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PROG Holdings, Inc. (PRG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered an EPS and revenue beat: Non-GAAP EPS $0.90 vs S&P consensus $0.74*, Revenue $595.1M vs $586.1M*, driven by improved Progressive Leasing margins (gross margin +80 bps YoY) and ongoing BNPL momentum at Four Technologies .
  • Management raised full‑year EPS outlook while trimming revenue to exclude the divested Vive portfolio: FY25 Non‑GAAP EPS to $3.35–$3.45 (from $3.20–$3.35) and total revenue to $2.410–$2.435B (from $2.450–$2.500B); Q4 guide: revenue $575–$590M, Non‑GAAP EPS $0.55–$0.65 .
  • Strategic portfolio action: PRG sold Vive’s credit card receivables to Atlanticus for ~$150M cash (portfolio ~$165M), enhancing capital efficiency and focusing resources on Progressive Leasing, Four, and Build .
  • Credit quality remained solid: write‑offs at 7.4% of leasing revenue (within 6–8% target), with sequential and YoY improvement despite macro pressure; Progressive Leasing GMV down 10% YoY largely from Big Lots’ bankruptcy and tighter approval posture .
  • Near‑term catalysts: holiday Q4 seasonality (with expected Four provisioning dynamics), newly signed “recognizable” retail partners and extended exclusives (≈70% of PL GMV now exclusive through 2030+), and ample capital allocation capacity (cash $292.6M, gross debt $600M, $309.6M buyback authorization) .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and EPS beat: Progressive Leasing gross margin rose to 32.0% (+80 bps YoY) and consolidated Non‑GAAP EPS of $0.90 exceeded the high end of guidance; management cited “strong margins” and portfolio performance as key drivers .
  • BNPL scaling profitably: Four Technologies posted its eighth consecutive quarter of triple‑digit GMV/revenue growth and remained profitable YTD; management highlighted a ~10% take rate (TTM) and ~23% YTD EBITDA margin at Four .
  • Strategic focus sharpened: Sale of Vive’s receivables (~$150M cash) improves capital efficiency while maintaining second‑look access via Atlanticus partnership; “meaningful step in improving our capital efficiency” per CEO .

Quoted management

  • “We surpassed the high end of our outlook for revenue and earnings… Non‑GAAP diluted EPS of $0.90 exceeded our outlook range of $0.70 to $0.75 per share” .
  • “Four Technologies… delivering its eighth consecutive quarter of triple‑digit GMV and revenue growth” .
  • “We have successfully renewed nearly 70% of our Progressive Leasing GMV to exclusive contracts reaching to 2030 and beyond” .

What Went Wrong

  • GMV headwinds: Progressive Leasing GMV fell 10.0% YoY to $410.9M, reflecting the Big Lots bankruptcy and deliberate tightening of approvals; revenue also declined 4.5% YoY in PL .
  • Macro softness: Management called out ongoing consumer pressure (elevated DQs vs prior years) and softer demand in durable goods, impacting GMV and outlook assumptions .
  • “Other” profitability seasonality: Four expected to swing to Q4 adjusted EBITDA loss due to upfront loss provisioning on holiday originations (timing effect), pressuring consolidated Q4 “Other” segment margins despite full‑year profitability .

Financial Results

Headline Results vs Prior Quarter and Street

MetricQ2 2025 ActualQ3 2025 S&P Consensus*Q3 2025 Actual
Revenue ($M)$604.7 $586.1*$595.1
Diluted EPS (Non‑GAAP)$1.02 $0.74* (Primary EPS)$0.90

*Values retrieved from S&P Global.

Year-over-Year Comparison

MetricQ3 2024Q3 2025
Revenue ($M)$606.1 $595.1
Diluted EPS (GAAP)$1.94 $0.82
Diluted EPS (Non‑GAAP)$0.77 $0.90
Adjusted EBITDA ($M)$63.5 $67.0
Adjusted EBITDA Margin (%)10.5% 11.3%

Notes: Q3’24 GAAP EPS benefited from a non‑cash net tax benefit related to reversal of an uncertain tax position, inflating YoY GAAP comparison .

Segment Revenue Mix (Q3)

SegmentQ3 2024 ($M)Q3 2025 ($M)YoY
Progressive Leasing – Lease Revenues & Fees$582.6 $556.6 -4.5%
Vive – Interest & Fees on Loans$16.0 $17.4 +8.8%
Other – Interest & Fees on Loans$7.6 $21.1 +178.4%
Consolidated Total$606.1 $595.1 -1.8%

Operating KPIs (Progressive Leasing and Consolidated)

KPIQ1 2025Q2 2025Q3 2025
Progressive Leasing GMV ($M)$402.0 $413.9 $410.9
PL Write‑Offs (% of revenue)7.4% 7.5% 7.4%
PL Gross Margin (%)29.3% 32.4% 32.0%
Consolidated Adjusted EBITDA Margin (%)10.3% 12.2% 11.3%

Balance Sheet & Capital

  • Cash: $292.6M; Gross debt: $600.0M; Net leverage ~1.11x (TTM adj. EBITDA) .
  • Share repurchases: none in Q3; remaining authorization $309.6M; dividend $0.13/share (also declared for Dec 2, 2025 payment) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenuesFY 2025$2,450–$2,500M $2,410–$2,435M Lowered (excludes Vive)
Net Earnings from Continuing OpsFY 2025$120–$125M $124.3–$128.8M Raised
Adjusted EBITDAFY 2025$255–$265M $258–$265M Slightly raised low end
Diluted EPS from Continuing Ops (GAAP)FY 2025$2.91–$3.06 $3.06–$3.16 Raised
Diluted Non‑GAAP EPS from Continuing OpsFY 2025$3.20–$3.35 $3.35–$3.45 Raised
Progressive Leasing – RevenuesFY 2025$2,325–$2,360M $2,330–$2,345M Maintained/Narrowed
Progressive Leasing – EBTFY 2025$179–$185M $180–$185M Maintained/Narrowed
Progressive Leasing – Adjusted EBITDAFY 2025$255–$261M $256–$261M Slightly raised low end
Other – RevenuesFY 2025$65–$75M $80–$90M Raised
Other – Loss Before TaxesFY 2025$(9.0)–$(7.5)M $(9.7)–$(9.2)M Slightly worse
Other – Adjusted EBITDAFY 2025$2.5–$5.0M $2.0–$4.0M Lowered
Total RevenuesQ4 2025—$575–$590M New detail
Adjusted EBITDAQ4 2025—$47–$54M New detail
Diluted EPS from Continuing Ops (GAAP)Q4 2025—$0.47–$0.57 New detail
Diluted Non‑GAAP EPS from Continuing OpsQ4 2025—$0.55–$0.65 New detail

Context: Management removed Vive from FY/Q4 outlook following the receivables sale; assumptions include soft durable goods demand, steady decisioning posture, ~27% tax rate for Non‑GAAP EPS, and no further buybacks .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Q3 2025 CommentaryTrend
AI/Technology initiativesQ2: Deploying AI tools; optimizing digital funnel and experiences .AI‑powered transactional chat handled 100K+ interactions; supports payments, approval increases; more personalization planned .Expanding capability and adoption
Macro/consumer healthQ1: Deteriorating macro backdrop; managing write‑offs within 6–8% target .Persistent consumer pressures; elevated DQs vs prior years but manageable; no incremental tightening since early 2025 .Persistent headwinds; vigilant risk posture
Portfolio credit/write‑offsQ1–Q2: Write‑offs at 7.4%–7.5% within target .7.4% in Q3, improving sequentially and YoY .Stable to improving within target
Retail partners & Big LotsQ2: Big Lots bankruptcy driving GMV headwinds .GMV down 10% YoY; underlying growth mid‑single digits ex‑Big Lots and tightening; ~70% GMV now exclusive through 2030+ .Offsetting headwind with share gains & exclusivity
BNPL (Four Technologies)Q1–Q2: Triple‑digit growth; profitability emerging .8th straight triple‑digit GMV/revenue growth; ~10% take rate; YTD positive adj. EBITDA; expected Q4 seasonal loss from upfront provisioning .Scaling with profitable unit economics; seasonal P&L timing
Capital allocationQ1–Q2: Ongoing buybacks/dividend; net leverage ~1.4x .No Q3 buybacks due to Vive negotiations; post‑sale flexibility with $292.6M cash, $309.6M authorization, dividend maintained .Increased flexibility after divestiture

Management Commentary

  • Strategic focus and execution: “We are investing in high‑impact businesses and products, including Progressive Leasing, our direct‑to‑consumer channel, PROG Marketplace, and our fast‑growing BNPL platform, Four Technologies” .
  • Credit posture: “Q3 write‑offs at 7.4% improved both sequentially and year‑over‑year… we can deliver consistent portfolio outcomes while driving profitable GMV” .
  • Partner momentum: “We… extended long‑term exclusive agreements with several of our major national partners… nearly 70% of our Progressive Leasing GMV to exclusive contracts reaching to 2030 and beyond” .
  • BNPL economics: “Four’s take rate of approximately 10%… has operated profitably year to date… we expect Q4 seasonal loss due to upfront provisioning, with a rebound and highest quarterly margin in Q1 2026” .
  • Capital efficiency: “The sale of the VIVE Receivables Portfolio strengthens our balance sheet, giving us additional flexibility to invest in strategic priorities” .

Q&A Highlights

  • Consumer health and risk: Elevated delinquencies vs prior years but not translating into worse outcomes; no material additional tightening since early 2025; ready to adjust “dials” by vertical/retailer/geography if needed .
  • GMV outlook: Q3 slightly below internal expectations; Big Lots and tightened approval rates remain headwinds through Q4; comps ease more meaningfully starting Q1 2026 .
  • Four seasonality: Q4 adjusted EBITDA loss expected due to upfront loss provisioning on holiday volumes; full‑year Four still positive, with revenue recognition shifting to Q1 .
  • Capital allocation: Post‑Vive sale, priorities remain investing in growth (including Four and DTC), selective M&A, and returning excess cash via buybacks/dividends; leverage comfortable near ~1.1x .
  • New partners: Three “recognizable” retail logos signed (one post‑quarter), expected to contribute in 2026; did not disclose names .

Estimates Context

  • Q3 beats: Revenue $595.1M vs $586.1M* (+$9.0M); EPS $0.90 vs $0.74* (+$0.16). Q2 also beat: revenue $604.7M vs $589.1M*; EPS $1.02 vs $0.796* .
  • Q4 setup: Company guides GAAP EPS $0.47–$0.57 and Non‑GAAP EPS $0.55–$0.65 vs Street EPS ~0.60*; revenue guide $575–$590M vs Street ~$585.7M*—roughly in line at midpoints when comparing revenue, with EPS range bracketing consensus .
MetricQ2 2025 ActualQ3 2025 Consensus*Q3 2025 Actual
Revenue ($M)$604.7 $586.1*$595.1
Primary EPS ($)$1.02 $0.74*$0.90

*Values retrieved from S&P Global.

Implications: Street likely nudges FY Non‑GAAP EPS higher given back‑to‑back quarterly beats and raised FY EPS guidance, while revenue models should reflect the removal of Vive and macro‑conservative Q4.

Key Takeaways for Investors

  • Execution continues to outpace expectations: Two straight quarters of revenue/EPS beats with improving PL margins and disciplined credit management under a soft consumer backdrop .
  • Business mix is moving to higher‑return assets: Vive exit increases capital efficiency; focus centers on Progressive Leasing, BNPL Four, and DTC Marketplace .
  • Four Technologies is a structural growth vector: Triple‑digit GMV growth, positive YTD adj. EBITDA, ~10% take rate—expect seasonal Q4 loss but strong Q1 rebound .
  • Contract quality and pipeline improving: ~70% of PL GMV secured under exclusives through 2030+ and three new recognizable partners signed, supporting 2026 trajectory .
  • Credit quality stable within target: Write‑offs at 7.4% despite elevated DQs; data‑driven underwriting allows rapid, targeted adjustments .
  • Capital allocation optionality: $292.6M cash, $309.6M repurchase capacity, and steady dividend provide flexibility to balance growth investments and shareholder returns .
  • Near‑term trading setup: Q4 revenue largely in line with Street; EPS bracketed by company guide vs consensus; watch for holiday demand, Four’s loss provisioning dynamics, and any macro‑driven changes to approval posture .

Disclosures on non‑GAAP: Non‑GAAP EPS/Adjusted EBITDA exclude items including intangible amortization, transaction and cybersecurity-related costs; outlook also excludes Vive operations and gain on sale beginning Q4’25 .

S&P Global estimates: Items marked with an asterisk (*) reflect values retrieved from S&P Global.