UPBOUND GROUP, INC.

Previous wording

We report financial operating performance under four operating segments, including our Acima segment, which includes our virtual and staffed business models; our Rent-A-Center segment, which represents our company-owned stores and e-commerce platform through rentacenter.com; and our Mexico and Franchising segments.

Current wording

We report financial operations under four operating segments, including our Acima segment, which includes our virtual and staffed business models; our Rent-A-Center segment, which includes our company-owned stores, franchise stores, and e-commerce platform through rentacenter.com; and our Brigit and Mexico segments.

Previous wording

Brigit Acquisition. On January 31, 2025, we completed the acquisition of Brigit for total consideration of up to $460 million, consisting of approximately $278.7 million in cash consideration and approximately 2.7 million shares of Upbound Group, Inc. common stock at closing, $75 million in deferred consideration, payable in multiple installments, and an earnout of up to $60 million based on the achievement of certain financial performance metrics for the Brigit business in 2026. Brigit is a holistic financial health technology company that has helped millions of Americans budget better, access their earned wages before their regularly scheduled payday, build their credit through savings, protect themselves from identity theft, and find ways to earn and save money. Its mission is to help everyday Americans build a better financial future.

Current wording

Brigit Acquisition. On January 31, 2025, we completed the acquisition of Brigit for total consideration of up to $460 million, consisting of approximately $278.7 million in cash consideration and approximately 2.7 million shares of Upbound Group, Inc. common stock at closing, $75 million in deferred consideration, payable in multiple installments, and an earnout of up to $60 million based on the achievement of certain financial performance metrics for the Brigit business in 2026. Brigit is a holistic financial health technology company that has helped millions of Americans improve their financial health and literacy, find ways to earn and save money, access their earned wages before their regularly scheduled payday, build their credit through savings, and protect themselves from identity theft. Its mission is to help everyday Americans build a better financial future.

Previous wording

•On February 20, 2025, we announced that Mitchell E. Fadel will retire from his position as Chief Executive Officer and as a member of the Board of Directors, effective June 1, 2025. Fahmi Karam will succeed Mr. Fadel as Chief Executive Officer and a member of the Board of Directors at that time. Mr. Karam has served as Chief Financial Officer since October 2022.

Current wording

•On June 1, 2025, Mitchell E. Fadel retired from his position as Chief Executive Officer and as a member of the Board of Directors. Fahmi Karam, our former Chief Financial Officer, succeeded Mr. Fadel as Chief Executive Officer and a member of the Board of Directors.

Previous 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, 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.

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 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 our businesses have historically remained resilient through various economic cycles, the full extent to which our risk management strategy and these macroeconomic trends (including consumer spending and payment behavior) may impact the Company 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 years ended December 31, 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 have continued to increase as a percentage of total rentals and fees revenue in our Rent-A-Center segment. For the years ended December 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 on our financial statements in future periods or be ultimately favorable or unfavorable to our financial results.

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 lease-to-own 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 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.

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

During the year ended December 31, 2024, consolidated revenues and gross profit increased by approximately $328.2 million and $58.1 million, respectively, primarily due to an increase in the Acima segment revenues described below. Operating profit increased by approximately $128.7 million, primarily due to decreases in other gains and charges of $112.3 million and operating labor expenses of $4.3 million in addition to the increase in gross profit noted above, partially offset by increases in non-labor operating expenses of $35.7 million and general and administrative expense of $10.8 million.

Current wording

During the year ended December 31, 2025, consolidated revenues and gross profit increased by approximately $374.5 million and $191.3 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 $68.3 million, primarily due to increases in non-labor operating expenses, other gains and charges and general and administrative expenses of $138.3 million, $107.6 million and $19.5 million, respectively, partially offset by the increase in gross profit noted above and a decrease in operating labor expenses of $6.9 million.

Previous wording

The Acima segment revenues increased approximately by $330.1 million for the year ended December 31, 2024, due to increases in rentals and fees revenues and merchandise sales of $244.9 million and $84.1 million, respectively, primarily resulting from an increase in GMV of 17.1%. 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 $20.1 million for the year ended December 31, 2024, primarily due to an increase in gross profit of $58.2 million and a decrease in other gains and charges of $11.6 million, partially offset by an increase in non-labor operating expenses of approximately $49.2 million. See “Segment Performance” below for further discussion of Acima segment operating results for the year ended December 31, 2024.

Current wording

The Acima segment revenues increased approximately $251.0 million for the year ended December 31, 2025, due to increases in rentals and fees revenues and merchandise sales of $192.5 million and $59.0 million, respectively, primarily resulting from higher GMV of 8.6%. 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 $39.4 million for the year ended December 31, 2025, primarily due to an increase in gross profit of $60.3 million and decreases in operating labor costs and other gains and charges of $4.4 million and $1.7 million, respectively, partially offset by an increase in non-labor operating expenses of $26.4 million. See “Segment Performance” below for further discussion of Acima segment operating results for the year ended December 31, 2025.

Previous wording

Revenues in our Rent-A-Center segment decreased approximately $0.7 million for the year ended December 31, 2024, primarily due to decreases in merchandise sales and installment sales of $1.0 million and $2.7 million, partially offset by an increase in rentals and fees revenue of $3.1 million, resulting from an increase in same store sales of 1.5%. Operating profit increased approximately $6.9 million for the year ended December 31, 2024, primarily due to decreases in non-labor operating expenses and operating labor expenses of $13.4 million and $5.7 million, respectively partially offset by an increase in other gains and charges of $7.3 million and a decrease in gross profit of $5.2 million. See“Segment Performance” below for further discussion of Rent-A-Center segment operating results for the year ended December 31, 2024.

Current wording

Revenues in our Rent-A-Center segment decreased approximately $83.2 million for the year ended December 31, 2025, due to decreases in same store sales of 2.2% and lower corporate-owned store count as a result of prior year store closures, resulting in decreases in rentals and fees revenues and merchandise sales of $79.9 million and $3.5 million, respectively. Operating profit decreased approximately $47.6 million for the year ended December 31, 2025, primarily due to a decrease in gross profit of approximately $51.1 million driven by lower revenues, in addition to higher general and administrative expenses and other gains and charges of approximately $9.1 million and $6.2 million, respectively, partially offset by decreases in non-labor operating expenses and operating labor expense of approximately $13.2 million and $6.4 million, respectively. See“Segment Performance” below for further discussion of Rent-A-Center segment operating results for the year ended December 31, 2025.

Previous wording

Cash flow from operations was $104.7 million for the year ended December 31, 2024 As of December 31, 2024, we held $60.9 million of cash and cash equivalents and had outstanding indebtedness of $1.3 billion.

Current wording

Cash flow from operations was $305.6 million for the year ended December 31, 2025. As of December 31, 2025, we held $120.5 million of cash and cash equivalents and had outstanding indebtedness of $1.6 billion.

Previous wording

Revenue. Total revenue increased by $328.2 million, or 8.2%, to $4,320.6 million for the year ended December 31, 2024, from $3,992.4 million for 2023. The increase was primarily due to an increase of approximately $330.1 million in the Acima segment, as discussed further in the section “Segment Performance” below.

Current wording

Revenue. Total revenue increased by $374.5 million, or 8.7%, to $4,695.1 million for the year ended December 31, 2025, from $4,320.6 million for 2024, primarily due to an increase of approximately $251.0 million in the Acima segment and the addition of the Brigit segment with $206.0 million in revenue, partially offset by a decrease of approximately $83.2 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 year ended December 31, 2024 increased by $156.3 million, or 13.0%, to $1,355.5 million, as compared to $1,199.2 million in 2023. This increase in cost of rentals and fees was primarily attributable to an increase of $156.7 million in the Acima segment, driven by an increase in rentals and fees revenue. Cost of rentals and fees expressed as a percentage of rentals and fees revenue increased to 38.6% for the year ended December 31, 2024 as compared to 36.8% in 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 year ended December 31, 2025 increased by $86.3 million, or 6.4%, to $1,441.8 million, as compared to $1,355.5 million in 2024. The increase was primarily attributable to an increase of approximately $116.5 million in the Acima segment driven by an increase in rentals and fees revenues, partially offset by a decrease of approximately $30.8 million in the Rent-A-Center segment resulting from a decrease in rentals and fees revenue. Cost of rentals and fees expressed as a percentage of rentals and fees revenue increased to 39.8% for the year ended December 31, 2025, as compared to 38.6% in 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 $121.0 million, or 18.5%, to $773.9 million for the year ended December 31, 2024, from $652.9 million in 2023, primarily attributable to an increase of $115.3 million in the Acima segment, driven by an increase in merchandise sales. The gross margin percent of merchandise sales decreased to (23.9)% for the year ended December 31, 2024, from (20.5)% in 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 $72.9 million, or 8.2%, to $957.6 million for the year ended December 31, 2025, from $884.7 million in 2024, primarily attributable to an increase of $74.3 million in the Acima segment primarily driven by higher merchandise sales. The gross margin percent of merchandise sales decreased to (15.5)% for the year ended December 31, 2025, from (14.3)% in 2024 primarily due to the conversion of Acceptance Now locations to the Acima Holdings Lease Management platform.

Previous wording

Gross Profit. Gross profit increased by $58.1 million, or 2.9%, to $2,080.4 million for the year ended December 31, 2024, from $2,022.3 million in 2023, primarily due to an increase of $58.2 million in the Acima segment, as discussed further in the section “Segment Performance” below. Gross profit as a percentage of total revenue decreased to 48.1% in 2024, as compared to 50.7% in 2023.

Current wording

Gross Profit. Gross profit increased by $191.3 million, or 9.2%, to $2,271.7 million for the year ended December 31, 2025, from $2,080.4 million in 2024, primarily due to the addition of the Brigit segment with $182.1 million in gross profit and an increase of $60.3 million in the Acima segment, partially offset by a decrease of approximately $51.1 million in the Rent-A-Center segment, as discussed further in the “Segment Performance” section below. Gross profit as a percentage of total revenue increased to 48.4% in 2025, as compared to 48.1% in 2024.

Previous wording

Operating Labor. Operating labor includes all salaries and wages paid to store operational employees and district managers, together with payroll taxes and benefits. Operating labor decreased by $4.3 million, or 0.7%, to $609.2 million for the year ended December 31, 2024, as compared to $613.5 million in 2023, primarily attributable to a decrease of $5.7 million in the Rent-A-Center segment, partially offset by an increase of $1.2 million in the Mexico segment. Operating labor expressed as a percentage of total revenue excluding franchise merchandise sales and royalty income and fees was 14.5% for the year ended December 31, 2024, as compared to 15.8% in 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 $6.9 million, or 1.1%, to $602.3 million for the year ended December 31, 2025, as compared to $609.2 million in 2024, primarily due to decreases of $6.4 million and $4.4 million in the Rent-A-Center and Acima segments, respectively, partially offset by the addition of the Brigit segment with $4.0 million in operating labor. The decrease in Rent-A-Center operating labor was primarily attributable to a decrease in corporate-owned store count, resulting from prior year store closures and refranchising. Operating labor expressed as a percentage of total revenue was 12.8% for the year ended December 31, 2025, as compared to 14.1% in 2024.

Previous 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 $35.7 million, or 4.6%, to $811.6 million for the year ended December 31, 2024, as compared to $775.9 million in 2023, due to an increase of $49.2 million in the Acima segment, primarily attributable to an increase of $35.8 million in LCOs and other merchandise losses. Non-labor operating expenses expressed as a percentage of total revenue excluding franchise merchandise sales and royalty income and fees were 19.3% for the year ended December 31, 2024, compared to 20.0% in 2023.

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 $138.3 million, or 17.0%, to $949.9 million for the year ended December 31, 2025, as compared to $811.6 million in 2024, primarily due to the addition of the Brigit segment with $124.5 million in non-labor operating expenses and an increase of approximately $26.4 million in the Acima segment primarily related to an increase of $27.2 million in lease charge-off expense, partially offset by a decrease of approximately $13.2 million in the Rent-A-Center segment, primarily attributable to decreases of $11.3 million in lease-to-own store merchandise losses. Non-labor operating expenses expressed as a percentage of total revenue was 20.2% for the year ended December 31, 2025, as compared to 18.8% in 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 $10.8 million, or 5.3%, to $212.5 million for the year ended December 31, 2024, as compared to $201.7 million in 2023, primarily due to higher compensation. General and administrative expenses expressed as a percentage of total revenue were 4.9% for the year ended December 31, 2024, compared to 5.1% in 2023.

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 $19.5 million, or 9.2%, to $232.0 million for the year ended December 31, 2025, as compared to $212.5 million in 2024, primarily due to an increase in the allowance for doubtful accounts of $9.5 million related to franchising trade receivables, and the addition of the Brigit segment with $7.3 million in general and administrative expenses. General and administrative expenses expressed as a percentage of total revenue were 4.9% for both the years ended December 31, 2025 and 2024.

Previous wording

Other gains and charges. Other gains and charges decreased by $112.3 million to $104.6 million in 2024, as compared to $216.9 million in 2023. The decrease in other gains and charges was primarily driven by a decrease of $132.6 million in stock compensation expense recognized for the year ended December 31, 2024, related to the restricted stock issued in connection with the Acima Holding acquisition. The decrease to other gains and charges was also due to a decrease of $11.6 million in amortization of acquired intangible assets and $3.1 million in interest income on tax refunds related to prior year returns received in 2023, partially offset by increases of $15.4 million in estimated legal accruals and legal expenses, $5.9 million in lease impairment charges and fixed asset disposal, $5.1 million in accelerated stock compensation expense related to our letter agreement with the Company’s Chief Executive Officer, $3.1 million in accelerated software depreciation, and $3.7 million in acquisition transaction costs. See Note N of our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our other gains and charges.

Current wording

Other gains and charges. Other gains and charges increased by $107.6 million to $212.2 million in 2025, as compared to $104.6 million in 2024. The increase in other gains and charges was driven primarily by increases of $60.1 million related to the Brigit acquisition, including depreciation and amortization of the fair value of acquired software and intangible assets, stock compensation expense related to the vesting of a portion of the equity consideration, other compensation and transaction costs, $60.7 million in estimated legal accruals and related litigation and defense expenses described further in Note M of our consolidated financial statements and $7.0 million in lease impairment charges and fixed asset disposals, partially offset by decreases of $6.1 million in accelerated software depreciation, $4.9 million in stock compensation expense related to restricted stock issued in connection with the Acima Holdings acquisition, $3.5 million in accelerated stock compensation expense related to our letter agreement with the Company’s former Chief Executive Officer and $1.7 million in depreciation and amortization of acquired software and intangible assets in connection with the Acima Holdings acquisition for the year ended December 31, 2025.

Previous wording

Operating Profit. Operating profit increased $128.7 million, or 79.1%, to $291.6 million for the year ended December 31, 2024, as compared to $162.9 million in 2023, primarily due to an increase in gross profit and decreases in other gains and charges and labor operating expenses, partially offset by increases in non-labor operating and general and administrative expenses as described above. Operating profit expressed as a percentage of total revenue was 6.7% for the year ended December 31, 2024, compared to 4.1% in 2023.

Current wording

Operating Profit. Operating profit decreased by $68.3 million, or 23.4%, to $223.3 million for the year ended December 31, 2025, as compared to $291.6 million in 2024, primarily due to the increases in non-labor operating expenses, other gains and charges and general and administrative expenses, partially offset by an increase in gross profit and decreases in operating labor, as described above. Operating profit expressed as a percentage of total revenue was 4.8% for the year ended December 31, 2025, compared to 6.7% in 2024.

Previous wording

Income Tax Expense. Income tax expense decreased by $3.9 million to $54.1 million for the year ended December 31, 2024, as compared to $58.0 million in 2023. The effective tax rate of 30.5% for the year ended December 31, 2024, compared to 109.8% in 2023, decreased primarily due to a lower tax impact of stock compensation expense related to stock consideration issued to the former owners of Acima Holdings in the form of restricted stock awards, compared to the prior year period. See Note J of our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our effective tax rate.

Current wording

Income Tax Expense. Income tax expense decreased by $19.3 million to $34.8 million for the year ended December 31, 2025, as compared to $54.1 million in 2024, primarily due to the decrease in earnings before income taxes for the year ended December 31, 2025 compared to 2024, partially offset by a higher effective tax rate for the year ended December 31, 2025 attributable to the tax impact on non-deductible expenses related to the Brigit acquisition. See Note J of our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our effective tax rate.

Previous wording

Revenues. The increase in revenues for the year ended December 31, 2024 compared to 2023 was primarily due to increases in rentals and fees revenue and merchandise sales revenue of $244.9 million and $84.1 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, in addition to expanded direct-to-consumer offerings.

Current wording

Revenues. The increase in revenues for the year ended December 31, 2025, as compared to 2024, was primarily due to increases in rentals and fees revenues and merchandise sales revenue of $192.5 million and $59.0 million, respectively, resulting from higher GMV. Growth in GMV was primarily due to an increase in new 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 year ended December 31, 2024 compared to 2023, driven primarily by the increase in revenues described above. Gross profit as a percentage of segment revenues decreased to 31.1% for the year ended December 31, 2024, compared to 33.4% in 2023, primarily due to an increase in merchandise sales as a percent of total revenue, and the conversion of Acceptance Now locations to the Acima platform.

Current wording

Gross Profit. Gross profit increased for the year ended December 31, 2025, as compared to 2024, driven primarily by the increase in revenues described above. Gross profit as a percentage of segment revenues decreased to 30.4% for the year ended December 31, 2025, compared to 31.1% in 2024, primarily due to the conversion of Acceptance Now locations to the Acima Holdings Lease Management platform.

Previous wording

Operating Profit. Operating profit as a percentage of segment revenues decreased to 11.3% for the year ended December 31, 2024, compared to 12.2% in 2023. The decrease in operating profit margin was primarily due to increases in non-labor operating expense of approximately $49.2 million for the year ended December 31, 2024 compared to 2023 and decreases in gross profit margin described above. The increase in non-labor operating expense is primarily attributable to an increase of $35.8 million in LCOs and other merchandise losses for the year ended December 31, 2024 compared to 2023. Merchandise losses in our Acima locations due to LCOs, expressed as a percentage of revenues, were approximately 9.4% in 2024, compared to 9.3% in 2023. Merchandise losses in our Acima locations due to other merchandise losses, expressed as a percentage of revenues, were 0.2% in 2024, compared to 0.1% in 2023. 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 increased to 11.7% for the year ended December 31, 2025, compared to 11.3% in 2024. The increase in operating profit margin is primarily due to higher revenues described above, resulting in a decrease of 1.2% in operating expenses as a percentage of total revenue, partially offset by the increase in gross profit margin described above. Merchandise losses in our Acima locations due to LCOs, expressed as a percentage of revenues, were approximately 9.5% in 2025, compared to 9.4% in 2024. Merchandise losses in our Acima locations due to other merchandise losses, expressed as a percentage of revenues, were 0.4% in 2025, as compared to 0.2% in 2024. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims.

Previous wording

Gross Profit. Gross profit decreased in 2024, driven primarily by the decrease in revenues described above. Gross profit as a percentage of segment revenues decreased to 69.4% in 2024 from 69.6% in 2023, primarily due to mix-shift changes between lease merchandise product categories.

Current wording

Gross Profit. Gross profit decreased in 2025, as compared to 2024, driven primarily by the decrease in revenues described above. Gross profit as a percentage of segment revenues increased to 67.0% in 2025 from 66.7% in 2024, primarily due to mix-shift changes between lease merchandise product categories.

Previous wording

Operating Profit. Operating profit as a percentage of segment revenues was 15.0% for 2024 compared to 14.7% for 2023. The increase in operating profit margin for the year ended December 31, 2024 was primarily due to a decrease in non-labor operating expenses of $13.4 million, which includes the net gain on refranchise sale of approximately $3.1 million, and decrease in operating labor expenses of approximately $5.7 million, partially offset by increase in other gains and charges of $7.3 million. 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 the year ended December 31, 2024, compared to 4.5% in 2023. 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 1.3% for the year ended December 31, 2024, compared to 1.4% in 2023. 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 13.2% for 2025, as compared to 15.0% for 2024. The decrease in operating profit margin for the year ended December 31, 2025 was primarily due to an increase in other gains and charges of $6.2 million, primarily due to impairment charges and shutdown costs related to closure of refranchised locations. The decrease in operating profit margin for the year ended December 31, 2025 was also attributable to an increase in general and administrative expenses of $9.1 million, primarily driven by increase 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 years ended December 31, 2025 and 2024. 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% for the year ended December 31, 2025, compared to 1.3% in 2024. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims.

Previous wording

Revenues. Revenues for 2024 were negatively impacted by exchange rate fluctuations of approximately $2.2 million, as compared to 2023. On a constant currency basis, revenues for the year ended December 31, 2024 increased approximately $6.3 million, compared to 2023.

Current wording

Revenues. Exchange rate fluctuations negatively impacted revenues by approximately $4.2 million for the year ended December 31, 2025, as compared to 2024. On a constant currency basis, revenues for the year ended December 31, 2025 increased approximately $4.9 million, as compared to 2024.

Previous wording

Gross Profit. Gross profit for the year ended December 31, 2024 was negatively impacted by exchange rate fluctuations of approximately $1.6 million, as compared to 2023. On a constant currency basis, gross profit for the year ended December 31, 2024 increased by approximately $5.2 million, compared to 2023. Gross profit as a percentage of segment revenues increased to 71.7% in 2024, compared to 70.8% in 2023.

Current wording

Gross Profit. Exchange rate fluctuations negatively impacted gross profit by approximately $3.1 million for the year ended December 31, 2025, as compared to 2024. On a constant currency basis, gross profit for the year ended December 31, 2025 increased by approximately $3.2 million, as compared to 2024. Gross profit as a percentage of segment revenues was 71.2% for the year ended December 31, 2025, as compared to 71.7% for 2024.

Previous wording

Operating Profit. Operating profit for the year ended December 31, 2024 was minimally impacted by exchange rate fluctuations, as compared to 2023. On a constant currency basis, the decrease in operating profit was less than $0.1 million for the year ended December 31, 2024, as compared to 2023. Operating profit as a percentage of segment revenues decreased to 6.1% in 2024, compared to 6.5% in 2023.

Current wording

Operating Profit. Exchange rate fluctuations negatively impacted operating profit by approximately $0.4 million for the year ended December 31, 2025, as compared to 2024. On a constant currency basis, operating profit for the year ended December 31, 2025 increased by approximately $1.0 million, as compared to 2024. Operating profit as a percentage of segment revenues increased to 6.9% for the year ended December 31, 2025, as compared to 6.1% for 2024.

Previous wording

Overview. For the year ended December 31, 2024, we generated $104.7 million in operating cash flow and used cash in the amount of $323.8 million for debt repayments, $82.3 million for dividends and $56.3 million for capital expenditures, and had cash proceeds from indebtedness of $320.0 million and proceeds from sale of property assets of $18.7 million. We ended the year with $60.9 million of cash and cash equivalents and outstanding indebtedness of $1.3 billion. In connection with the Merger, we incurred additional indebtedness in January 2025, as discussed in the “Senior Debt” section below.

Current wording

Overview. For the year ended December 31, 2025, we generated $305.6 million in operating cash flow, used cash in the amount of $516.6 million for debt repayments, $278.9 million for acquisitions, $87.9 million for dividends, $66.9 million for capital expenditures, and $58.2 million for customer cash advance originations net of collections, and had cash proceeds from indebtedness of $776.0 million. We ended the year with $120.5 million of cash and cash equivalents and outstanding indebtedness of $1.6 billion.

Previous wording

Analysis of Cash Flow. Cash provided by operating activities decreased by $95.6 million to $104.7 million in 2024 from $200.3 million in 2023, primarily due to an increase in our inventory purchases driven by increased consumer demand.

Current wording

Analysis of Cash Flow. Cash provided by operating activities increased by $200.9 million to $305.6 million in 2025, from $104.7 million in 2024, primarily due to an increase of approximately $180.7 million in cash provided by net earnings (net earnings less adjustments to reconcile net earnings to net cash provided by operating activities), which was benefited by $30.7 million in operating income generated by the Brigit operating segment following the acquisition; a year-over-year decrease of approximately $82.3 million in payments of outstanding inventory and trade payables primarily due to higher payments of outstanding inventory payables made in early 2024; and a year-over-year decrease in income taxes paid, net of refunds, of approximately $32.6 million. . These impacts were partially offset by higher inventory purchases of approximately $165.4 million, net of approximately $47.1 million of customer lease buyouts through early purchase options, lease charge-offs, and other merchandise losses, driven by increased consumer demand.

Previous wording

Cash used in financing activities decreased to $93.5 million in 2024, compared to $202.1 million in 2023, primarily due to an increase in borrowings under the ABL Credit Facility of $250.0 million and a decrease in share repurchases of $50.0 million, partially offset by an increase in debt repayments of $185.1 million.

Current wording

Cash provided by (used in) financing activities increased by $250.0 million to $156.5 million in 2025, compared to $(93.5) million in 2024, primarily due to an increase in borrowings under the ABL Credit Facility of $456.0 million, partially offset by an increase in debt repayments of $192.8 million for the year ended December 31, 2025.

Previous wording

Liquidity Requirements. Our primary liquidity requirements are for rental merchandise purchases, which are impacted by consumer demand for our lease-to-own solutions. Other capital requirements include expenditures for technology and property assets, and debt service. Our primary source of liquidity has been cash provided by operations.

Current wording

Liquidity Requirements. Our primary liquidity requirements are for rental merchandise purchases in our Acima and Rent-A-Center segments, which are impacted by consumer demand for our lease-to-own solutions, and customer advances in our Brigit segment. Other capital requirements include expenditures for technology and property assets, and debt service. Our primary source of liquidity has been cash provided by operations.

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 February 18, 2025, we had approximately $113.7 million in cash on hand. Please reference the Senior Debt section below for additional discussion of 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 relative to 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 February 13, 2026, we had approximately $102.4 million in cash on hand and $216.6 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 $56.3 million, $53.4 million and $61.4 million on capital expenditures in the years 2024, 2023 and 2022, respectively. The increase of $2.9 million for the year ended December 31, 2024 is primarily due to higher 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 $66.9 million, $56.3 million and $53.4 million on capital expenditures in the years 2025, 2024 and 2023, respectively. The increase of $10.6 million for the year ended December 31, 2025 is primarily due to higher investment in software development.

Previous wording

Acquisitions and New Location Openings. During 2024, we acquired six lease-to-own store locations and customer accounts for an aggregate purchase price of approximately $1.5 million. Three of the store locations were closed upon acquisition and consolidated into existing store operations in our Rent-A-Center segment and three remained open as part of our Rent-A-Center segment.

Current wording

New Location Openings and Acquisitions. During 2025, we acquired four lease-to-own store locations and customer accounts for an aggregate purchase price of approximately $2.2 million. One store location was closed upon acquisition and consolidated into existing store operations in our Rent-A-Center segment and three remained open as part of our Rent-A-Center segment.

Previous wording

The tables below summarize the location activity for the years ended December 31, 2024, 2023 and 2022 for our Rent-A-Center, Mexico and Franchising operating segments.

Current wording

The tables below summarize the location activity for the years ended December 31, 2025, 2024 and 2023 for our Rent-A-Center and Mexico operating segments.