Upbound Group (UPBD) Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025 summary

Business overview and recent developments

• Company operates three segments: Rent-A-Center, Acima, and newly acquired Brigit, focusing on financial solutions for underserved consumers.

• Rent-A-Center is a mature, cash-generating rent-to-own business with 2,300 stores and 70% of revenue from furniture and appliances.

• Acima, a virtual lease-to-own platform, grew top line by 17% in 2024 and targets high single to low double-digit growth in 2025.

• Brigit, acquired in January, is a financial health app with 2 million subscribers, offering credit-building and instant cash solutions.

• Integration of Brigit aims to enhance underwriting and cross-marketing across all business units.

Consumer trends and portfolio management

• Core customers are non-prime, earning $25,000–$60,000 annually, and remain under pressure from inflation since late 2021.

• Underwriting was tightened in late 2024 due to deterioration at the lower end of credit tiers, improving losses and delinquencies.

• Acima benefits from trade-down as higher-tier lenders tighten, capturing new customers and growing despite economic headwinds.

• Rent-A-Center faces margin pressure from portfolio size reduction but maintains healthy 15% margins.

• Trade-down cycle is expected to persist through 2025, supporting continued growth and margin stability.

Product and merchant diversification

• Acima has diversified GMV sources, with wheel and tire at 25% and jewelry at 15%, reducing reliance on furniture.

• Top 10 merchants account for about 30% of Acima’s GMV, reflecting a well-diversified merchant base.

• Over a million new customers joined Acima in 2024, with a 10% increase in active locations year over year.