UPBOUND GROUP, INC.

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•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;

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 non-credit consumer offerings;

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•our ability to protect our proprietary intellectual property;

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•our ability to protect our proprietary intellectual property and to defend against allegations by third parties that any of our products, services or business activities may infringe against their intellectual property rights;

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•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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•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, cybersecurity attacks or similar disruptions;

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•the impact of any breaches in data security or other disturbances to our information technology and other networks;

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•the impact of breaches in data security or other disturbances to our information technology and other networks;

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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.

Current wording

Dividend. On June 3, 2025, we announced that our board of directors approved a quarterly cash dividend of $0.39 per share for the second quarter of 2025. The dividend was paid on July 8, 2025 to our common stockholders of record as of the close of business on June 17, 2025.

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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.

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 and trade policies, and global supply chain disruptions resulting in reduced product availability and rising product costs.

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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.

Current wording

Rent-A-Center e-commerce revenue. In recent years, e-commerce revenues have continued to increase as a percentage of total rentals and fees revenue in our Rent-A-Center segment. For the six months ended June 30, 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 ultimately 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 three months ended March 31, 2025 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 six months ended June 30, 2025 included in Part I, Item I of this Quarterly Report on Form 10-Q.

Previous 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.

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 six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Previous 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.

Current wording

During the first six months of 2025, consolidated revenues and gross profit increased by approximately $161.4 million and $60.9 million, respectively, primarily due to the addition of Brigit segment revenues and an increase in the Acima segment revenues, partially offset by a decrease in Rent-A-Center segment revenues described below. Operating profit decreased by approximately $29.1 million, primarily due to increases in other gains and charges, non-labor operating expenses, and general and administrative expenses of $57.1 million, $31.5 million, and $18.5 million, respectively, partially offset by the increase in gross profit noted above and a decrease in operating labor expenses of $16.0 million.

Previous 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.

Current wording

The Acima segment revenues increased approximately $142.1 million for the six months ended June 30, 2025, due to increases in rentals and fees revenues and merchandise sales of $104.4 million and $37.5 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 $33.8 million for the six months ended June 30, 2025, primarily due to an increase in gross profit of $32.5 million and decreases in operating labor costs and other gains and charges of $4.2 million and $1.7 million, respectively, partially offset by an increase in non-labor operating expenses of $4.2 million. See“Segment Performance” below for further discussion of Acima segment operating results for the six months ended June 30, 2025.

Previous 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.

Current wording

Revenues in our Rent-A-Center segment decreased approximately $60.8 million for the six months ended June 30, 2025, due to a decrease in same store sales of 3.0% driven by decreases in rentals and fees revenues and merchandise sales of $55.8 million and $6.7 million, respectively. Operating profit decreased approximately $20.3 million for the six months ended June 30, 2025, primarily due to the decrease in gross profit of approximately $42.6 million in addition to higher general and administrative expenses of approximately $10.3 million, partially offset by decreases in non-labor operating expenses, operating labor expense and other gains and charges of $14.6 million, $12.7 million and $6.1 million, respectively. See“Segment Performance” below for further discussion of Rent-A-Center segment operating results for the six months ended June 30, 2025.

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The Brigit segment had revenues and operating profit of $31.9 million and $8.8 million, respectively, since the Closing Date. See“Segment Performance” below for further discussion of Brigit segment operating results for the three months ended March 31, 2025.

Current wording

The Brigit segment had revenues and operating profit of $83.8 million and $19.3 million, respectively, since the Closing Date. See“Segment Performance” below for further discussion of Brigit segment operating results for the six months ended June 30, 2025.

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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.

Current wording

The Mexico segment revenues, gross profit and operating profit decreased by 8.9%, 9.3%, and 2.9% for the six months ended June 30, 2025, respectively, primarily due to negative impacts of exchange rate fluctuations. See“Segment Performance” below for further discussion of Mexico segment operating results for the six months ended June 30, 2025.

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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.

Current wording

Cash flow from operations was $145.6 million for the six months ended June 30, 2025. As of June 30, 2025, we held $106.8 million of cash and cash equivalents and had outstanding indebtedness of $1.6 billion.

Previous 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.

Current wording

Revenue. Total revenues increased by $81.0 million, or 7.5%, to $1,157.5 million for the three months ended June 30, 2025, from $1,076.5 million for the three months ended June 30, 2024. This increase was primarily due to an increase of approximately $66.2 million in the Acima segment and the addition of the Brigit segment with $51.9 million in revenues, partially offset by a decrease of approximately $35.7 million in the Rent-A-Center segment, as discussed further in the “Segment Performance” section 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 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.

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 June 30, 2025 increased by $19.5 million, or 5.8%, to $358.1 million as compared to $338.6 million for the three months ended June 30, 2024. The increase was primarily attributable to an increase of approximately $30.6 million in the Acima segment, driven by an increase in rentals and fees revenues, partially offset by a decrease of approximately $10.8 million in the Rent-A-Center segment. Cost of rentals and fees expressed as a percentage of rentals and fees revenue increase to 39.6% for the three months ended June 30, 2025, as compared to 38.2% for the three months ended June 30, 2024, primarily due to the continued growth of the Acima segment as a percent of total rentals and fees revenue.

Previous 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.

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 $15.7 million, or 7.6%, to $221.7 million for the three months ended June 30, 2025, from $206.0 million for the three months ended June 30, 2024, primarily attributable to an increase of $20.2 million in the Acima segment, driven primarily by higher merchandise sales, partially offset by a decrease of approximately $4.5 million in the Rent-A-Center segment. The gross margin percent of merchandise sales decreased to (15.3)% for the three months ended June 30, 2025, from (12.8)% for the three months ended June 30, 2024.

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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.

Current wording

Gross Profit. Gross profit increased by $39.8 million, or 7.5%, to $571.8 million for the three months ended June 30, 2025, from $532.0 million for the three months ended June 30, 2024, primarily due to the addition of the Brigit segment with $45.9 million in gross profit and an increase of $15.4 million in the Acima segment, partially offset by a decrease of $20.4 million in the Rent-A-Center segment, as discussed further in the section “Segment Performance” below. Gross profit as a percentage of total revenue was 49.4% for both the three months ended June 30, 2025 and 2024.

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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.

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 $7.1 million, or 4.5%, to $149.1 million for the three months ended June 30, 2025, as compared to $156.2 million for the three months ended June 30, 2024, primarily due to decreases of $5.7 million and $2.2 million in the Rent-A-Center and Acima segments, respectively, partially offset by the addition of the Brigit segment with $1.1 million in operating labor. Operating labor expressed as a percentage of total revenue was 12.9% for the three months ended June 30, 2025, as compared to 14.5% for the three months ended June 30, 2024.

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Non-Labor Operating Expenses. Non-labor operating expenses include LCOs, occupancy, delivery, advertising, selling, insurance, travel and other operating expenses. Non-labor operating expenses increased by $5.2 million, or 2.4%, to $219.0 million for the three months ended March 31, 2025, as compared to $213.8 million for the three months ended March 31, 2024, primarily due to the addition of the Brigit segment with $14.4 million in non-labor operating expenses, partially offset by a decrease of $7.4 million in the Rent-A-Center segment, primarily attributable to a decrease in corporate-owned store count, resulting from prior year store closures and refranchising. Non-labor operating expenses expressed as a percentage of total revenue was 18.6% for the three months ended March 31, 2025, compared to 19.5% for the three months ended March 31, 2024.

Current wording

Non-Labor Operating Expenses. Non-labor operating expenses include LCOs, occupancy, delivery, advertising, selling, insurance, travel and other operating expenses. Non-labor operating expenses increased by $26.2 million, or 12.8%, to $230.1 million for the three months ended June 30, 2025, as compared to $203.9 million for the three months ended June 30, 2024, primarily due to the addition of the Brigit segment with $28.3 million in non-labor operating expenses and an increase in non-labor operating expense of approximately $5.5 million in the Acima segment, primarily related to an increase in lease charge-off expense, partially offset by a decrease in non-labor operating expenses of $7.2 million in the Rent-A-Center segment, primarily attributable to a decrease in corporate-owned store count, resulting from prior year store closures and refranchising. Non-labor operating expenses expressed as a percentage of total revenue was 19.9% for the three months ended June 30, 2025, compared to 18.9% for the three months ended June 30, 2024.

Previous wording

General and Administrative Expenses. General and administrative expenses include all corporate overhead expenses related to our headquarters such as salaries, payroll taxes and benefits, stock-based compensation, occupancy, administrative and other expenses, as well as salaries and labor costs for our regional directors, divisional vice presidents and executive vice presidents. General and administrative expenses increased by $8.7 million, or 15.8%, to $63.8 million for the three months ended March 31, 2025, as compared to $55.1 million for the three months ended March 31, 2024, primarily due to increases in overhead labor costs. General and administrative expenses expressed as a percentage of total revenue was 5.4% for the three months ended March 31, 2025, compared to 5.0% for the three months ended March 31, 2024.

Current wording

General and Administrative Expenses. General and administrative expenses include all corporate overhead expenses related to our headquarters such as salaries, payroll taxes and benefits, stock-based compensation, occupancy, administrative and other expenses, as well as salaries and labor costs for our regional directors, divisional vice presidents and executive vice presidents. General and administrative expenses increased by $9.8 million, or 18.2%, to $63.4 million for the three months ended June 30, 2025, as compared to $53.6 million for the three months ended June 30, 2024, primarily due to increases in the allowance for doubtful accounts related to franchising trade receivables and the addition of the Brigit segment. General and administrative expenses expressed as a percentage of total revenue was 5.5% for the three months ended June 30, 2025, compared to 5.0% for the three months ended June 30, 2024.

Previous wording

Operating Profit. Operating profit increased by $0.8 million, or 1.4%, to $62.6 million for the three months ended March 31, 2025, as compared to $61.8 million for the three months ended March 31, 2024, primarily due to an increase in gross profit and a decrease in operating labor, partially offset by increases in other gains and charges, general and administrative expenses and non-labor operating expenses, as described above. Operating profit expressed as a percentage of total revenue was 5.3% for the three months ended March 31, 2025, compared to 5.6% for the three months ended March 31, 2024.

Current wording

Operating Profit. Operating profit decreased by $30.0 million, or 37.1%, to $50.7 million for the three months ended June 30, 2025, as compared to $80.7 million for the three months ended June 30, 2024, primarily due to increases in other gains and charges, non-labor operating expenses and general and administrative expenses, partially offset by an increase in gross profit and a decrease in operating labor, as described above. Operating profit expressed as a percentage of total revenue was 4.4% for the three months ended June 30, 2025, compared to 7.5% for the three months ended June 30, 2024.

Previous wording

Income Tax Expense. Income tax expense increased by $5.8 million to $10.7 million for the three months ended March 31, 2025, as compared to $4.9 million for the three months ended March 31, 2024, primarily due to a higher effective tax rate for the three months ended March 31, 2025, attributable to the tax impact on non-deductible expenses related to the Brigit acquisition. Additionally, in the three months ended March 31, 2024 we recorded a favorable adjustment related to foreign deferred tax assets that did not reoccur in the three months ended March 31, 2025.

Current wording

Income Tax Expense. Income tax expense increased by $0.7 million to $18.1 million for the six months ended June 30, 2025, as compared to $17.4 million for the six months ended June 30, 2024, primarily due to a higher effective tax rate for the six months ended June 30, 2025. Additionally, in the six months ended June 30, 2024, we recorded a favorable adjustment related to foreign deferred tax assets that did not reoccur in the six months ended June 30, 2025.

Previous wording

Revenues. The increase in revenues for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, included increases in rentals and fees revenues and merchandise sales revenue of $53.4 million and $22.4 million, respectively, 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 merchant, and expanding direct-to-consumer offerings.

Current wording

Revenues. The increase in revenues for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, were primarily due to increases in rentals and fees revenues of $51.0 million and $104.4 million, respectively, and increases in merchandise sales revenue of $15.1 million and $37.5 million, respectively, 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, in addition to expanded direct-to-consumer offerings.

Previous wording

Gross Profit. Gross profit increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, driven primarily by the increase in revenues described above. Gross profit as a percentage of segment revenues decreased to 29.3% for the three months ended March 31, 2025, compared to 30.2% for the three months ended March 31, 2024, partly due to an increase in merchandise sales resulting from a larger portfolio at the beginning of 2025 compared to 2024, in addition to the conversion of Acceptance Now locations to the Acima Holdings Lease Management platform.

Current wording

Gross Profit. Gross profit increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, driven primarily by the increase in revenues described above. Gross profit as a percentage of segment revenues decreased to 31.5% and 30.4% for the three and six months ended June 30, 2025, compared to 32.5% and 31.3% for the three and six months ended June 30, 2024, primarily due to an increase in merchandise sales as a percent of total revenue.

Previous wording

Operating Profit. Operating profit as a percentage of segment revenues increased to 11.6% for the three months ended March 31, 2025, compared to 9.2% for the three months ended March 31, 2024. The increase in operating profit for the three months ended March 31, 2025 is primarily due to the increase in gross profit and decreases in operating labor, other gains and charges and non-labor operating expenses of approximately $2.0 million, $1.7 million and $1.3 million, respectively. Merchandise losses in our Acima locations due to LCOs, expressed as a percentage of segment revenues, were approximately 8.9% for the three months ended March 31, 2025, compared to 9.6% for the three months ended March 31, 2024. Merchandise losses in our Acima locations due to other merchandise losses, expressed as a percentage of segment revenues, were approximately 0.3% for both the three months ended March 31, 2025 and 2024.

Current wording

Operating Profit. Operating profit as a percentage of segment revenues increased to 13.2% and 12.4% for the three and six months ended June 30, 2025, compared to 12.7% and 10.9% for the three and six months ended June 30, 2024. The increases in operating profit margin were primarily due to increases in gross profit as described above and decreases in operating labor of approximately $2.2 million and $4.2 million for the three and six months ended June 30, 2025, respectively. Merchandise losses in our Acima locations due to LCOs, expressed as a percentage of revenues, were approximately 9.3% and 9.1% for the three and six months ended June 30, 2025, respectively, compared to 9.6% for both the three and six months ended June 30, 2024. Merchandise losses in our Acima locations due to other merchandise losses, expressed as a percentage of revenues, were 0.4% and 0.3% for the three and six months ended June 30, 2025, respectively, and were negligible for both the three and six months ended June 30, 2024. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims.

Previous wording

Gross Profit. Gross profit decreased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, driven primarily by the decrease in revenues described above. Gross profit as a percentage of segment revenues was 66.0% for the three months ended March 31, 2025, as compared to 67.1% for the three months ended March 31, 2024, primarily due to mix-shift changes between lease merchandise product categories.

Current wording

Gross Profit. Gross profit decreased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, driven primarily by the decrease in revenues described above. Gross profit as a percentage of segment revenues was 67.9% and 66.9% for the three and six months ended June 30, 2025, respectively, as compared to 67.1% for both the three and six months ended June 30, 2024.

Previous wording

Operating Profit. Operating profit as a percentage of segment revenues was 13.6% for the three months ended March 31, 2025, compared to 15.2% for the three months ended March 31, 2024. The decrease in operating margin for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily driven by the decrease in gross profit described above. Merchandise losses in our company-owned Rent-A-Center lease-to-own stores due to LCOs, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 4.6% for the three months ended March 31, 2025, compared to 4.7% for the three months ended March 31, 2024. Other merchandise losses in our company-owned Rent-A-Center lease-to-own stores, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 0.8% for the three months ended March 31, 2025, compared to approximately 1.1% for the three months ended March 31, 2024. Other merchandise losses include unrepairable and missing merchandise, and loss/damage waiver claims.

Current wording

Operating Profit. Operating profit as a percentage of segment revenues was 13.5% for both the three and six months ended June 30, 2025, compared to 14.2% and 14.7% for the three and six months ended June 30, 2024, respectively. The decrease in operating profit margin for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, was primarily due to an increase in general and administrative expenses of $6.3 million and $10.3 million for the three and six months ended June 30, 2025, respectively. The increases in general and administrative expenses were primarily driven by increases in the allowance for doubtful accounts related to franchising trade receivables. Merchandise losses in our Rent-A-Center lease-to-own stores due to LCOs, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 4.7% for both the three and six months ended June 30, 2025, compared to 4.2% and 4.5% for the three and six months ended June 30, 2024, respectively. Merchandise losses in our Rent-A-Center lease-to-own stores due to other merchandise losses, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 1.0% and 0.9% for the three and six months ended June 30, 2025, respectively, compared to approximately 1.6% and 1.3% for the three and six months ended June 30, 2024, respectively. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims.

Previous wording

Revenues. Revenues for the three months ended March 31, 2025 included $24.0 million in subscription revenue, $5.7 million in transfer fee revenue and $2.2 million in marketplace revenue.

Current wording

Revenues. Revenues for the three and six months ended June 30, 2025 included $36.3 million and $60.3 million in subscription revenue, $10.9 million and $16.6 million in transfer fee revenue and $4.7 million and $6.8 million in marketplace revenue, respectively.

Previous wording

Operating Profit. Operating profit as a percentage of segment revenues was 27.7% for the three months ended March 31, 2025. Net advance losses expressed as a percentage of total cash advances originated was approximately 2.4% for the three months ended March 31, 2025.

Current wording

Operating Profit. Operating profit as a percentage of segment revenues was 20.2% and 23.0% for the three and six months ended June 30, 2025. Net advance losses expressed as a percentage of total cash advances originated was approximately 2.6% for both the three and six months ended June 30, 2025.

Previous wording

Revenues. Revenues were negatively impacted by exchange rate fluctuations of approximately $3.7 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. On a constant currency basis, revenues for the three months ended March 31, 2025 increased approximately $1.3 million, compared to the three months ended March 31, 2024.

Current wording

Revenues. Revenues were negatively impacted by exchange rate fluctuations of approximately $2.6 million and $6.3 million for the three and six months ended June 30, 2025, respectively, as compared to the three and six months ended June 30, 2024. On a constant currency basis, revenues for the three and six months ended June 30, 2025 increased approximately $1.3 million and $2.6 million, respectively, compared to the three and six months ended June 30, 2024.

Previous wording

Gross Profit. Gross profit was negatively impacted by exchange rate fluctuations of approximately $2.6 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. On a constant currency basis, gross profit for the three months ended March 31, 2025 increased by approximately $0.9 million as compared to the three months ended March 31, 2024. Gross profit as a percentage of segment revenues was 71.5% for the three months ended March 31, 2025, compared to 71.6% for the three months ended March 31, 2024.

Current wording

Gross Profit. Gross profit was negatively impacted by exchange rate fluctuations of approximately $1.9 million and $4.5 million for the three and six months ended June 30, 2025, respectively, as compared to the three and six months ended June 30, 2024. On a constant currency basis, gross profit for the three and six months ended June 30, 2025 increased by approximately $0.9 million and $1.7 million, respectively, as compared to the three and six months ended June 30, 2024. Gross profit as a percentage of segment revenues was 71.4% for both the three and six months ended June 30, 2025, compared to 71.9% and 71.7% for the three and six months ended June 30, 2024, respectively.

Previous wording

Operating Profit. Operating profit was negatively impacted by exchange rate fluctuations of approximately $0.3 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. On a constant currency basis, operating profit for the three months ended March 31, 2025 decreased by approximately $0.2 million as compared to the three months ended March 31, 2024. Operating profit as a percentage of segment revenues decreased to 6.7% for the three months ended March 31, 2025, compared to 8.2% for the three months ended March 31, 2024, primarily due to lower LCOs.

Current wording

Operating Profit. Operating profit was negatively impacted by exchange rate fluctuations of approximately $0.3 million and $0.5 million for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024. On a constant currency basis, operating profit for the three and six months ended June 30, 2025 increased by approximately $0.7 million and $0.4 million, respectively, as compared to the three and six months ended June 30, 2024. Operating profit as a percentage of segment revenues increased to 9.9% and 8.4% for the three and six months ended June 30, 2025, respectively, compared to 7.5% and 7.9% for the three and six months ended June 30, 2024, respectively, primarily due to lower LCOs.

Previous wording

Overview. For the three months ended March 31, 2025, we generated $137.7 million in operating cash flow, used cash in the amount of $274.9 million for the Brigit acquisition, $237.2 million for debt repayments, $21.4 million for dividends and $10.6 million for capital expenditures, and had cash proceeds from indebtedness of $459.0 million. We ended the first quarter of 2025 with $107.3 million of cash and cash equivalents and outstanding indebtedness of $1.5 billion.

Current wording

Overview. For the six months ended June 30, 2025, we generated $145.6 million in operating cash flow, used cash in the amount of $294.4 million for debt repayments, $276.2 million for acquisitions, $43.5 million for dividends and $28.8 million for capital expenditures, and had cash proceeds from indebtedness of $549.0 million. We ended the second quarter of 2025 with $106.8 million of cash and cash equivalents and outstanding indebtedness of $1.6 billion.

Previous wording

Analysis of Cash Flow. Cash provided by operating activities increased by $92.3 million to $137.7 million for the three months ended March 31, 2025, from $45.4 million for the three months ended March 31, 2024, primarily due the decrease in Rent-A-Center segment corporate-owned store count, resulting from prior year store closures and refranchising, and decreases in inventory purchases and incentive compensation payouts for the three months ended March 31, 2025.

Current wording

Analysis of Cash Flow. Cash provided by operating activities increased by $85.1 million to $145.6 million for the six months ended June 30, 2025, from $60.5 million for the six months ended June 30, 2024, primarily due to the acquisition of Brigit, timing of vendor payments in previous years, decreases in Rent-A-Center segment inventory purchases due to lower corporate-owned store count, and lower incentive compensation payouts, partially offset by higher inventory purchases at Acima driven by increased consumer demand.

Previous wording

Cash used in investing activities increased by $273.7 million to $285.4 million for the three months ended March 31, 2025, compared to $11.7 million for the three months ended March 31, 2024, primarily due to payment of cash consideration for acquisition of Brigit of $274.9 million for the three months ended March 31, 2025, partially offset by a decrease in investment in store-related assets in our Rent-A-Center segment.

Current wording

Cash used in investing activities increased by $278.8 million to $304.9 million for the six months ended June 30, 2025, compared to $26.1 million for the six months ended June 30, 2024, primarily due to payment of cash consideration for the acquisition of Brigit of $275.9 million for the six months ended June 30, 2025.

Previous wording

Cash provided by (used in) financing activities increased by $237.0 million to $194.2 million for the three months ended March 31, 2025, compared to $(42.8) million for the three months ended March 31, 2024, primarily due to an increase in borrowings under the ABL Credit Facility of $399.0 million, used to facilitate Brigit acquisition, partially offset by an increase in debt repayments of $158.0 million for the three months ended March 31, 2025.

Current wording

Cash provided by (used in) financing activities increased by $248.9 million to $204.6 million for the six months ended June 30, 2025, compared to $(44.3) million for the six months ended June 30, 2024, primarily due to an increase in borrowings under the ABL Credit Facility of $384.0 million, used to facilitate the Brigit acquisition, partially offset by an increase in debt repayments of $134.0 million for the six months ended June 30, 2025.

Previous wording

We generally utilize our ABL Credit Facility for the issuance of letters of credit, as well as to manage normal fluctuations in operational cash flow caused by the timing of cash receipts. In that regard, we may from time to time draw funds under the ABL Credit Facility for general corporate purposes. Amounts are drawn as needed due to the timing of cash flows and are generally paid down as cash is generated by our operating activities. We believe cash flow generated from operations and availability under our ABL Credit Facility will be sufficient to fund our operations during the next twelve months. At April 24, 2025, we had approximately $59.3 million in cash on hand, and $134.5 million available under our ABL Credit Facility.

Current wording

We generally utilize our ABL Credit Facility for the issuance of letters of credit, to manage normal fluctuations in operational cash flow caused by the timing of cash payments vs cash receipts, and to potentially fund strategic initiatives including acquisitions. In that regard, we may from time to time draw funds under the ABL Credit Facility for general corporate purposes. Amounts are drawn as needed due to the timing of cash flows and are generally paid down as cash is generated by our operating activities. We believe cash flow generated from operations and availability under our ABL Credit Facility will be sufficient to fund our operations during the next twelve months. At July 24, 2025, we had approximately $44.3 million in cash on hand, and $159.5 million available under our ABL Credit Facility.

Previous wording

Capital Expenditures. We make capital expenditures in order to maintain our existing operations, acquire new capital assets in new and acquired stores and invest in information technology. We spent $10.6 million and $11.8 million on capital expenditures during the three months ended March 31, 2025 and 2024, respectively. The decrease of $1.2 million is primarily due to lower investment in store-related assets in our Rent-A-Center segment.

Current wording

Capital Expenditures. We make capital expenditures in order to maintain our existing operations, acquire new capital assets in new and acquired stores and invest in information technology. We spent $28.8 million and $26.2 million on capital expenditures during the six months ended June 30, 2025 and 2024, respectively. The increase of $2.6 million is primarily due to higher investment in store-related assets in our Rent-A-Center segment.