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01/10 05:43
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reveals strong financial performance with significant revenue and EBITDA growth, particularly in Acima and Brigit segments. The company maintains a solid liquidity position and a commitment to dividends. The Q&A section highlights positive market sentiment towards Brigit's integration and Acima's expansion in Mexico. Despite some concerns about Rent-A-Center's performance and unclear responses on integration timelines, the overall outlook is optimistic. The market cap suggests a moderate reaction, leading to a positive stock price prediction.
Revenue $1.2 billion, a 7.3% increase year-over-year, driven by strength in Acima and the addition of Brigit.
Adjusted EBITDA $126 million, up nearly 16% year-over-year, with adjusted EBITDA margins of 10.7%, up 70 basis points from last year.
Non-GAAP diluted EPS $1, approximately 27% higher than the year-ago quarter.
Free Cash Flow $127 million, nearly 4x larger than last year's first quarter result.
Acima GMV Growth 8.8% year-over-year, with the highest GMV in the first quarter since 2021.
Acima Revenue Growth 13.5% year-over-year, marking the fifth consecutive quarter of double-digit growth.
Acima Adjusted EBITDA Up 31% year-over-year, with adjusted EBITDA margins up 170 basis points.
Brigit Revenue $32 million for February and March, a 35% increase year-over-year.
Brigit Subscribers 1.2 million, up more than 26% year-over-year.
Brigit Cash Advance Volume $49 million on the balance sheet, with over $335 million in advances made, a 27% increase from Q1 of 2024.
Rent-A-Center Revenue $489 million, down 4.9% year-over-year due to fewer company-owned stores.
Rent-A-Center Same-Store Sales Down 2% year-over-year, reflecting fewer deliveries and tightened underwriting.
Rent-A-Center Adjusted EBITDA $72 million, down 14% from the first quarter of 2024.
Rent-A-Center Loss Rate 4.6%, an improvement of 10 basis points year-over-year.
Lease Charge-Off Rate for Acima 8.9%, improved by 70 basis points year-over-year.
Lease Charge-Off Rate for Rent-A-Center 4.6%, improved by 10 basis points year-over-year.
Net Leverage Ratio Approximately 2.9 times, up slightly from 2.7 times at year-end.
Liquidity $312 million in liquidity between cash on hand and revolver availability.
Brigit Average Revenue Per User (ARPU) $12.88, up nearly 6% year-over-year.
New Product Offerings: Brigit's financial wellness solutions have been integrated, resulting in mid-20% growth in subscribers and cash advances.
Instant Cash Advances: New Instant Cash advances via Brigit introduced to help customers manage liquidity.
Market Expansion: Acima plans to pilot a launch in the Mexican market, leveraging Rent-A-Center's existing infrastructure.
Operational Efficiency: Acima achieved a 9% GMV growth with improved lease charge-offs by 70 basis points, leading to a 170 basis point increase in adjusted EBITDA margin.
Digital Enhancements: Rent-A-Center implemented new digital initiatives, including AI search functionality and a chatbot to improve customer engagement.
Strategic Shift: Focus on becoming a holistic financial platform for underserved consumers, integrating services across segments.
Competitive Pressures: Acima's growth is driven by a diversified lineup of merchant relationships, with the top 10 merchants representing about 30% of total GMV, indicating a need to manage competitive pressures effectively.
Regulatory Issues: The company successfully resolved a long-standing regulatory matter with the CFPB involving Acima, which could have impacted business operations.
Supply Chain Challenges: The introduction of new tariffs has created market turbulence, impacting consumer confidence and potentially leading to lower investment and higher inflation. Rent-A-Center suppliers are diversifying their global supply lines to mitigate these risks.
Economic Factors: The company faces macroeconomic uncertainties, including sticky inflation and tariff escalations, which could affect consumer spending and liquidity. However, they also see potential benefits from trade-down effects during economic downturns.
Liquidity and Capital Allocation: Despite expected growth, the company emphasizes the importance of maintaining a strong balance sheet and reliable access to funding amid market volatility.
Consumer Behavior: There is a potential risk of changes in consumer behavior due to economic pressures, although current purchasing and payment behaviors remain strong.
Acima Growth Strategy: Acima achieved nearly 9% GMV growth year-over-year, with expectations of low-double-digit GMV growth for the year.
Brigit Integration: Brigit's financial wellness solutions are resonating with consumers, showing mid-20% growth in subscribers and cash advances.
Digital Enhancements: Investments in digital initiatives are aimed at improving customer engagement and experience across segments.
Expansion Plans: Acima plans to pilot its services in the Mexican market, leveraging Rent-A-Center's existing infrastructure.
Cross-Selling Initiatives: Brigit's offerings will be introduced to Rent-A-Center and Acima customers to enhance customer acquisition.
Revenue Guidance: Full year 2025 revenue is revised to $4.6 billion to $4.75 billion, reflecting an increase of over 8% from 2024.
Adjusted EBITDA Guidance: Adjusted EBITDA is projected to be between $510 million and $540 million, an increase of nearly 11% from 2024.
Non-GAAP EPS Guidance: Non-GAAP EPS is tightened to a range of $4.00 to $4.40 per share, representing a 10% increase from 2024.
Q2 Revenue Outlook: Q2 revenue is expected to range from $1.05 billion to $1.15 billion.
Q2 Adjusted EBITDA Outlook: Q2 adjusted EBITDA is projected between $125 million and $135 million.
Free Cash Flow: Upbound generated free cash flow of $127 million in Q1 2025, which is nearly 4x larger than last year's first quarter result.
Capital Allocation Priorities: Upbound's capital allocation priorities continue to focus on investments in the business, supporting the dividend, and de-levering.
Leverage Ratio: The net leverage ratio was approximately 2.9 times on March 31, 2025, reflecting the closure of the Brigit transaction.
Dividend Support: The company is committed to supporting the dividend as part of its capital allocation strategy.
The earnings call reveals strong financial metrics, such as increased free cash flow and EPS guidance. Positive developments in product innovation and strategic initiatives across segments are highlighted. Despite macroeconomic concerns, the company demonstrates resilience and adaptability. The Q&A section confirms cautious optimism, with growth potential in Acima and Brigit segments. The company's proactive approach to capital management and AI initiatives further supports a positive outlook. Considering a market cap of $1.6 billion, the stock is likely to experience a positive movement in the 2% to 8% range over the next two weeks.
The earnings call presents a generally positive outlook with strong GMV growth, optimistic guidance, and strategic investments in digital and marketing initiatives. Acima's expansion and Brigit's growth are promising, despite minor concerns like increased loss ratios and legal accruals. The market cap suggests moderate volatility, leading to a prediction of a positive stock price movement (2% to 8%) over the next two weeks.
The earnings call summary reveals strong financial performance with significant revenue and EBITDA growth, particularly in Acima and Brigit segments. The company maintains a solid liquidity position and a commitment to dividends. The Q&A section highlights positive market sentiment towards Brigit's integration and Acima's expansion in Mexico. Despite some concerns about Rent-A-Center's performance and unclear responses on integration timelines, the overall outlook is optimistic. The market cap suggests a moderate reaction, leading to a positive stock price prediction.
The earnings call reveals strong financial performance with revenue growth, improved EBITDA margins, and raised guidance. Despite some concerns about trade-down activity affecting margins and pending regulatory changes, the company expects margin normalization and growth in 2025. The Q&A section shows management's confidence in handling challenges, and the expansion plan into Mexico suggests growth potential. The market cap indicates moderate sensitivity to earnings news, leading to a predicted stock price increase of 2% to 8% over the next two weeks.
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