Upbound Group (UPBD) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated revenue reached $1,068.9 million, up 9.2% year-over-year, with net income of $30.9 million and non-GAAP EPS of $0.95, meeting or exceeding guidance and consensus estimates.

• Adjusted EBITDA grew 10.3% year-over-year to $116.9 million, with a margin of 10.9%.

• Acima led growth with 19.1% revenue increase and 13% GMV growth, while Rent-A-Center achieved 1.1% revenue growth and 2.6% same-store sales growth despite store closures and a franchise sale.

• Both segments benefited from digital enhancements, AI-powered tools, and a successful franchise transaction in New York.

• Net cash from operating activities was $106.2 million, up $28.2 million year-over-year; $81 million in debt was reduced, and the ABL revolver was fully undrawn.

Financial highlights

• Revenue: $1,068.9 million (+9.2% y/y); operating profit: $70.1 million (+$12.0 million y/y); net profit margin: 2.9% (+250 bps y/y).

• Adjusted EBITDA: $116.9 million (+10.3% y/y); Adjusted EBITDA margin: 10.9%.

• Non-GAAP EPS increased 20% year-over-year to $0.95; GAAP EPS was $0.55.

• Free cash flow for Q3 was $88.3 million, up from $63.2 million last year.

• Consolidated gross margin was 47.8%, down 300 basis points year-over-year.

Outlook and guidance

• Full-year 2024 revenue guidance: $4.20–$4.30 billion; Adjusted EBITDA: $470–$480 million; non-GAAP EPS: $3.75–$3.90; free cash flow: $100–$130 million.

• Q4 adjusted EBITDA projected at $120–$130 million, non-GAAP EPS at $0.97–$1.12.

• Guidance unchanged from previous update; strong Q3 performance supports achieving targets.

• Acima GMV growth for Q4 expected in low double digits; Rent-A-Center revenue to decline low single digits due to franchise sale.