PROG (US:PRG)2022-04-27 15:34Financial Data and Key Metrics Changes - Q1 consolidated revenues decreased by 1.5% year-over-year, amounting to $710.5 million compared to $721 million in the previous year [27] - Adjusted EBITDA for Q1 was $64.6 million, representing a margin of 9.1%, down from $118.1 million or 16.4% in the same period last year [27] - GAAP diluted EPS was $0.49, while non-GAAP EPS was $0.57 [28] Business Line Data and Key Metrics Changes - Progressive Leasing's revenue was $692.9 million, a 2.1% decrease from $708 million in the prior year [21] - The gross leased asset balance increased by 17.6%, which is expected to drive stronger revenue in the latter half of the year [13][22] - Write-offs for Progressive Leasing were $50.3 million, or 7.3% of revenue, compared to $18.6 million and 2.6% in the previous year [25] Market Data and Key Metrics Changes - Progressive Leasing's GMV declined by 1.1% year-over-year, with e-commerce GMV growing by 10% year-over-year, representing 15.9% of total GMV in Q1 [12] - The company anticipates that the macroeconomic environment will remain challenging but believes it can capture a larger share of the underserved market [18] Company Strategy and Development Direction - The company is focusing on several initiatives to increase GMV, including co-branded marketing campaigns and enhanced customer experience [11] - The management believes that the current economic environment presents an opportunity to capture a larger share of the market as consumers seek flexible payment solutions [18] - The company is committed to investing in technology and product development to enhance its offerings and maintain competitive advantage [67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that Q1 results represent the low point for EBITDA margins and GMV growth for the year [11] - The company expects write-offs to remain within the targeted annual range of 6% to 8% for 2022 [15] - Management noted that the business has shown resilience in various economic cycles and anticipates growth opportunities in the current environment [18] Other Important Information - The company repurchased approximately $78.1 million of its common stock during Q1, with $482.8 million remaining under its $1 billion share repurchase program [29] - The company ended the quarter with $600 million in gross debt and $184 million in cash, resulting in a net leverage of approximately 1.2 times trailing 12-month adjusted EBITDA [28] Q&A Session Summary Question: Can you provide more details on the new e-commerce retail partner? - Management indicated that the new partner is Wayfair, which presents a significant opportunity for growth [59] Question: How do you expect the year to shape up, particularly for Q2? - Management expects Q2 to show improvement but noted that the most significant acceleration will occur in the back half of the year [49][53] Question: What are the implications of the tax refund season on results? - Management described the tax season as muted this year, with typical behaviors observed but difficult to separate from the impact of prior stimulus [85] Question: What percentage of customers are repeat customers? - Approximately 50% of leases originated in any given period are from repeat customers, an increase from the mid-30s percentage a few years ago [94]