PROG Holdings, Inc.

Previous wording

Special Note Regarding Forward-Looking Information: Except for historical information contained herein, the matters set forth in this Form 10-Q are forward-looking statements. These statements are based on management’s current expectations and plans, which involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "delivering," "driving," "advancing," "expectation," "target," "uncertainty," "outlook," "assumes" and similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the filing date of this Quarterly Report and which involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. These risks and uncertainties include factors that could cause our actual results and financial condition to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Annual Report") and in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the filing date of this Quarterly Report.

Current wording

Special Note Regarding Forward-Looking Information: Except for historical information contained herein, the matters set forth in this Form 10-Q are forward-looking statements. These statements are based on management’s current expectations and plans, which involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "delivering," "driving," "advancing," "expectation," "target," "uncertainty," "outlook," "assumes" and similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the filing date of this Quarterly Report and which involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Such risks and uncertainties include, among others, those discussed in "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Annual Report") and in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the filing date of this Quarterly Report.

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three months ended March 31, 2026 and 2025, 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 2025 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 six months ended June 30, 2026 and 2025, 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 2025 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 three reportable segments as of March 31, 2026: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; (ii) Purchasing Power, a voluntary employee benefit program provider, allowing employees to purchase brand-name products and services from Purchasing Power and then pay for those purchases through either automatic payroll deductions or allotments; and (iii) Four Technologies, Inc. ("Four"), which offers Buy Now, Pay Later ("BNPL") payment options to consumers through the Four platform.

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 three reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; (ii) Purchasing Power, a voluntary employee benefit program provider, allowing employees to purchase brand-name products and services from Purchasing Power and then pay for those purchases through either automatic payroll deductions or allotments; and (iii) Four Technologies, Inc. ("Four"), which offers Buy Now, Pay Later ("BNPL") payment options to consumers through the Four platform.

Previous wording

PROG Holdings also owns MoneyApp, a mobile application that offers customers interest-free cash advances. MoneyApp is not a reportable segment in 2026 as its financial results are not expected to be significant to the Company's condensed consolidated financial results. MoneyApp's financial results are reported within "Other" for segment reporting purposes.

Current wording

PROG Holdings also owns MoneyApp, a mobile application that offers customers short-term liquidity solutions through cash advances. MoneyApp is not a reportable segment in 2026 as its financial results are not expected to be significant to the Company's condensed consolidated financial results. MoneyApp's financial results are reported within "Other" for segment reporting purposes.

Previous wording

On January 2, 2026, we completed the acquisition of Purchasing Power for $424.2 million in cash. In addition, Purchasing Power had approximately $338.6 million of non-recourse funding debt that remained in place following the closing of the acquisition. The results of Purchasing Power are included in our condensed consolidated financial statements beginning on the acquisition date. Results for periods prior to the acquisition date are not included in this MD&A. See Note 2 of the condensed consolidated financial statements for additional information.

Current wording

On January 2, 2026, we completed the acquisition of Purchasing Power for $424.2 million in cash. In addition, Purchasing Power had $338.6 million of non-recourse funding debt that remained in place following the closing of the acquisition. The results of Purchasing Power are included in our condensed consolidated financial statements beginning on the acquisition date. Results for periods prior to the acquisition date are not included in this MD&A. See Note 2 of the condensed consolidated financial statements for additional information.

Previous wording

We believe the increased cost of living and recent rise in fuel costs has continued to have a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many products offered by our businesses, as well as in customer payment performance. We believe the significant increase in inflation resulting from the war in Iran and related geopolitical disruption has further pressured our customers' budgets and unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of larger-ticket, durable consumer goods offered by many of our retail partners and by our Purchasing Power business.

Current wording

We believe the increased cost of living and recent rise in fuel costs has continued to have a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many products offered by our businesses, as well as in customer payment performance. The significant increase in inflation resulting from the war in Iran and related geopolitical disruption has further pressured our customers' budgets and unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of larger-ticket, durable consumer goods offered by many of our retail partners and by our Purchasing Power business.

Previous wording

Progressive Leasing entered 2026 with a smaller lease portfolio, as measured by its gross leased asset balance, compared to 2025, which resulted in a decrease in lease revenues when compared to the first quarter of 2025. The Company continues to operate in a challenging macroeconomic environment due to the factors described above. In addition, American Signature, Inc., one of Progressive Leasing's POS partners, filed for bankruptcy in November 2025, which will result in the permanent closure of many of its stores in 2026, which has had and will continue to have an unfavorable impact on Progressive Leasing's GMV, revenue, and earnings from continuing operations before income tax in 2026.

Current wording

The Company continues to operate in a challenging macroeconomic environment due to the factors described above. In addition, American Signature, Inc., one of Progressive Leasing's POS partners, filed for bankruptcy in November 2025, which will result in the permanent closure of many of its stores in 2026. Those closures have had and will continue to have an unfavorable impact on Progressive Leasing's GMV, revenue, and earnings from continuing operations before income tax in 2026.

Previous wording

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. That tighter decisioning posture remained in place during the full first quarter of 2026. While that action benefited our lease portfolio performance and helped us achieve a provision for lease merchandise write-offs of 7.3% of lease revenues in the first quarter of 2026, it also had an unfavorable impact on Progressive Leasing's GMV during the periods subsequent to the change.

Current wording

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 this action benefited our lease portfolio performance, it also negatively impacted Progressive Leasing's GMV during the periods subsequent to the change. In addition, elevated delinquencies in the second quarter of 2026 contributed to a provision for lease merchandise write-offs as a percentage of Progressive Leasing revenue of 8.4% compared to 7.5% in the prior year period. As a result, Progressive Leasing recently further tightened its decisioning posture, which is expected to continue to pressure GMV in future periods while supporting portfolio performance. Despite these trends, customer payment activity remained within expected ranges, and gross margin as a percentage of revenues increased during the three and six months ended June 30, 2026 when compared to the prior year.

Previous wording

We believe customer demand for the larger-ticket products and services sold by Purchasing Power also has been adversely impacted by the macroeconomic headwinds affecting Progressive Leasing's performance. However, we expect that Purchasing Power's recent focus on improving eligible employee-customer penetration, and its addition of several new employer-clients, will help offset the impacts of such decreases in demand.

Current wording

We believe customer demand for the larger-ticket products and services sold by Purchasing Power also has been adversely impacted by the macroeconomic headwinds affecting Progressive Leasing's performance. However, we expect that Purchasing Power's recent focus on improving eligible employee-customer penetration, continuing to create new, attractive merchandising choices for its customers, and its addition of several new employer-clients, will help offset the impacts of such decreases in demand.

Previous wording

While customer payment delinquencies and write-offs for Purchasing Power are generally lower than those of Progressive Leasing due to Purchasing Power's payroll deduction and allotment repayment model, the recent federal government workforce disruptions, including DOGE workforce reductions and multiple government shutdowns, have resulted in elevated delinquencies and write-offs with Purchasing Power's current and former federal government employee-customers. We continue to monitor these conditions, as well as any potential additional layoffs impacting Purchasing Power's customers, as prolonged fiscal uncertainty at the federal government level or such layoffs could pose additional risk to Purchasing Power's receivables performance.

Current wording

While customer payment delinquencies and write-offs for Purchasing Power are generally lower than those of Progressive Leasing due to Purchasing Power's payroll deduction and allotment repayment model, delinquencies on non-federal employee receivables were elevated in the second quarter of 2026, which resulted in a higher than estimated provision for credit losses. Delinquencies for federal government employee receivables have improved compared to the elevated delinquencies experienced in 2025 resulting from various workforce disruptions, including DOGE workforce reductions and multiple government shutdowns. We continue to monitor these conditions, as well as increased turnover (both voluntary and involuntary) at Purchasing Power's clients, as prolonged uncertainty could pose additional risk to Purchasing Power's receivables performance.

Previous wording

•We reported consolidated revenues of $742.7 million, which was an 11.1% increase compared to the $668.4 million we reported for the first quarter of 2025. The increase in consolidated revenues was primarily due to the $107.1 million of total revenues contributed by Purchasing Power, which we acquired on January 2, 2026. Additionally, revenues at Four increased by $20.5 million due to continued growth in BNPL transactions at Four. These increases were offset by a $54.7 million decrease in revenue at Progressive Leasing, which was driven primarily by a smaller gross leased asset balance throughout the first quarter of 2026 when compared to the same period in the prior year.

Current wording

•We reported consolidated revenues of $719.7 million, which was a 22.3% increase compared to the $588.5 million we reported for the second quarter of 2025. The increase in consolidated revenues was primarily due to the $130.4 million of revenues contributed by Purchasing Power, which we acquired on January 2, 2026. Additionally, revenues at Four increased by $19.0 million, compared to the prior year period, due to continued growth in its BNPL transactions. These increases were offset by a $19.8 million decrease in revenue at Progressive Leasing, which was driven primarily by a smaller gross leased asset balance throughout the second quarter of 2026 when compared to the same period in the prior year.

Previous wording

•GMV from Four increased by $160.1 million, due to an increase in Four loan originations in the first quarter of 2026 compared to the first quarter of 2025, as a result of the continued growth in that business. GMV decreased by $9.0 million for Progressive Leasing in the first quarter of 2026, compared to the same period in the prior year. The decrease in GMV for Progressive Leasing was due to several factors, including the tightening of our decisioning posture, which was reflected for the full first quarter in 2026 compared to only a portion of the first quarter in 2025. We believe the reduction in GMV was also driven by inflationary pressures, elevated cost of living and fuel costs, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. GMV relating to Purchasing Power was included for the first time, as the acquisition was completed on January 2, 2026.

Current wording

•GMV from Four increased by $165.5 million, due to an increase in Four loan originations in the second quarter of 2026 compared to the second quarter of 2025, as a result of the continued growth in that business. GMV increased by $14.2 million for Progressive Leasing in the second quarter of 2026, compared to the same period in the prior year. The increase in GMV for Progressive Leasing was due primarily to $23.0 million in GMV growth from e-commerce channels. This increase was offset by a reduction in GMV due to the higher cost of living experienced by our customer base, including increased fuel prices, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. GMV relating to Purchasing Power was $158.8 million and no GMV was reported in the prior year period, as the acquisition was completed on January 2, 2026.

Previous wording

Progressive Leasing's GMV decreased compared to the first quarter of 2025 due to a lower gross leased asset balance resulting from tightened decisioning in 2025 and retail partner bankruptcies. 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 25.7% of Progressive Leasing's GMV in the first quarter of 2026 compared to 16.8% in the first quarter of 2025. The increase in Four's GMV is primarily attributable to the continued expansion of the Four BNPL platform, reflecting growth and higher transaction volumes from existing and new customers over the period.

Current wording

Progressive Leasing's GMV increased compared to the second quarter of 2025 due primarily to increases in GMV from e-commerce channels. E-commerce channels generated 25.6% of Progressive Leasing's GMV in the second quarter of 2026 compared to 20.9% in the second quarter of 2025. This increase was offset by a reduction in GMV 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. The increase in Four's GMV is primarily attributable to the continued expansion of the Four BNPL platform, reflecting growth through higher transaction volumes and average order value from existing and new customers over the period.

Previous wording

The number of active customers for Progressive Leasing decreased due to the tightening of our decisioning posture, and a decrease in consumer demand for many of the durable leasable goods offered by our retail partners, due to the continued elevated costs of living and inflationary pressures facing our customers. The increase in the number of customers for Four was the result of continued growth in BNPL transactions, which have a significantly smaller transaction size, as compared to our Progressive Leasing business.

Current wording

The number of active customers for Progressive Leasing decreased due to a decrease in consumer demand for many of the durable leasable goods offered by our retail partners, due to the continued elevated costs of living and inflationary pressures facing our customers. The increase in the number of customers for Four was the result of continued growth in BNPL transactions, which have a significantly smaller transaction size, as compared to our Progressive Leasing business.

Previous wording

In this MD&A section, we discuss the key components of our condensed consolidated results. For the three months ended March 31, 2026 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 discuss the key components of our condensed consolidated results. For the three and six months ended June 30, 2026 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

Revenues. We separate our total revenues into three components: (i) lease revenues and fees, (ii) product and service revenues and (iii) other revenues. Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Product and service revenues represent Purchasing Power's sales of products and the commission earned relating to arranging for services, net of estimated returns. Other revenues represents transaction income, subscription revenues, and annual and other fees earned relating to loans in our Four segment and our other strategic businesses, as well as imputed interest income recognized on a portion of Purchasing Power's receivables portfolio.

Current wording

Revenues. We separate our total revenues into three components: (i) lease revenues and fees, (ii) product and service revenues and (iii) other revenues. Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Product and service revenues represent Purchasing Power's sales of products and the revenue earned relating to arranging for services that customers purchase from Purchasing Power, net of estimated returns. Other revenues represents transaction income, subscription revenues, annual and other fees earned relating to loans in our Four segment and our other strategic businesses, as well as Progressive Leasing affiliate commissions and imputed interest income recognized on a portion of Purchasing Power's receivables portfolio.

Previous wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs represents the estimated merchandise losses incurred but not yet identified by management and adjustments for changes in estimates for the allowance for lease merchandise write-offs.

Current wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs represents the estimated merchandise losses incurred and adjustments for changes in estimates for the allowance for lease merchandise write-offs.

Previous wording

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

Current wording

Operating expenses. Operating expenses include primarily personnel costs, stock-based compensation, occupancy costs, advertising, decisioning expense, professional services expense, sales acquisition costs, computer software expense, bank charges and processing fees, fixed asset depreciation expense, intangible amortization expense, legal settlement expense and restructuring expenses, among other expenses.

Previous wording

Provision for credit losses. The provision for credit losses reflects the expected lifetime credit losses on Purchasing Power's, Four's and other strategic operations receivables, determined using the CECL framework and incorporating historical loss experience, current conditions, and reasonable and supportable forecasts. The provision for credit losses on Purchasing Power's receivables are net of estimated recoveries from its program of selling portfolios of charged-off receivables to third parties.

Current wording

Provision for credit losses. The provision for credit losses reflects the expected lifetime credit losses on Purchasing Power's, Four's and other strategic operations receivables, determined using the Current Expected Credit Losses ("CECL") framework and incorporating historical loss experience, current conditions, and reasonable and supportable forecasts. The provision for credit losses on Purchasing Power's receivables are net of estimated recoveries from its program of selling portfolios of charged-off receivables to third-parties.

Previous wording

The decrease in leasing revenues was primarily due to a lower gross leased asset balance as a result of the tightening of our decisioning posture during 2025, and a decrease in demand for the durable leasable products offered by many of our retail partners. We believe the inflationary and other macroeconomic factors had a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many products offered by our retail partners.

Current wording

The decrease in revenues was primarily due to a lower gross leased asset balance as a result of the tightening of our decisioning posture during 2025, and a decrease in demand for the durable leasable products offered by many of our retail partners. We believe the inflationary and other macroeconomic factors had a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many products offered by our retail partners.

Previous wording

Gross margin is a key performance measure for our Progressive Leasing segment, which generates lease revenue from transactions that include associated depreciation of the merchandise on lease, making gross margin a meaningful indicator of profit. The increase in Progressive Leasing's gross margin percentage reflects a decline in customers' electing early purchase options, as macroeconomic conditions contributed to customers choosing to extend lease terms rather than exercising early purchase options, which generally result in lower margin realization.

Current wording

Gross margin is a key performance measure for our Progressive Leasing segment, which generates lease revenue from transactions that include associated depreciation of the merchandise on lease, making gross margin a meaningful indicator of profit. The increase in Progressive Leasing's gross margin percentage reflects a decline in customers' electing early purchase options, as macroeconomic conditions contributed to customers choosing to make payments over the full contractual lease term rather than exercising early purchase options, which generally result in lower margin realization.

Previous wording

Selling, general and administrative expense decreased resulting from the following:

Current wording

Selling, general and administrative expense increased resulting from the following:

Previous wording

In February 2026, Progressive Leasing sold a portfolio of charged-off lease receivables to a third-party for $6.5 million in cash and recognized a gain of $6.5 million as the carrying amount of the charged-off receivables had been reduced to zero. There were no similar sales during the three months ended March 31, 2025.

Current wording

In June 2026, Progressive Leasing sold a portfolio of charged-off lease receivables to a third-party for $4.7 million in cash and recognized a gain of $4.7 million as the carrying amount of the charged-off receivables had been reduced to zero. There were no similar sales during the three months ended June 30, 2025.

Previous wording

The provision for lease merchandise write-offs decreased $4.4 million compared to the same period in 2025. The provision for lease merchandise write-offs as a percentage of lease revenues decreased to 7.3% during the first quarter of 2026 from 7.4% in the same period in 2025. The decrease was due to a tighter decisioning posture in 2026 as compared to the same period in 2025, as the Company tightened its decisioning during the first quarter of 2025. Given the significant uncertainty regarding the impacts of the war in Iran and related geopolitical disruptions, inflation, tariffs, elevated interest rates, and unemployment rates on our business, 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 March 31, 2026. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Current wording

The provision for lease merchandise write-offs decreased $0.5 million compared to the same period in 2025. The provision for lease merchandise write-offs as a percentage of total revenues increased to 7.9% during the six months ended June 30, 2026 from 7.4% in the same period in 2025. The increase was due to a continued pressure on customer payment performance in a challenging macroeconomic environment. Given the significant uncertainty regarding the impacts of geopolitical disruptions, inflation, tariffs, higher fuel costs, elevated interest rates, and unemployment rates on our business, 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, 2026. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Previous wording

Selling, general and administrative expenses include $1.8 million of costs incurred related to the acquisition of Purchasing Power.

Current wording

Selling, general and administrative expenses include $1.9 million of transaction and transition costs incurred related to the acquisition of Purchasing Power.

Previous wording

The gain on change in fair value of receivables of $5.7 million reflects changes in the estimated fair value of Purchasing Power's receivables under the fair value option, including the impact of the passage of time, changes in credit performance, discount rates and other valuation inputs.

Current wording

The gain on change in fair value of receivables of $1.8 million reflects changes in the estimated fair value of Purchasing Power's receivables under the fair value option, including the impact of the passage of time, changes in credit performance, discount rates and other valuation inputs.

Previous wording

Other expenses include restructuring expense related to employee severance of $3.3 million resulting from cost reduction initiatives that occurred shortly after the Company's acquisition of Purchasing Power.

Current wording

Other expenses include restructuring expense related to employee severance of $3.4 million resulting from cost reduction initiatives that occurred shortly after the Company's acquisition of Purchasing Power.

Previous wording

Revenues at Four increased due to the continued significant growth in BNPL transactions, including growth in the Four+ subscription customers.

Current wording

Revenues at Four increased due to the continued significant growth in BNPL transactions, including growth in the number of Four+ subscription customers.

Previous wording

Selling, general and administrative costs increased resulting from the following:

Current wording

Selling, general and administrative costs increased due to the following:

Previous wording

–Bank charges and processing fees increased $4.9 million related to higher customer payment transaction volumes; and

Current wording

–Bank charges and processing fees increased $4.4 million related to higher customer payment transaction volumes; and

Previous wording

–Advertising expense increased $1.4 million resulting from additional marketing efforts to support the continued growth of Four.

Current wording

–Advertising expense increased $1.6 million resulting from additional marketing efforts to drive continued growth of Four.

Previous wording

Other operations incurred$8.3 million of losses before income tax expense, which is primarily related to costs incurred related to the successful acquisition of Purchasing Power on January 2, 2026.

Current wording

Other operations incurred$9.7 million of losses before income tax expense for thesix months ended June 30, 2026, which was primarily related to costs incurred in connection with the acquisition of Purchasing Power on January 2, 2026.

Previous wording

Income tax expense decreased to $11.3 million for the three months ended March 31, 2026 compared to $12.7 million in the prior year comparable period. The effective income tax rate was 23.9% for the three months ended March 31, 2026 compared to 26.8% for the same period in 2025. The decrease in the effective tax rate was primarily due to the discrete tax benefit related to stock-based compensation vestings in March 2026.

Current wording

Income tax expense decreased to $24.8 million for the six months ended June 30, 2026 compared to $26.2 million in the prior year comparable period. The effective income tax rate was 25.2% for the six months ended June 30, 2026 compared to 26.7% for the same period in 2025. The decrease in the effective tax rate was primarily due to the discrete tax benefit related to stock-based compensation vestings in March 2026.

Previous wording

The major changes in the condensed consolidated balance sheet from December 31, 2025 to March 31, 2026 were driven by the acquisition of Purchasing Power on January 2, 2026, as discussed below:

Current wording

The significant changes in the condensed consolidated balance sheet from December 31, 2025 to June 30, 2026 were driven by the acquisition of Purchasing Power on January 2, 2026, as discussed below:

Previous wording

•Cash and cash equivalents decreased $239.4 million from $308.8 million to $69.4 million during the three months ended March 31, 2026, due primarily to the cash consideration paid in connection with the acquisition of Purchasing Power. For additional information, refer to the "Liquidity and Capital Resources" section below.

Current wording

•Cash and cash equivalents decreased $223.6 million from $308.8 million to $85.2 million during the six months ended June 30, 2026, due primarily to the cash consideration paid in connection with the acquisition of Purchasing Power. For additional information, refer to the "Liquidity and Capital Resources" section below.

Previous wording

•Accounts receivable, net of allowances and unearned interest income, increased $313.4 million compared to December 31, 2025 primarily due to the addition of Purchasing Power's receivable portfolio acquired on January 2, 2026.

Current wording

•Accounts receivable, net of allowances and unearned interest income, increased $300.3 million compared to December 31, 2025 primarily due to the addition of Purchasing Power's receivable portfolio acquired on January 2, 2026.

Previous wording

•Goodwill and other intangible assets, net increased $417.8 million, reflecting preliminary purchase accounting associated with the Purchasing Power acquisition, including the recognition of goodwill and identifiable intangible assets.

Current wording

•Goodwill and other intangible assets, net increased $409.3 million, reflecting preliminary purchase accounting associated with the Purchasing Power acquisition, including the recognition of goodwill and identifiable intangible assets.

Previous wording

•Accounts payable and accrued expenses increased $40.5 million, primarily due to liabilities assumed in the Purchasing Power acquisition. Purchasing Power had $56.0 million of accounts payable and accrued liabilities as of March 31, 2026.

Current wording

•Accounts payable and accrued expenses increased $52.2 million, primarily due to the Purchasing Power acquisition. Purchasing Power had $60.0 million of accounts payable and accrued liabilities as of June 30, 2026.

Previous wording

•Deferred income tax liabilities increased $26.7 million resulting from the recognition of deferred income tax liabilities with the acquisition of Purchasing Power.

Current wording

•Deferred income tax liabilities increased $36.0 million resulting primarily from the recognition of deferred income tax liabilities with the acquisition of Purchasing Power.

Previous wording

•Income tax receivables decreased $21.3 million primarily due to federal tax refund received during the quarter ended March 31, 2026, resulting from enactment of tax legislation permitting 100% federal bonus depreciation.

Current wording

•Income tax receivables decreased $22.7 million primarily due to federal tax refunds received during 2026, resulting from enactment of tax legislation permitting 100% federal bonus depreciation.