive subscriber growth and improve customer acquisition [25][66] - Rent-A-Center has implemented operational improvements and promotional strategies to enhance customer engagement and sales performance [27][29] Future Outlook - The company expects revenue for the full year to be in the range of $4.6 billion to $4.075 billion, with adjusted EBITDA projected between $500 million and $510 million [47][49] - Asima is projected to achieve mid-single-digit GMV growth in the fourth quarter, while Bridget is expected to see high single-digit revenue growth [48][49] - The company remains focused on leveraging digital transformation and AI to enhance customer experiences and operational efficiency [51][70]