PROG Holdings — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenues from continuing operations were $725.8 million, an increase of 25.6% compared to the prior year period.
• Net earnings from continuing operations were $37.5 million, up from $32.3 million in the prior year period.
• Adjusted EBITDA from continuing operations was $80.0 million, up 21.8% from $65.7 million in the prior year period, representing 11.0% of revenues compared to 11.4% previously.
• Diluted EPS from continuing operations was $0.92, compared to $0.80 in the prior year period.
• Non-GAAP diluted EPS from continuing operations was $1.06, up 21.8% from $0.87 in the prior year period.
• Consolidated Gross Merchandise Volume (GMV) was $912.0 million, up 58.9% year-over-year.
• Net leverage ratio ended the quarter at 1.5x.
• Cash and cash equivalents were $108.9 million; gross debt was $872.0 million.
• The company repurchased $36.7 million of stock in the quarter at an average price of $41.47 per share.

Guidance and Future Outlook:

• The company reduced its full-year 2026 revenue outlook to a range of $3,015.0 million to $3,050.0 million (previously $3,025.0 million to $3,100.0 million).
• Full-year 2026 net earnings outlook was reduced to $152.0 million to $158.5 million (previously $155.0 million to $164.5 million).
• Full-year 2026 Adjusted EBITDA outlook was reduced to $345.0 million to $355.0 million (previously $355.0 million to $375.0 million).
• Full-year 2026 non-GAAP diluted EPS outlook was reduced to $4.70 to $4.85 (previously $4.75 to $5.00).
• Fourth quarter 2026 revenue outlook is $827.0 million to $862.0 million.
• Fourth quarter 2026 net earnings outlook is $40.0 million to $45.5 million.
• Fourth quarter 2026 Adjusted EBITDA outlook is $86.0 million to $96.0 million.
• Fourth quarter 2026 non-GAAP diluted EPS outlook is $1.20 to $1.32.
• Outlook assumes an effective tax rate for non-GAAP EPS of approximately 26% and includes the impact of an anticipated $100 million accelerated share repurchase program.

Business Segments and Product Lines:

• Progressive Leasing: GMV was $420.4 million (up 2.3%); revenues were $552.7 million (down 0.7%); earnings before taxes were $40.8 million (down 12.7%); Adjusted EBITDA was $56.5 million (down 12.3%). Provision for lease merchandise write-offs was 8.3% of leasing revenues.
• Four: GMV was $330.4 million (up 102.6%); revenues were $37.2 million (up 113.8%); earnings before taxes were $10.0 million (up 683.6%); Adjusted EBITDA was $11.4 million (up 323.3%).
• Purchasing Power: Acquired on January 2, 2026. GMV was $161.2 million (up 12.3% on a standalone basis); revenues were $131.8 million; earnings before taxes were $3.0 million; Adjusted EBITDA was $12.9 million.
• Other: Revenues were $4.0 million; earnings before taxes were a loss of $1.5 million; Adjusted EBITDA was a loss of $0.8 million.

Market and Competitive Landscape:

• Management noted a "more pressured consumer backdrop" and is taking a "more cautious view of the consumer" for the remainder of the year.
• The company operates in highly competitive industries including lease-to-own, Buy Now, Pay Later, and employee benefit programs.
• Progressive Leasing faces concentration risk with several key retail partners.

Risks and Challenges:

• Macroeconomic pressures, including geopolitical disruptions and inflation, may impact consumer confidence, disposable income, and the ability to make lease/loan payments.
• Uncertainty in the macroeconomic environment may affect proprietary algorithms and decisioning tools used to approve customers.
• Risks include the loss of key retail partner relationships for Progressive Leasing or employer-clients for Purchasing Power.
• Potential for increased lease and loan charge-offs if decisioning tools are less effective.
• Regulatory risks, including government investigations, penalties, and negative characterization of business models by officials or advocacy groups.
• Cybersecurity risks and potential disruptions to information technology systems.

Management Commentary and Tone:

• Steve Michaels, Chairman, President, and CEO, stated results reflect the "strength and resilience of our diversified platform" and "discipline with which we run it."
• Management highlighted that the "growth engine is working" and "every part of our ecosystem is contributing."
• The CEO expressed "deep conviction in the long-term value we are building" and noted the company is "improving portfolio metrics with our active management in the face of macro pressures."
• Management confirmed the company is on track to deliver against multi-year growth targets laid out at the March Investor Day.

Other Key Points:

• The company announced an intention to enter into a $100 million accelerated share repurchase (ASR) program during the fourth quarter.
• The Board replenished the current share repurchase program by adding $237.3 million, bringing the total available for future repurchases to $500.0 million.
• The term of the share repurchase program was extended from February 21, 2027, to October 26, 2029.
• The company paid a quarterly cash dividend of $0.14 per share.
• Since the acquisition of Purchasing Power, the company has reduced total debt by $326.6 million.
• The outlook assumes the ASR program will be entered into, with non-GAAP EPS reflecting only the initial delivery of approximately 80% of shares to be repurchased.