Sign in

You're signed outSign in or to get full access.

PH

PROG Holdings, Inc. (PRG)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered top-line and EPS upside: revenue $604.7M (+2.1% YoY), GAAP diluted EPS $0.95, non-GAAP EPS $1.02, both above guidance; non-GAAP EPS was above the high end of the company’s Q2 outlook ($0.75–$0.85) .
  • Revenue and EPS beat Wall Street consensus: revenue $604.7M vs $589.1M consensus (+$15.5M); non-GAAP EPS $1.02 vs $0.796 consensus (+$0.224); both beats were significant and likely supported by strong Four Technologies growth and disciplined portfolio management in Progressive Leasing * * .
  • Guidance raised at the low end for FY25 (revenue $2.45B–$2.50B, non-GAAP EPS $3.20–$3.35, adjusted EBITDA $255M–$265M) and provided Q3 outlook (revenue $580M–$595M; non-GAAP EPS $0.70–$0.75) .
  • Strategic narrative: Progressive Leasing managed GMV headwinds from the Big Lots liquidation and tighter decisioning while maintaining write-offs at 7.5% within the 6–8% target; Four Technologies delivered >200% revenue growth with continued profitability and robust subscription adoption (~85% of GMV) .
  • Near-term stock reaction catalyst: upside vs consensus and raised low-end FY guide, balanced by disclosed back-half margin headwinds (loss of Big Lots portfolio benefit, smaller lease portfolio, CECL seasonality at Four) that temper the magnitude of upward estimate revisions .

What Went Well and What Went Wrong

What Went Well

  • “Revenue and earnings outperformance compared to guidance reflects strong execution in our Progressive Leasing business…even as we navigated notable GMV headwinds,” with non-GAAP EPS $1.02 vs Q2 outlook $0.75–$0.85 .
  • Four Technologies posted another standout quarter with “over 200% revenue growth,” positive pre-tax income, ~167% GMV growth YoY, ~10% trailing-12-month take rate, and ~85% GMV from subscribers on Four+—driving ecosystem cross-sell and monetization efficiency .
  • Portfolio quality and decisioning discipline: write-offs 7.5% of Progressive Leasing revenues (–20 bps YoY), within 6–8% target; management noted favorable early-stage indicators and ability to selectively add approvals while holding portfolio risk guardrails .

What Went Wrong

  • Progressive Leasing GMV –8.9% YoY to $413.9M, primarily from Big Lots bankruptcy headwind (~$40M) and intentional tightening actions (–800–900 bps GMV drag), despite share gains and DTC momentum .
  • Margins modestly pressured: Progressive gross margin 32.4% (–15 bps YoY) on higher 90-day purchase utilization and loss of Big Lots; SG&A 13.8% of revenue (+80 bps YoY) reflecting tech and sales enablement investments .
  • Back-half setup includes headwinds: roll-off of Big Lots portfolio benefit, smaller lease portfolio size (ended Q2 down ~3% gross leased assets), and CECL-driven upfront reserving at Four expected to pressure consolidated margins in Q4 despite strong growth .

Financial Results

Consolidated Performance vs Prior Quarters

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$623.3 $684.1 $604.7
GAAP Diluted EPS ($)$1.34 $0.83 $0.95
Non-GAAP Diluted EPS ($)$0.80 $0.90 $1.02
Adjusted EBITDA ($USD Millions)$65.7 $70.3 $73.5
Adjusted EBITDA % of Revenue10.5% 10.3% 12.2%

Q2 2025 Actual vs Wall Street Consensus (S&P Global)

MetricActualConsensusSurprise
Revenue ($USD Millions)$604.7 $589.1*+$15.5
Non-GAAP EPS ($)$1.02 $0.796*+$0.224

Values retrieved from S&P Global.*

Segment Revenues (Reported)

Segment Revenue ($USD Millions)Q2 2024Q1 2025Q2 2025
Progressive Leasing – Lease Revenues & Fees$570.5 $651.6 $569.7
Vive – Interest & Fees on Loans Receivable$15.4 $15.7 $16.2
Other – Interest & Fees on Loans Receivable$6.2 $16.9 $18.8
Consolidated Total Revenue$592.2 $684.1 $604.7

Segment GMV

GMV ($USD Millions)Q2 2024Q1 2025Q2 2025
Progressive Leasing$454.5 $402.0 $413.9
Vive$35.8 $36.3 $44.0
Other$56.1 $119.9 $149.6
Total GMV$546.4 $558.1 $607.5

Progressive Leasing KPIs

KPIQ2 2024Q2 2025
Gross Margin %32.6% 32.4%
SG&A % of Revenue13.0% 13.8%
Write-offs % of Revenue7.7% 7.5%

Liquidity & Capital Allocation (Q2 Snapshot)

ItemQ2 2025
Cash & Equivalents$222.0M
Gross Debt$600.0M
Net Leverage (TTM Adjusted EBITDA)1.38x
Share Repurchases$25.7M in Q2 at $28.51 avg; $309.6M remaining authorization
Dividend$0.13 per share in Q2 (declared/paid for the quarter); next dividend declared Aug 7 for payment Sep 4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenues ($)FY 2025$2.425B–$2.500B $2.450B–$2.500B Raised low end
Net Earnings ($)FY 2025$109M–$125M $120M–$125M Raised low end
Adjusted EBITDA ($)FY 2025$245M–$265M $255M–$265M Raised low end
GAAP Diluted EPS ($)FY 2025$2.62–$3.01 $2.91–$3.06 Raised low end
Non-GAAP Diluted EPS ($)FY 2025$2.90–$3.30 $3.20–$3.35 Raised low end
Progressive Leasing Revenues ($)FY 2025$2.300B–$2.360B $2.325B–$2.360B Raised low end
Progressive Leasing EBT ($)FY 2025$168M–$185M $179M–$185M Raised low end
Progressive Leasing Adjusted EBITDA ($)FY 2025$245M–$261M $255M–$261M Raised low end
Vive Revenues ($)FY 2025$60M–$65M $60M–$65M Maintained
Vive Loss Before Taxes ($)FY 2025$(5.0)M–$(3.5)M $(5.0)M–$(3.5)M Maintained
Other Revenues ($)FY 2025$65M–$75M $65M–$75M Maintained
Other Loss Before Taxes ($)FY 2025$(9.0)M–$(7.5)M $(9.0)M–$(7.5)M Maintained
Total Revenues ($)Q3 2025—$580M–$595M New
Adjusted EBITDA ($)Q3 2025—$57M–$62M New
GAAP Diluted EPS ($)Q3 2025—$0.63–$0.68 New
Non-GAAP Diluted EPS ($)Q3 2025—$0.70–$0.75 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Big Lots bankruptcy impactNoted none yet; strong GMV in Q4 (+9.1% YoY) Headwind to PL GMV; outlook reduced midpoints ~–$40M GMV headwind; gross margin hit ~20–30 bps; lapping by Q4 Ongoing but fading into H2
Decisioning/tightening postureQ4 built share with tighter credit; portfolio solid Kept write-offs in 6–8% target; tightening actions late 2024 Maintains 6–8% write-off guardrail; selective loosening in “pockets” only Stable discipline
Four Technologies scale/profitabilityBuilding BNPL within ecosystem First quarter of positive adj. EBITDA (Q1) Profitable again; ~167% GMV growth; ~10% TTM take rate; 85% GMV from subscribers Accelerating scale
Omnichannel/e-commerceQ4 noted diversified channels DTC/Marketplace gaining traction e-commerce at all-time high ~21% of PL GMV; Marketplace GMV +38% YoY Improving mix
Macro/Category demandSoft demand expected in 2025 Deteriorated macro; outlook lowered Soft durable goods demand assumed in guides; no call for near-term replacement cycle in furniture/mattress/appliances Still soft
Tax policy/Cash taxes——“Big Beautiful Bill” permanent 100% bonus depreciation; lowers cash taxes (no GAAP rate impact) Positive cash flow tailwind

Management Commentary

  • CEO: “Our second quarter results once again demonstrate the resiliency of our Leasing business…The revenue and earnings outperformance compared to guidance reflects strong execution in our Progressive Leasing business…Four Technologies delivered another outstanding quarter, with over 200% revenue growth and continued profitability” .
  • Technology initiatives: “Deploying AI-powered tools, optimizing our digital funnel…These improvements are driving greater efficiency and top-of-the-funnel engagement” .
  • E-commerce/Marketplace: “In Q2, e-commerce…~21% of total leasing GMV…PROG Marketplace…Q2 GMV up 38% YoY” .
  • Four: “Seventh consecutive quarter of triple-digit GMV and revenue growth…trailing 12-month take rate of ~10%…~85% of GMV now driven by active subscribers” .

Q&A Highlights

  • Underlying GMV growth ex-headwinds: management quantified Big Lots headwind (~$40M in Q2) and tightening drag (–800–900 bps), implying pro forma high-single/≈10% GMV growth ex these effects; Big Lots laps mostly by Q4 .
  • Pipeline with retailers: increased engagement including RFIs/RFPs at enterprise logos; cautious to avoid timing commitments but focused on share gains .
  • Back-half margin dynamics: Big Lots portfolio benefit rolls off; smaller lease portfolio size deleverages; CECL upfront reserving at Four in Q4 will pressure margins despite growth .
  • Category/channel: continued softness in furniture/mattress/large appliance; omnichannel initiatives and retailer-specific programs can offset category weakness .
  • Four economics and scale: high take rate (~10%), frequency (~5x per quarter), subscriber mix (~85% GMV); margins expected to expand as growth normalizes and repeat cohorts deepen .
  • Capital returns and tax: continued balanced repurchases/dividends within leverage guardrails; permanent bonus depreciation lowers cash taxes without changing GAAP tax rate .

Estimates Context

  • Q2 beat vs S&P Global consensus: revenue $604.7M vs $589.1M; non-GAAP EPS $1.02 vs $0.796; both sizable surprises, aided by Four’s profitability and disciplined decisioning at Progressive Leasing * * .
  • FY25 guide raised at low ends across revenue, EPS, and adjusted EBITDA; sell-side models will likely lift low-end assumptions but incorporate disclosed H2 headwinds (Big Lots roll-off, smaller lease portfolio, CECL at Four), constraining magnitude of upward revisions .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Quality beat: broad-based upside vs guidance and consensus; non-GAAP EPS inflected to $1.02 with adjusted EBITDA of $73.5M and margin at 12.2% .
  • Four Technologies is becoming a material growth and profitability lever with strong unit economics (TTM take rate ~10%, subscriber GMV ~85%) and ecosystem cross-sell benefits .
  • Progressive Leasing remains disciplined: write-offs 7.5% within target; targeted “pockets” of loosening only as data supports, preserving portfolio health .
  • Near-term caution: Big Lots portfolio benefit fades; smaller lease portfolio; CECL seasonality at Four in Q4—expect consolidated margin pressure despite growth .
  • Guidance risk-balanced: FY25 low ends raised across key metrics; Q3 guide embeds soft durable demand and current decisioning posture (non-GAAP EPS $0.70–$0.75) .
  • Capital allocation remains supportive: $309.6M repurchase capacity; ongoing dividends; net leverage 1.38x and cash $222M enhance flexibility .
  • Tactical setup: upside drivers include continued Four scale, omnichannel/e-commerce momentum (e-commerce ~21% of PL GMV), and marketplace conversion improvements; watch macro durability and category demand recovery cadence .
Note: All figures and statements are sourced from the company’s Q2 2025 8-K, press releases, and earnings call transcript. Where consensus estimates are referenced, values are retrieved from S&P Global.*