Upbound (US:UPBD)2025-05-01 13:00Financial 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]