PRG Q2 Earnings Call Highlights Ecosystem Growth and Outlook Raise

PRG Expands Ecosystem Growth Strategy

CEO Steve Michaels said the quarter demonstrated strength across all businesses, with Progressive Leasing, Four and Purchasing Power each contributing to growth.

Consolidated gross merchandise volume increased 60.1% year over year to $902.0 million, reflecting stronger activity across the company’s payment solutions ecosystem.

Michaels emphasized that growth was driven by expanded distribution, customer demand and share gains rather than looser credit standards. He noted that approval rates at Progressive Leasing remained below prior-year levels as the company maintained portfolio discipline.

Progressive Leasing Returns to Growth

Progressive Leasing posted second-quarter GMV of $428.1 million, up 3.4% year over year, reversing a 2.2% decline in the first quarter.

Management said the improvement reflected the fading impact of prior tightening actions and the Big Lots bankruptcy headwind, along with growth initiatives implemented over the past year.

The segment generated adjusted EBITDA of $69.9 million, representing a 12.7% margin. Management said higher portfolio yield and fewer customers exercising early purchase options supported profitability.

PRG Manages Consumer Pressure

Management said consumers remain financially pressured but resilient, with inflation and higher gas prices affecting discretionary spending.

A Stephens analyst asked about consumer health and the balance between lower early buyout activity and improving demand. Michaels said the company continues monitoring customer behavior while managing the portfolio toward long-term economics.

Progressive Leasing’s lease merchandise write-offs were 8.4% of leasing revenue during the quarter. Management said the level reflected deliberate portfolio management and expects full-year 2026 write-offs to remain within the targeted 6% to 8% annual range.

Four Drives Profitable Expansion

Four Technologies continued its rapid expansion, with second-quarter GMV increasing 110.6% year over year to $315.1 million. Revenue increased 118.2% to $35.1 million, while adjusted EBITDA rose 111.2% to $8.7 million.

Michaels said Four benefited from strong customer engagement, repeat purchasing and marketing efficiency. The company also highlighted AI-driven product improvements that simplify the shopping experience.

A B. Riley Securities analyst asked about Four’s investments and margin expansion. Michaels said the business operates with a lean team and uses AI to improve product development, customer service and operating efficiency.

PRG Advances Purchasing Power Integration

Purchasing Power delivered GMV of $158.8 million, up 15.2% on a standalone basis from the prior-year period, while revenue reached $130.4 million. Adjusted EBITDA was $10.6 million.

Management said integration efforts are progressing, with improvements including a faster mobile experience, AI shopping assistant Vita and expanded merchandise categories.

A BTIG analyst asked about the onboarding timeline for a new employer client with more than 80,000 eligible employees. Michaels said adoption depends on employer communication efforts, with broader customer penetration typically building over a two- to three-year period.

PRG Raises 2026 Outlook

Following the strong quarter, PROG Holdings increased its full-year 2026 outlook. The company now expects revenue from continuing operations of $3.025 billion to $3.1 billion, adjusted EBITDA of $355 million to $375 million and non-GAAP EPS of $4.75 to $5.00.

Management also highlighted balance sheet improvements, with net leverage ending the quarter at 1.7x, down from approximately 2.5x following the Purchasing Power acquisition. The company resumed share repurchases during the quarter.

Executives said capital allocation priorities remain focused on reinvesting in the business, pursuing strategic opportunities and returning excess capital to shareholders through repurchases and dividends.

Zacks Rank and Style Scores Signals

PROG Holdings has a Zacks Rank #3 (Hold). The stock’s current Zacks Style Scores include a Value Score of A, Growth Score of A, Momentum Score of D and VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Style Scores evaluate value, growth and momentum characteristics, with higher grades representing stronger relative attributes. The Zacks Rank can change as earnings estimate revisions are updated following new quarterly information.

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