Executive Summary

Q3 2025 consolidated revenue was $1.165B (+9.0% y/y), Adjusted EBITDA $123.6M (+5.7% y/y), and non-GAAP diluted EPS $1.00; GAAP EPS was $0.22 due to $53.4M of “special items” including legal accruals and acquisition-related amortization .
Versus consensus (S&P Global), revenue and non-GAAP EPS were modest beats: $1.165B vs $1.144B and $1.00 vs $0.9825; management tightened FY25 non-GAAP EPS to $4.05–$4.15 and lowered Adjusted EBITDA to $500–$510M from $515–$535M; revenues and FCF were maintained . Values retrieved from S&P Global.
Segment drivers: Acima GMV +11% y/y with underwriting tightened after soft vintages and a jewelry mix shift compressing margins; Rent-A-Center comps improved sequentially (-3.6% y/y vs -4.0% in Q2) with 16.2% EBITDA margin; Brigit grew revenue 40% y/y, ARPU +11% y/y, with EBITDA margin of 16.1% as marketing ramped .
Catalysts: underwriting actions expected to peak Acima loss rate near ~10% in Q4 before improving in Q1’26; bonus depreciation tailwind adds ~$150M cash-tax savings across 2025–2026; leadership additions (new CFO and Chief Growth Officer) to accelerate AI, analytics, and growth initiatives .

What Went Well and What Went Wrong

What Went Well
- “Eighth consecutive quarter of GMV growth” at Acima (+11% y/y) as applications rose ~13% and marketplace GMV grew >150% y/y; revenue +10.4% y/y .
- Brigit scaled: revenue +40% y/y to $57.7M; ARPU $13.74 (+11.4% y/y), net advance loss 3.3% within low single-digit target while testing new products (line of credit) and channels .
- Rent-A-Center stabilization: comps improved sequentially to -3.6% y/y; deliveries +3.8% y/y; EBITDA margin expanded to 16.2% (+160 bps q/q) on operational efficiencies .
What Went Wrong
- Acima margins compressed: LCO rate rose to 9.7% (vs 9.3% in Q2 and 9.2% last year) and EBITDA margin fell to 12.0% (vs 13.3% last year) due to soft monthly vintages and jewelry mix effects .
- GAAP profitability impacted by “special items”: $53.4M of other gains/charges (legal accruals, asset impairment, acquisition-related amortization and compensation) reduced GAAP EPS to $0.22 .
- Brigit EBITDA margin stepped down to 16.1% (from 27.7% in Q3’24 and 28% in Q2) as marketing spend ramped; net profit margin 7.9% vs 20.2% last year .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Billions)	$1.069	$1.158	$1.165
GAAP Operating Profit ($USD Millions)	$70.1	$50.7	$52.8
Adjusted EBITDA ($USD Millions)	$116.9	$133.2	$123.6
Adjusted EBITDA Margin (%)	10.9%	11.5%	10.6%
Net Earnings ($USD Millions)	$30.9	$15.5	$13.2
Net Profit Margin (%)	2.9%	1.3%	1.1%
GAAP Diluted EPS ($)	$0.55	$0.26	$0.22
Non-GAAP Diluted EPS ($)	$0.95	$1.12	$1.00
Net Cash Provided by Operating Activities ($USD Millions)	$106.2	$26.1	$89.9
Free Cash Flow ($USD Millions)	$88.3	$(10.4)	$50.2

Segment Breakdown (Revenue and Adjusted EBITDA):

Segment	Metric	Q3 2024	Q2 2025	Q3 2025
Acima	Revenue ($M)	$566.2	$619.0	$625.3
	Adj. EBITDA ($M)	$75.3	$93.3	$75.0
Rent-A-Center	Revenue ($M)	$483.6	$467.1	$461.1
	Adj. EBITDA ($M)	$79.0	$68.4	$74.7
Brigit	Revenue ($M)	$51.9	$52.0	$57.7
	Adj. EBITDA ($M)	$14.4	$14.0	$9.3
Mexico	Revenue ($M)	$19.0	N/A	$20.7
	Adj. EBITDA ($M)	$1.3	$2.4	$1.9

KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Acima GMV ($M)	$436.1	$522.1	$484.0
Acima Lease Charge-Off Rate (%)	9.2%	9.3%	9.7%
Acima 60+ Day Past Due Rate (%)	13.4%	11.8%	12.7%
Rent-A-Center Same Store Sales (%)	+2.6%	-4.0%	-3.6%
Rent-A-Center Lease Charge-Off Rate (%)	4.9%	4.7%	4.7%
Rent-A-Center 30+ Day Past Due Rate (%)	3.4%	2.7%	3.3%
Rent-A-Center Adj. EBITDA Margin (%)	16.3%	14.6%	16.2%
Brigit ARPU ($/month)	$13.45	$13.45	$13.74
Brigit Net Advance Loss Rate (%)	2.6%	2.6%	3.3%

Estimates vs Actual (Q3 2025)

Metric	Consensus	Actual	Beat/Miss
Revenue ($USD Billions)	$1.144*	$1.165	Beat
Non-GAAP EPS ($)	$0.9825*	$1.00	Beat

Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance (7/31/2025)	Current Guidance (10/30/2025)	Change
Revenues ($B)	FY 2025	$4.60–$4.75	$4.60–$4.75	Maintained
Adj. EBITDA ex SBC ($M)	FY 2025	$515–$535	$500–$510	Lowered
Non-GAAP Diluted EPS ($)	FY 2025	$4.05–$4.40	$4.05–$4.15	Tightened (lower top end)
Free Cash Flow ($M)	FY 2025	$150–$200	$150–$200	Maintained

Management’s Q4 outlook: Acima GMV mid-single-digit growth, top line up low double digits, LCO rate to peak near ~10% in Q4 before improving in Q1’26; Rent-A-Center low-to-mid single-digit revenue decline y/y with flat/better LCO; Brigit revenue up high-single-digit q/q with low double-digit EBITDA margins .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
AI/Technology initiatives	Acima AI-powered “leasability engine”, marketplace personalization; RAC digital enhancements (Google AI search, chatbot), Cash App payments	Agentics AI for real-time sales coaching; tap-to-lease pilot underway; direct-to-consumer marketplace scaling	Acima adds tap-to-lease virtual card; account mgmt upgrades; refer-a-friend; CGO hired to accelerate data analytics/AI use cases	Expanding scope and execution
Supply chain & tariffs/macro	Limited tariff exposure; weekly payment/term levers to offset costs; consumer stable but cautious	No tariff-driven price increases yet; potential inflation tailwinds via trade-down; consumer stressed but resilient	Macro uncertainty; slowing job growth; tariff-related price pressures; consumer confidence low; nimble pricing/term adjustments planned	Macro headwinds; mitigation via pricing/terms
Product performance mix	Furniture/appliances >66% RAC revenue; Acima furniture ~40% GMV; DTC up ~80% y/y (Q1)	Acima DTC +130% y/y; jewelry rising share; returning customers >40% GMV	Jewelry mix lifts GMV but lower margin (early purchase option); furniture still largest (~40% GMV)	Mix shift toward jewelry; margin impact
Regional/merchant wins	Acima pilot expansion to Mexico leveraging RAC footprint	Extending large account exclusivity; pipeline strong; diversified SMB/regional wins	Milestone: 100,000th merchant location; Living Spaces onboarded; marketplace GMV +150% y/y	Merchant network scaling
Regulatory/legal	CFPB matter dismissed; multi-state AG and NY AG matters remain	Added $31.7M legal accrual; McBurnie class action settlement in principle	Q3 special items include ~$12.6M legal matters	Legacy matters winding down; ongoing accruals
Brigit R&D execution	Strong subscriber and ARPU growth; integration roadmap; cash flow underwriting capabilities	Marketing tests across new channels; line of credit pilot up to $500	Line of credit beta; expanded channel mix; marketing ramp; targeting mid-teens EBITDA margins	Scaling product set and acquisition

Management Commentary

CEO commentary: “Acima achieving its eighth consecutive quarter of GMV growth and Brigit delivering over 40% year-over-year increase in revenue… Rent-A-Center same store sales performance improved sequentially and is expected to stabilize further in the fourth quarter.”
On Acima underwriting: “Recent monthly vintage yields… under pressure… moved to an incrementally more conservative risk stance… actions already proving to be effective in August and September vintages.”
On mix and margins: “Jewelry sees a higher proportion of customers electing the first early purchase option, which is a lower margin outcome… category is profitable… helps diversify from furniture.”
Capital allocation: “Bonus depreciation… ~$50M in 2025 and ~$100M in 2026… supports deleveraging, investment, dividend ($1.56 per share) and opportunistic buybacks.”
Leadership: Appointment of Hal Khouri as CFO effective Nov 10, 2025; responsibilities include financial operations, optimization, capital allocation, IR .

Q&A Highlights

Acima growth cadence: Underwriting tightening will suppress GMV in Q4 (mid-single-digit guide); management targets high single-digit to low double-digit GMV growth in 2026 as merchant additions and DTC offset macro headwinds .
Consumer health: Non-prime consumer remains “stressed” amid inflation, slowing wages/job market; underwriting conservative; RAC benefits from prior tightening with stable-to-improving losses .
RAC improvement drivers: Refer-a-friend, loyalty revamp, pushing online declines to in-store, improved inventory positioning; comps expected to approach flat-to-positive in Q4 .
Brigit scaling: Strong ARPU and subscriber growth; marketing and new product (line of credit) tests; EBITDA margins to be low double digits near term with growth focus .
Capital priorities/M&A: Conservatively biasing excess cash to investment and deleveraging; open to small bolt-ons but near-term focus on balance sheet .

Estimates Context

Q3 2025 actuals beat consensus: Revenue $1.165B vs $1.144B*, non-GAAP EPS $1.00 vs $0.9825*. Values retrieved from S&P Global.
Implications: modest positive revisions likely to non-GAAP EPS trajectory; FY25 Adjusted EBITDA guidance lowered suggests sell-side may trim EBITDA, while maintaining revenue/FCF ranges .

Key Takeaways for Investors

Portfolio momentum intact: consolidated revenue +9% y/y, non-GAAP EPS +5.3% y/y amid macro uncertainty; Acima/DTC engine and Brigit subscription model provide diversified growth streams .
Near-term margin headwinds at Acima should crest in Q4; underwriting actions and mix normalization underpin margin recovery starting Q1’26—watch LCO trend vs the ~10% peak guide .
Rent-A-Center stabilization is a quiet positive: sequential comp and margin improvement with holiday inventory positioning—potential for Q4 comp inflection .
Cash flow and balance sheet improving: YTD OCF ~$264M and net leverage 2.9x; bonus depreciation provides ~$150M cash-tax tailwind through 2026, supporting deleveraging and dividend .
Leadership upgrades (CFO, CGO) + AI roadmap should accelerate data-driven growth and cost efficiencies across brands—monitor execution on tap-to-lease and cross-sell .
Guidance reset lowers FY25 EBITDA range; focus shifts to quality of earnings and unit economics as Brigit scales and Acima optimizes decisioning—stock may react to evidence of LCO moderation and holiday GMV .
Watch merchant wins and DTC scale: marketplace GMV +150% y/y; reduced integration dependency broadens TAM and deepens customer engagement—sustained GMV growth with improving cohorts is key .

Notes on non-GAAP and adjustments: Q3 GAAP EPS ($0.22) reflects $53.4M of special items (legal accruals, asset impairment, acquired intangibles amortization, Brigit equity awards/comp), with non-GAAP diluted EPS at $1.00 after reconciliation .

UPBOUND GROUP, INC. (UPBD)·Q3 2025 Earnings Summary