UPBOUND GROUP INC

Previous wording

This Quarterly Report on Form 10-Q includes “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “seeks” or words of similar meaning, or future or conditional verbs, such as “will,” “should,” “could,” “may,” “aims,” “intends,” or “projects.” These forward-looking statements, include, without limitation, those relating to the impact of ongoing challenging macroeconomic conditions on our business, operations, financial performance and prospects, the future business prospects and financial performance of our Company as a whole and of our segments, our growth strategies, our expectations, plans and strategy relating to our capital structure and capital allocation, including any share repurchases under our share repurchase program, the potential impact of the matters discussed in Note 12, and other statements that are not historical facts.

Current wording

This Quarterly Report on Form 10-Q includes “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “seeks” or words of similar meaning, or future or conditional verbs, such as “will,” “should,” “could,” “may,” “aims,” “intends,” or “projects.” These forward-looking statements, include, without limitation, those relating to the impact of ongoing challenging macroeconomic conditions on our business, operations, financial performance and prospects, the future business prospects and financial performance of our Company as a whole (which includes Bridge IT, Inc. (“Brigit”) following the closing of our acquisition of Brigit (the “Merger”) on January 31, 2025) and our segments, our growth strategies, our expectations, plans and strategy relating to our capital structure and capital allocation, including any share repurchases under our share repurchase program, the potential impact of the matters discussed in Note 12, and other statements that are not historical facts. Unless expressly indicated or the context requires otherwise, the terms “Upbound Group, Inc.,” “Company,” “we,” “us,” and “our” in this document refer to Upbound Group, Inc. and, where appropriate, its subsidiaries.

Previous wording

A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Our actual future results and trends may differ materially and adversely depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this Quarterly Report on Form 10-Q and any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. Except as required by law, we expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise. Factors that could cause or contribute to these differences include, but are not limited to:

Current wording

A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Our actual future results and trends may differ materially and adversely depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this Quarterly Report on Form 10-Q and any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. Except as required by law, we expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise. Factors that could cause or contribute to these differences include, but are not limited to:

Previous wording

•the general strength of the economy and other economic conditions affecting consumer preferences and spending, including the availability of credit to our target consumers and to other consumers, impacts from continued inflation, central bank monetary policy initiatives to address inflation concerns, and a possible recession or slowdown in economic growth;

Current wording

•the general strength of the economy and other economic conditions affecting consumer preferences, spending and payment behaviors, including the availability of credit to our target consumers and to other consumers, impacts from continued or renewed inflation, central bank monetary policy initiatives to address inflation concerns, and a possible recession or slowdown in economic growth;

Previous wording

•difficulties encountered in improving the financial and operational performance of our business segments;

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•difficulties encountered in managing the financial and operational performance of our multiple business segments;

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•risks associated with pricing, value proposition and other changes and strategies being deployed in our businesses;

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•risks associated with pricing, value proposition and other changes to our consumer offerings and strategies being deployed in our businesses;

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•our ability to continue to effectively execute our strategic initiatives, including mitigating risks associated with any potential mergers and acquisitions, or refranchising opportunities;

Current wording

•our ability to continue to effectively execute our strategic initiatives, including mitigating risks associated with any potential additional mergers and acquisitions, or lease-to-own refranchising opportunities;

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•our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies;

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•our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies, including Brigit;

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•failure to manage our operating labor and non-labor operating expenses, including merchandise losses;

Current wording

•failure to effectively manage our operating labor and non-labor operating expenses, including merchandise losses for our lease-to-own offerings;

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•disruptions caused by the operation of our information management systems or disruptions in the systems of our host retailers;

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•disruptions caused by the operation of our information management systems or disruptions in the systems of our host retailers or other third parties with whom we do business;

Previous wording

•our compliance with applicable statutes and regulations governing our businesses, impacts from the enforcement of existing laws and regulations and the enactment of new laws and regulations adversely affecting our business, including in connection with the regulatory matters described in Note 12 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and any legislative or other regulatory enforcement efforts that seek to re-characterize store-based or virtual lease-to-own transactions as credit sales and to apply consumer credit laws and regulations to our business;

Current wording

•our compliance with applicable statutes and regulations governing our businesses, impacts from the enforcement of existing laws and regulations and the enactment of new laws and regulations adversely affecting our business, including in connection with the regulatory matters described in Note 12 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and any legislative or other regulatory enforcement efforts that seek to re-characterize store-based or virtual lease-to-own transactions as credit sales and to apply consumer credit laws and regulations to our lease-to-own business or to apply credit laws to Brigit’s consumer offerings;

Previous wording

•our ability or that of our host retailers to protect the integrity and security of customer, employee, supplier and host retailer information, which may be adversely affected by hacking, computer viruses, or similar disruptions;

Current wording

•our ability or that of our host retailers or other third parties with whom we do business to protect the integrity and security of customer, employee, supplier and host retailer or other third party information, which may be adversely affected by hacking, computer viruses, or similar disruptions;

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•rapid inflation or deflation in the prices of our products and other related costs;

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•rapid inflation or deflation in the prices of our lease-to-own products and other related costs;

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•allegations of product safety and quality control issues, including recalls;

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•allegations of product safety and quality control issues, including recalls of goods we lease to customers;

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•our ability to execute, as well as the effectiveness of, store consolidations, including our ability to retain the revenue from customer accounts merged into another store location as a result of a store consolidation;

Current wording

•our ability to execute, as well as the effectiveness of, lease-to-own store consolidations, including our ability to retain the revenue from customer accounts merged into another store location as a result of a store consolidation;

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•increased competition from traditional competitors, virtual lease-to-own competitors, online retailers, Buy-Now-Pay-Later and other fintech companies and other competitors, including subprime lenders;

Current wording

•increased competition from traditional competitors, virtual lease-to-own competitors, online retailers, Buy-Now-Pay-Later, earned wage access and financial health technology competitors and other fintech companies and other competitors, including subprime lenders;

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•our ability to effectively provide consumers with additional products and services beyond lease-to-own, including through third-party partnerships;

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•our ability to effectively provide consumers with additional products and services beyond lease-to-own and products and services currently offered by Brigit, including through third-party partnerships;

Previous wording

•our ability to retain the revenue associated with acquired customer accounts and enhance the performance of acquired stores;

Current wording

•our ability to retain the revenue associated with acquired lease-to-own customer accounts and enhance the performance of acquired stores;

Previous wording

We are a leading lease-to-own provider with operations in the United States, Puerto Rico and Mexico. We provide a critical service for underserved consumers by providing them with access to, and the opportunity to obtain ownership of, high-quality, name brand durable products under a flexible lease-purchase agreement with no long-term debt obligation. Our Acima segment offers lease-to-own solutions through retailers in stores and online enabling such retailers to grow sales by expanding their customer base utilizing our differentiated offering and allowing customers to access our flexible lease-to-own solutions at thousands of retailers and to lease a wide range of durable products. Through our Rent-A-Center segment, we provide a fully integrated customer experience through our e-commerce platform and brick and mortar presence in local communities around the country. We were incorporated in the State of Delaware in 1986, and our common stock is traded on the Nasdaq Global Select Market under the ticker symbol “UPBD.”

Current wording

We are a technology and data-driven leader in accessible and inclusive financial solutions that address the evolving needs and aspirations of underserved consumers. Through our Acima and Rent-A-Center segments, we are a leading lease-to-own provider with operations in the United States, Puerto Rico and Mexico. We provide a critical service for underserved consumers by providing them with access to, and the opportunity to obtain ownership of, high-quality, name brand durable products under a flexible lease-purchase agreement with no long-term debt obligation. Our Acima segment offers lease-to-own solutions through retailers in stores and online enabling such retailers to grow sales by expanding their customer base utilizing our differentiated offering and allowing customers to access our flexible lease-to-own solutions at thousands of retailers and to lease a wide range of durable products. Through our Rent-A-Center segment, we provide a fully integrated customer experience through our e-commerce platform and brick and mortar presence.

Previous wording

•Execute on market opportunities and enhance our competitive position across both traditional and virtual lease-to-own solutions, and implement complementary products and services that supplement our current offerings and provide our customers more financial alternatives; and

Current wording

•Execute on market opportunities and enhance our competitive position across both traditional and virtual lease-to-own solutions, and implement complementary products and services that supplement our current offerings and provide our customers more financial alternatives;

Previous wording

•Grow penetration with current Acima third-party retailers and build on our strength with small to medium size businesses while also adding new national and regional third-party retailers to our platform and expanding our direct-to-consumer channels;

Current wording

•Grow penetration with current Acima third-party retailers and build on our strength with small to medium size businesses while also adding new national and regional third-party retailers to our platform and expanding our direct-to-consumer channels; and

Previous wording

Dividend. On September 19, 2024, we announced that our board of directors approved a quarterly cash dividend of $0.37 per share for the fourth quarter of 2024. The dividend was paid on October 22, 2024 to our common stockholders of record as of the close of business on October 1, 2024.

Current wording

Dividend. On March 20, 2025, we announced that our board of directors approved a quarterly cash dividend of $0.39 per share for the first quarter of 2025. The dividend was paid on April 22, 2025 to our common stockholders of record as of the close of business on April 2, 2025.

Previous wording

Macroeconomic Conditions. In recent years, we have experienced significant change in our business and operational trends driven by macroeconomic conditions, which have directly impacted our customers as well as our operations, including significant changes in the U.S. consumer price index, changes in demand for certain consumer retail categories, changes in consumer payment behaviors, a condensed labor market, which has also contributed to wage inflation, rapid increases in interest rates, and global supply chain disruptions resulting in reduced product availability and rising product costs.

Current wording

Macroeconomic Conditions. In recent years, we have experienced significant change in business and operational trends driven by macroeconomic conditions, which have directly impacted our customers as well as our operations, including significant changes in the U.S. consumer price index, changes in demand for certain consumer retail categories, changes in consumer payment behaviors, a condensed labor market, which has also contributed to wage inflation, rapid increases in interest rates, changes in tariff policies, and global supply chain disruptions resulting in reduced product availability and rising product costs.

Previous wording

While the lease-to-own industry has historically remained a resilient business model throughout various economic cycles, the full extent to which our risk management strategy and these macroeconomic trends (including consumer spending and payment behavior) may impact our business in future periods is uncertain. The continuation of negative and volatile macroeconomic trends may have a material adverse impact on our financial statements, including our results of operations, operating cash flows, liquidity and capital resources.

Current wording

While the lease-to-own industry has historically remained a resilient business model throughout various economic cycles, the full extent to which our risk management strategy and these macroeconomic trends (including consumer spending and payment behavior) may impact our business in future periods is uncertain. The continuation of volatile macroeconomic trends may have a material adverse impact on our financial statements, including our results of operations, operating cash flows, liquidity and capital resources.

Previous wording

Rent-A-Center e-commerce revenue. In recent years, e-commerce revenues increased as a percentage of total rentals and fees revenue in our Rent-A-Center segment. For the nine months ended September 30, 2024 and 2023, e-commerce revenues represented approximately 26% of total lease-to-own revenues. Due to recent trends in consumer shopping behaviors and expectations, we believe e-commerce solutions are an important part of our lease-to-own offering. However, we are unable to quantify the extent to which e-commerce revenues are incremental compared to what our overall revenues would have been in the absence of those e-commerce transactions. In addition, the profitability of e-commerce transactions can be impacted by different merchandise loss factors compared to traditional store-based transactions in the Rent-A-Center segment. Therefore, we are unable to determine with certainty whether the continuation of this trend toward increased e-commerce transactions will have a significant impact to our financial statements in future periods or be favorable or unfavorable to our financial results.

Current wording

Rent-A-Center e-commerce revenue. In recent years, e-commerce revenues increased as a percentage of total rentals and fees revenue in our Rent-A-Center segment. For the three months ended March 31, 2025 and 2024, e-commerce revenues represented approximately 27% and 26% of total lease-to-own revenues, respectively. Due to recent trends in consumer shopping behaviors and expectations, we believe e-commerce solutions are an important part of our lease-to-own offering. However, we are unable to quantify the extent to which e-commerce revenues are incremental compared to what our overall revenues would have been in the absence of those e-commerce transactions. In addition, the profitability of e-commerce transactions can be impacted by different merchandise loss factors compared to traditional store-based transactions in the Rent-A-Center segment. Therefore, we are unable to determine with certainty whether the continuation of this trend toward increased e-commerce transactions will have a significant impact to our financial statements in future periods or be favorable or unfavorable to our financial results.

Previous wording

The following discussion focuses on our results of operations and our liquidity and capital resources. You should read this discussion in conjunction with the condensed consolidated financial statements and notes thereto for the nine months ended September 30, 2024 included in Part I, Item I of this Quarterly Report on Form 10-Q.

Current wording

The following discussion focuses on our results of operations and our liquidity and capital resources. You should read this discussion in conjunction with the condensed consolidated financial statements and notes thereto for the three months ended March 31, 2025 included in Part I, Item I of this Quarterly Report on Form 10-Q.

Previous wording

Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Rent-A-Center stores and e-commerce platform at the end of any given period.

Current wording

Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Company-owned Rent-A-Center lease-to-own stores and e-commerce platform at the end of any given period.

Previous wording

Same Store Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Rent-A-Center stores that were operated by us for 13 months or more at the end of any given period. The Company excludes from the same store base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store base in the 30th full month following account transfer.

Current wording

Same Store Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Company-owned Rent-A-Center lease-to-own stores that were operated by us for 13 months or more at the end of any given period. The Company excludes from the same store base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store base in the 30th full month following account transfer.

Previous wording

Same Store Sales: Same store sales generally represents revenue earned in Rent-A-Center stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period. The Company excludes from the same store sales base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store sales base in the 30th full month following account transfer.

Current wording

Same Store Sales: Same store sales generally represents revenue earned in Company-owned Rent-A-Center stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period. The Company excludes from the same store sales base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store sales base in the 30th full month following account transfer.

Previous wording

Lease Charge-Offs (“LCOs”) (previously referred to as “skip / stolen losses”): Represents charge-offs of the net book value of unrecoverable on-rent merchandise with lease-to-own customers who are past due. This is typically expressed as a percentage of revenues for the applicable period. For the Rent-A-Center segment, LCOs exclude Get It Now and Home Choice locations.

Current wording

Lease Charge-Offs (“LCOs”) (previously referred to as “skip / stolen losses”): Represents charge-offs of the net book value of unrecoverable on-rent merchandise with lease-to-own customers who are past due. This is typically expressed as a percentage of revenues for the applicable period. For the Rent-A-Center segment, LCOs exclude Get It Now, Home Choice and franchise-owned Rent-A-Center locations.

Previous wording

The following briefly summarizes certain of our financial information for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Current wording

On January 31, 2025 we established a new operating segment following the acquisition of Brigit. Please reference Note 2 for additional discussion of the acquisition. In addition we combined our Franchising segment with our Rent-A-Center segment. Financial information disclosed within this report has been recast for the related prior year period to reflect this change. We report four operating segments: Acima, Rent-A-Center, Brigit and Mexico. The following briefly summarizes certain of our financial information for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Previous wording

During the first nine months of 2024, consolidated revenues and gross profit increased by approximately $267.0 million and $62.5 million, respectively, primarily due to an increase in the Acima segment revenues described below. Operating profit increased by approximately $105.5 million, primarily due to a decrease in other gains and charges of $104.5 million in addition to the increase in gross profit noted above, partially offset by an increase in non-labor operating expenses of $44.5 million, general and administrative expenses of $9.8 million and operating labor of $6.5 million.

Current wording

During the first three months of 2025, consolidated revenues and gross profit increased by approximately $80.4 million and $21.1 million, respectively, primarily due to an increase in the Acima and Brigit segment revenues, partially offset by a decrease in Rent-A-Center segment revenues described below. Operating profit increased by approximately $0.9 million, primarily due to the increase in gross profit noted above and a decrease in operating labor expenses of $8.9 million, partially offset by increases in other gains and charges, general and administrative expenses and non-labor operating expenses of $16.5 million, $8.7 million and $5.2 million, respectively.

Previous wording

The Acima segment revenues increased approximately $256.9 million for the nine months ended September 30, 2024, due to increases in rentals and fees revenues and merchandise sales of $193.9 million and $62.6 million, respectively, primarily resulting from higher GMV. Growth in GMV was primarily due to an increase in third-party retailer locations and productivity, which resulted in more leases per retailer, and expanded direct-to-consumer offerings. Operating profit increased approximately $10.8 million for the nine months ended September 30, 2024, primarily due to an increase in gross profit of $48.6 million and a decrease in other gains and charges of $8.3 million, partially offset by increases in non-labor operating expenses and operating labor costs of approximately $43.8 million and $2.0 million, respectively. See“Segment Performance” below for further discussion of Acima segment operating results for the nine months ended September 30, 2024.

Current wording

The Acima segment revenues increased approximately $75.9 million for the three months ended March 31, 2025, due to increases in rentals and fees revenues and merchandise sales of $53.4 million and $22.4 million, respectively, primarily resulting from higher GMV. Growth in GMV was primarily due to an increase in third-party retailer locations and productivity, which resulted in more leases per retailer, and expanded direct-to-consumer offerings. Operating profit increased approximately $21.8 million for the three months ended March 31, 2025, primarily due to an increase in gross profit of $17.1 million and decreases in operating labor costs, other gains and charges and non-labor operating expenses of $2.0 million, $1.7 million, and $1.3 million, respectively. See“Segment Performance” below for further discussion of Acima segment operating results for the three months ended March 31, 2025.

Previous wording

Revenues in our Rent-A-Center segment increased approximately $14.6 million for the nine months ended September 30, 2024 due to an increase in same store sales of 1.9% driven by an increase in rentals and fees revenues of $16.7 million, partially offset by a decrease in merchandise sales of $1.2 million. Operating profit decreased approximately $0.9 million for the nine months ended September 30, 2024, primarily due to an increase in operating labor and other gains and charges of $3.2 million and $7.0 million, respectively, partially offset by an increase in gross profit of approximately $9.7 million. See“Segment Performance” below for further discussion of Rent-A-Center segment operating results for the nine months ended September 30, 2024.

Current wording

Revenues in our Rent-A-Center segment decreased approximately $25.0 million for the three months ended March 31, 2025, due to an decrease in same store sales of 2.0% driven by decreases in rentals and fees revenues and merchandise sales of $24.6 million and $1.3 million, respectively. Operating profit decreased approximately $11.7 million for the three months ended March 31, 2025, primarily due to the decrease in gross profit of approximately $22.2 million, partially offset by decreases in non-labor operating expenses and operating labor expense of $7.4 million and $7.0 million, respectively. See“Segment Performance” below for further discussion of Rent-A-Center segment operating results for the three months ended March 31, 2025.

Previous wording

The Mexico segment revenues increased by 8.9% for the nine months ended September 30, 2024, contributing to an increase in gross profit of 10.2%, or $4.0 million, primarily due to a 7.6% increase in same store sales driven by an increase in rentals and fees revenues of $4.6 million. Operating profit increased $0.7 million for the nine months ended September 30, 2024, primarily due to the increase in gross profit described above, partially offset by increases in general and administrative expenses and operating labor costs of approximately $2.1 million and $1.3 million, respectively. See“Segment Performance” below for further discussion of Mexico segment operating results for the nine months ended September 30, 2024.

Current wording

The Mexico segment revenues decreased by 11.6% for the three months ended March 31, 2025, contributing to an decrease in gross profit of 11.7%, or $1.7 million, primarily due to negative impacts of exchange rate fluctuations. Operating profit decreased $0.5 million for the three months ended March 31, 2025, primarily due to the decrease in gross profit described above. See“Segment Performance” below for further discussion of Mexico segment operating results for the three months ended March 31, 2025.

Previous wording

Cash flow from operations was $166.7 million for the nine months ended September 30, 2024. As of September 30, 2024, we held $85.1 million of cash and cash equivalents and had outstanding indebtedness of $1.3 billion.

Current wording

Cash flow from operations was $137.7 million for the three months ended March 31, 2025. As of March 31, 2025, we held $107.3 million of cash and cash equivalents and had outstanding indebtedness of $1.5 billion.

Previous wording

Revenue. Total revenues increased by $89.8 million, or 9.2%, to $1,068.9 million for the three months ended September 30, 2024, from $979.1 million for the three months ended September 30, 2023. This increase was primarily due to an increase of approximately $91.0 million in the Acima segment, as discussed further in the section “Segment Performance” below.

Current wording

Revenue. Total revenues increased by $80.4 million, or 7.3%, to $1,176.4 million for the three months ended March 31, 2025, from $1,096.0 million for the three months ended March 31, 2024. This increase was primarily due to an increase of approximately $75.9 million in the Acima segment and the addition of the Brigit segment with $31.9 million in revenues, partially offset by a decrease of approximately $25.0 million in the Rent-A-Center segment, as discussed further in the section “Segment Performance” below.

Previous wording

Cost of Rentals and Fees. Cost of rentals and fees consists primarily of depreciation of rental merchandise. Cost of rentals and fees for the three months ended September 30, 2024 increased by $45.6 million, or 15.4%, to $342.4 million as compared to $296.8 million for the three months ended September 30, 2023. The increase was primarily attributable to an increase of approximately $43.4 million and $2.4 million in the Acima and Rent-A-Center segments, respectively, driven by an increase in rentals and fees revenues. Cost of rentals and fees expressed as a percentage of rentals and fees revenue was 39.0% for the three months ended September 30, 2024, as compared to 36.8% for the three months ended September 30, 2023.

Current wording

Cost of Rentals and Fees. Cost of rentals and fees consists primarily of depreciation of rental merchandise. Cost of rentals and fees for the three months ended March 31, 2025 increased by $25.4 million, or 7.8%, to $352.5 million as compared to $327.1 million for the three months ended March 31, 2024. The increase was primarily attributable to an increase of approximately $31.3 million in the Acima segment, driven by an increase in rentals and fees revenues. Cost of rentals and fees expressed as a percentage of rentals and fees revenue was 39.2% for the three months ended March 31, 2025, as compared to 37.5% for the three months ended March 31, 2024.

Previous wording

Cost of Merchandise Sold. Cost of merchandise sold increased by $91.9 million, or 18.7%, to $584.8 million for the nine months ended September 30, 2024, from $492.9 million for the nine months ended September 30, 2023, primarily attributable to an increase of $88.8 million in the Acima segment, driven primarily by higher merchandise sales. The gross margin percent of merchandise sales decreased to (22.7)% for the nine months ended September 30, 2024, from (18.7)% for the nine months ended September 30, 2023.

Current wording

Cost of Merchandise Sold. Cost of merchandise sold represents the net book value of rental merchandise at time of sale. Cost of merchandise sold increased by $29.9 million, or 12.5%, to $269.7 million for the three months ended March 31, 2025, from $239.8 million for the three months ended March 31, 2024, primarily attributable to an increase of $27.5 million in the Acima segment, driven primarily by higher merchandise sales. The gross margin percent of merchandise sales decreased to (14.2)% for the three months ended March 31, 2025, from (11.4)% for the three months ended March 31, 2024.

Previous wording

Gross Profit. Gross profit increased by $13.9 million, or 2.8%, to $511.1 million for the three months ended September 30, 2024, from $497.2 million for the three months ended September 30, 2023, primarily due to an increase of $14.5 million in the Acima segment, as discussed further in the section “Segment Performance” below. Gross profit as a percentage of total revenue decreased to 47.8% for the three months ended September 30, 2024, as compared to 50.8% for the three months ended September 30, 2023.

Current wording

Gross Profit. Gross profit increased by $21.0 million, or 4.0%, to $550.1 million for the three months ended March 31, 2025, from $529.1 million for the three months ended March 31, 2024, primarily due to the addition of the Brigit segment with $27.9 million in gross profit and an increase of $17.1 million in the Acima segment, partially offset by a decrease of $22.2 million in the Rent-A-Center segment, as discussed further in the section “Segment Performance” below. Gross profit as a percentage of total revenue decreased to 46.8% for the three months ended March 31, 2025, as compared to 48.3% for the three months ended March 31, 2024.

Previous wording

Operating Labor. Operating labor includes all salaries and wages paid to operational employees and district managers, together with payroll taxes and benefits. Operating labor increased by $0.5 million, or 0.4%, to $152.6 million for the three months ended September 30, 2024, as compared to $152.1 million for the three months ended September 30, 2023, primarily due to an increase of $0.7 million in the Acima segment. Operating labor expressed as a percentage of total revenue excluding franchise merchandise sales and royalty income and fees was 14.6% for the three months ended September 30, 2024, as compared to 16.0% for the three months ended September 30, 2023.

Current wording

Operating Labor. Operating labor includes all salaries and wages paid to operational employees and district managers, together with payroll taxes and benefits. Operating labor decreased by $8.9 million, or 5.7%, to $149.2 million for the three months ended March 31, 2025, as compared to $158.1 million for the three months ended March 31, 2024, primarily due to a decrease of $7.0 million in the Rent-A-Center segment. Operating labor expressed as a percentage of total revenue was 12.7% for the three months ended March 31, 2025, as compared to 14.4% for the three months ended March 31, 2024.