Upbound Group, Inc. ((UPBD)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Upbound Group, Inc. Reports Mixed Q3 2025 Performance Amid Growth and Challenges
The earnings call for Upbound Group, Inc. revealed a mixed performance for the third quarter of 2025. While the company showcased strong growth metrics in revenue and specific segments such as Brigit and Acima, it faced challenges including margin pressures at Acima, a revenue decline at Rent-A-Center, and macroeconomic headwinds affecting consumer behavior.
Revenue and EBITDA Growth
Upbound Group delivered robust Q3 2025 results with a 9% increase in revenue year-over-year, reaching $1.16 billion. The company also reported a 5.7% rise in adjusted EBITDA, totaling $123.6 million, indicating solid financial performance despite some challenges.
Brigit’s Impressive Performance
Brigit, a segment of Upbound Group, reported remarkable growth with a 40% increase in revenue and a 27% rise in subscribers year-over-year. This contributed $9.3 million in adjusted EBITDA at a margin exceeding 16%, highlighting Brigit’s strong market position and growth potential.
Acima GMV Growth
Acima achieved its eighth consecutive quarter of GMV growth, with an 11% increase year-over-year. This growth was accomplished despite the company tightening its underwriting standards, showcasing Acima’s resilience and strategic execution.
New Executive Appointments
The company announced the appointment of Hal Khouri as Chief Financial Officer and Rebecca Wooters as Chief Growth Officer. These strategic hires aim to strengthen the executive team and drive future growth initiatives.
Free Cash Flow
Upbound Group generated over $50 million in free cash flow during Q3, bringing the year-to-date total to $167 million. This demonstrates the company’s ability to generate cash and maintain financial flexibility.
Acima Margin and Loss Challenges
Acima faced challenges with its EBITDA margin declining to 12%, attributed to a 50 basis point increase in lease charge-offs and lower gross margins. This indicates areas where the company needs to focus on improving operational efficiency.
Rent-A-Center Revenue Decline
Rent-A-Center reported a 4.7% decline in revenue year-over-year. This was due to a higher store count in the previous year and strategic exits from certain product categories, reflecting a need to adapt to changing market conditions.
Macroeconomic Challenges
Economic uncertainty, inflation, and slowing job growth are exerting pressure on demand and consumer confidence, impacting Upbound Group’s top-line performance. These macroeconomic factors present ongoing challenges for the company.
Acima Loss Rates
Acima’s lease charge-off rate increased to 9.7%, surpassing the target range, with expectations for it to peak around 10% in Q4. This highlights the need for continued focus on managing credit risk.
Forward-Looking Guidance
During the earnings call, CEO Fahmi Karam highlighted the company’s strong results, including a 9% revenue increase and a 5.7% rise in adjusted EBITDA. The guidance for the full year 2025 was adjusted, with expected revenue between $4.6 billion and $4.75 billion and adjusted EBITDA ranging from $500 million to $510 million. The company also emphasized the strategic importance of new executive appointments to enhance customer experience and drive growth.
In summary, Upbound Group, Inc.’s Q3 2025 earnings call presented a mixed bag of growth and challenges. While segments like Brigit and Acima showed impressive performance, issues such as margin pressures and macroeconomic headwinds pose challenges. The company’s forward-looking guidance remains optimistic, with strategic initiatives and new leadership expected to drive future growth.