PROG Holdings, Inc.

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three and six months ended June 30, 2025 and 2024, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2024 Annual Report.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025 and 2024, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2024 Annual Report.

Previous wording

PROG Holdings, Inc. ("we," "our," "us," the "Company," or "PROG Holdings") is a financial technology holding company that provides transparent and competitive payment options to consumers. PROG Holdings has two reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products.

Current wording

PROG Holdings, Inc. ("we," "our," "us," the "Company," or "PROG Holdings") is a financial technology holding company that provides transparent and competitive payment options to consumers. PROG Holdings has two reportable segments as of September 30, 2025: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products.

Previous wording

Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers.

Current wording

Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers. On October 20, 2025, the Company completed the sale of substantially all of the assets of Vive, consisting primarily of its credit card receivable portfolio, along with related customer and merchant relationships, for an estimated$149.0 million of cash, subject to customary post-closing adjustments. The credit card portfolio represented the major asset of Vive, and the sale of this portfolio constitutes a strategic shift that will have a significant effect on the Company's operations and financial results. Accordingly, the Vive segment will be presented as discontinued operations in the Company's consolidated financial statements beginning in the quarter ending December 31, 2025.

Previous wording

Four Technologies, Inc. ("Four") is a Buy Now, Pay Later ("BNPL") company that allows shoppers to pay for merchandise through four interest-free installments. Four’s proprietary platform capabilities and its base of customers and retailers expand PROG Holdings’ ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer financial technology offerings. Shoppers use Four to purchase clothing, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not expected to be a reportable segment in 2025 as its financial results are not expected to be significant to the Company's consolidated financial results in 2025. Four's financial results are reported within "Other" for segment reporting purposes.

Current wording

Four Technologies, Inc. ("Four") is a Buy Now, Pay Later ("BNPL") company that allows shoppers to pay for merchandise through four interest-free installments. Four’s proprietary platform capabilities and its base of customers and retailers expand PROG Holdings’ ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer financial technology offerings. Shoppers use Four to purchase clothing, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not a reportable segment for the three and nine month periods ended September 30, 2025 as its financial results are not significant to the Company's condensed consolidated financial results. Four's financial results are reported within "Other" for segment reporting purposes.

Previous wording

Progressive Leasing entered 2025 with a larger lease portfolio, as measured by its gross leased asset balance, compared to 2024, which resulted in an increase in lease revenues in the first half of 2025 when compared to the same period in 2024. The Company continues to operate in a challenging macroeconomic environment. For example, Big Lots, Inc. ("Big Lots"), one of Progressive Leasing's major POS partners filed for bankruptcy in late 2024, resulting in the closure of many of its stores. The loss of Big Lots resulted in an unfavorable impact on Progressive Leasing's Gross Merchandise Volume ("GMV"), revenue, and earnings before income tax expense in the first half of 2025.

Current wording

Progressive Leasing entered 2025 with a larger lease portfolio, as measured by its gross leased asset balance, compared to 2024, which resulted in an increase in lease revenues in the first half of 2025 when compared to the same period in 2024. However, the gross leased asset balance was lower at the beginning of the three months ended September 30, 2025 when compared to the same period in the prior year, resulting in lower lease revenues for the quarter. The Company continues to operate in a challenging macroeconomic environment. For example, Big Lots, Inc. ("Big Lots"), one of Progressive Leasing's major POS partners filed for bankruptcy in late 2024, resulting in the closure of many of its stores. The loss of Big Lots resulted in an unfavorable impact on Progressive Leasing's Gross Merchandise Volume ("GMV"), revenue, and earnings before income tax in 2025.

Previous wording

Progressive Leasing customer payment delinquencies were elevated at the end of 2024 and during the first quarter of 2025, which prompted us to tighten our decisioning posture to maintain a healthy lease portfolio. While that action benefited our lease portfolio performance and helped us achieve a provision for lease merchandise write-offs of 7.5% of lease revenues in the second quarter of 2025, it also had an unfavorable impact on Progressive Leasing's GMV during that period.

Current wording

Progressive Leasing customer payment delinquencies were elevated at the end of 2024 and during the first quarter of 2025, which prompted us to tighten our decisioning posture to maintain a healthy lease portfolio during the quarter ended March 31, 2025. While that action benefited our lease portfolio performance and helped us achieve a provision for lease merchandise write-offs of 7.4% of lease revenues in the third quarter of 2025, it also had an unfavorable impact on Progressive Leasing's GMV during the periods subsequent to the change.

Previous wording

•We reported revenues of $604.7 million, which was a 2.1% increase compared to the $592.2 million we reported for the second quarter of 2024. The increase in revenue was driven primarily by growth in our Other operations.

Current wording

•We reported revenues of $595.1 million, which was a 1.8% decrease compared to the $606.1 million we reported for the third quarter of 2024. The decrease in revenue was driven primarily by a smaller gross leased asset balance when compared to the same period in the prior year. This decrease was partially offset by an increase in revenues due to growth in our Other operations.

Previous wording

•GMV decreased by $40.6 million for Progressive Leasing and increased by $8.2 million for Vive in the second quarter of 2025, compared to the same period in the prior year. The decrease in GMV for Progressive Leasing was due to the bankruptcy of Big Lots in late 2024 and tightening of our decisioning posture. We believe the reduction in GMV was also driven by inflationary pressures, elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. The increase in GMV for Vive was due to the expansion of loan origination programs associated with Vive's national retail merchants. GMV from our other operations increased by $93.5 million, due to an increase in Four loan originations in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

•GMV decreased by $45.7 million for Progressive Leasing and increased by $7.6 million for Vive in the third quarter of 2025, compared to the same period in the prior year. GMV from our Other operations increased by $101.0 million, due to an increase in Four loan originations in the third quarter of 2025 compared to the third quarter of 2024.The decrease in GMV for Progressive Leasing was due to several factors, including the bankruptcy of Big Lots in late 2024 and tightening of our decisioning posture during the first quarter of 2025. We believe the reduction in GMV was also driven by inflationary pressures, elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. The increase in GMV for Vive was due to the expansion of loan origination programs associated with Vive's national retail merchants.

Previous wording

•Earnings before income taxes increased to $52.6 million compared to $48.3 million in the same period in 2024. The increase was primarily driven by lower restructuring costs and increased revenues, partially offset by increases in provision for loan losses, and certain sales, general and administrative expenses.

Current wording

•Earnings before income taxes increased to $45.6 million compared to $41.8 million in the same period in 2024. The increase was primarily driven by increased revenues in our Other operations, partially offset by increases in the provision for loan losses and certain sales, general and administrative expenses.

Previous wording

Progressive Leasing's GMV decreased compared to the second quarter of 2024 due to the bankruptcy of Big Lots in late 2024 and tightening of its decisioning posture. We believe the reduction in GMV was also driven by inflationary pressures, an elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. E-commerce channels generated 20.9% of Progressive Leasing's GMV in the second quarter of 2025 compared to 14.4% in the second quarter of 2024. The increase in Vive's GMV was due to the expansion of loan origination programs associated with Vive's national retail merchants when compared to the same period in the prior year. GMV from Other increased due to an increase in Four loan originations.

Current wording

Progressive Leasing's GMV decreased compared to the third quarter of 2024 due to the bankruptcy of Big Lots in late 2024 and tightening of its decisioning posture during the first quarter of 2025, leading to a lower gross leased asset balance. We believe the reduction in GMV was also driven by inflationary pressures, an elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. E-commerce channels generated 23.0% of Progressive Leasing's GMV in the third quarter of 2025 compared to 16.6% in the third quarter of 2024. The increase in Vive's GMV was due to the expansion of loan origination programs associated with Vive's national retail merchants when compared to the same period in the prior year. GMV from Other increased due to an increase in Four loan originations.

Previous wording

Key Components of Earnings Before Income Tax Expense

Current wording

Key Components of Earnings Before Income Tax

Previous wording

In this MD&A section, we review our condensed consolidated results. For the three and six months ended June 30, 2025 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Current wording

In this MD&A section, we review our condensed consolidated results. For the three and nine months ended September 30, 2025 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Previous wording

Operating Expenses. Operating expenses include personnel costs, the provision for loan losses, restructuring expenses, sales acquisition expense, computer software expense, stock-based compensation expense, intangible asset amortization, professional services expense, advertising, bank service charges, fixed asset depreciation, occupancy costs, and decisioning expense, among other expenses.

Current wording

Operating Expenses. Operating expenses include personnel costs, the provision for loan losses, restructuring expenses, sales acquisition expense, computer software expense, stock-based compensation expense, intangible asset amortization, professional services expense, advertising, bank service charges and processing fees, fixed asset depreciation, occupancy costs, and decisioning expense, among other expenses.

Previous wording

Progressive Leasing revenues in the second quarter of 2025 were flat compared to the same quarter in 2024. Vive revenues increased due primarily to a larger loan portfolio during the second quarter of 2025 as compared to the second quarter of 2024. The increase in Other revenue was primarily driven by an increase in Four's GMV as compared to the same period in 2024, due to increased loan originations.

Current wording

The decrease in Progressive Leasing revenues was primarily due to a lower gross leased asset balance as a result of the bankruptcy of Big Lots in late 2024, the tightening of our decision posture during the first quarter of 2025, and inflationary and other macroeconomic factors, which also led to a 10.0% decrease in GMV compared to the same quarter in 2024. Vive revenues increased due primarily to a larger loan portfolio during the third quarter of 2025 as compared to the third quarter of 2024. The increase in Other revenue was primarily driven by an increase in Four's GMV as compared to the same period in 2024, due to increased loan originations.

Previous wording

Information about certain significant components of operating expenses for the second quarter of 2025 as compared to the second quarter of 2024 is as follows:

Current wording

Information about certain significant components of operating expenses for the third quarter of 2025 as compared to the third quarter of 2024 is as follows:

Previous wording

Other sales, general and administrative expense increased $2.7 million compared to the same periodin 2024, primarily due to a $2.4 million increase within our Other operations, due to higher customer payment processing fees arising from the continued GMV growth at Four and our other strategic operations.

Current wording

Bank charges and processing fees increased $3.1 million compared to the same periodin 2024, primarily due to a $2.8 million increase in processing fees within our Other operations, due to the continued GMV growth at Four and our other strategic operations.

Previous wording

Provision for loan losses increased $5.4 million compared to the same period in 2024. The increase was primarily the result of a $4.4 million increase in the provision for loan losses for our Other operations, due to the continued growth of our Four business and our other strategic operations. The provision for loan losses at Vive also increased $1.0 million resulting from an increase in GMV compared to the same period in 2024.

Current wording

Provision for loan losses increased $5.5 million compared to the same period in 2024. The increase was primarily the result of a $5.9 million increase in the provision for loan losses for our Other operations, due to the continued growth of our Four business and our other strategic operations.

Previous wording

Depreciation of lease merchandise. Depreciation of lease merchandise was flat during the three months ended June 30, 2025 compared to the same period in 2024. As a percentage of lease revenues and fees, depreciation of lease merchandise increased slightly to 67.6% from 67.4% in the prior year quarter, due to a higher level of early buyouts during the three months ended June 30, 2025 as compared to the same period in 2024.

Current wording

Depreciation of lease merchandise. Depreciation of lease merchandise decreased by 5.6% during the three months ended September 30, 2025 compared to the same period in 2024. As a percentage of lease revenues and fees, depreciation of lease merchandise decreased slightly to 68.0% from 68.8% in the prior year quarter, due to a lower level of 90-day early buyouts during the three months ended September 30, 2025 as compared to the same period in 2024.

Previous wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs decreased $1.2 million compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues decreased to 7.5% during the second quarter of 2025 from 7.7% in the same period in 2024. The decrease was due to a tighter decisioning posture in 2025 as compared to the same period in 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of June 30, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Current wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs decreased $3.7 million compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues decreased to 7.4% during the third quarter of 2025 from 7.7% in the same period in 2024. The decrease was due to a tighter decisioning posture in 2025 as compared to the same period in 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of September 30, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Previous wording

Information about our earnings before income tax expense by reportable segment is as follows:

Current wording

Information about our earnings before income tax by reportable segment is as follows:

Previous wording

The earnings (loss) before income tax expense within Other includes income from our Four operations, partially offset by losses related to our other strategic operations. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Current wording

The earnings (loss) before income tax within Other includes income from our Four operations, partially offset by losses related to our other strategic operations. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Previous wording

Income tax expense decreased to $14.1 million for the three months ended June 30, 2025 compared to $14.6 million in the prior year comparable period. The effective income tax rate was 26.8% for the three months ended June 30, 2025 compared to 30.1% for the same period in 2024. The decrease in the effective income tax rate was primarily the result of discrete income tax expense recognized in 2024 related to uncertain tax position liabilities and stock-based compensation.

Current wording

Income tax expense (benefit) for the three months ended September 30, 2025 was an expense of $12.5 million compared to a benefit of $42.1 million in the prior year comparable period. The effective income tax rate was 27.4% for the three months ended September 30, 2025 compared to (100.6)% for the same period in 2024. The increase in the effective tax rate was primarily due to the $53.6 million non-cash reversal of the uncertain tax position related to Progressive Leasing during 2024.

Previous wording

The increase in Progressive Leasing revenues was primarily due to a larger lease portfolio entering the period, as measured by its gross leased asset balance, resulting from the 9.1% increase in GMV for the fourth quarter of 2024 as compared to the fourth quarter of 2023. The increase in revenues was partially offset by the decrease in GMV at Progressive Leasing for the six months ended June 30, 2025, as compared to the same period in the prior year. Vive revenues were flat compared to the six months ended June 30, 2024. The increase in Other revenue was primarily driven by a 156.8% increase in Four's GMV as compared to the six months ended June 30, 2024.

Current wording

The increase in Progressive Leasing revenues was primarily due to a larger lease portfolio entering the period, as measured by its gross leased asset balance, resulting from the 9.1% increase in GMV for the fourth quarter of 2024 as compared to the fourth quarter of 2023. The increase in revenues was partially offset by the decrease in GMV at Progressive Leasing for the nine months ended September 30, 2025, as compared to the same period in the prior year. Vive revenues increased due to a larger loan portfolio for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in Other revenue was primarily driven by a 159.0% increase in Four's GMV as compared to the nine months ended September 30, 2024.

Previous wording

Information about certain significant components of operating expenses for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 is as follows:

Current wording

Information about certain significant components of operating expenses for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is as follows:

Previous wording

Professional services increased $6.7 million compared to the same period in 2024, primarily due to higher technology-related expenses and an increase in contract labor costs for various technology initiatives and customer service support at Progressive Leasing. Professional services also increased $0.5 million at Vive, primarily due to an increase in contract labor costs.

Current wording

Professional services increased $7.5 million compared to the same period in 2024, primarily due to higher technology-related expenses and an increase in contract labor costs for various technology initiatives and customer service support at Progressive Leasing. Professional services also increased $0.7 million at Vive, primarily due to an increase in contract labor costs.

Previous wording

Other sales, general and administrative expense increased $5.8 million compared to the same periodin 2024, primarily due to a $5.2 million increase within our Other operations, driven by higher customer payment processing fees and decisioning expenses associated with the continued GMV growth at Four and our other strategic operations.

Current wording

Bank charges and processing fees increased $7.6 million compared to the same periodin 2024, primarily due to a $7.1 million increase in processing fees within our Other operations, driven by the continued GMV growth at Four and our other strategic operations.

Previous wording

The provision for loan losses increased $8.7 million compared to the same period in 2024. The increase is primarily the result of a $7.0 million increase in the provision for loan losses for our Other operations, due to the continued growth of Four and our other strategic operations. The provision for loan losses at Vive also increased $1.7 million resulting from an increase in GMV compared to the same period in 2024.

Current wording

The provision for loan losses increased $14.2 million compared to the same period in 2024. The increase is primarily the result of a $12.9 million increase in the provision for loan losses for our Other operations, due to the continued growth of Four and our other strategic operations. The provision for loan losses at Vive also increased $1.3 million resulting from an increase in GMV compared to the same period in 2024.

Previous wording

Depreciation and amortization decreased $2.4 million compared to the same period in 2024, primarily due to a decrease of $2.7 million at Progressive Leasing resulting from a decline in depreciable assets compared to 2024, and some intangible assets becoming fully amortized in 2024. The decrease was partially offset by an increase of $0.3 million at Four and our other strategic operations.

Current wording

Depreciation and amortization decreased $2.5 million compared to the same period in 2024, primarily due to a decrease of $3.0 million at Progressive Leasing resulting from a decline in depreciable assets compared to 2024, and some intangible assets becoming fully amortized in 2024. The decrease was partially offset by an increase of $0.5 million at Four and our other strategic operations.

Previous wording

Restructuring expense decreased $20.9 million compared to the same period in 2024. In 2025, there were no new restructuring activities. For the six months ended June 30, 2024, restructuring costs included $7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing, $2.0 million associated with the early termination of a third party vendor agreement within other strategic operations, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, and $5.0 million of employee severance for Progressive Leasing and our other strategic operations.

Current wording

Restructuring expense decreased $20.9 million compared to the same period in 2024. In 2025, there were no new restructuring activities. For the nine months ended September 30, 2024, restructuring costs included $7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing, $2.0 million associated with the early termination of a third party vendor agreement within other strategic operations, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, and $5.0 million of employee severance for Progressive Leasing and our other strategic operations.

Previous wording

Depreciation of lease merchandise. Depreciation of lease merchandise increased by 3.6% during the six months ended June 30, 2025 compared to the same period in 2024. The increase was primarily due to growth in the Company's lease portfolio entering 2025. As a percentage of lease revenues and fees, depreciation of lease merchandise increased to 69.2% from 68.5% in the prior year period, primarily due to a higher level of early buyouts during the six months ended June 30, 2025 as compared to the same period in 2024.

Current wording

Depreciation of lease merchandise. Depreciation of lease merchandise increased by 0.5% during the nine months ended September 30, 2025 compared to the same period in 2024. The increase was primarily due to a higher balance in the Company's lease portfolio entering 2025. As a percentage of lease revenues and fees, depreciation of lease merchandise increased to 68.9% from 68.6% in the prior year period, primarily due to a higher level of early buyouts during the nine months ended September 30, 2025 as compared to the same period in 2024.

Previous wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs increased $3.7 million when compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.4% during the six months ended June 30, 2025 from 7.3% in the same period in 2024. The increase in the provision was a result of higher write-offs and delinquencies compared to the same period in 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of June 30, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Current wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs was essentially flat when compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues was 7.4% during the nine months ended September 30, 2025 and 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of September 30, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Previous wording

Information about our earnings before income tax expense by reportable segment is as follows:

Current wording

Information about our earnings before income tax by reportable segment is as follows:

Previous wording

The loss before income tax expense within Other primarily relates to losses from our other strategic operations. Factors impacting the change in earnings before income tax expense for each reporting segment are discussed above.

Current wording

The earnings (loss) before income tax within Other primarily relates to losses from our other strategic operations. Factors impacting the change in earnings before income tax for each reporting segment are discussed above.

Previous wording

Income tax expense increased to $26.6 million for the six months ended June 30, 2025 compared to $24.2 million in the prior year comparable period due to higher earnings before income tax expense. The effective income tax rate was 26.7% for the six months ended June 30, 2025 compared to 30.2% for the same period in 2024. The decrease in the effective tax rate was primarily due to discrete income tax expense recognized in 2024 related to uncertain tax position liabilities and stock-based compensation.

Current wording

Income tax expense (benefit) for the nine months ended September 30, 2025 was an expense of $39.1 million compared to a benefit of $17.9 million in the prior year comparable period. The effective income tax rate was 26.9% for the nine months ended September 30, 2025 compared to (14.7)% for the same period in 2024. The increase in the effective tax rate was primarily due to the $53.6 million non-cash reversal of the uncertain tax position related to Progressive Leasing during 2024.

Previous wording

•Cash and cash equivalents increased $126.3 million to $222.0 million during the six months ended June 30, 2025. For additional information, refer to the "Liquidity and Capital Resources" section below.

Current wording

•Cash and cash equivalents increased $196.9 million to $292.6 million during the nine months ended September 30, 2025. For additional information, refer to the "Liquidity and Capital Resources" section below.

Previous wording

•Accounts receivable, net of allowances, decreased $19.7 million primarily due to a decrease in Progressive Leasing's GMV for the second quarter of 2025 as compared to the fourth quarter of 2024.

Current wording

•Accounts receivable, net of allowances, decreased $16.5 million primarily due to a decrease in Progressive Leasing's GMV for the third quarter of 2025 as compared to the fourth quarter of 2024.

Previous wording

•Lease merchandise, net of accumulated depreciation and allowances, decreased $153.9 million due primarily to a decrease in Progressive Leasing's GMV for the second quarter of 2025 as compared to the fourth quarter of 2024. Higher exercises of early buyouts during the six months ended June 30, 2025 also contributed to the decrease.

Current wording

•Lease merchandise, net of accumulated depreciation and allowances, decreased $179.1 million due primarily to a decrease in Progressive Leasing's GMV for the third quarter of 2025 as compared to the fourth quarter of 2024. Higher exercises of early buyouts during the nine months ended September 30, 2025 also contributed to the decrease.

Previous wording

•Debt, net decreased $49.4 million primarily due to repayment in January 2025 of the $50.0 million balance that was outstanding on the Revolving Facility as of December 31, 2024.

Current wording

•Debt, net decreased $49.0 million primarily due to repayment in January 2025 of the $50.0 million balance that was outstanding on the Revolving Facility as of December 31, 2024.

Previous wording

As of June 30, 2025, the Company had $222.0 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of gross indebtedness.

Current wording

As of September 30, 2025, the Company had $292.6 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of gross indebtedness.

Previous wording

Cash provided by operating activities was $279.8 million and $191.1 million during the six months ended June 30, 2025 and 2024, respectively. The $88.7 million increase in operating cash flows was primarily due to a $51.1 million decrease in cash paid for lease merchandise and an increase in cash received from exercises of early lease buyout options. Operating cash flows were negatively impacted by a $32.3 million increase in cash paid for taxes when compared to the same period in 2024. Other changes in cash provided by operating activities are discussed above in our discussion of results for the six months ended June 30, 2025.

Current wording

Cash provided by operating activities was $389.9 million and $223.0 million during the nine months ended September 30, 2025 and 2024, respectively. The $166.9 million increase in operating cash flows was primarily due to a $93.3 million decrease in cash paid for lease merchandise. Other changes in cash provided by operating activities are discussed above in our discussion of results for the nine months ended September 30, 2025.