PROG Holdings Reports Fourth Quarter 2024 Results
PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, Four Technologies, and Build today announced financial results for the fourth quarter ended Decembe...
- Consolidated revenues of $623.3 million; Net earnings of $57.5 million
- Adjusted EBITDA of $65.7 million
- Diluted EPS of $1.34; Non-GAAP Diluted EPS of $0.80
- Progressive Leasing GMV of $597.5 million, 9.1% growth year-over-year
SALT LAKE CITY: PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, Four Technologies, and Build today announced financial results for the fourth quarter ended December 31, 2024.
"We finished 2024 with an excellent fourth quarter, delivering a third consecutive quarter of strong GMV growth and approximating the high end of our outlook ranges for both our revenues and earnings for the period," said PROG Holdings President and CEO Steve Michaels. "2024 was a successful year, driven by better-than-expected GMV growth, disciplined portfolio management, cost efficiencies, and continued execution on multiple strategic fronts. Our teams' execution across sales, marketing, and technology initiatives, combined with tighter credit conditions in the market, played a key role in driving a meaningful increase in new and repeat customers."
"As we move into 2025, we are excited about continuing to execute our three-pillared strategy to grow, enhance, and expand - investing in our businesses with a focus on increasing customer acquisition and lifetime value. We believe our cash-efficient model gives us the financial flexibility to invest in our future growth and return excess cash to shareholders, as we aim to maximize long-term value creation," concluded Michaels.
Consolidated Results
Consolidated revenues for the fourth quarter of 2024 were $623.3 million, an increase of 8.0% from the same period in 2023.
Consolidated net earnings for the quarter were $57.5 million, compared with $18.6 million in the prior year period. The effective income tax rate was (37.5)% in the fourth quarter. The effective income tax rate was negative due to a $27.6 million deferred tax benefit related to an election which resulted in the deemed liquidation of a wholly-owned partnership for tax purposes. Adjusted EBITDA for the quarter was $65.7 million, or 10.5% of revenues, compared with $61.0 million, or 10.6% of revenues for the same period in 2023.
Diluted earnings per share for the fourth quarter of 2024 were $1.34, compared with $0.41 in the year ago period. On a non-GAAP basis, diluted earnings per share were $0.80 in the fourth quarter of 2024, compared with $0.72 for the same period in 2023. The Company's weighted average shares outstanding assuming dilution in the fourth quarter was 5.1% lower year-over-year.
Progressive Leasing Results
Progressive Leasing's fourth quarter GMV of $597.5 million was up 9.1% compared to the same period in 2023. The provision for lease merchandise write-offs for the quarter was 7.9%. For the full year 2024, our provision for lease merchandise write-offs was 7.5%, within our 6-8% targeted annual range.
Liquidity and Capital Allocation
PROG Holdings ended the fourth quarter of 2024 with cash of $95.7 million and gross debt of $650.0 million. The Company repurchased $40.5 million of its stock in the fourth quarter at an average price of $47.03 per share, leaving $361.3 million of repurchase authorization under its $500 million share repurchase program. Additionally, the Company paid a cash dividend of $0.12 per share.
2025 Outlook
PROG Holdings is issuing full year and Q1 2025 outlook for revenues, consolidated net earnings, segment earnings before taxes, adjusted EBITDA, GAAP diluted EPS and non-GAAP diluted EPS. This outlook assumes a difficult operating environment with continued soft demand for consumer durable goods, no material changes in the Company's decisioning posture, an effective tax rate for Non-GAAP EPS of approximately 28%, no material increase in the unemployment rate for our consumer, and no impact from additional share repurchases.
| Full Year 2025 Outlook | |||||||
(In thousands, except per share amounts) | Low | High | ||||||
|
|
| ||||||
PROG Holdings - Total Revenues | $ | 2,515,000 |
| $ | 2,590,000 |
| ||
PROG Holdings - Net Earnings |
| 115,500 |
|
| 133,500 |
| ||
PROG Holdings - Adjusted EBITDA |
| 260,000 |
|
| 280,000 |
| ||
PROG Holdings - Diluted EPS |
| 2.82 |
|
| 3.22 |
| ||
PROG Holdings - Diluted Non-GAAP EPS |
| 3.10 |
|
| 3.50 |
| ||
|
|
| ||||||
Progressive Leasing - Total Revenues |
| 2,385,000 |
|
| 2,445,000 |
| ||
Progressive Leasing - Earnings Before Taxes |
| 181,000 |
|
| 195,000 |
| ||
Progressive Leasing - Adjusted EBITDA |
| 260,000 |
|
| 275,000 |
| ||
|
|
| ||||||
Vive - Total Revenues |
| 65,000 |
|
| 70,000 |
| ||
Vive - Loss Before Taxes |
| (5,500 | ) |
| (2,500 | ) | ||
Vive - Adjusted EBITDA |
| (2,500 | ) |
| — |
| ||
|
|
| ||||||
Other - Total Revenues |
| 65,000 |
|
| 75,000 |
| ||
Other - Loss Before Taxes |
| (9,000 | ) |
| (6,000 | ) | ||
Other - Adjusted EBITDA |
| 2,500 |
|
| 5,000 |
| ||
| Three Months Ended March 31, 2025 Outlook | |||||
(In thousands, except per share amounts) | Low | High | ||||
|
|
| ||||
PROG Holdings - Total Revenues | $ | 665,000 | $ | 685,000 | ||
PROG Holdings - Net Earnings |
| 28,000 |
| 32,000 | ||
PROG Holdings - Adjusted EBITDA |
| 63,000 |
| 68,000 | ||
PROG Holdings - Diluted EPS |
| 0.73 |
| 0.78 | ||
PROG Holdings - Diluted Non-GAAP EPS |
| 0.80 |
| 0.85 | ||
Conference Call and Webcast
The Company has scheduled a live webcast and conference call for Wednesday, February 19, 2025, at 8:30 A.M. ET to discuss its financial results for the fourth quarter of 2024. To access the live webcast, visit the Events and Presentations page of the Company’s Investor Relations website, https://investor.progholdings.com/.
About PROG Holdings, Inc.
PROG Holdings, Inc. (NYSE:PRG) is a fintech holding company headquartered in Salt Lake City, UT, that provides transparent and competitive payment options to consumers. The Company owns Progressive Leasing, a leading provider of e-commerce, app-based, and in-store point-of-sale lease-to-own solutions, Vive Financial, an omnichannel provider of second-look revolving credit products, Four Technologies, a provider of Buy Now, Pay Later payment options through its platform, Four, and Build, provider of personal credit building products. More information on PROG Holdings and its companies can be found at https://investor.progholdings.com/.
Forward Looking Statements:
Statements in this news release regarding our business that are not historical facts are "forward-looking statements" that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as "continuing", "believe", "aim", "outlook" and similar forward-looking terminology. These risks and uncertainties include factors such as (i) continued volatility and challenges in the macro environment and, in particular, the unfavorable effects on our business of impacts of inflation, a higher cost of living and elevated interest rates, and the impact of those headwinds on: (a) consumer confidence and customer demand for the merchandise that our POS partners sell, in particular consumer durables; (b) our customers’ disposable income and their ability to make the lease and loan payments they owe the Company; (c) the availability of consumer credit; and (d) our overall financial performance and outlook; (ii) our businesses being subject to extensive federal, state and local laws and regulations, including certain laws and regulations unique to the industries in which our businesses operate, that may subject them to government investigations and significant monetary penalties, remediation expenses and compliance-related burdens that may result in them changing the manner in which they operate, which may be materially adverse to several aspects of our performance; (iii) an uncertain macroeconomic environment resulting in our proprietary algorithms and decisioning tools used in approving customers no longer being indicative of their ability to perform, which in turn may limit the ability of our businesses to manage risk, avoid lease and loan charge-offs and may result in insufficient reserves to cover actual losses; (iv) a large percentage of Progressive Leasing's revenue being concentrated with several key POS partners, and the loss of any of these POS partner relationships materially and adversely affecting several aspects of our performance; (v) Progressive Leasing being unable to attract additional POS partners and retain and grow its relationships with its existing POS partners, resulting in several aspects of our performance being materially and adversely affected; (vi) Progressive Leasing being unable to attract new consumers and retain and grow its relationships with its existing customers materially and adversely affecting several aspects of our performance; (vii) Vive and Four’s business models differing significantly from Progressive Leasing’s lease-to-own business, which means each of these businesses have different risk profiles; (viii) our efforts to modernize and enhance certain enterprise-wide information management systems and technologies adversely impacting our businesses and operations; (ix) our inability to protect confidential, proprietary, or sensitive information, including the confidential information of our customers, being adversely affected by cyber-attacks or similar disruptions, which may result in significant costs, litigation and reputational damage or otherwise have a material adverse impact on several aspects of our performance; (x) our capital allocation strategy and financial policies, including our current stock repurchase and dividend programs, as well as any potential debt repurchase program not being effective at enhancing shareholder value, or providing other benefits we expect; (xi) the inability of our businesses to successfully operate in highly and increasingly competitive industries materially and adversely affecting several aspects of our performance; (xii) our business, results of operations, financial condition, and prospects being materially and adversely affected due to Progressive Leasing failing to maintain a consistently high level of consumer satisfaction and trust in its brand; (xiii) our performance being materially and adversely affected due to the transactions offered to consumers by our businesses being negatively characterized by federal, state and local government officials, consumer advocacy groups and the media; (xiv) any significant disruption in our vendors' information technology systems, or disruptions in the information our businesses rely on in their lease and loan decisioning, materially and adversely affecting several aspects of our performance; and (xv) the other risks and uncertainties discussed under "Risk Factors" in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 19, 2025. Statements in this press release that are "forward-looking" include without limitation statements about: (i) our ability to invest in our businesses to increase customer acquisition and lifetime value, and the results of any such investments; (ii) having the financial flexibility to invest in our future growth and return excess cash to shareholders; (iii) maximizing long-term value creation; and (iv) our full year 2025 outlook and our first quarter 2025 outlook. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this press release.
PROG Holdings, Inc. | ||||||||||||||||
Consolidated Statements of Earnings | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
| (Unaudited) |
| ||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
REVENUES: |
|
|
|
| ||||||||||||
Lease Revenues and Fees | $ | 592,872 |
| $ | 557,484 |
| $ | 2,366,489 |
| $ | 2,333,588 |
| ||||
Interest and Fees on Loans Receivable |
| 30,448 |
|
| 19,917 |
|
| 97,007 |
|
| 74,676 |
| ||||
|
| 623,320 |
|
| 577,401 |
|
| 2,463,496 |
|
| 2,408,264 |
| ||||
COSTS AND EXPENSES: |
|
|
|
| ||||||||||||
Depreciation of Lease Merchandise |
| 403,661 |
|
| 374,146 |
|
| 1,621,101 |
|
| 1,576,303 |
| ||||
Provision for Lease Merchandise Write-offs |
| 46,678 |
|
| 38,955 |
|
| 178,338 |
|
| 155,250 |
| ||||
Operating Expenses |
| 122,810 |
|
| 128,932 |
|
| 469,160 |
|
| 451,084 |
| ||||
|
| 573,149 |
|
| 542,033 |
|
| 2,268,599 |
|
| 2,182,637 |
| ||||
OPERATING PROFIT |
| 50,171 |
|
| 35,368 |
|
| 194,897 |
|
| 225,627 |
| ||||
Interest Expense, Net |
| (8,316 | ) |
| (6,857 | ) |
| (31,289 | ) |
| (29,406 | ) | ||||
EARNINGS BEFORE INCOME TAX (BENEFIT) EXPENSE |
| 41,855 |
|
| 28,511 |
|
| 163,608 |
|
| 196,221 |
| ||||
INCOME TAX (BENEFIT) EXPENSE |
| (15,692 | ) |
| 9,936 |
|
| (33,641 | ) |
| 57,383 |
| ||||
NET EARNINGS | $ | 57,547 |
| $ | 18,575 |
| $ | 197,249 |
| $ | 138,838 |
| ||||
EARNINGS PER SHARE |
|
|
|
| ||||||||||||
Basic | $ | 1.39 |
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