PROG Holdings, Inc. Q4 FY2025 earnings call

• 2025 was a year of balance, discipline, and focus; navigated retail challenges and tightened leasing decisioning to protect portfolio performance. Underlying leasing GMV grew in the mid-single digits excluding disruptions. - For drove triple-digit GMV and revenue growth organically, with strong consumer engagement. - Cross product engagement was a central element of the long-term strategy, with incremental leasing GMV from cross products increasing. - Sold the Vibe portfolio for capital efficiency and acquired Purchasing Power to expand offerings. - Strategy pillars: Grow (strengthen partnerships, scale direct-to-consumer channels), Enhance (improve consumer experience via digital and AI), Expand (new product innovation). - AI was embedded across operations, improving efficiency and customer experience, with applications in various aspects like Piper Plus and the flexible lease engine. - For Plus subscription model was a key driver with strong engagement trends.

Progressive Leasing: Fourth quarter GMV declined 10.6% year over year due to Big Lots bankruptcy and intentional tightening actions; excluding related impacts, underlying GMV grew 1% year over year. Q4 revenue was $545,000,000, down 8% year over year, but gross margin expanded approximately 90 basis points. Full-year write offs for Progressive Leasing were 7.5% within the targeted range of 6% to 8%. For: Delivered another quarter of triple-digit GMV and revenue growth; full-year GMV was approximately $730,000,000, a 144% growth year over year, and adjusted EBITDA was approximately $10,000,000. Money App approached EBITDA neutral performance for the quarter and played an important role as an engagement and cross sell engine. Purchasing Power: Acquired in January 2026, expected to contribute $680,000,000 to $730,000,000 of revenue and $50,000,000 to $60,000,000 of adjusted EBITDA for the full year, with Q1 roughly breakeven on an adjusted EBITDA basis and Q4 being the strongest quarter from a revenue and earnings standpoint.

• 2026 consolidated revenue is expected to be in the range of $3,000,000,000 to $3,100,000,000; adjusted EBITDA is expected to be in the range of $320,000,000 to $350,000,000; non-GAAP EPS is expected to be in the range of $4.00 to $4.45. - Progressive Leasing: First quarter and full year results will be influenced by a smaller lease portfolio, but revenue trends are expected to improve as the year progresses; write offs are expected to remain within the targeted range of 6% to 8%. - Purchasing Power: Expected to contribute the mentioned revenue and adjusted EBITDA figures with seasonal dynamics. - For: Expected to deliver significant revenue growth and expanding adjusted EBITDA margin as the platform continues to scale.

• Macro environment challenges for consumer segments, with elevated prices pressuring discretionary income. - Big ticket retail categories under pressure affecting the leasing segment. - Uncertainty around the impact of tax refunds on customer behavior and portfolio performance. - Seasonal dynamics and integration challenges with Purchasing Power, including potential disruptions during the integration process.

• Kyle Joseph asked about Purchasing Power's performance, seasonality, and synergies; Brian Garner and Steve Michaels responded on revenue growth expectations, adjusted EBITDA margin opportunities, and growth opportunities within the PROG ecosystem. - Harold Groch asked about Purchasing Power's ABS transactions; Brian Garner and Steve Michaels discussed the nature of the ABS facilities and the current efforts to improve economics. - Brad Thomas asked about GMV trends, CapEx, and free cash flow; Steve Michaels and Brian Garner provided insights on GMV trends, CapEx considerations, and cash flow dynamics. - Bobby Griffin asked about Purchasing Power's largest synergy opportunity; Steve Michaels discussed growth opportunities through accelerating the business's growth rate. - Anthony Chukumba asked about write offs due to retail bankruptcy, tax refund impact, and EPS guide; Steve Michaels and Brian Garner provided insights on write offs related to retail bankruptcy, the impact of tax refunds on customer behavior, and the mix of segment contributions in the EPS guide. - Hoang Nguyen asked about EPS guide mix and tax refund season impact; Steve Michaels and Brian Garner discussed segment contributions and customer behavior in relation to tax refunds.