Upbound Group (UPBD) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue was $4.0B, down 6.0% YoY; operating profit rose 9.6% to $162.9M and Adjusted EBITDA increased 0.5% to $455.7M.

• Q4 revenue rose 2.8% YoY to $1,018.1M; GAAP diluted EPS was $(0.21) and non-GAAP diluted EPS was $0.81.

• Acima GMV and Rent-A-Center portfolio value returned to YoY growth in Q4.

Financial highlights

• FY diluted EPS was $(0.09) versus $0.21 in 2022; non-GAAP diluted EPS was $3.55 versus $3.70.

• FY cash from operations was $200.3M and free cash flow was $146.9M, versus $468.5M and $407.1M in 2022.

• Q4 Adjusted EBITDA was $107.6M, down $2.5M YoY; adjusted margin was 10.6%, down 50 bps.

• Q4 free cash flow was $(36.9)M versus $44.4M in Q4 2022; dividend was $0.34 per share.

Outlook and guidance

• FY 2024 revenue guidance: $4.00B–$4.20B; Adjusted EBITDA excluding stock-based compensation: $455M–$485M.

• FY 2024 non-GAAP diluted EPS guidance is $3.55–$4.00; free cash flow guidance is $100M–$130M.

• Priorities include market-share growth, higher retention, digital capabilities, operational synergies, expanded offerings, productivity and balanced capital returns.