PROG Holdings, Inc. — Call Transcript 2026

Good day and thank you for standing by. Welcome to the PROG Holdings Q1 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like to hand the conference over to your first speaker today, John Baugh, Vice President of Investor Relations. Please go ahead. Thank you, and good morning, everyone. Welcome to the PROG Holdings first quarter 2026 earnings call. Joining me this morning are Steve Michaels, PROG Holdings President and Chief Executive Officer, and Brian Garner, our Chief Financial Officer. Many of you have already seen a copy of our earnings release issued this morning, which is available on our Investor Relations website, investor.progholdings.com. During this call, certain statements we make will be forward-looking, including comments regarding our revised 2026 full-year outlook and our outlook for the second quarter of 2026. Listeners are cautioned not to place undue emphasis on forward-looking statements we make today, all of which are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. We undertake no obligation to update any such statements. On today's call, we will be referring to certain non-GAAP financial measures, including adjusted EBITDA and non-GAAP EPS, which have been adjusted for certain items which may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included with our earnings release. The company believes that these non-GAAP financial measures provide meaningful insight into the company's operational performance and cash flows and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding the company's ongoing operational performance. With that, I would like to turn the call over to Steve Michaels, PROG Holdings President and Chief Executive Officer. Steve? Thanks, John. Good morning, everyone and thank you for joining us. I'll start by saying we delivered a strong first quarter. We are very happy with the start to the year and the momentum we're seeing in the business. Our results came in at the high end of our revenue outlook and exceeded the top end of our outlook for earnings and non-GAAP EPS. This outperformance reflects the discipline of our operating model and strong execution across the organization, supported by higher-than-expected GMV with improved economics at Four, as well as better portfolio yield at Progressive Leasing, primarily due to lower than expected utilization of 90-day purchase options. In an environment where the geopolitical and macroeconomic situation presents challenges, including from rising gas prices, our model performed as designed. This consistency is a direct result of how we built and managed this business over time. Let me provide some additional color on the quarter before walking through our strategic priorities. As I mentioned in February, we have begun framing growth through the lens of consolidated GMV, which grew 54% in Q1 compared to the same period last year. These results reflect the addition of Purchasing Power and the triple-digit growth of Four. As our portfolio of solutions expands, GMV is generated through multiple products across Leasing, Four, and Purchasing Power, and this consolidated view better reflects the full scale of our platform. It's a great example of how we are deploying an integrated ecosystem of solutions to better reach underserved individuals and families. Starting with Progressive Leasing, GMV for the first quarter came in at 2.2% below the same period last year. However, trends improved meaningfully as the quarter progressed, with January down high single digits, February down low single digits, and March up low single digits. As a reminder, throughout last year, our leasing business faced GMV headwinds from deliberate tightening actions and the bankruptcy of Big Lots. As we lapped both of those headwinds, particularly through February, Leasing's GMV trends inflected positively in March. From a GMV standpoint, the quarter played out largely as expected, and we are excited to exit the quarter on a growth trajectory. Four's GMV for the quarter was 134% high year-over-year. Customer demand for our BNPL product remains robust, and importantly, we are seeing that growth translate into attractive economics and profitability, which I'll discuss in more detail shortly. Purchasing Power's Q1 GMV grew double digits at 10.3% year-over-year. This growth was due to favorable performance within existing employer accounts. We also added several new employer clients during the quarter, bringing tens of thousands of new eligible employees onto the platform and supporting future growth. Consolidated revenue came in at $743 million, representing 11% year-over-year growth. This performance was primarily as a result of the addition of Purchasing Power along with growth at Four and partially offset by a revenue decline at Progressive Leasing due to a lower portfolio size throughout the quarter. Consolidated adjusted EBITDA was $90.3 million, and non-GAAP EPS was $1.24, both exceeding the high end of our outlook. This outperformance was fueled by better-than-expected portfolio yield and customer payment performance at Progressive Leasing, as well as increased customer demand and profitability at Four. To summarize the quarter, we delivered results above expectations, saw improving GMV trends while maintaining portfolio health at Leasing, drove profitable triple-digit growth with improving economics at Four, achieved double-digit GMV growth at Purchasing Power, and continued to execute against our ecosystem strategy. Before we shift into our strategic priorities, I want to briefly address the broader environment and how it informs our updated outlook. The consumer we serve remains resilient, but they are facing real challenges. Gas prices are elevated, and there is increased uncertainty in the macro backdrop. We remain committed to continue to deliver consistent portfolio performance across all our businesses and managing costs prudently to achieve our earnings outlook. Our track record demonstrates our ability to adapt quickly, and we will do so as conditions evolve. Let me now turn to our three strategic pillars, Grow, Enhance, and Expand, to share some highlights from the quarter. Starting with the Grow pillar, we saw encouraging traction at Progressive Leasing and Purchasing Power, with remarkable growth at Four, which collectively resulted in consolidated GMV being up 54% year-over-year. For Leasing, Q1 applications grew double digits year over year, and GMV trends improved sequentially month-over-month, with March up low single digits compared to the prior year. In addition to lapping the tightening actions from early 2025, these results reflect our investments in technology to enhance customer experience and in marketing to promote engagement across both new and existing customers. You heard about many of these initiatives at our recent Investor Day. We're pleased to say that they are continuing to have a positive impact on our business. Our long-term distribution base of exclusive retail partners with approximately 70% of Progressive Leasing GMV secured into the 2030s provides a durable foundation for growth as we also gain balance of share within existing key retail partners. Additionally, our direct-to-consumer efforts spanning both marketing and digital channels have been meaningful drivers of growth. Within marketing at Progressive Leasing, we leaned into customer acquisition, partner marketing, and cross-product campaigns, which drove increased engagement and incremental GMV. We focused further up the funnel while maintaining flat acquisition costs year over year. At the same time, our outreach channels, including email, SMS, and push notifications, generated incremental GMV, reinforcing healthy consumer demand and improving return on ad spend. On the digital front, PROG Marketplace delivered another notable quarter, growing at 169% year-over-year. We are scaling this channel through ongoing product enhancements, increased traffic, and improved conversion. Our e-commerce channel also grew meaningfully due to deeper integrations with retail partners and improved digital checkout experiences. Q1 e-commerce GMV was 25.7% of total Progressive Leasing GMV, up from 16.8% in the same period last year and the highest first quarter mix to date. Shifting to Four, we delivered another triple-digit growth quarter, our 10th in a row, with performance powered by both customer acquisition and engagement. The team rolled out AI-driven product enhancements that simplify the shopping experience and average order values increased year over year. Monthly active users more than doubled compared to a year ago, reflecting growing consumer interest. On the marketing side, spend was deployed efficiently to support growth, maintaining a healthy balance between paid and organic customer acquisition. Finally, Purchasing Power delivered double-digit GMV growth, reinforcing the strength of its model and its strategic role within our ecosystem. Its payroll deduction model represents a differentiated distribution mode, serving employees who value predictable, convenient purchasing options through their paycheck. We remain in the early stages of deeper integration, including introducing Purchasing Power to our retail partner employee bases and leveraging addressable employer relationships to expand leasing distribution. Over time, we believe this opportunity represents a meaningful incremental growth lever. From a marketing perspective, early media testing at Purchasing Power is showing encouraging results, demonstrating our ability to improve penetration within the eligible population. Under the Enhanced pillar, our investments in improving both customer and retailer experiences are progressing, with several initiatives beginning to deliver positive results. Our AI-driven lease eligibility engine is scaling meaningfully. We've expanded our leasing product catalog and improved response times from three seconds down to a tenth of a second. At the same time, we are advancing customer experience enhancements that are driving higher conversion. We deployed multiple AI-driven improvements across our PROG Marketplace, including an AI chatbot assistant, enhanced payments navigation, and a new AI-powered checkout flow that simplifies and streamlines the transaction process. These PROG Marketplace enhancements have delivered an approximately 20 percentage point improvement in checkout conversion versus the prior experience, while also lowering cost to serve and improving operational efficiency. The focus remains clear. Enhance the customer experience to support higher customer lifetime value while improving the economics of the business. Under the Expand pillar, Four is scaling and Purchasing Power is growing double digits in line with expectations as integration efforts advance. We remain intensely focused on strengthening our ecosystem. Four, executed at a high level, delivering 142% revenue growth in Q1 2026, the 10th consecutive quarter of triple-digit GMV and revenue growth. Q1 GMV reached $280 million, more than doubling Q1 2025, and March 2026 GMV of $108 million was the second-highest month in company history. Customer engagement trends remain favorable, with average purchase frequency of approximately five transactions per quarter and more than 130% growth in active shoppers year over year. New shoppers grew approximately 80% year-over-year, representing expansion of the platform's customer base. Four subscription model remains a key driver, with Four+ subscribers continuing to contribute approximately 80% of total GMV. Four's take rate, defined as revenue generated as a percentage of GMV over the trailing-12-month period, remained consistent at approximately 10%, indicating positive monetization efficiency as the business scales. From a profitability standpoint, Four generated adjusted EBITDA of $12.9 million in Q1 2026, already exceeding full-year 2025 adjusted EBITDA of $9.9 million. Q1 adjusted EBITDA margin was 37%, reflecting the benefits of scale. While Q1 is seasonally the highest margin quarter following elevated GMV from the holiday period, the business continues to demonstrate meaningful operating leverage. Money App, our cash advance product, grew revenue over 50% in the first quarter and continues to play an important role as both an engagement and cross-sell driver within our ecosystem. Growth was as a result of higher average advance sizes as well as early traction from a new product we introduced in December called Top-Ups, which allows qualifying customers to responsibly access additional funds on top of an existing advance. While still early, Top-Ups are beginning to generate incremental revenue and represent another avenue for us to deepen customer engagement and expand the platform over time. Our ecosystem strategy is gaining traction. At our Investor Day in March, I highlighted that cross-product engagement is a strategic priority because we believe it is a key component of long-term growth and value creation. We are seeing progress from our ecosystem-first approach, with customers increasingly engaging across multiple products, driving higher lifetime value and improved acquisition efficiency. Four is currently our most connected product, often serving as an entry point and engagement driver across our platform. Progressive Leasing showed the most meaningful improvement in cross-product engagement during the quarter, with more of its customers interacting with other offerings. Notably, we also drove the largest overlap and fastest growth in overlap between Progressive Leasing and Four customers. Before turning over to Brian, let me touch on capital allocation. Our priorities remain unchanged. Invest in the business, pursue strategic M&A, and return excess capital to shareholders through share repurchases and dividends. In February, I told you that in the near term, we will focus on prioritizing debt reduction as we work toward our long-term net leverage target of 1.5x-2x, and we did. During the quarter, we paid down $210 million in recourse debt, ending Q1 with a net leverage ratio of 2x. To summarize the quarter, we delivered results above expectations, led by consistent execution and improving demand trends across the business. Importantly, these results were achieved while continuing to invest in our strategic priorities, advancing our direct consumer capabilities, scaling our digital channels, and deepening integration across our platform. Overall, our distribution moat, diversified ecosystem, and data-driven decisioning capabilities position us well to perform across a range of environments. I firmly believe the best chapters of PROG's story are still ahead of us. With that, I'll turn the call over to Brian. Brian? Thanks, Steve, and good morning, everyone. Our strong performance in the first quarter was broad-based and reflects disciplined execution across each of our businesses, as well as some margin favorability from consumer behavior in the Leasing segment. In a short period of time, we made significant progress against our goal of deleveraging following the Purchasing Power acquisition. As we exit the quarter, we are within our target net leverage range of 1.5x-2x. I'll begin with our Q1 results of Progressive Leasing, followed by Four Technologies, Purchasing Power, and then move to consolidated results. I'll close with an update on our balance sheet, capital allocation, and our revised full-year 2026 outlook. While more broadly, consumer demand across several discretionary categories remains pressured, our teams executed well on the areas within our control, including targeted growth initiatives, decisioning, expense discipline, and capital deployment, enabling us to deliver results ahead of expectations and reinforcing the underlying opportunities within the business. Starting with Progressive Leasing, first quarter GMV came in at $393 million, representing a 2.2% decline year-over-year, which was in line with our expectations. As Steve outlined, this performance reflects two primary factors in the first half of the quarter. The tightening actions we implemented last year to preserve portfolio performance and the lapping of remaining GMV from Big Lots following their bankruptcy. As we progress through the quarter and move past these headwinds, GMV trends improve sequentially, returning to low single-digit growth in March. Revenue for the Progressive Leasing segment was $597 million in the first quarter, down 8.4% year-over-year, primarily a result of a smaller average lease portfolio throughout the quarter. The lower gross leased asset balance, which is down 9.4% entering the quarter compared to a year ago, created a headwind to Q1 revenue. We ended the first quarter with a portfolio size down 5.4% year-over-year. As we executed against our growth initiatives at Progressive Leasing, we expect this portfolio headwind to subside and the revenue compare will become less difficult as the year progresses. Additionally, utilization of the 90-day early purchase option, which is seasonally high in Q1 due to tax refund season, came in lower than expected for the quarter and below 2025. While an environment where fewer customers electing to exercise their 90-day purchase option represents a revenue headwind in the period, over time, we expect total revenue, gross profit and margins to trend favorably. Gross margin for Progressive Leasing was 31.5% in the quarter, up 210 basis points year-over-year. Margin expansion stemmed from improved portfolio yield and a higher proportion of customers choosing to remain in their lease agreements longer, which in part ties to a lower 90-day purchase option activity. Leased merchandise write-offs came in at 7.3% of lease revenue within our targeted annual range of 6%-8% and a 10-basis point improvement from the Q1 2025 rate of 7.4%. This result reflects the benefits of the tightening actions taken a year ago, and we have been largely comfortable with the trends we have been seeing since those changes. As we've consistently emphasized, protecting portfolio health remains our top priority, and we are closely monitoring payment behavior, delinquencies and vintage-level performance, and we are pleased with what we have seen year to date. Progressive Leasing's SG&A for the quarter was $81.3 million, or 13.6% of revenue, compared to 12.6% in Q1 of 2025, and was flat in total SG&A dollars spent even as we invest selectively in areas that support long-term growth, including technology modernization, customer experience, and AI initiatives. As we've demonstrated over time, we remain focused on balancing near-term expense discipline with investments that enhance the durability and scalability of the business. Adjusted EBITDA for Progressive Leasing was $77 million or 12.9% of revenue at the high end of our long-term target range of 11%-13%, representing a 260-basis point improvement year over year. This performance was primarily the result of operational execution, including managing portfolio performance and yield, partially offset by the revenue headwind of a smaller lease portfolio throughout the quarter. Turning to Four Technologies. Q1 GMV reached $280 million, representing growth of 134% year-over-year, and marking the 10th consecutive quarter of triple-digit GMV growth. March alone generated $108 million in GMV, the second highest month in company history. Revenue of $35 million exceeded expectations, growing 142% year-over-year. Adjusted EBITDA was $12.9 million, representing a margin of 37%. I would note that Q1 is the strongest margin period for Four, and throughout the remainder of the year, I expect margins to moderate to the range implied in the revised outlook for the segment. Underlying economics are improving, and we remain highly encouraged by the performance of the business across both growth and profitability metrics. Finally switching to Purchasing Power. Q1 GMV was $132.7 million, representing 10.3% growth. Revenue for Purchasing Power was $107.1 million in the first quarter, with adjusted EBITDA of $0.8 million, consistent with the near breakeven results we expected. As a reminder, Purchasing Power seasonally generates a greater proportion of its revenue and earnings in the back half of the year, particularly in the fourth quarter. Integration efforts are on track. We remain encouraged by the progress we are making across both front-end and back-end synergies, as well as its strategic fit within our broader ecosystem. Transitioning to consolidated results. We delivered strong GMV growth, with continuing operations increasing 54% year-over-year to $806 million, driven by the addition of Purchasing Power and growth at Four. Revenue from continuing operations grew 11.1% year-over-year to $742.7 million, reflecting the addition of Purchasing Power and triple-digit growth at Four Technologies, partially offset by the revenue decline at Progressive Leasing. From an earnings perspective for continuing operations, consolidated adjusted EBITDA was $90.3 million, or 12.2% of revenue, and non-GAAP diluted EPS was $1.24, both exceeding the high end of our February outlook and delivering 29% and 38% year-over-year growth respectively. Turning to the balance sheet, we ended the first quarter with $69.4 million of unrestricted cash and total available liquidity of $419.4 million, including our revolving credit facility. We ended the quarter with $650 million of recourse debt. Since closing the acquisition, we paid down recourse debt by $210 million, resulting in a net leverage ratio of 2x trailing 12-month adjusted EBITDA. As a reminder, this ratio excludes the non-recourse ABS debt used to fund Purchasing Power operations, does not add back the associated interest expense to adjusted EBITDA, and only includes the Purchasing Power adjusted EBITDA since the acquisition. Importantly, net leverage was approximately 2.5x immediately following the acquisition on January 2nd of 2026. Since then, our focus has been on integrating Purchasing Power and driving meaningful deleveraging, and we have made material progress in the quarter, bringing net leverage back within our long-term target range of 1.5x-2x. As we move through the balance of the year, we expect to remain below two turns. We returned capital to shareholders in the first quarter through our quarterly dividend, paying $0.14 per share, a 7.7% increase from the prior year quarter. I would now like to touch on a few key aspects of our second quarter and revised full-year outlook, which was provided in this morning's earnings release. Despite their macroeconomic challenges, we believe our GMV momentum at a consolidated level will carry into the remainder of the year. The improving leasing GMV trends positively impact the gross leased asset balance, which is a leading indicator of future period revenue. Four is delivering strong growth with improving economics, and Purchasing Power is just getting started on realizing its GMV and margin potential. Portfolio performance at leasing is expected to remain healthy as we actively manage yields while balancing GMV growth. We expect full-year 2026 leased merchandise write-offs to remain within our targeted annual range of 6%-8%. Our revised consolidated outlook for 2026 raises expectations on both revenue and earnings from continuing operations, reflecting the Q1 outperformance and our confidence in executing at a high level through the rest of the year. We are already making progress against the three-year 2028 compound annual growth rate framework we outlined in Investor Day. Q1 was a strong and encouraging start to this journey. Our revised consolidated outlook for continuing operations for 2026 calls for revenues in the range of $3 billion-$3.1 billion, adjusted EBITDA in the range of $343 million-$370 million, and non-GAAP EPS in the range of $4.40-$4.80. This outlook assumes an operating environment with no change in the current financial pressures and uncertainties for our customer, no material changes in the company's decisioning posture, no meaningful increase in the unemployment rates for our customer base, an effective tax rate for non-GAAP EPS of approximately 26%, and no impact from additional share repurchases. To summarize, Q1 was a great start to the year, with broad-based outperformance across our businesses and disciplined execution in the areas within our control. We delivered improving trends of Progressive Leasing, sustained high growth and expanding profitability of Four, and early progress with Purchasing Power as integration continues. At the same time, we strengthened the balance sheet, bringing net leverage back within our targeted range while maintaining a prudent approach to capital allocation. As we look ahead, we remain focused on driving profitable growth, managing portfolio performance while executing against our strategic priorities and navigating a still uncertain macro environment. I'll turn the call back over to the operator for questions. Operator? Thank you. At this time, we'll conduct a question-and-answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Due to the interest of time, please limit yourself to one question and a follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kyle Joseph of Stephens. Your line is now open. Hey, good morning, guys. Congrats on a really strong start to the year. Steve, would love to kind of pick your brain on macro. Obviously, a lot of moving parts throughout the quarter. You know, initially, we're expecting higher tax refunds, and then you get into March and higher gas prices. Just kind of walk us through the moving parts of macro and maybe how those impact your businesses differently. You know, we're no longer just focused on leasing, obviously. Four had a really good quarter, and we're obviously new on the Purchasing Power side of things. Just a little bit of macro kinda evolution through the quarter and differing impacts across the businesses. Thanks. Yeah. Thanks, Kyle. Good morning. I guess I would start by saying that, you know, we do have the multiple product ecosystem, but they do have connections in that they serve a very similar customer across the product. To the extent that the macro-overlay has an impact, it's not identical, but it's, you know, directionally similar across the products. We have the benefit of being able to see the customer behavior and the, you know, the influence on the customers across those products and can use that to help, you know, as insights into all the products. As the quarter played out and you called out a few of those things, you know, we're always used to preparing for a tax season. We thought the tax season was gonna be higher. Tax season actually played out about as we expected. It was higher, but not maybe as high as some people were reporting back in, you know, August, September, October timeframe for our customer. Certainly refunds were up across the board, for our customer, they were up, you know, somewhere in the, you know, whatever high singles to low doubles range. That was about what we were planning for. As Brian said in his remarks, we did see in the leasing business less or fewer customers choosing to opt to exercise their 90-day purchase option. We've seen that in over time in different cycles, when customers might be making different decisions about the liquidity the tax season brings. They're making payments to stay current, but not necessarily accelerating a payoff of an obligation. That played out. Some of the other products don't exactly have that kind of accelerated repayment, you know, during the tax season, so less of an impact outside of leasing. Certainly gas prices during the month of March became a bigger story. The consumer is stressed but resilient. I mean, I think that's the common refrain. We're watching all of our early indicators, you know, intensely. We're seeing basically evidence of that stress but resilient. So we feel good about where we're positioned. The tightening and leasing that we did in the first quarter of 2025 has, I think, served us well and positioned the portfolio to be able to withstand some of the stress. You know, we saw a really good first quarter and, you know, we're watching the numbers closely and watching the early indicators, but poised for some good momentum to continue. Got it. That was broad-based, but appreciate you covering it all. Just one follow-up from me. You know, obviously a tough retail environment, even going into the year and then layering in gas prices. Just kinda wanna talk, get an update on your discussions with retail partners, kinda given now you have a bigger suite of products and given, call it some more incremental headwinds for retailers. Thanks. Yeah. I mean, that's kinda more of the same on the retail, especially in consumer durables that the leasing business addresses. Our biz dev teams are doing a good job. They've had some wins in the back half of 2025 and have a very good pipeline of retailers of all sizes that we think we're making progress with from a sales stage progression standpoint. We continue to believe that our suite of products with leasing at the retail level being the largest one are things that can help retailers. We are having increased conversations about a multiple product solution with various retailers, bringing Four into the mix or on the Purchasing Power side, bringing other products to employers to be able to offer additional value to their employees on that voluntary benefit platform. We look forward to continuing to, you know, really dive into that ecosystem strategy and business development in our B2B2C businesses, in specifically Leasing and Purchasing Power is a big part of it. Great. Thanks very much for taking my questions. Thank you. One moment for our next question. Our next question comes to the line of Bobby Griffin of Raymond James. Your line is now open. Good morning, guys. Thanks for taking the question and congrats on a good start to the year. I guess, Steve, I wanted to first ask, like when you've seen that customer behavior before with like lower expected 90-day buyout, has that historically given you kind of any insights into what the customer does for the back half of the year? Is there anything to like learn or kind of how that plays out and what the health of that customer is when you see that? Yeah. I'll start and Brian can certainly fill in the gaps. There's no, you know, no perfect kinda corollary. We have seen in the past, specifically in 2023, coming off of a really tough 2022 from a inflation standpoint, but also a pretty material tightening that we did in the leasing business. We saw a very low 90-day buyout take rate on our customers. What we saw was those customers kind of just they stayed in their leases longer, which is a theme that we've talked about for a couple quarters here on the leasing business. Not doing a 90-day, you know, in that time period, 2023, did not indicate or necessarily mean that the customer was gonna do a straight roll or through the buckets and end up having elevated charge-offs. They end up paying deeper into their lease and maybe doing an early buyout, you know, later in the lease or going to full term. Certainly, some do end up in charge-offs, but we saw from a margin standpoint that this was a margin positive kinda trade-off because as you know, 90 days are a very low margin outcome for us, and the deeper they go in the lease is better. We're watching that closely to see what the kinda the next action is. If the 90-day window expires, which a lot of it did in March because of the holiday uptick in leasing activity, and it expires unexercised, what happens and how do those customers continue to pay us? You know, so far we're pleased with the roll rates and other indicators in the portfolio health. We're not expecting a mirror of 2023, but we are looking to that period to help with our forecasting. Yeah. I would just add, I mean, it is the right question as you just kind of evaluate consumer health overall. We talked about 210 basis point improvement in gross margins at leasing in the quarter, primarily driven by this dynamic. I think what's reflected in our outlook is a view that this is gonna be a net positive for us, that the tailwinds from lower 90 days, you might see some pressure and maybe some potentially some delinquency trends that you watch, but I'm not anticipating that they're anything significant. We saw write-offs come down 10 basis points year-over-year. As you see us increase our outlook and at leasing specifically, we expect this kinda disposition dynamic and a shift towards lower 90 days to be a net positive for the P&L over the course of the year. Okay. That's helpful. I appreciate the details. Maybe lastly from me, just on the actual GMV trends within Progressive Leasing side, you know, flip back positive in the quarter. Can you unpack a little? Is that just a function of the comparisons or is that, you know, actually a sign of kind of inflections in consumer trends or whatnot? I guess I'm just asking it in context. I believe you did call out double-digit growth in apps, which would probably reflect some of the, you know, comparisons dynamic too with Big Lots. Just trying to understand what is more comparison-driven or if it's, you know, an inflection on that consumer engaging with the product and maybe start to see a little trend improvement. Yeah. We're pleased with the trends as we exited the quarter. Specifically as the quarter progressed, like we talked about, it was kinda down high singles in January when we had both of those two discrete headwinds still in force, and then improved to down low singles in February as we lapped those things during the month, and then up low singles in March. If you remember kind of through most of 2025, we called out what the GMV trends would have been were it not for those two headwinds. We were in kind of the low to mid singles as air quotes, "the rest of the business." That did actually decline in Q4 down to only up 1%, absent those headwinds. Much of it is kind of what the business has been performing absent those headwinds over the last several quarters. But we're also seeing some strength in our digital channels. We talked about marketplace being up again 169%. E-commerce as a percentage of total leasing GMV up at 25.7% and the highest first quarter mix to date. And also some various projects that we got over the goal line with existing retailers to help improve that integration and improve balance of sale. There's a mix of freeing up from the lapping. There's also some things that are positively trending in our execution. The apps are a strong point. Apps have to turn into approvals that have to turn into conversions, and that those things vary by channel. We're pleased with how we exited the quarter and how it sets us up for the rest of the year. Thank you, guys. Best of luck here in 2Q. Thanks, Bobby. Thank you. One moment for our next question. Our next question comes on the line of Hoang Nguyen of TD Cowen. Your line is now open. Thank you, guys. Congrats on the quarter. Just a quick one from me. You mentioned about, you know, some of the cost-saving synergies between Leasing and Purchasing Power. I think it's still in the early days, but can you give us some of the flavor of the conversation that you are having? Are you seeing, you know, a lot of inbound engagement from both sides of the enterprises? And I have a follow-up. Sure. Yeah, I mean, that's definitely part of our plan. It was identified during diligence, and we plan to execute on it. We talked a little bit about it during Investor Day. We believe that the deep and long relationships that we have with retailers on the leasing side are you know, fertile ground for us on the business side for Purchasing Power and those efforts are underway. Purchasing Power has several employer clients that happen to be retailers that we believe could benefit from offering leasing to their customers, and those discussions are happening. As well as augmenting the Purchasing Power offering with additional products that our intelligence says their employees are already consuming in the broader market. If we can deliver that to them, you know, as a voluntary benefit, we think that's a big benefit and differentiator for Purchasing Power to help with the sales, you know, motion in those employer clients. We're pleased and we're excited about the opportunity. As you called out, we're very early in the integration because, you know, we're still just a few months post-closing. Got it. Maybe one for Brian. You guys have now returned back to your targeted leverage range, although at the high end. I think historically you guys have done, you know, opportunistic buyback. I guess, I mean, when can we expect you guys to kind of get back into the market and buyback shares at these prices? Thank you. Yeah. You know, we haven't given any, you know, plans specifically to our buyback cadence. I think what I'd offer is you saw here in Q1 with the highly cash generative period, our ability to deploy capital against the deleveraging. As we look forward over the course of the year into Q2 and Q3, I think you continue to see some cash generation during those periods. What I think is on the horizon in Q4 is now you have these three businesses, Progressive Leasing, Purchasing Power, and Four that, you know, are seasonally heavy in Q4 in terms of their the GMV concentration in the fourth quarter and utilization of cash in that period. I think the calculus is just kinda going through our capital allocation priorities of investing in the business first before we look to those kinda share repurchase type options. We're sizing up that fourth quarter and just kinda, you know, assessing the cash needs during that period. That's really the calculus. To the extent that we have excess capital, we'll go through that decision-making process. Obviously, we're bullish on you know, where we think this business is going and share repurchase have been a part of our repertoire in the past, and we'll continue to evaluate them. Got it. Thank you, and congrats on the quarter. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Anthony Chukumba of Loop Capital Markets. Your line is now open. Good morning. Thank you for taking my question, and let me add my congrats on a strong start to the year as well. Just had a question on Four. Incredibly impressive performance there. As I look at the revised guidance, if I take kind of the midpoint of the adjusted EBITDA and the revenue, it would imply that the EBITDA margin was in the previous outlook calling about 15.1%, and that goes up now to about 18.2%. You know, given the fact that take rate is consistent, I'm assuming that that's just greater scale in terms of that higher EBITDA margin or is there something else there as well? Yeah. Thanks, Anthony. Yeah, we're very pleased with Four. You know, it's the start to the year, but also the position it's in and what we think we can accomplish with it. You're right, we did increase our view as to the margin expansion that we could achieve this year versus last year, you know, as we set about executing on that path towards a more mature state that we think is materially north of where we'll be in 2026. It is largely due to scale, but I would say that this team at Four is doing an outstanding job of doing more with the same and in some cases doing more with less. They have leaned into AI in a very aggressive way and are not only achieving you know customer-facing improvements and innovation but also back-office savings. It is a scale play but it's also an efficiency play. Just the subscription strength and stickiness or said another way you know lack of churn has been a bright spot and that revenue is very high-quality revenue that flows through to earnings in a meaningful way. Got it. Okay. And then I just have to ask my obligatory question in terms of the retail partner pipeline in Progressive Leasing. Yeah. Thank you. Yeah, I mean, as I think I was saying to Kyle, the biz dev team is really doing a great job. They're out there, they're talking. They had some wins in the back half of 2025 that will pay us dividends here in 2026. The pipeline is full with retailers of all sizes. You know, we're constantly getting new doors out in the SMB space, and that's kind of a different team than the folks that are hunting the super regionals and the enterprise accounts. We're very pleased. We've got a great offering and a great way to tell the story. The ecosystem strategy reinforces that story. Even though it might be a leasing conversation, we have, you know, more earned authority around this customer and have more products. Those are all helping us have some successes and, you know, it's our expectation that we'll have some more wins here this year in 2026. Keep up the good work, guys. Thanks, Anthony. Thank you. One moment for our next question. Our next question comes from the line of Hal Goetsch of B. Riley Securities. Your line is now open. Hey, guys. Congratulations on a super quarter. You know, with the acquisition of Purchasing Power, and I think, you know, hitting the asset-backed market for some of their receivables, you've got some new items on your income statement, gain on sale of lease receivables, gain on change of fair value of receivables. I wonder if you could just give us some color on how we should think about, you know, any thumb rules we should use in modeling for those types of line items in your income statement going forward since you've got this new business and need a little bit of fleshing out for us to help us predict the future with it. Thanks. Yeah. I'll start, and then I'll turn it over to the expert, Brian. But you're right, and we appreciate that. I will call out the difference in the two things that you specifically mentioned. The gain on sale of aged lease receivables, is not Purchasing Power related. That's on the Leasing side. We did that in Q4 of last year and again in Q1 of this year. We had not done that historically, but I would point that that is not a one-time thing. That is gonna be a recurring motion that we're in. It's probably not gonna be to the same quantum as Q4 and Q1 moving forward, but we do have an inventory of items that, or not items, but charged-off leases that we have been, you know, working internally that we will then turn to sell into the open market. That would be something that we consider to be a recurring item. I'm gonna let Brian talk about the Purchasing Power side because there is some purchase price accounting and fair value stuff that we have excluded out of or we've not had it in, you know, adjusted EBITDA for the reasons of, it's not kind of a ongoing thing. Yeah. Hey, Hal. It's really that line item is related to the acquired receivables from Purchasing Power, and they were fair valued on the date of acquisition. Really what that line represents is just a continued evaluation of the fair value of those receivables. You know, you might see a few million bucks in any given period. Like Steve said, this is really a more of a technical accounting dynamic and bleeding through from the fair value on the acquisition date. We have made the decision to adjust it out of, or add it back to adjusted EBITDA, to, you know, for more of a consistent presentation. It's hard to give you any guidance on exactly how that's going to move. A lot of that has to do with collection activity and what actually occurs relative to what we thought was going to be the value at acquisition date. I don't expect it to be, you know, material in any given period. It should be speed slight adjustments each quarter. Okay. Terrific. The first point that Steve mentioned, are these more like, you know, monies received on basically a recovery basis from selling past due accounts? Is that basically what it is? Did I hear that correctly, or is it? Sorry. Did I take that differently? You know, aged lease receivables. So receivables, that we charged off, you know, in some cases years ago, we sell them to a third party, you know, it's not the. The dollars are sizable, but the percent, the pennies on the dollar are not that big. But they go out, and they attempt collection efforts. It's not a consignment. It's an actual sale where we get our money up front, and then they go out and do their, you know, attempt to collect. Understood. Okay. You know, if I could ask you. I now understand, like, you know, on the Buy Now, Pay Later, Q1 is a very big quarter because a lot of the payments from a very heavy holiday season come in the first quarter. You have the subscriptions, so your take rate's, you know, good. But your margins in the first quarter were better than most people in the industry already. I'm just wondering if there's like a, are margins reflective of maybe not being fully burdened with the corporate overhead? Does that make sense? If the margins are quite high, and I'm just trying to figure out if like, you know, if this was a standalone comp, it may be lower because there'd be more corporate overhead associated with it. Yeah. I mean, I think that's fair. You know, the margins are high. I mean, at 37% EBITDA margin, you know, is impressive. As you pointed out, Q1 is the seasonally high quarter, and as Anthony pointed out, like, our guide implies you know, something in the range of half of that for the full year. Understood. You know, so that, you know, that shows that we're still in the scaling phase and haven't reached the maturity of some of the pure play competitors that are out there. We believe that the progression from loss-making in 2024 to low teens in 2025 with margin expansion in 2026 paints a nice picture of our ability to get up to those margin levels of the pure play competitors. All right. Excellent. Thank you very much, guys. Thanks, Hal. Thank you. One moment for our next question. Our next question comes from the line of Brad Thomas of KeyBanc Capital Markets. Your line is now open. Hey, good morning, and congrats on the nice quarter here, guys. I wanted to just follow up on the GMV growth that you're seeing at the end of the quarter within Progressive Leasing. Just curious if you could speak to perhaps, you know, your confidence level that we may be at an inflection point here and may be able to continue to drive growth in that GMV in 2Q and through the balance of the year. And then just how we should think about the timing potentially of the portfolio flipping to growth again and when Progressive Leasing revenues could then flip to growth again. Yeah. Thanks, Brad. I'll start, and Brian can talk about the gross leased assets portfolio. Actually the GLA is part of my answer. We don't guide specifically to GMV on a quarter-by-quarter basis. I think that in order to achieve the revenue guide that we did put out for the leasing business, it would need to imply that we, you know, followed similar trends coming out of Q1 into the balance of the year. On the revenue side, a lot of that will be exactly what you called out, the portfolio size. We made some good progress here this quarter, but I'll let Brian kinda chime in on that. Yeah. I think what I'd highlight there is starting the quarter, Brad, our portfolio size, which is, you know, the key driver of revenue, was down 9.4% start. We made progress as Steve has articulated, kinda step functioning up our GMV trajectory. We ended the quarter down 5.4%. Sorry, 9.4% to 5.4%. The net impact of revenue in the period was down 8.4%. There's a pretty good corollary between kind of the average portfolio size year over year and where revenue is trending. You kinda extend that trend line into Q2 and Q3. What we've got kind of implied in our revenue for Progressive Leasing for the rest of the year. I think what you said would really have to play out, which is we'd have to see a continued improvement in that trajectory, the gross leased asset balance continuing to make progress towards growing year over year as the year moves on, in order for us to hit that revenue target. I like the trends there. I think we're taking it month by month and continue to make progress. I think as we now pass these difficult comps that you know I feel like we've been talking about for forever with Big Lots and the tightening action I think we can now you know have an easier conversation just about the apples-to-apples periods year over year and I think they're trending favorably. I don't think it's too far down the road before we're seeing that portfolio size larger year over year. That's very helpful. If I could ask a follow-up around the cash flow generation. Brian, I apologize if I missed it in your prepared remarks, but what does the guidance imply for free cash flow this year? Can you remind us if there's anything that's sorta maybe one-timey that wouldn't repeat as we look to cash flow next year? It seems like you could, you know, boost margins nicely if you paid off some of this funding debt. Are you considering paying that off? Thanks. Yeah, it's a good question. Just a couple of things. We haven't provided free cash flow guidance. What I will say is if you just kinda take it quarter by quarter here. Here in the first quarter, post-acquisition on January 2nd, we were able to pay down total debt of $254 million. Very heavy cash generative quarter. It gives us a lot of optionality. As we've stated, you know, out the gate here, our prioritization is deleveraging back to our targets. As we look forward to Q2 and Q3, I think both of those quarters will be slightly cash generative and give us additional optionality around either further deleveraging or you know, evaluating putting the cash elsewhere. Q4 is, and I mentioned this to Hoang, is, you know, where there's gonna be, you know, a net cash need, I anticipate, just with the growth that really these three businesses are demonstrating right now, and that's not talking about Money App, which is also showing some encouraging trends. I think we've kinda got that lens that we're looking through in the cash decisions that we're making. Net-net, you know, highly cash generative, even in a growth heavy growth anticipation for Four, and then Purchasing Power double digits and Progressive Leasing turning the corner on growth. The one-time aspect that I would just highlight, and we've spoken about it on prior calls, and that's with respect to the OBBA. You know, I wouldn't even call that necessarily one time because given that that is permanent in the law, that's gonna continue to benefit us. We did have a $20 million tax refund that just under $20 million that we ended up getting here in Q1 early into 2025. That was additive. The OBBA is gonna continue to benefit the rest of the year just as it reduces our overall tax liability. We sized that rough benefit of about $100 million for the 2026 period. That's I think a tailwind obviously from a cash perspective. Going forward, you know, I think we've got a lot of optionality. You asked about the funding debt, the ABS debt that's tied to Purchasing Power. You know, our view is that that is you know important tool for Purchasing Power right now. I think it's an efficient model for them to be able to borrow against the receivables that they're generating and help us from a just you know a capital efficiency standpoint. Obviously as long as the ABS market is you know favorable to us and the rates that we've disclosed here in our 10-Q, you can see them by tranche. They're relatively favorable for us. I think we, you know, continue marching down that path. No plans to pull those back meaningfully in the near term at least. That's very helpful. Thank you so much. Thank you. This concludes the question-and-answer session. I'll now turn it back to Steve Michaels, President and CEO, for closing remarks. Thank you very much for joining us today. We delivered a strong first quarter with improving trends across the businesses, and we're entering the balance of the year with real momentum. I wanna thank all of the team members across PROG nation for the execution we've seen, as well as our retail partners and employer clients and our customers for trusting us. I firmly believe the best chapters of PROG story are still ahead of us. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Speaker 9: Good day and thank you for standing by. Welcome to the PROG Holdings Q1 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like to hand the conference over to your first speaker today, John Baugh, Vice President of Investor Relations. Please go ahead. Good day and thank you for standing by. good day and thank you for standing by Welcome to the PROG Holdings Q1 earnings conference call. welcome to the prog holdings q1 earnings conference call At this time, all participants are in listen- only mode. at this time all participants are in listen- only mode After the speaker's presentation, there'll be a question-and-answer session. after the speaker's presentation there'll be a question-and-answer session To ask a question during the session, you'll need to press star one one on your telephone. to ask a question during the session you'll need to press star one one on your telephone You will then hear an automated message advising your hand is raised. you will then hear an automated message advising your hand is raised To withdraw your question, please press star one one again. to withdraw your question please press star one one again Please be advised that today's conference is being recorded. please be advised that today's conference is being recorded I would like to hand the conference over to your first speaker today, John Baugh, Vice President of Investor Relations. i would like to hand the conference over to your first speaker today john baugh vice president of investor relations Please go ahead. please go ahead

Speaker 7: Thank you, and good morning, everyone. Welcome to the PROG Holdings first quarter 2026 earnings call. Joining me this morning are Steve Michaels, PROG Holdings President and Chief Executive Officer, and Brian Garner, our Chief Financial Officer. Many of you have already seen a copy of our earnings release issued this morning, which is available on our Investor Relations website, investor.progholdings.com. During this call, certain statements we make will be forward-looking, including comments regarding our revised 2026 full-year outlook and our outlook for the second quarter of 2026. Listeners are cautioned not to place undue emphasis on forward-looking statements we make today, all of which are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. We undertake no obligation to update any such statements. Thank you, and good morning, everyone. thank you and good morning everyone Welcome to the PROG Holdings first quarter 2026 earnings call. welcome to the prog holdings first quarter 2026 earnings call Joining me this morning are Steve Michaels, PROG Holdings President and Chief Executive Officer, and Brian Garner, our Chief Financial Officer. joining me this morning are steve michaels prog holdings president and chief executive officer and brian garner our chief financial officer Many of you have already seen a copy of our earnings release issued this morning, which is available on our Investor Relations website, investor.progholdings.com. many of you have already seen a copy of our earnings release issued this morning which is available on our investor relations website investor.progholdings.com During this call, certain statements we make will be forward-looking, including comments regarding our revised 2026 full- year outlook and our outlook for the second quarter of 2026. during this call certain statements we make will be forward-looking including comments regarding our revised 2026 full- year outlook and our outlook for the second quarter of 2026 Listeners are cautioned not to place undue emphasis on forward-looking statements we make today, all of which are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. listeners are cautioned not to place undue emphasis on forward-looking statements we make today all of which are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements We undertake no obligation to update any such statements. we undertake no obligation to update any such statements On today's call, we will be referring to certain non-GAAP financial measures, including adjusted EBITDA and non-GAAP EPS, which have been adjusted for certain items which may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included with our earnings release. The company believes that these non-GAAP financial measures provide meaningful insight into the company's operational performance and cash flows and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding the company's ongoing operational performance. With that, I would like to turn the call over to Steve Michaels, PROG Holdings President and Chief Executive Officer. Steve? On today's call, we will be referring to certain non-GAAP financial measures, including adjusted EBITDA and non-GAAP EPS, which have been adjusted for certain items which may affect the comparability of our performance with other companies. on today's call we will be referring to certain non-gaap financial measures including adjusted ebitda and non-gaap eps which have been adjusted for certain items which may affect the comparability of our performance with other companies These non-GAAP measures are detailed in the reconciliation tables included with our earnings release. these non-gaap measures are detailed in the reconciliation tables included with our earnings release The company believes that these non-GAAP financial measures provide meaningful insight into the company's operational performance and cash flows and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding the company's ongoing operational performance. the company believes that these non-gaap financial measures provide meaningful insight into the company's operational performance and cash flows and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding the company's ongoing operational performance With that, I would like to turn the call over to Steve Michaels, PROG Holdings President and Chief Executive Officer. with that i would like to turn the call over to steve michaels prog holdings president and chief executive officer Steve? steve

Speaker 10: Thanks, John. Good morning, everyone and thank you for joining us. I'll start by saying we delivered a strong first quarter. We are very happy with the start to the year and the momentum we're seeing in the business. Our results came in at the high end of our revenue outlook and exceeded the top end of our outlook for earnings and non-GAAP EPS. This outperformance reflects the discipline of our operating model and strong execution across the organization, supported by higher-than-expected GMV with improved economics at Four, as well as better portfolio yield at Progressive Leasing, primarily due to lower than expected utilization of 90-day purchase options. In an environment where the geopolitical and macroeconomic situation presents challenges, including from rising gas prices, our model performed as designed. This consistency is a direct result of how we built and managed this business over time. Thanks, John. thanks john Good morning, everyone and thank you for joining us. good morning everyone and thank you for joining us I'll start by saying we delivered a strong first quarter. i'll start by saying we delivered a strong first quarter We are very happy with the start to the year and the momentum we're seeing in the business. we are very happy with the start to the year and the momentum we're seeing in the business Our results came in at the high end of our revenue outlook and exceeded the top end of our outlook for earnings and non-GAAP EPS . our results came in at the high end of our revenue outlook and exceeded the top end of our outlook for earnings and non-gaap eps This outperformance reflects the discipline of our operating model and strong execution across the organization, supported by higher-than-expected GMV with improved economics at Four, as well as better portfolio yield at Progressive Leasing, primarily due to lower than expected utilization of 90-day purchase options. this outperformance reflects the discipline of our operating model and strong execution across the organization supported by higher-than-expected gmv with improved economics at four as well as better portfolio yield at progressive leasing primarily due to lower than expected utilization of 90-day purchase options In an environment where the geopolitical and macroeconomic situation presents challenges, including from rising gas prices, our model performed as designed. in an environment where the geopolitical and macroeconomic situation presents challenges including from rising gas prices our model performed as designed This consistency is a direct result of how we built and managed this business over time. this consistency is a direct result of how we built and managed this business over time Let me provide some additional color on the quarter before walking through our strategic priorities. As I mentioned in February, we have begun framing growth through the lens of consolidated GMV, which grew 54% in Q1 compared to the same period last year. These results reflect the addition of Purchasing Power and the triple-digit growth of Four. As our portfolio of solutions expands, GMV is generated through multiple products across Leasing, Four, and Purchasing Power, and this consolidated view better reflects the full scale of our platform. It's a great example of how we are deploying an integrated ecosystem of solutions to better reach underserved individuals and families. Starting with Progressive Leasing, GMV for the first quarter came in at 2.2% below the same period last year. Let me provide some additional color on the quarter before walking through our strategic priorities. let me provide some additional color on the quarter before walking through our strategic priorities As I mentioned in February, we have begun framing growth through the lens of consolidated GMV, which grew 54% in Q1 compared to the same period last year. as i mentioned in february we have begun framing growth through the lens of consolidated gmv which grew 54% in q1 compared to the same period last year These results reflect the addition of Purchasing Power and the triple-digit growth of Four. these results reflect the addition of purchasing power and the triple-digit growth of four As our portfolio of solutions expands, GMV is generated through multiple products across Leasing, Four, and Purchasing Power, and this consolidated view better reflects the full scale of our platform. as our portfolio of solutions expands gmv is generated through multiple products across leasing four and purchasing power and this consolidated view better reflects the full scale of our platform It's a great example of how we are deploying an integrated ecosystem of solutions to better reach underserved individuals and families. it's a great example of how we are deploying an integrated ecosystem of solutions to better reach underserved individuals and families Starting with Progressive Leasing, GMV for the first quarter came in at 2.2% below the same period last year. starting with progressive leasing gmv for the first quarter came in at 2.2% below the same period last year However, trends improved meaningfully as the quarter progressed, with January down high single digits, February down low single digits, and March up low single digits. As a reminder, throughout last year, our leasing business faced GMV headwinds from deliberate tightening actions and the bankruptcy of Big Lots. As we lapped both of those headwinds, particularly through February, Leasing's GMV trends inflected positively in March. From a GMV standpoint, the quarter played out largely as expected, and we are excited to exit the quarter on a growth trajectory. Four's GMV for the quarter was 134% high year-over-year. Customer demand for our BNPL product remains robust, and importantly, we are seeing that growth translate into attractive economics and profitability, which I'll discuss in more detail shortly. Purchasing Power's Q1 GMV grew double digits at 10.3% year-over-year. However, trends improved meaningfully as the quarter progressed, with January down high single digits, February down low single digits, and March up low single digits. however trends improved meaningfully as the quarter progressed with january down high single digits february down low single digits and march up low single digits As a reminder, throughout last year, our leasing business faced GMV headwinds from deliberate tightening actions and the bankruptcy of Big Lots. as a reminder throughout last year our leasing business faced gmv headwinds from deliberate tightening actions and the bankruptcy of big lots As we lapped both of those headwinds, particularly through February, Leasing's GMV trends inflected positively in March. as we lapped both of those headwinds particularly through february leasing's gmv trends inflected positively in march From a GMV standpoint, the quarter played out largely as expected, and we are excited to exit the quarter on a growth trajectory. from a gmv standpoint the quarter played out largely as expected and we are excited to exit the quarter on a growth trajectory Four's GMV for the quarter was 134% high year-over-year. four's gmv for the quarter was 134% high year-over-year Customer demand for our BNPL product remains robust, and importantly, we are seeing that growth translate into attractive economics and profitability, which I'll discuss in more detail shortly. customer demand for our bnpl product remains robust and importantly we are seeing that growth translate into attractive economics and profitability which i'll discuss in more detail shortly Purchasing Power's Q1 GMV grew double digits at 10.3% year-over-year. purchasing power's q1 gmv grew double digits at 10.3% year-over-year This growth was due to favorable performance within existing employer accounts. We also added several new employer clients during the quarter, bringing tens of thousands of new eligible employees onto the platform and supporting future growth. Consolidated revenue came in at $743 million, representing 11% year-over-year growth. This performance was primarily as a result of the addition of Purchasing Power along with growth at Four and partially offset by a revenue decline at Progressive Leasing due to a lower portfolio size throughout the quarter. Consolidated adjusted EBITDA was $90.3 million, and non-GAAP EPS was $1.24, both exceeding the high end of our outlook. This outperformance was fueled by better-than-expected portfolio yield and customer payment performance at Progressive Leasing, as well as increased customer demand and profitability at Four. This growth was due to favorable performance within existing employer accounts. this growth was due to favorable performance within existing employer accounts We also added several new employer clients during the quarter, bringing tens of thousands of new eligible employees onto the platform and supporting future growth. we also added several new employer clients during the quarter bringing tens of thousands of new eligible employees onto the platform and supporting future growth Consolidated revenue came in at $743 million, representing 11% year-over-year growth. consolidated revenue came in at $743 million representing 11% year-over-year growth This performance was primarily as a result of the addition of Purchasing Power along with growth at Four and partially offset by a revenue decline at Progressive Leasing due to a lower portfolio size throughout the quarter. Consolidated adjusted EBITDA was $90.3 million, and non-GAAP EPS was $1.24, both exceeding the high end of our outlook. this performance was primarily as a result of the addition of purchasing power along with growth at four and partially offset by a revenue decline at progressive leasing due to a lower portfolio size throughout the quarter. consolidated adjusted ebitda was $90.3 million and non-gaap eps was $1.24 both exceeding the high end of our outlook This outperformance was fueled by better-than-expected portfolio yield and customer payment performance at Progressive Leasing, as well as increased customer demand and profitability at Four. this outperformance was fueled by better-than-expected portfolio yield and customer payment performance at progressive leasing as well as increased customer demand and profitability at four To summarize the quarter, we delivered results above expectations, saw improving GMV trends while maintaining portfolio health at Leasing, drove profitable triple-digit growth with improving economics at Four, achieved double-digit GMV growth at Purchasing Power, and continued to execute against our ecosystem strategy. Before we shift into our strategic priorities, I want to briefly address the broader environment and how it informs our updated outlook. The consumer we serve remains resilient, but they are facing real challenges. Gas prices are elevated, and there is increased uncertainty in the macro backdrop. We remain committed to continue to deliver consistent portfolio performance across all our businesses and managing costs prudently to achieve our earnings outlook. Our track record demonstrates our ability to adapt quickly, and we will do so as conditions evolve. Let me now turn to our three strategic pillars, Grow, Enhance, and Expand, to share some highlights from the quarter. To summarize the quarter, we delivered results above expectations, saw improving GMV trends while maintaining portfolio health at Leasing, drove profitable triple-digit growth with improving economics at Four, achieved double-digit GMV growth at Purchasing Power, and continued to execute against our ecosystem strategy. to summarize the quarter we delivered results above expectations saw improving gmv trends while maintaining portfolio health at leasing drove profitable triple-digit growth with improving economics at four achieved double-digit gmv growth at purchasing power and continued to execute against our ecosystem strategy Before we shift into our strategic priorities, I want to briefly address the broader environment and how it informs our updated outlook. before we shift into our strategic priorities i want to briefly address the broader environment and how it informs our updated outlook The consumer we serve remains resilient, but they are facing real challenges. the consumer we serve remains resilient but they are facing real challenges Gas prices are elevated, and there is increased uncertainty in the macro backdrop. gas prices are elevated and there is increased uncertainty in the macro backdrop We remain committed to continue to deliver consistent portfolio performance across all our businesses and managing costs prudently to achieve our earnings outlook. we remain committed to continue to deliver consistent portfolio performance across all our businesses and managing costs prudently to achieve our earnings outlook Our track record demonstrates our ability to adapt quickly, and we will do so as conditions evolve. our track record demonstrates our ability to adapt quickly and we will do so as conditions evolve Let me now turn to our three strategic pillars, Grow, Enhance, and Expand, to share some highlights from the quarter. let me now turn to our three strategic pillars grow enhance and expand to share some highlights from the quarter Starting with the Grow pillar, we saw encouraging traction at Progressive Leasing and Purchasing Power, with remarkable growth at Four, which collectively resulted in consolidated GMV being up 54% year-over-year. For Leasing, Q1 applications grew double digits year over year, and GMV trends improved sequentially month-over-month, with March up low single digits compared to the prior year. In addition to lapping the tightening actions from early 2025, these results reflect our investments in technology to enhance customer experience and in marketing to promote engagement across both new and existing customers. You heard about many of these initiatives at our recent Investor Day. We're pleased to say that they are continuing to have a positive impact on our business. Starting with the Grow pillar, we saw encouraging traction at Progressive Leasing and Purchasing Power, with remarkable growth at Four, which collectively resulted in consolidated GMV being up 54% year-over-year. starting with the grow pillar we saw encouraging traction at progressive leasing and purchasing power with remarkable growth at four which collectively resulted in consolidated gmv being up 54% year-over-year For Leasing, Q1 applications grew double digits year over year, and GMV trends improved sequentially month-over-month, with March up low single digits compared to the prior year. for leasing q1 applications grew double digits year over year and gmv trends improved sequentially month-over-month with march up low single digits compared to the prior year In addition to lapping the tightening actions from early 2025, these results reflect our investments in technology to enhance customer experience and in marketing to promote engagement across both new and existing customers. in addition to lapping the tightening actions from early 2025 these results reflect our investments in technology to enhance customer experience and in marketing to promote engagement across both new and existing customers You heard about many of these initiatives at our recent Investor Day. you heard about many of these initiatives at our recent investor day We're pleased to say that they are continuing to have a positive impact on our business. we're pleased to say that they are continuing to have a positive impact on our business Our long-term distribution base of exclusive retail partners with approximately 70% of Progressive Leasing GMV secured into the 2030s provides a durable foundation for growth as we also gain balance of share within existing key retail partners. Additionally, our direct-to-consumer efforts spanning both marketing and digital channels have been meaningful drivers of growth. Within marketing at Progressive Leasing, we leaned into customer acquisition, partner marketing, and cross-product campaigns, which drove increased engagement and incremental GMV. We focused further up the funnel while maintaining flat acquisition costs year over year. At the same time, our outreach channels, including email, SMS, and push notifications, generated incremental GMV, reinforcing healthy consumer demand and improving return on ad spend. On the digital front, PROG Marketplace delivered another notable quarter, growing at 169% year-over-year. Our long-term distribution base of exclusive retail partners with approximately 70% of Progressive Leasing GMV secured into the 2030s provides a durable foundation for growth as we also gain balance of share within existing key retail partners. Additionally, our direct-to-consumer efforts spanning both marketing and digital channels have been meaningful drivers of growth. our long-term distribution base of exclusive retail partners with approximately 70% of progressive leasing gmv secured into the 2030s provides a durable foundation for growth as we also gain balance of share within existing key retail partners. additionally our direct-to-consumer efforts spanning both marketing and digital channels have been meaningful drivers of growth Within marketing at Progressive Leasing, we leaned into customer acquisition, partner marketing, and cross-product campaigns, which drove increased engagement and incremental GMV. within marketing at progressive leasing we leaned into customer acquisition partner marketing and cross-product campaigns which drove increased engagement and incremental gmv We focused further up the funnel while maintaining flat acquisition costs year over year. we focused further up the funnel while maintaining flat acquisition costs year over year At the same time, our outreach channels, including email, SMS, and push notifications, generated incremental GMV, reinforcing healthy consumer demand and improving return on ad spend. at the same time our outreach channels including email sms and push notifications generated incremental gmv reinforcing healthy consumer demand and improving return on ad spend On the digital front, PROG Marketplace delivered another notable quarter, growing at 169% year-over-year. on the digital front prog marketplace delivered another notable quarter growing at 169% year-over-year We are scaling this channel through ongoing product enhancements, increased traffic, and improved conversion. Our e-commerce channel also grew meaningfully due to deeper integrations with retail partners and improved digital checkout experiences. Q1 e-commerce GMV was 25.7% of total Progressive Leasing GMV, up from 16.8% in the same period last year and the highest first quarter mix to date. Shifting to Four, we delivered another triple-digit growth quarter, our 10th in a row, with performance powered by both customer acquisition and engagement. The team rolled out AI-driven product enhancements that simplify the shopping experience and average order values increased year over year. Monthly active users more than doubled compared to a year ago, reflecting growing consumer interest. On the marketing side, spend was deployed efficiently to support growth, maintaining a healthy balance between paid and organic customer acquisition. We are scaling this channel through ongoing product enhancements, increased traffic, and improved conversion. we are scaling this channel through ongoing product enhancements increased traffic and improved conversion Our e-commerce channel also grew meaningfully due to deeper integrations with retail partners and improved digital checkout experiences. our e-commerce channel also grew meaningfully due to deeper integrations with retail partners and improved digital checkout experiences Q1 e-commerce GMV was 25.7% of total Progressive Leasing GMV, up from 16.8% in the same period last year and the highest first quarter mix to date. q1 e-commerce gmv was 25.7% of total progressive leasing gmv up from 16.8% in the same period last year and the highest first quarter mix to date Shifting to Four, we delivered another triple-digit growth quarter, our 10th in a row, with performance powered by both customer acquisition and engagement. shifting to four we delivered another triple-digit growth quarter our 10th in a row with performance powered by both customer acquisition and engagement The team rolled out AI-driven product enhancements that simplify the shopping experience and average order values increased year over year. the team rolled out ai-driven product enhancements that simplify the shopping experience and average order values increased year over year Monthly active users more than doubled compared to a year ago, reflecting growing consumer interest. monthly active users more than doubled compared to a year ago reflecting growing consumer interest On the marketing side, spend was deployed efficiently to support growth, maintaining a healthy balance between paid and organic customer acquisition. on the marketing side spend was deployed efficiently to support growth maintaining a healthy balance between paid and organic customer acquisition Finally, Purchasing Power delivered double-digit GMV growth, reinforcing the strength of its model and its strategic role within our ecosystem. Its payroll deduction model represents a differentiated distribution mode, serving employees who value predictable, convenient purchasing options through their paycheck. We remain in the early stages of deeper integration, including introducing Purchasing Power to our retail partner employee bases and leveraging addressable employer relationships to expand leasing distribution. Over time, we believe this opportunity represents a meaningful incremental growth lever. From a marketing perspective, early media testing at Purchasing Power is showing encouraging results, demonstrating our ability to improve penetration within the eligible population. Under the Enhanced pillar, our investments in improving both customer and retailer experiences are progressing, with several initiatives beginning to deliver positive results. Our AI-driven lease eligibility engine is scaling meaningfully. Finally, Purchasing Power delivered double-digit GMV growth, reinforcing the strength of its model and its strategic role within our ecosystem. finally purchasing power delivered double-digit gmv growth reinforcing the strength of its model and its strategic role within our ecosystem Its payroll deduction model represents a differentiated distribution mode, serving employees who value predictable, convenient purchasing options through their paycheck. its payroll deduction model represents a differentiated distribution mode serving employees who value predictable convenient purchasing options through their paycheck We remain in the early stages of deeper integration, including introducing Purchasing Power to our retail partner employee bases and leveraging addressable employer relationships to expand leasing distribution. we remain in the early stages of deeper integration including introducing purchasing power to our retail partner employee bases and leveraging addressable employer relationships to expand leasing distribution Over time, we believe this opportunity represents a meaningful incremental growth lever. over time we believe this opportunity represents a meaningful incremental growth lever From a marketing perspective, early media testing at Purchasing Power is showing encouraging results, demonstrating our ability to improve penetration within the eligible population. from a marketing perspective early media testing at purchasing power is showing encouraging results demonstrating our ability to improve penetration within the eligible population Under the Enhanced pillar, our investments in improving both customer and retailer experiences are progressing, with several initiatives beginning to deliver positive results. under the enhanced pillar our investments in improving both customer and retailer experiences are progressing with several initiatives beginning to deliver positive results Our AI-driven lease eligibility engine is scaling meaningfully. our ai-driven lease eligibility engine is scaling meaningfully We've expanded our leasing product catalog and improved response times from three seconds down to a tenth of a second. At the same time, we are advancing customer experience enhancements that are driving higher conversion. We deployed multiple AI-driven improvements across our PROG Marketplace, including an AI chatbot assistant, enhanced payments navigation, and a new AI-powered checkout flow that simplifies and streamlines the transaction process. These PROG Marketplace enhancements have delivered an approximately 20 percentage point improvement in checkout conversion versus the prior experience, while also lowering cost to serve and improving operational efficiency. The focus remains clear. Enhance the customer experience to support higher customer lifetime value while improving the economics of the business. Under the Expand pillar, Four is scaling and Purchasing Power is growing double digits in line with expectations as integration efforts advance. We remain intensely focused on strengthening our ecosystem. We've expanded our leasing product catalog and improved response times from three seconds down to a tenth of a second. we've expanded our leasing product catalog and improved response times from three seconds down to a tenth of a second At the same time, we are advancing customer experience enhancements that are driving higher conversion. at the same time we are advancing customer experience enhancements that are driving higher conversion We deployed multiple AI-driven improvements across our PROG Marketplace, including an AI chatbot assistant, enhanced payments navigation, and a new AI-powered checkout flow that simplifies and streamlines the transaction process. These PROG Marketplace enhancements have delivered an approximately 20 percentage point improvement in checkout conversion versus the prior experience, while also lowering cost to serve and improving operational efficiency. we deployed multiple ai-driven improvements across our prog marketplace including an ai chatbot assistant enhanced payments navigation and a new ai-powered checkout flow that simplifies and streamlines the transaction process. these prog marketplace enhancements have delivered an approximately 20 percentage point improvement in checkout conversion versus the prior experience while also lowering cost to serve and improving operational efficiency The focus remains clear. the focus remains clear Enhance the customer experience to support higher customer lifetime value while improving the economics of the business. enhance the customer experience to support higher customer lifetime value while improving the economics of the business Under the Expand pillar, Four is scaling and Purchasing Power is growing double digits in line with expectations as integration efforts advance. under the expand pillar four is scaling and purchasing power is growing double digits in line with expectations as integration efforts advance We remain intensely focused on strengthening our ecosystem. we remain intensely focused on strengthening our ecosystem Four, executed at a high level, delivering 142% revenue growth in Q1 2026, the 10th consecutive quarter of triple-digit GMV and revenue growth. Q1 GMV reached $280 million, more than doubling Q1 2025, and March 2026 GMV of $108 million was the second-highest month in company history. Customer engagement trends remain favorable, with average purchase frequency of approximately five transactions per quarter and more than 130% growth in active shoppers year over year. New shoppers grew approximately 80% year-over-year, representing expansion of the platform's customer base. Four subscription model remains a key driver, with Four+ subscribers continuing to contribute approximately 80% of total GMV. Four, executed at a high level, delivering 142% revenue growth in Q1 2026, the 10th consecutive quarter of triple-digit GMV and revenue growth. four executed at a high level delivering 142% revenue growth in q1 2026 the 10th consecutive quarter of triple-digit gmv and revenue growth Q1 GMV reached $280 million, more than doubling Q1 2025, and March 2026 GMV of $108 million was the second-highest month in company history. q1 gmv reached $280 million more than doubling q1 2025 and march 2026 gmv of $108 million was the second-highest month in company history Customer engagement trends remain favorable, with average purchase frequency of approximately five transactions per quarter and more than 130% growth in active shoppers year over year. customer engagement trends remain favorable with average purchase frequency of approximately five transactions per quarter and more than 130% growth in active shoppers year over year New shoppers grew approximately 80% year-over-year, representing expansion of the platform's customer base. new shoppers grew approximately 80% year-over-year representing expansion of the platform's customer base Four subscription model remains a key driver, with Four+ subscribers continuing to contribute approximately 80% of total GMV. four subscription model remains a key driver with four+ subscribers continuing to contribute approximately 80% of total gmv Four's take rate, defined as revenue generated as a percentage of GMV over the trailing-12-month period, remained consistent at approximately 10%, indicating positive monetization efficiency as the business scales. From a profitability standpoint, Four generated adjusted EBITDA of $12.9 million in Q1 2026, already exceeding full-year 2025 adjusted EBITDA of $9.9 million. Q1 adjusted EBITDA margin was 37%, reflecting the benefits of scale. While Q1 is seasonally the highest margin quarter following elevated GMV from the holiday period, the business continues to demonstrate meaningful operating leverage. Money App, our cash advance product, grew revenue over 50% in the first quarter and continues to play an important role as both an engagement and cross-sell driver within our ecosystem. Four's take rate, defined as revenue generated as a percentage of GMV over the trailing-12-month period, remained consistent at approximately 10%, indicating positive monetization efficiency as the business scales. four's take rate defined as revenue generated as a percentage of gmv over the trailing-12-month period remained consistent at approximately 10% indicating positive monetization efficiency as the business scales From a profitability standpoint, Four generated adjusted EBITDA of $12.9 million in Q1 2026, already exceeding full- year 2025 adjusted EBITDA of $9.9 million. from a profitability standpoint four generated adjusted ebitda of $12.9 million in q1 2026 already exceeding full- year 2025 adjusted ebitda of $9.9 million Q1 adjusted EBITDA margin was 37%, reflecting the benefits of scale. q1 adjusted ebitda margin was 37% reflecting the benefits of scale While Q1 is seasonally the highest margin quarter following elevated GMV from the holiday period, the business continues to demonstrate meaningful operating leverage. while q1 is seasonally the highest margin quarter following elevated gmv from the holiday period the business continues to demonstrate meaningful operating leverage Money App, our cash advance product, grew revenue over 50% in the first quarter and continues to play an important role as both an engagement and cross-sell driver within our ecosystem. money app our cash advance product grew revenue over 50% in the first quarter and continues to play an important role as both an engagement and cross-sell driver within our ecosystem Growth was as a result of higher average advance sizes as well as early traction from a new product we introduced in December called Top-Ups, which allows qualifying customers to responsibly access additional funds on top of an existing advance. While still early, Top-Ups are beginning to generate incremental revenue and represent another avenue for us to deepen customer engagement and expand the platform over time. Our ecosystem strategy is gaining traction. At our Investor Day in March, I highlighted that cross-product engagement is a strategic priority because we believe it is a key component of long-term growth and value creation. We are seeing progress from our ecosystem-first approach, with customers increasingly engaging across multiple products, driving higher lifetime value and improved acquisition efficiency. Four is currently our most connected product, often serving as an entry point and engagement driver across our platform. Growth was as a result of higher average advance sizes as well as early traction from a new product we introduced in December called Top-Ups, which allows qualifying customers to responsibly access additional funds on top of an existing advance. growth was as a result of higher average advance sizes as well as early traction from a new product we introduced in december called top-ups which allows qualifying customers to responsibly access additional funds on top of an existing advance While still early, Top-Ups are beginning to generate incremental revenue and represent another avenue for us to deepen customer engagement and expand the platform over time. while still early top-ups are beginning to generate incremental revenue and represent another avenue for us to deepen customer engagement and expand the platform over time Our ecosystem strategy is gaining traction. our ecosystem strategy is gaining traction At our Investor Day in March, I highlighted that cross-product engagement is a strategic priority because we believe it is a key component of long-term growth and value creation. at our investor day in march i highlighted that cross-product engagement is a strategic priority because we believe it is a key component of long-term growth and value creation We are seeing progress from our ecosystem-first approach, with customers increasingly engaging across multiple products, driving higher lifetime value and improved acquisition efficiency. we are seeing progress from our ecosystem-first approach with customers increasingly engaging across multiple products driving higher lifetime value and improved acquisition efficiency Four is currently our most connected product, often serving as an entry point and engagement driver across our platform. four is currently our most connected product often serving as an entry point and engagement driver across our platform Progressive Leasing showed the most meaningful improvement in cross-product engagement during the quarter, with more of its customers interacting with other offerings. Notably, we also drove the largest overlap and fastest growth in overlap between Progressive Leasing and Four customers. Before turning over to Brian, let me touch on capital allocation. Our priorities remain unchanged. Invest in the business, pursue strategic M&A, and return excess capital to shareholders through share repurchases and dividends. In February, I told you that in the near term, we will focus on prioritizing debt reduction as we work toward our long-term net leverage target of 1.5x-2x, and we did. During the quarter, we paid down $210 million in recourse debt, ending Q1 with a net leverage ratio of 2x. Progressive Leasing showed the most meaningful improvement in cross-product engagement during the quarter, with more of its customers interacting with other offerings. progressive leasing showed the most meaningful improvement in cross-product engagement during the quarter with more of its customers interacting with other offerings Notably, we also drove the largest overlap and fastest growth in overlap between Progressive Leasing and Four customers. notably we also drove the largest overlap and fastest growth in overlap between progressive leasing and four customers Before turning over to Brian, let me touch on capital allocation. before turning over to brian let me touch on capital allocation Our priorities remain unchanged. our priorities remain unchanged Invest in the business, pursue strategic M&A, and return excess capital to shareholders through share repurchases and dividends. invest in the business pursue strategic m&a and return excess capital to shareholders through share repurchases and dividends In February, I told you that in the near term, we will focus on prioritizing debt reduction as we work toward our long-term net leverage target of 1.5x-2x, and we did. in february i told you that in the near term we will focus on prioritizing debt reduction as we work toward our long-term net leverage target of 1.5x-2x and we did During the quarter, we paid down $210 million in recourse debt, ending Q1 with a net leverage ratio of 2x. during the quarter we paid down $210 million in recourse debt ending q1 with a net leverage ratio of 2x To summarize the quarter, we delivered results above expectations, led by consistent execution and improving demand trends across the business. Importantly, these results were achieved while continuing to invest in our strategic priorities, advancing our direct consumer capabilities, scaling our digital channels, and deepening integration across our platform. Overall, our distribution moat, diversified ecosystem, and data-driven decisioning capabilities position us well to perform across a range of environments. I firmly believe the best chapters of PROG's story are still ahead of us. With that, I'll turn the call over to Brian. Brian? To summarize the quarter, we delivered results above expectations, led by consistent execution and improving demand trends across the business. to summarize the quarter we delivered results above expectations led by consistent execution and improving demand trends across the business Importantly, these results were achieved while continuing to invest in our strategic priorities, advancing our direct consumer capabilities, scaling our digital channels, and deepening integration across our platform. importantly these results were achieved while continuing to invest in our strategic priorities advancing our direct consumer capabilities scaling our digital channels and deepening integration across our platform Overall, our distribution moat, diversified ecosystem, and data-driven decisioning capabilities position us well to perform across a range of environments. overall our distribution moat diversified ecosystem and data-driven decisioning capabilities position us well to perform across a range of environments I firmly believe the best chapters of PROG's story are still ahead of us. i firmly believe the best chapters of prog's story are still ahead of us With that, I'll turn the call over to Brian. with that i'll turn the call over to brian Brian? brian

Speaker 4: Thanks, Steve, and good morning, everyone. Our strong performance in the first quarter was broad-based and reflects disciplined execution across each of our businesses, as well as some margin favorability from consumer behavior in the Leasing segment. In a short period of time, we made significant progress against our goal of deleveraging following the Purchasing Power acquisition. As we exit the quarter, we are within our target net leverage range of 1.5x-2x. I'll begin with our Q1 results of Progressive Leasing, followed by Four Technologies, Purchasing Power, and then move to consolidated results. I'll close with an update on our balance sheet, capital allocation, and our revised full-year 2026 outlook. Thanks, Steve, and good morning, everyone. thanks steve and good morning everyone Our strong performance in the first quarter was broad-based and reflects disciplined execution across each of our businesses, as well as some margin favorability from consumer behavior in the Leasing segment. our strong performance in the first quarter was broad-based and reflects disciplined execution across each of our businesses as well as some margin favorability from consumer behavior in the leasing segment In a short period of time, we made significant progress against our goal of deleveraging following the Purchasing Power acquisition. in a short period of time we made significant progress against our goal of deleveraging following the purchasing power acquisition As we exit the quarter, we are within our target net leverage range of 1.5x-2 x. as we exit the quarter we are within our target net leverage range of 1.5x-2 x I'll begin with our Q1 results of Progressive Leasing, followed by Four Technologies, Purchasing Power, and then move to consolidated results. i'll begin with our q1 results of progressive leasing followed by four technologies purchasing power and then move to consolidated results I'll close with an update on our balance sheet, capital allocation, and our revised full-year 2026 outlook. i'll close with an update on our balance sheet capital allocation and our revised full-year 2026 outlook While more broadly, consumer demand across several discretionary categories remains pressured, our teams executed well on the areas within our control, including targeted growth initiatives, decisioning, expense discipline, and capital deployment, enabling us to deliver results ahead of expectations and reinforcing the underlying opportunities within the business. Starting with Progressive Leasing, first quarter GMV came in at $393 million, representing a 2.2% decline year-over-year, which was in line with our expectations. As Steve outlined, this performance reflects two primary factors in the first half of the quarter. The tightening actions we implemented last year to preserve portfolio performance and the lapping of remaining GMV from Big Lots following their bankruptcy. As we progress through the quarter and move past these headwinds, GMV trends improve sequentially, returning to low single-digit growth in March. While more broadly, consumer demand across several discretionary categories remains pressured, our teams executed well on the areas within our control, including targeted growth initiatives, decisioning, expense discipline, and capital deployment, enabling us to deliver results ahead of expectations and reinforcing the underlying opportunities within the business. while more broadly consumer demand across several discretionary categories remains pressured our teams executed well on the areas within our control including targeted growth initiatives decisioning expense discipline and capital deployment, enabling us to deliver results ahead of expectations and reinforcing the underlying opportunities within the business Starting with Progressive Leasing, first quarter GMV came in at $393 million, representing a 2.2% decline year-over-year, which was in line with our expectations. starting with progressive leasing first quarter gmv came in at $393 million representing a 2.2% decline year-over-year which was in line with our expectations As Steve outlined, this performance reflects two primary factors in the first half of the quarter. as steve outlined this performance reflects two primary factors in the first half of the quarter The tightening actions we implemented last year to preserve portfolio performance and the lapping of remaining GMV from Big Lots following their bankruptcy. the tightening actions we implemented last year to preserve portfolio performance and the lapping of remaining gmv from big lots following their bankruptcy As we progress through the quarter and move past these headwinds, GMV trends improve sequentially, returning to low single-digit growth in March. as we progress through the quarter and move past these headwinds gmv trends improve sequentially returning to low single-digit growth in march Revenue for the Progressive Leasing segment was $597 million in the first quarter, down 8.4% year-over-year, primarily a result of a smaller average lease portfolio throughout the quarter. The lower gross leased asset balance, which is down 9.4% entering the quarter compared to a year ago, created a headwind to Q1 revenue. We ended the first quarter with a portfolio size down 5.4% year-over-year. As we executed against our growth initiatives at Progressive Leasing, we expect this portfolio headwind to subside and the revenue compare will become less difficult as the year progresses. Additionally, utilization of the 90-day early purchase option, which is seasonally high in Q1 due to tax refund season, came in lower than expected for the quarter and below 2025. Revenue for the Progressive Leasing segment was $597 million in the first quarter, down 8.4% year-over-year, primarily a result of a smaller average lease portfolio throughout the quarter. revenue for the progressive leasing segment was $597 million in the first quarter down 8.4% year-over-year primarily a result of a smaller average lease portfolio throughout the quarter The lower gross leased asset balance, which is down 9.4% entering the quarter compared to a year ago, created a headwind to Q1 revenue. the lower gross leased asset balance which is down 9.4% entering the quarter compared to a year ago created a headwind to q1 revenue We ended the first quarter with a portfolio size down 5.4% year-over-year. we ended the first quarter with a portfolio size down 5.4% year-over-year As we executed against our growth initiatives at Progressive Leasing, we expect this portfolio headwind to subside and the revenue compare will become less difficult as the year progresses. as we executed against our growth initiatives at progressive leasing we expect this portfolio headwind to subside and the revenue compare will become less difficult as the year progresses Additionally, utilization of the 90-day early purchase option, which is seasonally high in Q1 due to tax refund season, came in lower than expected for the quarter and below 2025. additionally utilization of the 90-day early purchase option which is seasonally high in q1 due to tax refund season came in lower than expected for the quarter and below 2025 While an environment where fewer customers electing to exercise their 90-day purchase option represents a revenue headwind in the period, over time, we expect total revenue, gross profit and margins to trend favorably. Gross margin for Progressive Leasing was 31.5% in the quarter, up 210 basis points year-over-year. Margin expansion stemmed from improved portfolio yield and a higher proportion of customers choosing to remain in their lease agreements longer, which in part ties to a lower 90-day purchase option activity. Leased merchandise write-offs came in at 7.3% of lease revenue within our targeted annual range of 6%-8% and a 10-basis point improvement from the Q1 2025 rate of 7.4%. While an environment where fewer customers electing to exercise their 90-day purchase option represents a revenue headwind in the period, over time, we expect total revenue, gross profit and margins to trend favorably. while an environment where fewer customers electing to exercise their 90-day purchase option represents a revenue headwind in the period over time we expect total revenue gross profit and margins to trend favorably Gross margin for Progressive Leasing was 31.5% in the quarter, up 210 basis points year-over-year. gross margin for progressive leasing was 31.5% in the quarter up 210 basis points year-over-year Margin expansion stemmed from improved portfolio yield and a higher proportion of customers choosing to remain in their lease agreements longer, which in part ties to a lower 90-day purchase option activity. margin expansion stemmed from improved portfolio yield and a higher proportion of customers choosing to remain in their lease agreements longer which in part ties to a lower 90-day purchase option activity Leased merchandise write-offs came in at 7.3% of lease revenue within our targeted annual range of 6%-8% and a 10-basis point improvement from the Q1 2025 rate of 7.4%. leased merchandise write-offs came in at 7.3% of lease revenue within our targeted annual range of 6%-8% and a 10-basis point improvement from the q1 2025 rate of 7.4% This result reflects the benefits of the tightening actions taken a year ago, and we have been largely comfortable with the trends we have been seeing since those changes. As we've consistently emphasized, protecting portfolio health remains our top priority, and we are closely monitoring payment behavior, delinquencies and vintage-level performance, and we are pleased with what we have seen year to date. Progressive Leasing's SG&A for the quarter was $81.3 million, or 13.6% of revenue, compared to 12.6% in Q1 of 2025, and was flat in total SG&A dollars spent even as we invest selectively in areas that support long-term growth, including technology modernization, customer experience, and AI initiatives. As we've demonstrated over time, we remain focused on balancing near-term expense discipline with investments that enhance the durability and scalability of the business. This result reflects the benefits of the tightening actions taken a year ago, and we have been largely comfortable with the trends we have been seeing since those changes. this result reflects the benefits of the tightening actions taken a year ago and we have been largely comfortable with the trends we have been seeing since those changes As we've consistently emphasized, protecting portfolio health remains our top priority, and we are closely monitoring payment behavior, delinquencies and vintage- level performance, and we are pleased with what we have seen year to date. as we've consistently emphasized protecting portfolio health remains our top priority and we are closely monitoring payment behavior delinquencies and vintage- level performance and we are pleased with what we have seen year to date Progressive Leasing's SG&A for the quarter was $81.3 million, or 13.6% of revenue, compared to 12.6% in Q1 of 2025, and was flat in total SG&A dollars spent even as we invest selectively in areas that support long-term growth, including technology modernization, customer experience, and AI initiatives. progressive leasing's sg&a for the quarter was $81.3 million or 13.6% of revenue compared to 12.6% in q1 of 2025 and was flat in total sg&a dollars spent even as we invest selectively in areas that support long-term growth including technology modernization customer experience and ai initiatives As we've demonstrated over time, we remain focused on balancing near-term expense discipline with investments that enhance the durability and scalability of the business. as we've demonstrated over time we remain focused on balancing near-term expense discipline with investments that enhance the durability and scalability of the business Adjusted EBITDA for Progressive Leasing was $77 million or 12.9% of revenue at the high end of our long-term target range of 11%-13%, representing a 260-basis point improvement year over year. This performance was primarily the result of operational execution, including managing portfolio performance and yield, partially offset by the revenue headwind of a smaller lease portfolio throughout the quarter. Turning to Four Technologies. Q1 GMV reached $280 million, representing growth of 134% year-over-year, and marking the 10th consecutive quarter of triple-digit GMV growth. March alone generated $108 million in GMV, the second highest month in company history. Revenue of $35 million exceeded expectations, growing 142% year-over-year. Adjusted EBITDA was $12.9 million, representing a margin of 37%. Adjusted EBITDA for Progressive Leasing was $77 million or 12.9% of revenue at the high end of our long-term target range of 11%-13%, representing a 260-basis point improvement year over year. adjusted ebitda for progressive leasing was $77 million or 12.9% of revenue at the high end of our long-term target range of 11%-13% representing a 260-basis point improvement year over year This performance was primarily the result of operational execution, including managing portfolio performance and yield, partially offset by the revenue headwind of a smaller lease portfolio throughout the quarter. this performance was primarily the result of operational execution including managing portfolio performance and yield partially offset by the revenue headwind of a smaller lease portfolio throughout the quarter Turning to Four Technologies. turning to four technologies Q1 GMV reached $280 million, representing growth of 134% year-over-year, and marking the 10th consecutive quarter of triple-digit GMV growth. q1 gmv reached $280 million representing growth of 134% year-over-year and marking the 10th consecutive quarter of triple-digit gmv growth March alone generated $108 million in GMV, the second highest month in company history. march alone generated $108 million in gmv the second highest month in company history Revenue of $35 million exceeded expectations, growing 142% year-over-year. revenue of $35 million exceeded expectations growing 142% year-over-year Adjusted EBITDA was $12.9 million, representing a margin of 37%. adjusted ebitda was $12.9 million representing a margin of 37% I would note that Q1 is the strongest margin period for Four, and throughout the remainder of the year, I expect margins to moderate to the range implied in the revised outlook for the segment. Underlying economics are improving, and we remain highly encouraged by the performance of the business across both growth and profitability metrics. Finally switching to Purchasing Power. Q1 GMV was $132.7 million, representing 10.3% growth. Revenue for Purchasing Power was $107.1 million in the first quarter, with adjusted EBITDA of $0.8 million, consistent with the near breakeven results we expected. As a reminder, Purchasing Power seasonally generates a greater proportion of its revenue and earnings in the back half of the year, particularly in the fourth quarter. I would note that Q1 is the strongest margin period for Four, and throughout the remainder of the year, I expect margins to moderate to the range implied in the revised outlook for the segment. i would note that q1 is the strongest margin period for four and throughout the remainder of the year i expect margins to moderate to the range implied in the revised outlook for the segment Underlying economics are improving, and we remain highly encouraged by the performance of the business across both growth and profitability metrics. underlying economics are improving and we remain highly encouraged by the performance of the business across both growth and profitability metrics Finally switching to Purchasing Power. finally switching to purchasing power Q1 GMV was $132.7 million, representing 10.3% growth. q1 gmv was $132.7 million representing 10.3% growth Revenue for Purchasing Power was $107.1 million in the first quarter, with adjusted EBITDA of $0.8 million, consistent with the near breakeven results we expected. revenue for purchasing power was $107.1 million in the first quarter with adjusted ebitda of $0.8 million consistent with the near breakeven results we expected As a reminder, Purchasing Power seasonally generates a greater proportion of its revenue and earnings in the back half of the year, particularly in the fourth quarter. as a reminder purchasing power seasonally generates a greater proportion of its revenue and earnings in the back half of the year particularly in the fourth quarter Integration efforts are on track. We remain encouraged by the progress we are making across both front-end and back-end synergies, as well as its strategic fit within our broader ecosystem. Transitioning to consolidated results. We delivered strong GMV growth, with continuing operations increasing 54% year-over-year to $806 million, driven by the addition of Purchasing Power and growth at Four. Revenue from continuing operations grew 11.1% year-over-year to $742.7 million, reflecting the addition of Purchasing Power and triple-digit growth at Four Technologies, partially offset by the revenue decline at Progressive Leasing. Integration efforts are on track. integration efforts are on track We remain encouraged by the progress we are making across both front-end and back-end synergies, as well as its strategic fit within our broader ecosystem. we remain encouraged by the progress we are making across both front-end and back-end synergies as well as its strategic fit within our broader ecosystem Transitioning to consolidated results. transitioning to consolidated results We delivered strong GMV growth, with continuing operations increasing 54% year-over-year to $806 million, driven by the addition of Purchasing Power and growth at Four. Revenue from continuing operations grew 11.1% year-over-year to $742.7 million, reflecting the addition of Purchasing Power and triple-digit growth at Four Technologies, partially offset by the revenue decline at Progressive Leasing. we delivered strong gmv growth with continuing operations increasing 54% year-over-year to $806 million driven by the addition of purchasing power and growth at four. revenue from continuing operations grew 11.1% year-over-year to $742.7 million reflecting the addition of purchasing power and triple-digit growth at four technologies partially offset by the revenue decline at progressive leasing From an earnings perspective for continuing operations, consolidated adjusted EBITDA was $90.3 million, or 12.2% of revenue, and non-GAAP diluted EPS was $1.24, both exceeding the high end of our February outlook and delivering 29% and 38% year-over-year growth respectively. Turning to the balance sheet, we ended the first quarter with $69.4 million of unrestricted cash and total available liquidity of $419.4 million, including our revolving credit facility. We ended the quarter with $650 million of recourse debt. Since closing the acquisition, we paid down recourse debt by $210 million, resulting in a net leverage ratio of 2x trailing 12-month adjusted EBITDA. From an earnings perspective for continuing operations, consolidated adjusted EBITDA was $90.3 million, or 12.2% of revenue, and non-GAAP diluted EPS was $1.24, both exceeding the high end of our February outlook and delivering 29% and 38% year-over-year growth respectively. from an earnings perspective for continuing operations consolidated adjusted ebitda was $90.3 million or 12.2% of revenue and non-gaap diluted eps was $1.24 both exceeding the high end of our february outlook and delivering 29% and 38% year-over-year growth respectively Turning to the balance sheet, we ended the first quarter with $69.4 million of unrestricted cash and total available liquidity of $419.4 million, including our revolving credit facility. turning to the balance sheet we ended the first quarter with $69.4 million of unrestricted cash and total available liquidity of $419.4 million including our revolving credit facility We ended the quarter with $650 million of recourse debt. we ended the quarter with $650 million of recourse debt Since closing the acquisition, we paid down recourse debt by $210 million, resulting in a net leverage ratio of 2x trailing 12-month adjusted EBITDA. since closing the acquisition we paid down recourse debt by $210 million resulting in a net leverage ratio of 2x trailing 12-month adjusted ebitda As a reminder, this ratio excludes the non-recourse ABS debt used to fund Purchasing Power operations, does not add back the associated interest expense to adjusted EBITDA, and only includes the Purchasing Power adjusted EBITDA since the acquisition. Importantly, net leverage was approximately 2.5x immediately following the acquisition on January 2nd of 2026. Since then, our focus has been on integrating Purchasing Power and driving meaningful deleveraging, and we have made material progress in the quarter, bringing net leverage back within our long-term target range of 1.5x-2x. As we move through the balance of the year, we expect to remain below two turns. We returned capital to shareholders in the first quarter through our quarterly dividend, paying $0.14 per share, a 7.7% increase from the prior year quarter. As a reminder, this ratio excludes the non-recourse ABS debt used to fund Purchasing Power operations, does not add back the associated interest expense to adjusted EBITDA, and only includes the Purchasing Power adjusted EBITDA since the acquisition. as a reminder this ratio excludes the non-recourse abs debt used to fund purchasing power operations does not add back the associated interest expense to adjusted ebitda and only includes the purchasing power adjusted ebitda since the acquisition Importantly, net leverage was approximately 2.5 x immediately following the acquisition on January 2nd of 2026. importantly net leverage was approximately 2.5 x immediately following the acquisition on january 2nd of 2026 Since then, our focus has been on integrating Purchasing Power and driving meaningful deleveraging, and we have made material progress in the quarter, bringing net leverage back within our long-term target range of 1.5x-2 x. since then our focus has been on integrating purchasing power and driving meaningful deleveraging and we have made material progress in the quarter bringing net leverage back within our long-term target range of 1.5x-2 x As we move through the balance of the year, we expect to remain below two turns. as we move through the balance of the year we expect to remain below two turns We returned capital to shareholders in the first quarter through our quarterly dividend, paying $0.14 per share, a 7.7% increase from the prior year quarter. we returned capital to shareholders in the first quarter through our quarterly dividend paying $0.14 per share a 7.7% increase from the prior year quarter I would now like to touch on a few key aspects of our second quarter and revised full-year outlook, which was provided in this morning's earnings release. Despite their macroeconomic challenges, we believe our GMV momentum at a consolidated level will carry into the remainder of the year. The improving leasing GMV trends positively impact the gross leased asset balance, which is a leading indicator of future period revenue. Four is delivering strong growth with improving economics, and Purchasing Power is just getting started on realizing its GMV and margin potential. Portfolio performance at leasing is expected to remain healthy as we actively manage yields while balancing GMV growth. We expect full-year 2026 leased merchandise write-offs to remain within our targeted annual range of 6%-8%. I would now like to touch on a few key aspects of our second quarter and revised full-year outlook, which was provided in this morning's earnings release. i would now like to touch on a few key aspects of our second quarter and revised full-year outlook which was provided in this morning's earnings release Despite their macroeconomic challenges, we believe our GMV momentum at a consolidated level will carry into the remainder of the year. despite their macroeconomic challenges we believe our gmv momentum at a consolidated level will carry into the remainder of the year The improving leasing GMV trends positively impact the gross leased asset balance, which is a leading indicator of future period revenue. the improving leasing gmv trends positively impact the gross leased asset balance which is a leading indicator of future period revenue Four is delivering strong growth with improving economics, and Purchasing Power is just getting started on realizing its GMV and margin potential. four is delivering strong growth with improving economics and purchasing power is just getting started on realizing its gmv and margin potential Portfolio performance at leasing is expected to remain healthy as we actively manage yields while balancing GMV growth. portfolio performance at leasing is expected to remain healthy as we actively manage yields while balancing gmv growth We expect full-year 2026 leased merchandise write-offs to remain within our targeted annual range of 6%-8%. we expect full-year 2026 leased merchandise write-offs to remain within our targeted annual range of 6%-8% Our revised consolidated outlook for 2026 raises expectations on both revenue and earnings from continuing operations, reflecting the Q1 outperformance and our confidence in executing at a high level through the rest of the year. We are already making progress against the three-year 2028 compound annual growth rate framework we outlined in Investor Day. Q1 was a strong and encouraging start to this journey. Our revised consolidated outlook for continuing operations for 2026 calls for revenues in the range of $3 billion-$3.1 billion, adjusted EBITDA in the range of $343 million-$370 million, and non-GAAP EPS in the range of $4.40-$4.80. Our revised consolidated outlook for 2026 raises expectations on both revenue and earnings from continuing operations, reflecting the Q1 outperformance and our confidence in executing at a high level through the rest of the year. our revised consolidated outlook for 2026 raises expectations on both revenue and earnings from continuing operations reflecting the q1 outperformance and our confidence in executing at a high level through the rest of the year We are already making progress against the three-year 2028 compound annual growth rate framework we outlined in Investor Day. we are already making progress against the three-year 2028 compound annual growth rate framework we outlined in investor day Q1 was a strong and encouraging start to this journey. q1 was a strong and encouraging start to this journey Our revised consolidated outlook for continuing operations for 2026 calls for revenues in the range of $3 billion-$3.1 billion, adjusted EBITDA in the range of $343 million-$370 million, and non-GAAP EPS in the range of $4.40-$4.80. our revised consolidated outlook for continuing operations for 2026 calls for revenues in the range of $3 billion-$3.1 billion adjusted ebitda in the range of $343 million-$370 million and non-gaap eps in the range of $4.40-$4.80 This outlook assumes an operating environment with no change in the current financial pressures and uncertainties for our customer, no material changes in the company's decisioning posture, no meaningful increase in the unemployment rates for our customer base, an effective tax rate for non-GAAP EPS of approximately 26%, and no impact from additional share repurchases. To summarize, Q1 was a great start to the year, with broad-based outperformance across our businesses and disciplined execution in the areas within our control. We delivered improving trends of Progressive Leasing, sustained high growth and expanding profitability of Four, and early progress with Purchasing Power as integration continues. At the same time, we strengthened the balance sheet, bringing net leverage back within our targeted range while maintaining a prudent approach to capital allocation. This outlook assumes an operating environment with no change in the current financial pressures and uncertainties for our customer, no material changes in the company's decisioning posture, no meaningful increase in the unemployment rates for our customer base, an effective tax rate for non-GAAP EPS of approximately 26%, and no impact from additional share repurchases. this outlook assumes an operating environment with no change in the current financial pressures and uncertainties for our customer no material changes in the company's decisioning posture no meaningful increase in the unemployment rates for our customer base an effective tax rate for non-gaap eps of approximately 26% and no impact from additional share repurchases To summarize, Q1 was a great start to the year, with broad-based outperformance across our businesses and disciplined execution in the areas within our control. to summarize q1 was a great start to the year with broad-based outperformance across our businesses and disciplined execution in the areas within our control We delivered improving trends of Progressive Leasing, sustained high growth and expanding profitability of Four, and early progress with Purchasing Power as integration continues. we delivered improving trends of progressive leasing sustained high growth and expanding profitability of four and early progress with purchasing power as integration continues At the same time, we strengthened the balance sheet, bringing net leverage back within our targeted range while maintaining a prudent approach to capital allocation. at the same time we strengthened the balance sheet bringing net leverage back within our targeted range while maintaining a prudent approach to capital allocation As we look ahead, we remain focused on driving profitable growth, managing portfolio performance while executing against our strategic priorities and navigating a still uncertain macro environment. I'll turn the call back over to the operator for questions. Operator? As we look ahead, we remain focused on driving profitable growth, managing portfolio performance while executing against our strategic priorities and navigating a still uncertain macro environment. as we look ahead we remain focused on driving profitable growth managing portfolio performance while executing against our strategic priorities and navigating a still uncertain macro environment I'll turn the call back over to the operator for questions. i'll turn the call back over to the operator for questions Operator? operator

Speaker 9: Thank you. At this time, we'll conduct a question-and-answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Due to the interest of time, please limit yourself to one question and a follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kyle Joseph of Stephens. Your line is now open. Thank you. thank you At this time, we'll conduct a question-and-answer session. at this time we'll conduct a question-and-answer session As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. as a reminder to ask a question you'll need to press star one one on your telephone and wait for your name to be announced To withdraw your question, please press star one one again. to withdraw your question please press star one one again Due to the interest of time, please limit yourself to one question and a follow-up. due to the interest of time please limit yourself to one question and a follow-up Please stand by while we compile the Q&A roster. please stand by while we compile the q&a roster Our first question comes from the line of Kyle Joseph of Stephens. our first question comes from the line of kyle joseph of stephens Your line is now open. your line is now open

Speaker 8: Hey, good morning, guys. Congrats on a really strong start to the year. Steve, would love to kind of pick your brain on macro. Obviously, a lot of moving parts throughout the quarter. You know, initially, we're expecting higher tax refunds, and then you get into March and higher gas prices. Just kind of walk us through the moving parts of macro and maybe how those impact your businesses differently. You know, we're no longer just focused on leasing, obviously. Four had a really good quarter, and we're obviously new on the Purchasing Power side of things. Just a little bit of macro kinda evolution through the quarter and differing impacts across the businesses. Thanks. Hey, good morning, guys. hey good morning guys Congrats on a really strong start to the year. congrats on a really strong start to the year Steve, would love to kind of pick your brain on macro. steve would love to kind of pick your brain on macro Obviously, a lot of moving parts throughout the quarter. obviously a lot of moving parts throughout the quarter You know, initially, we're expecting higher tax refunds, and then you get into March and higher gas prices. you know initially we're expecting higher tax refunds and then you get into march and higher gas prices Just kind of walk us through the moving parts of macro and maybe how those impact your businesses differently. just kind of walk us through the moving parts of macro and maybe how those impact your businesses differently You know, we're no longer just focused on leasing, obviously. you know we're no longer just focused on leasing obviously Four had a really good quarter, and we're obviously new on the Purchasing Power side of things. four had a really good quarter and we're obviously new on the purchasing power side of things Just a little bit of macro kinda evolution through the quarter and differing impacts across the businesses. just a little bit of macro kinda evolution through the quarter and differing impacts across the businesses Thanks. thanks

Speaker 10: Yeah. Thanks, Kyle. Good morning. I guess I would start by saying that, you know, we do have the multiple product ecosystem, but they do have connections in that they serve a very similar customer across the product. To the extent that the macro-overlay has an impact, it's not identical, but it's, you know, directionally similar across the products. We have the benefit of being able to see the customer behavior and the, you know, the influence on the customers across those products and can use that to help, you know, as insights into all the products. As the quarter played out and you called out a few of those things, you know, we're always used to preparing for a tax season. Yeah. yeah Thanks, Kyle. thanks kyle Good morning. good morning I guess I would start by saying that, you know, we do have the multiple product ecosystem, but they do have connections in that they serve a very similar customer across the product. i guess i would start by saying that you know we do have the multiple product ecosystem but they do have connections in that they serve a very similar customer across the product To the extent that the macro-overlay has an impact, it's not identical, but it's, you know, directionally similar across the products. to the extent that the macro-overlay has an impact it's not identical but it's you know directionally similar across the products We have the benefit of being able to see the customer behavior and the, you know, the influence on the customers across those products and can use that to help, you know, as insights into all the products. we have the benefit of being able to see the customer behavior and the you know the influence on the customers across those products and can use that to help you know as insights into all the products As the quarter played out and you called out a few of those things, you know, we're always used to preparing for a tax season. as the quarter played out and you called out a few of those things you know we're always used to preparing for a tax season We thought the tax season was gonna be higher. Tax season actually played out about as we expected. It was higher, but not maybe as high as some people were reporting back in, you know, August, September, October timeframe for our customer. Certainly refunds were up across the board, for our customer, they were up, you know, somewhere in the, you know, whatever high singles to low doubles range. That was about what we were planning for. As Brian said in his remarks, we did see in the leasing business less or fewer customers choosing to opt to exercise their 90-day purchase option. We thought the tax season was gonna be higher. we thought the tax season was gonna be higher Tax season actually played out about as we expected. tax season actually played out about as we expected It was higher, but not maybe as high as some people were reporting back in, you know, August, September, October timeframe for our customer. it was higher but not maybe as high as some people were reporting back in you know august september october timeframe for our customer Certainly refunds were up across the board, for our customer, they were up, you know, somewhere in the, you know, whatever high singles to low doubles range. certainly refunds were up across the board for our customer they were up you know somewhere in the you know whatever high singles to low doubles range That was about what we were planning for. that was about what we were planning for As Brian said in his remarks, we did see in the leasing business less or fewer customers choosing to opt to exercise their 90-day purchase option. as brian said in his remarks we did see in the leasing business less or fewer customers choosing to opt to exercise their 90-day purchase option We've seen that in over time in different cycles, when customers might be making different decisions about the liquidity the tax season brings. They're making payments to stay current, but not necessarily accelerating a payoff of an obligation. That played out. Some of the other products don't exactly have that kind of accelerated repayment, you know, during the tax season, so less of an impact outside of leasing. Certainly gas prices during the month of March became a bigger story. The consumer is stressed but resilient. I mean, I think that's the common refrain. We're watching all of our early indicators, you know, intensely. We're seeing basically evidence of that stress but resilient. We've seen that in over time in different cycles, when customers might be making different decisions about the liquidity the tax season brings. we've seen that in over time in different cycles when customers might be making different decisions about the liquidity the tax season brings They're making payments to stay current, but not necessarily accelerating a payoff of an obligation. they're making payments to stay current but not necessarily accelerating a payoff of an obligation That played out. that played out Some of the other products don't exactly have that kind of accelerated repayment, you know, during the tax season, so less of an impact outside of leasing. some of the other products don't exactly have that kind of accelerated repayment you know during the tax season so less of an impact outside of leasing Certainly gas prices during the month of March became a bigger story. certainly gas prices during the month of march became a bigger story The consumer is stressed but resilient. the consumer is stressed but resilient I mean, I think that's the common refrain. i mean i think that's the common refrain We're watching all of our early indicators, you know, intensely. we're watching all of our early indicators you know intensely We're seeing basically evidence of that stress but resilient. we're seeing basically evidence of that stress but resilient So we feel good about where we're positioned. The tightening and leasing that we did in the first quarter of 2025 has, I think, served us well and positioned the portfolio to be able to withstand some of the stress. You know, we saw a really good first quarter and, you know, we're watching the numbers closely and watching the early indicators, but poised for some good momentum to continue. So we feel good about where we're positioned. so we feel good about where we're positioned The tightening and leasing that we did in the first quarter of 2025 has, I think, served us well and positioned the portfolio to be able to withstand some of the stress. the tightening and leasing that we did in the first quarter of 2025 has i think served us well and positioned the portfolio to be able to withstand some of the stress You know, we saw a really good first quarter and, you know, we're watching the numbers closely and watching the early indicators, but poised for some good momentum to continue. you know we saw a really good first quarter and you know we're watching the numbers closely and watching the early indicators but poised for some good momentum to continue

Speaker 8: Got it. That was broad-based, but appreciate you covering it all. Just one follow-up from me. You know, obviously a tough retail environment, even going into the year and then layering in gas prices. Just kinda wanna talk, get an update on your discussions with retail partners, kinda given now you have a bigger suite of products and given, call it some more incremental headwinds for retailers. Thanks. Got it. got it That was broad-based, but appreciate you covering it all. that was broad-based but appreciate you covering it all Just one follow-up from me. just one follow-up from me You know, obviously a tough retail environment, even going into the year and then layering in gas prices. you know obviously a tough retail environment even going into the year and then layering in gas prices Just kinda wanna talk, get an update on your discussions with retail partners, kinda given now you have a bigger suite of products and given, call it some more incremental headwinds for retailers. just kinda wanna talk get an update on your discussions with retail partners kinda given now you have a bigger suite of products and given call it some more incremental headwinds for retailers Thanks. thanks

Speaker 10: Yeah. I mean, that's kinda more of the same on the retail, especially in consumer durables that the leasing business addresses. Our biz dev teams are doing a good job. They've had some wins in the back half of 2025 and have a very good pipeline of retailers of all sizes that we think we're making progress with from a sales stage progression standpoint. We continue to believe that our suite of products with leasing at the retail level being the largest one are things that can help retailers. Yeah. yeah I mean, that's kinda more of the same on the retail, especially in consumer durables that the leasing business addresses. i mean that's kinda more of the same on the retail especially in consumer durables that the leasing business addresses Our biz dev teams are doing a good job. our biz dev teams are doing a good job They've had some wins in the back half of 2025 and have a very good pipeline of retailers of all sizes that we think we're making progress with from a sales stage progression standpoint. they've had some wins in the back half of 2025 and have a very good pipeline of retailers of all sizes that we think we're making progress with from a sales stage progression standpoint We continue to believe that our suite of products with leasing at the retail level being the largest one are things that can help retailers. we continue to believe that our suite of products with leasing at the retail level being the largest one are things that can help retailers We are having increased conversations about a multiple product solution with various retailers, bringing Four into the mix or on the Purchasing Power side, bringing other products to employers to be able to offer additional value to their employees on that voluntary benefit platform. We look forward to continuing to, you know, really dive into that ecosystem strategy and business development in our B2B2C businesses, in specifically Leasing and Purchasing Power is a big part of it. We are having increased conversations about a multiple product solution with various retailers, bringing Four into the mix or on the Purchasing Power side, bringing other products to employers to be able to offer additional value to their employees on that voluntary benefit platform. we are having increased conversations about a multiple product solution with various retailers bringing four into the mix or on the purchasing power side bringing other products to employers to be able to offer additional value to their employees on that voluntary benefit platform We look forward to continuing to, you know, really dive into that ecosystem strategy and business development in our B2B2C businesses, in specifically Leasing and Purchasing Power is a big part of it. we look forward to continuing to you know really dive into that ecosystem strategy and business development in our b2b2c businesses in specifically leasing and purchasing power is a big part of it

Speaker 8: Great. Thanks very much for taking my questions. Great. great Thanks very much for taking my questions. thanks very much for taking my questions

Speaker 9: Thank you. One moment for our next question. Our next question comes to the line of Bobby Griffin of Raymond James. Your line is now open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes to the line of Bobby Griffin of Raymond James. our next question comes to the line of bobby griffin of raymond james Your line is now open. your line is now open

Speaker 2: Good morning, guys. Thanks for taking the question and congrats on a good start to the year. I guess, Steve, I wanted to first ask, like when you've seen that customer behavior before with like lower expected 90-day buyout, has that historically given you kind of any insights into what the customer does for the back half of the year? Is there anything to like learn or kind of how that plays out and what the health of that customer is when you see that? Good morning, guys. good morning guys Thanks for taking the question and congrats on a good start to the year. thanks for taking the question and congrats on a good start to the year I guess, Steve, I wanted to first ask, like when you've seen that customer behavior before with like lower expected 90-day buyout , has that historically given you kind of any insights into what the customer does for the back half of the year? i guess steve i wanted to first ask like when you've seen that customer behavior before with like lower expected 90-day buyout has that historically given you kind of any insights into what the customer does for the back half of the year Is there anything to like learn or kind of how that plays out and what the health of that customer is when you see that? is there anything to like learn or kind of how that plays out and what the health of that customer is when you see that

Speaker 10: Yeah. I'll start and Brian can certainly fill in the gaps. There's no, you know, no perfect kinda corollary. We have seen in the past, specifically in 2023, coming off of a really tough 2022 from a inflation standpoint, but also a pretty material tightening that we did in the leasing business. We saw a very low 90-day buyout take rate on our customers. What we saw was those customers kind of just they stayed in their leases longer, which is a theme that we've talked about for a couple quarters here on the leasing business. Yeah. yeah I'll start and Brian can certainly fill in the gaps. i'll start and brian can certainly fill in the gaps There's no, you know, no perfect kinda corollary. there's no you know no perfect kinda corollary We have seen in the past, specifically in 2023, coming off of a really tough 2022 from a inflation standpoint, but also a pretty material tightening that we did in the leasing business. we have seen in the past specifically in 2023 coming off of a really tough 2022 from a inflation standpoint but also a pretty material tightening that we did in the leasing business We saw a very low 90-day buyout take rate on our customers. we saw a very low 90-day buyout take rate on our customers What we saw was those customers kind of just they stayed in their leases longer, which is a theme that we've talked about for a couple quarters here on the leasing business. what we saw was those customers kind of just they stayed in their leases longer which is a theme that we've talked about for a couple quarters here on the leasing business Not doing a 90-day, you know, in that time period, 2023, did not indicate or necessarily mean that the customer was gonna do a straight roll or through the buckets and end up having elevated charge-offs. They end up paying deeper into their lease and maybe doing an early buyout, you know, later in the lease or going to full term. Certainly, some do end up in charge-offs, but we saw from a margin standpoint that this was a margin positive kinda trade-off because as you know, 90 days are a very low margin outcome for us, and the deeper they go in the lease is better. We're watching that closely to see what the kinda the next action is. Not doing a 90-day, you know, in that time period, 2023, did not indicate or necessarily mean that the customer was gonna do a straight roll or through the buckets and end up having elevated charge-offs. not doing a 90-day you know in that time period 2023 did not indicate or necessarily mean that the customer was gonna do a straight roll or through the buckets and end up having elevated charge-offs They end up paying deeper into their lease and maybe doing an early buyout, you know, later in the lease or going to full term. they end up paying deeper into their lease and maybe doing an early buyout you know later in the lease or going to full term Certainly, some do end up in charge-offs, but we saw from a margin standpoint that this was a margin positive kinda trade-off because as you know, 90 days are a very low margin outcome for us, and the deeper they go in the lease is better. certainly some do end up in charge-offs but we saw from a margin standpoint that this was a margin positive kinda trade-off because as you know 90 days are a very low margin outcome for us and the deeper they go in the lease is better We're watching that closely to see what the kinda the next action is. we're watching that closely to see what the kinda the next action is If the 90-day window expires, which a lot of it did in March because of the holiday uptick in leasing activity, and it expires unexercised, what happens and how do those customers continue to pay us? You know, so far we're pleased with the roll rates and other indicators in the portfolio health. We're not expecting a mirror of 2023, but we are looking to that period to help with our forecasting. If the 90-day window expires, which a lot of it did in March because of the holiday uptick in leasing activity, and it expires unexercised, what happens and how do those customers continue to pay us? if the 90-day window expires which a lot of it did in march because of the holiday uptick in leasing activity and it expires unexercised what happens and how do those customers continue to pay us You know, so far we're pleased with the roll rates and other indicators in the portfolio health. you know so far we're pleased with the roll rates and other indicators in the portfolio health We're not expecting a mirror of 2023, but we are looking to that period to help with our forecasting. we're not expecting a mirror of 2023 but we are looking to that period to help with our forecasting

Speaker 4: Yeah. I would just add, I mean, it is the right question as you just kind of evaluate consumer health overall. We talked about 210 basis point improvement in gross margins at leasing in the quarter, primarily driven by this dynamic. I think what's reflected in our outlook is a view that this is gonna be a net positive for us, that the tailwinds from lower 90 days, you might see some pressure and maybe some potentially some delinquency trends that you watch, but I'm not anticipating that they're anything significant. We saw write-offs come down 10 basis points year-over-year. Yeah. yeah I would just add, I mean, it is the right question as you just kind of evaluate consumer health overall. i would just add i mean it is the right question as you just kind of evaluate consumer health overall We talked about 210 basis point improvement in gross margins at leasing in the quarter, primarily driven by this dynamic. we talked about 210 basis point improvement in gross margins at leasing in the quarter primarily driven by this dynamic I think what's reflected in our outlook is a view that this is gonna be a net positive for us, that the tailwinds from lower 90 days, you might see some pressure and maybe some potentially some delinquency trends that you watch, but I'm not anticipating that they're anything significant. i think what's reflected in our outlook is a view that this is gonna be a net positive for us that the tailwinds from lower 90 days you might see some pressure and maybe some potentially some delinquency trends that you watch but i'm not anticipating that they're anything significant We saw write-offs come down 10 basis points year-over-year. we saw write-offs come down 10 basis points year-over-year As you see us increase our outlook and at leasing specifically, we expect this kinda disposition dynamic and a shift towards lower 90 days to be a net positive for the P&L over the course of the year. As you see us increase our outlook and at leasing specifically, we expect this kinda disposition dynamic and a shift towards lower 90 days to be a net positive for the P&L over the course of the year. as you see us increase our outlook and at leasing specifically we expect this kinda disposition dynamic and a shift towards lower 90 days to be a net positive for the p&l over the course of the year

Speaker 2: Okay. That's helpful. I appreciate the details. Maybe lastly from me, just on the actual GMV trends within Progressive Leasing side, you know, flip back positive in the quarter. Can you unpack a little? Is that just a function of the comparisons or is that, you know, actually a sign of kind of inflections in consumer trends or whatnot? I guess I'm just asking it in context. I believe you did call out double-digit growth in apps, which would probably reflect some of the, you know, comparisons dynamic too with Big Lots. Just trying to understand what is more comparison-driven or if it's, you know, an inflection on that consumer engaging with the product and maybe start to see a little trend improvement. Okay. okay That's helpful. that's helpful I appreciate the details. i appreciate the details Maybe lastly from me, just on the actual GMV trends within Progressive Leasing side, you know, flip back positive in the quarter. maybe lastly from me just on the actual gmv trends within progressive leasing side you know flip back positive in the quarter Can you unpack a little? can you unpack a little Is that just a function of the comparisons or is that, you know, actually a sign of kind of inflections in consumer trends or whatnot? is that just a function of the comparisons or is that you know actually a sign of kind of inflections in consumer trends or whatnot I guess I'm just asking it in context. i guess i'm just asking it in context I believe you did call out double-digit growth in apps, which would probably reflect some of the, you know, comparisons dynamic too with Big Lots. i believe you did call out double-digit growth in apps which would probably reflect some of the you know comparisons dynamic too with big lots Just trying to understand what is more comparison- driven or if it's, you know, an inflection on that consumer engaging with the product and maybe start to see a little trend improvement. just trying to understand what is more comparison- driven or if it's you know an inflection on that consumer engaging with the product and maybe start to see a little trend improvement

Speaker 10: Yeah. We're pleased with the trends as we exited the quarter. Specifically as the quarter progressed, like we talked about, it was kinda down high singles in January when we had both of those two discrete headwinds still in force, and then improved to down low singles in February as we lapped those things during the month, and then up low singles in March. If you remember kind of through most of 2025, we called out what the GMV trends would have been were it not for those two headwinds. We were in kind of the low to mid singles as air quotes, "the rest of the business." That did actually decline in Q4 down to only up 1%, absent those headwinds. Yeah. yeah We're pleased with the trends as we exited the quarter. we're pleased with the trends as we exited the quarter Specifically as the quarter progressed, like we talked about, it was kinda down high singles in January when we had both of those two discrete headwinds still in force, and then improved to down low singles in February as we lapped those things during the month, and then up low singles in March. specifically as the quarter progressed like we talked about it was kinda down high singles in january when we had both of those two discrete headwinds still in force and then improved to down low singles in february as we lapped those things during the month and then up low singles in march If you remember kind of through most of 2025, we called out what the GMV trends would have been were it not for those two headwinds. if you remember kind of through most of 2025 we called out what the gmv trends would have been were it not for those two headwinds We were in kind of the low to mid singles as air quotes, "the rest of the business." That did actually decline in Q4 down to only up 1%, absent those headwinds. we were in kind of the low to mid singles as air quotes "the rest of the business." that did actually decline in q4 down to only up 1% absent those headwinds Much of it is kind of what the business has been performing absent those headwinds over the last several quarters. But we're also seeing some strength in our digital channels. We talked about marketplace being up again 169%. E-commerce as a percentage of total leasing GMV up at 25.7% and the highest first quarter mix to date. And also some various projects that we got over the goal line with existing retailers to help improve that integration and improve balance of sale. There's a mix of freeing up from the lapping. There's also some things that are positively trending in our execution. The apps are a strong point. Much of it is kind of what the business has been performing absent those headwinds over the last several quarters. much of it is kind of what the business has been performing absent those headwinds over the last several quarters But we're also seeing some strength in our digital channels. but we're also seeing some strength in our digital channels We talked about marketplace being up again 169%. we talked about marketplace being up again 169% E-commerce as a percentage of total leasing GMV up at 25.7% and the highest first quarter mix to date. e-commerce as a percentage of total leasing gmv up at 25.7% and the highest first quarter mix to date And also some various projects that we got over the goal line with existing retailers to help improve that integration and improve balance of sale. and also some various projects that we got over the goal line with existing retailers to help improve that integration and improve balance of sale There's a mix of freeing up from the lapping. there's a mix of freeing up from the lapping There's also some things that are positively trending in our execution. there's also some things that are positively trending in our execution The apps are a strong point. the apps are a strong point Apps have to turn into approvals that have to turn into conversions, and that those things vary by channel. We're pleased with how we exited the quarter and how it sets us up for the rest of the year. Apps have to turn into approvals that have to turn into conversions, and that those things vary by channel. apps have to turn into approvals that have to turn into conversions and that those things vary by channel We're pleased with how we exited the quarter and how it sets us up for the rest of the year. we're pleased with how we exited the quarter and how it sets us up for the rest of the year

Speaker 2: Thank you, guys. Best of luck here in 2Q. Thank you, guys. thank you guys Best of luck here in 2Q. best of luck here in 2q

Speaker 10: Thanks, Bobby. Thanks, Bobby. thanks bobby

Speaker 9: Thank you. One moment for our next question. Our next question comes on the line of Hoang Nguyen of TD Cowen. Your line is now open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes on the line of Hoang Nguyen of TD Cowen. our next question comes on the line of hoang nguyen of td cowen Your line is now open. your line is now open

Speaker 6: Thank you, guys. Congrats on the quarter. Just a quick one from me. You mentioned about, you know, some of the cost-saving synergies between Leasing and Purchasing Power. I think it's still in the early days, but can you give us some of the flavor of the conversation that you are having? Are you seeing, you know, a lot of inbound engagement from both sides of the enterprises? And I have a follow-up. Thank you, guys. thank you guys Congrats on the quarter. congrats on the quarter Just a quick one from me. just a quick one from me You mentioned about, you know, some of the cost-saving synergies between Leasing and Purchasing Power. you mentioned about you know some of the cost-saving synergies between leasing and purchasing power I think it's still in the early days, but can you give us some of the flavor of the conversation that you are having? i think it's still in the early days but can you give us some of the flavor of the conversation that you are having Are you seeing, you know, a lot of inbound engagement from both sides of the enterprises? are you seeing you know a lot of inbound engagement from both sides of the enterprises And I have a follow-up. and i have a follow-up

Speaker 10: Sure. Yeah, I mean, that's definitely part of our plan. It was identified during diligence, and we plan to execute on it. We talked a little bit about it during Investor Day. We believe that the deep and long relationships that we have with retailers on the leasing side are you know, fertile ground for us on the business side for Purchasing Power and those efforts are underway. Purchasing Power has several employer clients that happen to be retailers that we believe could benefit from offering leasing to their customers, and those discussions are happening. As well as augmenting the Purchasing Power offering with additional products that our intelligence says their employees are already consuming in the broader market. Sure. sure Yeah, I mean, that's definitely part of our plan. yeah i mean that's definitely part of our plan It was identified during diligence, and we plan to execute on it. it was identified during diligence and we plan to execute on it We talked a little bit about it during Investor Day. we talked a little bit about it during investor day We believe that the deep and long relationships that we have with retailers on the leasing side are you know, fertile ground for us on the business side for Purchasing Power and those efforts are underway. we believe that the deep and long relationships that we have with retailers on the leasing side are you know fertile ground for us on the business side for purchasing power and those efforts are underway Purchasing Power has several employer clients that happen to be retailers that we believe could benefit from offering leasing to their customers, and those discussions are happening. purchasing power has several employer clients that happen to be retailers that we believe could benefit from offering leasing to their customers and those discussions are happening As well as augmenting the Purchasing Power offering with additional products that our intelligence says their employees are already consuming in the broader market. as well as augmenting the purchasing power offering with additional products that our intelligence says their employees are already consuming in the broader market If we can deliver that to them, you know, as a voluntary benefit, we think that's a big benefit and differentiator for Purchasing Power to help with the sales, you know, motion in those employer clients. We're pleased and we're excited about the opportunity. As you called out, we're very early in the integration because, you know, we're still just a few months post-closing. If we can deliver that to them, you know, as a voluntary benefit, we think that's a big benefit and differentiator for Purchasing Power to help with the sales, you know, motion in those employer clients. if we can deliver that to them you know as a voluntary benefit we think that's a big benefit and differentiator for purchasing power to help with the sales you know motion in those employer clients We're pleased and we're excited about the opportunity. we're pleased and we're excited about the opportunity As you called out, we're very early in the integration because, you know, we're still just a few months post-closing. as you called out we're very early in the integration because you know we're still just a few months post-closing

Speaker 6: Got it. Maybe one for Brian. You guys have now returned back to your targeted leverage range, although at the high end. I think historically you guys have done, you know, opportunistic buyback. I guess, I mean, when can we expect you guys to kind of get back into the market and buyback shares at these prices? Thank you. Got it. got it Maybe one for Brian. maybe one for brian You guys have now returned back to your targeted leverage range, although at the high end. you guys have now returned back to your targeted leverage range although at the high end I think historically you guys have done, you know, opportunistic buyback. i think historically you guys have done you know opportunistic buyback I guess, I mean, when can we expect you guys to kind of get back into the market and buyback shares at these prices? i guess i mean when can we expect you guys to kind of get back into the market and buyback shares at these prices Thank you. thank you

Speaker 4: Yeah. You know, we haven't given any, you know, plans specifically to our buyback cadence. I think what I'd offer is you saw here in Q1 with the highly cash generative period, our ability to deploy capital against the deleveraging. As we look forward over the course of the year into Q2 and Q3, I think you continue to see some cash generation during those periods. Yeah. yeah You know, we haven't given any, you know, plans specifically to our buyback cadence. you know we haven't given any you know plans specifically to our buyback cadence I think what I'd offer is you saw here in Q1 with the highly cash generative period, our ability to deploy capital against the deleveraging. i think what i'd offer is you saw here in q1 with the highly cash generative period our ability to deploy capital against the deleveraging As we look forward over the course of the year into Q2 and Q3, I think you continue to see some cash generation during those periods. as we look forward over the course of the year into q2 and q3 i think you continue to see some cash generation during those periods What I think is on the horizon in Q4 is now you have these three businesses, Progressive Leasing, Purchasing Power, and Four that, you know, are seasonally heavy in Q4 in terms of their the GMV concentration in the fourth quarter and utilization of cash in that period. I think the calculus is just kinda going through our capital allocation priorities of investing in the business first before we look to those kinda share repurchase type options. We're sizing up that fourth quarter and just kinda, you know, assessing the cash needs during that period. That's really the calculus. What I think is on the horizon in Q4 is now you have these three businesses, Progressive Leasing, Purchasing Power, and Four that, you know, are seasonally heavy in Q4 in terms of their the GMV concentration in the fourth quarter and utilization of cash in that period. what i think is on the horizon in q4 is now you have these three businesses, progressive leasing, purchasing power and four that you know are seasonally heavy in q4 in terms of their the gmv concentration in the fourth quarter and utilization of cash in that period I think the calculus is just kinda going through our capital allocation priorities of investing in the business first before we look to those kinda share repurchase type options. i think the calculus is just kinda going through our capital allocation priorities of investing in the business first before we look to those kinda share repurchase type options We're sizing up that fourth quarter and just kinda, you know, assessing the cash needs during that period. we're sizing up that fourth quarter and just kinda you know assessing the cash needs during that period That's really the calculus. that's really the calculus To the extent that we have excess capital, we'll go through that decision-making process. Obviously, we're bullish on you know, where we think this business is going and share repurchase have been a part of our repertoire in the past, and we'll continue to evaluate them. To the extent that we have excess capital, we'll go through that decision-making process. to the extent that we have excess capital we'll go through that decision-making process Obviously, we're bullish on you know, where we think this business is going and share repurchase have been a part of our repertoire in the past, and we'll continue to evaluate them. obviously we're bullish on you know where we think this business is going and share repurchase have been a part of our repertoire in the past and we'll continue to evaluate them

Speaker 6: Got it. Thank you, and congrats on the quarter. Got it. got it Thank you, and congrats on the quarter. thank you and congrats on the quarter

Speaker 4: Thank you. Thank you. thank you

Speaker 9: Thank you. One moment for our next question. Our next question comes from the line of Anthony Chukumba of Loop Capital Markets. Your line is now open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from the line of Anthony Chukumba of Loop Capital Markets. our next question comes from the line of anthony chukumba of loop capital markets Your line is now open. your line is now open

Speaker 1: Good morning. Thank you for taking my question, and let me add my congrats on a strong start to the year as well. Just had a question on Four. Incredibly impressive performance there. As I look at the revised guidance, if I take kind of the midpoint of the adjusted EBITDA and the revenue, it would imply that the EBITDA margin was in the previous outlook calling about 15.1%, and that goes up now to about 18.2%. You know, given the fact that take rate is consistent, I'm assuming that that's just greater scale in terms of that higher EBITDA margin or is there something else there as well? Good morning. good morning Thank you for taking my question, and let me add my congrats on a strong start to the year as well. thank you for taking my question and let me add my congrats on a strong start to the year as well Just had a question on Four. just had a question on four Incredibly impressive performance there. incredibly impressive performance there As I look at the revised guidance, if I take kind of the midpoint of the adjusted EBITDA and the revenue, it would imply that the EBITDA margin was in the previous outlook calling about 15.1%, and that goes up now to about 18.2%. as i look at the revised guidance if i take kind of the midpoint of the adjusted ebitda and the revenue it would imply that the ebitda margin was in the previous outlook calling about 15.1% and that goes up now to about 18.2% You know, given the fact that take rate is consistent, I'm assuming that that's just greater scale in terms of that higher EBITDA margin or is there something else there as well? you know given the fact that take rate is consistent i'm assuming that that's just greater scale in terms of that higher ebitda margin or is there something else there as well

Speaker 10: Yeah. Thanks, Anthony. Yeah, we're very pleased with Four. You know, it's the start to the year, but also the position it's in and what we think we can accomplish with it. You're right, we did increase our view as to the margin expansion that we could achieve this year versus last year, you know, as we set about executing on that path towards a more mature state that we think is materially north of where we'll be in 2026. It is largely due to scale, but I would say that this team at Four is doing an outstanding job of doing more with the same and in some cases doing more with less. Yeah. yeah Thanks, Anthony. thanks anthony Yeah, we're very pleased with Four. yeah we're very pleased with four You know, it's the start to the year, but also the position it's in and what we think we can accomplish with it. you know it's the start to the year but also the position it's in and what we think we can accomplish with it You're right, we did increase our view as to the margin expansion that we could achieve this year versus last year, you know, as we set about executing on that path towards a more mature state that we think is materially north of where we'll be in 2026. you're right we did increase our view as to the margin expansion that we could achieve this year versus last year you know as we set about executing on that path towards a more mature state that we think is materially north of where we'll be in 2026 It is largely due to scale, but I would say that this team at Four is doing an outstanding job of doing more with the same and in some cases doing more with less. it is largely due to scale but i would say that this team at four is doing an outstanding job of doing more with the same and in some cases doing more with less They have leaned into AI in a very aggressive way and are not only achieving you know customer-facing improvements and innovation but also back-office savings. It is a scale play but it's also an efficiency play. Just the subscription strength and stickiness or said another way you know lack of churn has been a bright spot and that revenue is very high-quality revenue that flows through to earnings in a meaningful way. They have leaned into AI in a very aggressive way and are not only achieving you know customer-facing improvements and innovation but also back-office savings. they have leaned into ai in a very aggressive way and are not only achieving you know customer-facing improvements and innovation but also back-office savings It is a scale play but it's also an efficiency play. it is a scale play but it's also an efficiency play Just the subscription strength and stickiness or said another way you know lack of churn has been a bright spot and that revenue is very high-quality revenue that flows through to earnings in a meaningful way. just the subscription strength and stickiness or said another way you know lack of churn has been a bright spot and that revenue is very high-quality revenue that flows through to earnings in a meaningful way

Speaker 1: Got it. Okay. And then I just have to ask my obligatory question in terms of the retail partner pipeline in Progressive Leasing. Got it. Okay. And then I just have to ask my obligatory question in terms of the retail partner pipeline in Progressive Leasing. got it. okay. and then i just have to ask my obligatory question in terms of the retail partner pipeline in progressive leasing

Speaker 10: Yeah. Thank you. Yeah, I mean, as I think I was saying to Kyle, the biz dev team is really doing a great job. They're out there, they're talking. They had some wins in the back half of 2025 that will pay us dividends here in 2026. The pipeline is full with retailers of all sizes. You know, we're constantly getting new doors out in the SMB space, and that's kind of a different team than the folks that are hunting the super regionals and the enterprise accounts. We're very pleased. We've got a great offering and a great way to tell the story. The ecosystem strategy reinforces that story. Yeah. yeah Thank you. thank you Yeah, I mean, as I think I was saying to Kyle, the biz dev team is really doing a great job. yeah i mean as i think i was saying to kyle the biz dev team is really doing a great job They're out there, they're talking. they're out there they're talking They had some wins in the back half of 2025 that will pay us dividends here in 2026. they had some wins in the back half of 2025 that will pay us dividends here in 2026 The pipeline is full with retailers of all sizes. the pipeline is full with retailers of all sizes You know, we're constantly getting new doors out in the SMB space, and that's kind of a different team than the folks that are hunting the super regionals and the enterprise accounts. you know we're constantly getting new doors out in the smb space and that's kind of a different team than the folks that are hunting the super regionals and the enterprise accounts We're very pleased. we're very pleased We've got a great offering and a great way to tell the story. we've got a great offering and a great way to tell the story The ecosystem strategy reinforces that story. the ecosystem strategy reinforces that story Even though it might be a leasing conversation, we have, you know, more earned authority around this customer and have more products. Those are all helping us have some successes and, you know, it's our expectation that we'll have some more wins here this year in 2026. Even though it might be a leasing conversation, we have, you know, more earned authority around this customer and have more products. even though it might be a leasing conversation we have you know more earned authority around this customer and have more products Those are all helping us have some successes and, you know, it's our expectation that we'll have some more wins here this year in 2026. those are all helping us have some successes and you know it's our expectation that we'll have some more wins here this year in 2026

Speaker 1: Keep up the good work, guys. Keep up the good work, guys. keep up the good work guys

Speaker 10: Thanks, Anthony. Thanks, Anthony. thanks anthony

Speaker 9: Thank you. One moment for our next question. Our next question comes from the line of Hal Goetsch of B. Riley Securities. Your line is now open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from the line of Hal Goetsch of B. Riley Securities. our next question comes from the line of hal goetsch of b. riley securities Your line is now open. your line is now open

Speaker 5: Hey, guys. Congratulations on a super quarter. You know, with the acquisition of Purchasing Power, and I think, you know, hitting the asset-backed market for some of their receivables, you've got some new items on your income statement, gain on sale of lease receivables, gain on change of fair value of receivables. I wonder if you could just give us some color on how we should think about, you know, any thumb rules we should use in modeling for those types of line items in your income statement going forward since you've got this new business and need a little bit of fleshing out for us to help us predict the future with it. Thanks. Hey, guys. hey guys Congratulations on a super quarter. congratulations on a super quarter You know, with the acquisition of Purchasing Power, and I think, you know, hitting the asset-backed market for some of their receivables, you've got some new items on your income statement, gain on sale of lease receivables, gain on change of fair value of receivables. you know with the acquisition of purchasing power and i think you know hitting the asset-backed market for some of their receivables you've got some new items on your income statement gain on sale of lease receivables gain on change of fair value of receivables I wonder if you could just give us some color on how we should think about, you know, any thumb rules we should use in modeling for those types of line items in your income statement going forward since you've got this new business and need a little bit of fleshing out for us to help us predict the future with it. i wonder if you could just give us some color on how we should think about you know any thumb rules we should use in modeling for those types of line items in your income statement going forward since you've got this new business and need a little bit of fleshing out for us to help us predict the future with it Thanks. thanks

Speaker 10: Yeah. I'll start, and then I'll turn it over to the expert, Brian. But you're right, and we appreciate that. I will call out the difference in the two things that you specifically mentioned. Yeah. I'll start, and then I'll turn it over to the expert, Brian. yeah. i'll start and then i'll turn it over to the expert brian But you're right, and we appreciate that. but you're right and we appreciate that I will call out the difference in the two things that you specifically mentioned. i will call out the difference in the two things that you specifically mentioned The gain on sale of aged lease receivables, is not Purchasing Power related. That's on the Leasing side. The gain on sale of aged lease receivables, is not Purchasing Power related. the gain on sale of aged lease receivables is not purchasing power related That's on the Leasing side. that's on the leasing side We did that in Q4 of last year and again in Q1 of this year. We had not done that historically, but I would point that that is not a one-time thing. That is gonna be a recurring motion that we're in. It's probably not gonna be to the same quantum as Q4 and Q1 moving forward, but we do have an inventory of items that, or not items, but charged-off leases that we have been, you know, working internally that we will then turn to sell into the open market. That would be something that we consider to be a recurring item. We did that in Q4 of last year and again in Q1 of this year. we did that in q4 of last year and again in q1 of this year We had not done that historically, but I would point that that is not a one-time thing. we had not done that historically but i would point that that is not a one-time thing That is gonna be a recurring motion that we're in. that is gonna be a recurring motion that we're in It's probably not gonna be to the same quantum as Q4 and Q1 moving forward, but we do have an inventory of items that, or not items, but charged-off leases that we have been, you know, working internally that we will then turn to sell into the open market. it's probably not gonna be to the same quantum as q4 and q1 moving forward but we do have an inventory of items that or not items but charged-off leases that we have been you know working internally that we will then turn to sell into the open market That would be something that we consider to be a recurring item. that would be something that we consider to be a recurring item I'm gonna let Brian talk about the Purchasing Power side because there is some purchase price accounting and fair value stuff that we have excluded out of or we've not had it in, you know, adjusted EBITDA for the reasons of, it's not kind of a ongoing thing. I'm gonna let Brian talk about the Purchasing Power side because there is some purchase price accounting and fair value stuff that we have excluded out of or we've not had it in, you know, adjusted EBITDA for the reasons of, it's not kind of a ongoing thing. i'm gonna let brian talk about the purchasing power side because there is some purchase price accounting and fair value stuff that we have excluded out of or we've not had it in you know adjusted ebitda for the reasons of it's not kind of a ongoing thing

Speaker 4: Yeah. Hey, Hal. It's really that line item is related to the acquired receivables from Purchasing Power, and they were fair valued on the date of acquisition. Really what that line represents is just a continued evaluation of the fair value of those receivables. You know, you might see a few million bucks in any given period. Like Steve said, this is really a more of a technical accounting dynamic and bleeding through from the fair value on the acquisition date. We have made the decision to adjust it out of, or add it back to adjusted EBITDA, to, you know, for more of a consistent presentation. Yeah. yeah Hey, Hal . hey hal It's really that line item is related to the acquired receivables from Purchasing Power, and they were fair valued on the date of acquisition. it's really that line item is related to the acquired receivables from purchasing power and they were fair valued on the date of acquisition Really what that line represents is just a continued evaluation of the fair value of those receivables. really what that line represents is just a continued evaluation of the fair value of those receivables You know, you might see a few million bucks in any given period. you know you might see a few million bucks in any given period Like Steve said, this is really a more of a technical accounting dynamic and bleeding through from the fair value on the acquisition date. like steve said this is really a more of a technical accounting dynamic and bleeding through from the fair value on the acquisition date We have made the decision to adjust it out of, or add it back to adjusted EBITDA, to, you know, for more of a consistent presentation. we have made the decision to adjust it out of or add it back to adjusted ebitda to you know for more of a consistent presentation It's hard to give you any guidance on exactly how that's going to move. A lot of that has to do with collection activity and what actually occurs relative to what we thought was going to be the value at acquisition date. I don't expect it to be, you know, material in any given period. It should be speed slight adjustments each quarter. It's hard to give you any guidance on exactly how that's going to move. it's hard to give you any guidance on exactly how that's going to move A lot of that has to do with collection activity and what actually occurs relative to what we thought was going to be the value at acquisition date. a lot of that has to do with collection activity and what actually occurs relative to what we thought was going to be the value at acquisition date I don't expect it to be, you know, material in any given period. i don't expect it to be you know material in any given period It should be speed slight adjustments each quarter. it should be speed slight adjustments each quarter

Speaker 5: Okay. Terrific. The first point that Steve mentioned, are these more like, you know, monies received on basically a recovery basis from selling past due accounts? Is that basically what it is? Did I hear that correctly, or is it? Sorry. Did I take that differently? Okay. okay Terrific. terrific The first point that Steve mentioned, are these more like, you know, monies received on basically a recovery basis from selling past due accounts? the first point that steve mentioned are these more like you know monies received on basically a recovery basis from selling past due accounts Is that basically what it is? is that basically what it is Did I hear that correctly, or is it? did i hear that correctly or is it Sorry. sorry Did I take that differently? did i take that differently

Speaker 10: You know, aged lease receivables. So receivables, that we charged off, you know, in some cases years ago, we sell them to a third party, you know, it's not the. The dollars are sizable, but the percent, the pennies on the dollar are not that big. But they go out, and they attempt collection efforts. It's not a consignment. It's an actual sale where we get our money up front, and then they go out and do their, you know, attempt to collect. You know, aged lease receivables. So receivables, that we charged off, you know, in some cases years ago, we sell them to a third party, you know, it's not the. you know aged lease receivables. so receivables that we charged off you know in some cases years ago we sell them to a third party you know it's not the The dollars are sizable, but the percent, the pennies on the dollar are not that big. the dollars are sizable but the percent the pennies on the dollar are not that big But they go out, and they attempt collection efforts. but they go out and they attempt collection efforts It's not a consignment. it's not a consignment It's an actual sale where we get our money up front, and then they go out and do their, you know, attempt to collect. it's an actual sale where we get our money up front and then they go out and do their you know attempt to collect

Speaker 5: Understood. Okay. You know, if I could ask you. I now understand, like, you know, on the Buy Now, Pay Later, Q1 is a very big quarter because a lot of the payments from a very heavy holiday season come in the first quarter. You have the subscriptions, so your take rate's, you know, good. But your margins in the first quarter were better than most people in the industry already. I'm just wondering if there's like a, are margins reflective of maybe not being fully burdened with the corporate overhead? Does that make sense? Understood. understood Okay. okay You know, if I could ask you. you know if i could ask you I now understand, like, you know, on the Buy Now, Pay Later, Q1 is a very big quarter because a lot of the payments from a very heavy holiday season come in the first quarter. i now understand like you know on the buy now pay later q1 is a very big quarter because a lot of the payments from a very heavy holiday season come in the first quarter You have the subscriptions, so your take rate's, you know, good. you have the subscriptions so your take rate's you know good B ut your margins in the first quarter were better than most people in the industry already. b ut your margins in the first quarter were better than most people in the industry already I'm just wondering if there's like a, are margins reflective of maybe not being fully burdened with the corporate overhead? i'm just wondering if there's like a are margins reflective of maybe not being fully burdened with the corporate overhead Does that make sense? does that make sense If the margins are quite high, and I'm just trying to figure out if like, you know, if this was a standalone comp, it may be lower because there'd be more corporate overhead associated with it. If the margins are quite high, and I'm just trying to figure out if like, you know, if this was a standalone comp, it may be lower because there'd be more corporate overhead associated with it. if the margins are quite high and i'm just trying to figure out if like you know if this was a standalone comp it may be lower because there'd be more corporate overhead associated with it

Speaker 10: Yeah. I mean, I think that's fair. You know, the margins are high. I mean, at 37% EBITDA margin, you know, is impressive. As you pointed out, Q1 is the seasonally high quarter, and as Anthony pointed out, like, our guide implies you know, something in the range of half of that for the full year. Yeah. yeah I mean, I think that's fair. i mean i think that's fair You know, the margins are high. you know the margins are high I mean, at 37% EBITDA margin, you know, is impressive. i mean at 37% ebitda margin you know is impressive As you pointed out, Q1 is the seasonally high quarter, and as Anthony pointed out, like, our guide implies you know, something in the range of half of that for the full year. as you pointed out q1 is the seasonally high quarter and as anthony pointed out like our guide implies you know something in the range of half of that for the full year

Speaker 5: Understood. Understood. understood

Speaker 10: You know, so that, you know, that shows that we're still in the scaling phase and haven't reached the maturity of some of the pure play competitors that are out there. We believe that the progression from loss-making in 2024 to low teens in 2025 with margin expansion in 2026 paints a nice picture of our ability to get up to those margin levels of the pure play competitors. You know, so that, you know, that shows that we're still in the scaling phase and haven't reached the maturity of some of the pure play competitors that are out there. you know so that you know that shows that we're still in the scaling phase and haven't reached the maturity of some of the pure play competitors that are out there We believe that the progression from loss-making in 2024 to low teens in 2025 with margin expansion in 2026 paints a nice picture of our ability to get up to those margin levels of the pure play competitors. we believe that the progression from loss-making in 2024 to low teens in 2025 with margin expansion in 2026 paints a nice picture of our ability to get up to those margin levels of the pure play competitors

Speaker 5: All right. Excellent. Thank you very much, guys. All right. all right Excellent. excellent Thank you very much, guys. thank you very much guys

Speaker 10: Thanks, Hal. Thanks, Hal. thanks hal

Speaker 9: Thank you. One moment for our next question. Our next question comes from the line of Brad Thomas of KeyBanc Capital Markets. Your line is now open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from the line of Brad Thomas of KeyBanc Capital Markets. our next question comes from the line of brad thomas of keybanc capital markets Your line is now open. your line is now open

Speaker 3: Hey, good morning, and congrats on the nice quarter here, guys. I wanted to just follow up on the GMV growth that you're seeing at the end of the quarter within Progressive Leasing. Just curious if you could speak to perhaps, you know, your confidence level that we may be at an inflection point here and may be able to continue to drive growth in that GMV in 2Q and through the balance of the year. And then just how we should think about the timing potentially of the portfolio flipping to growth again and when Progressive Leasing revenues could then flip to growth again. Hey, good morning, and congrats on the nice quarter here, guys. hey good morning and congrats on the nice quarter here guys I wanted to just follow up on the GMV growth that you're seeing at the end of the quarter within Progressive Leasing. i wanted to just follow up on the gmv growth that you're seeing at the end of the quarter within progressive leasing Just curious if you could speak to perhaps, you know, your confidence level that we may be at an inflection point here and may be able to continue to drive growth in that GMV in 2Q and through the balance of the year. just curious if you could speak to perhaps you know your confidence level that we may be at an inflection point here and may be able to continue to drive growth in that gmv in 2q and through the balance of the year And then just how we should think about the timing potentially of the portfolio flipping to growth again and when Progressive Leasing revenues could then flip to growth again. and then just how we should think about the timing potentially of the portfolio flipping to growth again and when progressive leasing revenues could then flip to growth again

Speaker 10: Yeah. Thanks, Brad. I'll start, and Brian can talk about the gross leased assets portfolio. Actually the GLA is part of my answer. We don't guide specifically to GMV on a quarter-by-quarter basis. I think that in order to achieve the revenue guide that we did put out for the leasing business, it would need to imply that we, you know, followed similar trends coming out of Q1 into the balance of the year. On the revenue side, a lot of that will be exactly what you called out, the portfolio size. We made some good progress here this quarter, but I'll let Brian kinda chime in on that. Yeah. yeah Thanks, Brad. thanks brad I'll start, and Brian can talk about the gross leased assets portfolio. i'll start and brian can talk about the gross leased assets portfolio Actually the GLA is part of my answer. actually the gla is part of my answer We don't guide specifically to GMV on a quarter-by-quarter basis. we don't guide specifically to gmv on a quarter-by-quarter basis I think that in order to achieve the revenue guide that we did put out for the leasing business, it would need to imply that we, you know, followed similar trends coming out of Q1 into the balance of the year. i think that in order to achieve the revenue guide that we did put out for the leasing business it would need to imply that we you know followed similar trends coming out of q1 into the balance of the year On the revenue side, a lot of that will be exactly what you called out, the portfolio size. on the revenue side a lot of that will be exactly what you called out the portfolio size We made some good progress here this quarter, but I'll let Brian kinda chime in on that. we made some good progress here this quarter but i'll let brian kinda chime in on that

Speaker 4: Yeah. I think what I'd highlight there is starting the quarter, Brad, our portfolio size, which is, you know, the key driver of revenue, was down 9.4% start. We made progress as Steve has articulated, kinda step functioning up our GMV trajectory. We ended the quarter down 5.4%. Sorry, 9.4% to 5.4%. The net impact of revenue in the period was down 8.4%. There's a pretty good corollary between kind of the average portfolio size year over year and where revenue is trending. You kinda extend that trend line into Q2 and Q3. Yeah. yeah I think what I'd highlight there is starting the quarter, Brad, our portfolio size, which is, you know, the key driver of revenue, was down 9.4% start. i think what i'd highlight there is starting the quarter brad our portfolio size which is you know the key driver of revenue was down 9.4% start We made progress as Steve has articulated, kinda step functioning up our GMV trajectory. we made progress as steve has articulated kinda step functioning up our gmv trajectory We ended the quarter down 5.4%. we ended the quarter down 5.4% Sorry, 9.4% to 5.4%. sorry 9.4% to 5.4% The net impact of revenue in the period was down 8.4%. the net impact of revenue in the period was down 8.4% There's a pretty good corollary between kind of the average portfolio size year over year and where revenue is trending. there's a pretty good corollary between kind of the average portfolio size year over year and where revenue is trending You kinda extend that trend line into Q2 and Q3. you kinda extend that trend line into q2 and q3 What we've got kind of implied in our revenue for Progressive Leasing for the rest of the year. I think what you said would really have to play out, which is we'd have to see a continued improvement in that trajectory, the gross leased asset balance continuing to make progress towards growing year over year as the year moves on, in order for us to hit that revenue target. I like the trends there. I think we're taking it month by month and continue to make progress. What we've got kind of implied in our revenue for Progressive Leasing for the rest of the year. what we've got kind of implied in our revenue for progressive leasing for the rest of the year I think what you said would really have to play out, which is we'd have to see a continued improvement in that trajectory, the gross leased asset balance continuing to make progress towards growing year over year as the year moves on, in order for us to hit that revenue target. i think what you said would really have to play out which is we'd have to see a continued improvement in that trajectory the gross leased asset balance continuing to make progress towards growing year over year as the year moves on in order for us to hit that revenue target I like the trends there. i like the trends there I think we're taking it month by month and continue to make progress. i think we're taking it month by month and continue to make progress I think as we now pass these difficult comps that you know I feel like we've been talking about for forever with Big Lots and the tightening action I think we can now you know have an easier conversation just about the apples-to-apples periods year over year and I think they're trending favorably. I don't think it's too far down the road before we're seeing that portfolio size larger year over year. I think as we now pass these difficult comps that you know I feel like we've been talking about for forever with Big Lots and the tightening action I think we can now you know have an easier conversation just about the apples-to-apples periods year over year and I think they're trending favorably. i think as we now pass these difficult comps that you know i feel like we've been talking about for forever with big lots and the tightening action i think we can now you know have an easier conversation just about the apples-to-apples periods year over year and i think they're trending favorably I don't think it's too far down the road before we're seeing that portfolio size larger year over year. i don't think it's too far down the road before we're seeing that portfolio size larger year over year

Speaker 3: That's very helpful. If I could ask a follow-up around the cash flow generation. Brian, I apologize if I missed it in your prepared remarks, but what does the guidance imply for free cash flow this year? Can you remind us if there's anything that's sorta maybe one-timey that wouldn't repeat as we look to cash flow next year? It seems like you could, you know, boost margins nicely if you paid off some of this funding debt. Are you considering paying that off? Thanks. That's very helpful. that's very helpful If I could ask a follow-up around the cash flow generation. if i could ask a follow-up around the cash flow generation Brian, I apologize if I missed it in your prepared remarks, but what does the guidance imply for free cash flow this year? brian i apologize if i missed it in your prepared remarks but what does the guidance imply for free cash flow this year Can you remind us if there's anything that's sorta maybe one-timey that wouldn't repeat as we look to cash flow next year? can you remind us if there's anything that's sorta maybe one-timey that wouldn't repeat as we look to cash flow next year It seems like you could, you know, boost margins nicely if you paid off some of this funding debt. it seems like you could you know boost margins nicely if you paid off some of this funding debt Are you considering paying that off? are you considering paying that off Thanks. thanks

Speaker 4: Yeah, it's a good question. Just a couple of things. We haven't provided free cash flow guidance. What I will say is if you just kinda take it quarter by quarter here. Here in the first quarter, post-acquisition on January 2nd, we were able to pay down total debt of $254 million. Very heavy cash generative quarter. It gives us a lot of optionality. As we've stated, you know, out the gate here, our prioritization is deleveraging back to our targets. As we look forward to Q2 and Q3, I think both of those quarters will be slightly cash generative and give us additional optionality around either further deleveraging or you know, evaluating putting the cash elsewhere. Yeah, it's a good question. yeah it's a good question Just a couple of things. just a couple of things We haven't provided free cash flow guidance. we haven't provided free cash flow guidance What I will say is if you just kinda take it quarter by quarter here. what i will say is if you just kinda take it quarter by quarter here Here in the first quarter, post-acquisition on January 2nd, we were able to pay down total debt of $254 million. here in the first quarter post-acquisition on january 2nd we were able to pay down total debt of $254 million Very heavy cash generative quarter. very heavy cash generative quarter It gives us a lot of optionality. it gives us a lot of optionality As we've stated, you know, out the gate here, our prioritization is deleveraging back to our targets. as we've stated you know out the gate here our prioritization is deleveraging back to our targets As we look forward to Q2 and Q3, I think both of those quarters will be slightly cash generative and give us additional optionality around either further deleveraging or you know, evaluating putting the cash elsewhere. as we look forward to q2 and q3 i think both of those quarters will be slightly cash generative and give us additional optionality around either further deleveraging or you know evaluating putting the cash elsewhere Q4 is, and I mentioned this to Hoang, is, you know, where there's gonna be, you know, a net cash need, I anticipate, just with the growth that really these three businesses are demonstrating right now, and that's not talking about Money App, which is also showing some encouraging trends. I think we've kinda got that lens that we're looking through in the cash decisions that we're making. Net-net, you know, highly cash generative, even in a growth heavy growth anticipation for Four, and then Purchasing Power double digits and Progressive Leasing turning the corner on growth. Q4 is, and I mentioned this to Hoang, is, you know, where there's gonna be, you know, a net cash need, I anticipate, just with the growth that really these three businesses are demonstrating right now, and that's not talking about Money App, which is also showing some encouraging trends. q4 is and i mentioned this to hoang is you know where there's gonna be you know a net cash need i anticipate just with the growth that really these three businesses are demonstrating right now and that's not talking about money app which is also showing some encouraging trends I think we've kinda got that lens that we're looking through in the cash decisions that we're making. i think we've kinda got that lens that we're looking through in the cash decisions that we're making Net-net, you know, highly cash generative, even in a growth heavy growth anticipation for Four, and then Purchasing Power double digits and Progressive Leasing turning the corner on growth. net-net you know highly cash generative even in a growth heavy growth anticipation for four and then purchasing power double digits and progressive leasing turning the corner on growth The one-time aspect that I would just highlight, and we've spoken about it on prior calls, and that's with respect to the OBBA. You know, I wouldn't even call that necessarily one time because given that that is permanent in the law, that's gonna continue to benefit us. We did have a $20 million tax refund that just under $20 million that we ended up getting here in Q1 early into 2025. That was additive. The OBBA is gonna continue to benefit the rest of the year just as it reduces our overall tax liability. We sized that rough benefit of about $100 million for the 2026 period. The one-time aspect that I would just highlight, and we've spoken about it on prior calls, and that's with respect to the OBBA. the one-time aspect that i would just highlight and we've spoken about it on prior calls and that's with respect to the obba You know, I wouldn't even call that necessarily one time because given that that is permanent in the law, that's gonna continue to benefit us. you know i wouldn't even call that necessarily one time because given that that is permanent in the law that's gonna continue to benefit us We did have a $20 million tax refund that just under $20 million that we ended up getting here in Q1 early into 2025. we did have a $20 million tax refund that just under $20 million that we ended up getting here in q1 early into 2025 That was additive. that was additive The OBBA is gonna continue to benefit the rest of the year just as it reduces our overall tax liability. the obba is gonna continue to benefit the rest of the year just as it reduces our overall tax liability We sized that rough benefit of about $100 million for the 2026 period. we sized that rough benefit of about $100 million for the 2026 period That's I think a tailwind obviously from a cash perspective. Going forward, you know, I think we've got a lot of optionality. You asked about the funding debt, the ABS debt that's tied to Purchasing Power. You know, our view is that that is you know important tool for Purchasing Power right now. I think it's an efficient model for them to be able to borrow against the receivables that they're generating and help us from a just you know a capital efficiency standpoint. Obviously as long as the ABS market is you know favorable to us and the rates that we've disclosed here in our 10-Q, you can see them by tranche. That's I think a tailwind obviously from a cash perspective. that's i think a tailwind obviously from a cash perspective Going forward, you know, I think we've got a lot of optionality. going forward you know i think we've got a lot of optionality You asked about the funding debt, the ABS debt that's tied to Purchasing Power. you asked about the funding debt the abs debt that's tied to purchasing power You know, our view is that that is you know important tool for Purchasing Power right now. you know our view is that that is you know important tool for purchasing power right now I think it's an efficient model for them to be able to borrow against the receivables that they're generating and help us from a just you know a capital efficiency standpoint. i think it's an efficient model for them to be able to borrow against the receivables that they're generating and help us from a just you know a capital efficiency standpoint Obviously as long as the ABS market is you know favorable to us and the rates that we've disclosed here in our 10-Q, you can see them by tranche. obviously as long as the abs market is you know favorable to us and the rates that we've disclosed here in our 10-q you can see them by tranche They're relatively favorable for us. I think we, you know, continue marching down that path. No plans to pull those back meaningfully in the near term at least. They're relatively favorable for us. they're relatively favorable for us I think we, you know, continue marching down that path. i think we you know continue marching down that path No plans to pull those back meaningfully in the near term at least. no plans to pull those back meaningfully in the near term at least

Speaker 3: That's very helpful. Thank you so much. That's very helpful. that's very helpful Thank you so much. thank you so much

Speaker 9: Thank you. This concludes the question-and-answer session. I'll now turn it back to Steve Michaels, President and CEO, for closing remarks. Thank you. thank you This concludes the question-and-answer session. this concludes the question-and-answer session I'll now turn it back to Steve Michaels, President and CEO, for closing remarks. i'll now turn it back to steve michaels president and ceo for closing remarks

Speaker 10: Thank you very much for joining us today. We delivered a strong first quarter with improving trends across the businesses, and we're entering the balance of the year with real momentum. I wanna thank all of the team members across PROG nation for the execution we've seen, as well as our retail partners and employer clients and our customers for trusting us. I firmly believe the best chapters of PROG story are still ahead of us. Thank you very much for joining us today. thank you very much for joining us today We delivered a strong first quarter with improving trends across the businesses, and we're entering the balance of the year with real momentum. we delivered a strong first quarter with improving trends across the businesses and we're entering the balance of the year with real momentum I wanna thank all of the team members across PROG nation for the execution we've seen, as well as our retail partners and employer clients and our customers for trusting us. i wanna thank all of the team members across prog nation for the execution we've seen as well as our retail partners and employer clients and our customers for trusting us I firmly believe the best chapters of PROG story are still ahead of us. i firmly believe the best chapters of prog story are still ahead of us

Speaker 9: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Thank you for your participation in today's conference. thank you for your participation in today's conference This does conclude the program. this does conclude the program You may now disconnect. you may now disconnect