Q4 2023 Upbound Group Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the fourth quarter 2023 Upbound Group Earnings Conference Call. At this time, all participants are in a listen-only mode.

Good day and thank you for Senate by welcome to the fourth quarter 2023 Group earnings Conference call. At this time, all participants on a listen only mode. After the speaker's presentation there'll be a question and answer session. Jessica question during the session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I want to hand the conference over to your first speaker today, Jeff Chestnut, head of investor relations. Please go ahead.

411 on your telephone.

You're an automated message advising your head injuries to withdraw your question. Please press start one one again please be advised that today's conference is being recorded.

The conference over to your first speaker today.

Jeff Chestnut head of Investor Relations. Please go ahead.

Jeff Chestnut: Good morning, and thank you all for joining us to discuss the company's performance for the fourth quarter and full year of 2023, as well as our outlook for 2024. We issued our earnings release this morning before the market opened, and the release and all related materials, including a link to the live webcast, are available on our website at investor.upbound.com. On the call today from Upbound Group, we have Mitch Fadel, our CEO, and Fahmy Kuttum, our CFO. As a reminder, some of the statements provided on this call are forward-looking and are subject to factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release as well as in the company's SEC file. Upbound Group undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

Jeff Chestnut: Good morning, and thank you all for joining us to discuss the company's performance for the fourth quarter and full year of 2023 as well as our outlook for 2024.

Jeff Chestnut: Our earnings release this morning before the market opened.

Jeff Chestnut: And all related materials, including a link to the live webcast are available on our website and investor Dot Dot com.

Jeff Chestnut: On the call today from Uptown group, we have Mitch Padel R. C E O Stanley Cuddle.

Jeff Chestnut: R C up though.

Jeff Chestnut: A reminder of some of the statements provided on this call are forward looking at our subject of factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release as well within the company does SEC filings.

Jeff Chestnut: One group undertakes no obligation to publicly update or revise any forward looking statements, except as required by law.

Jeff Chestnut: This call will also include references to non-GAAP financial measures. Please refer to our fourth quarter and full year earnings release, which can be found on our website, for a description of the non-GAAP financial measures and the reconciliations to the most comparable GAAP financial measures. Finally, Upbound Group is not responsible for, and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. Please refer to our website for the only authorized webcasts. With that, I'll turn the call over to Mitch.

Jeff Chestnut: Call will also include references to non-GAAP financial measures. Please refer to our fourth quarter and full year earnings release, which can be found on our website for a description of the non-GAAP financial measures and a reconciliation to the most comfortable GAAP financial measures.

Jeff Chestnut: Finally, I found group is not responsible for and does not guarantee the accuracy of our earnings teleconference. Transcript provided by third parties. Please refer to our website, where the only authorized webcast with that I'll turn the call over to Mitch.

Mitchell E. Fadel: Thank you, Jeff, and good morning to everyone on the call today. I'll begin with a review of key highlights from 2023, as well as a discussion of our priorities for 2024, and then I'll hand it off to Fannie for a more detailed review of our financial results and our financial outlook. After that, we'll take some questions.

Mitchell E. Fadel: Thank you and good morning, everyone on the call today.

Mitchell E. Fadel: With a review of key highlights from 2023 as well as a discussion of our priorities for 2024, and then I ended up the family for a more detailed review of our financial results in better financial outlook.

Mitchell E. Fadel: After that we'll take some questions.

Mitchell E. Fadel: As we reflect on our achievements throughout 2023, we believe our business took meaningful steps forward across both major segments and the new shared services holding. At Acima, we saw growth in both our customer base and our retailer network. We also continue to develop our direct-to-consumer options with the virtual Acima marketplace, where our customers can shop at various merchants across the country, including unintegrated, to select eligible products and enter a lease with a SEMA. The CMA returned year-over-year revenue growth in the fourth quarter, driven by a 19% increase in GMV. The investments we have made in our technology and product offerings are beginning to pay off with GMV momentum throughout the fourth quarter. Importantly, we're driving GMB growth while remaining disciplined on underwriting with a SEMA loss that is stable throughout the year.

Mitchell E. Fadel: Reflect on our achievements are up 2023, we believe our business took meaningful steps forward across both major segments and the new shared services holding company.

Mitchell E. Fadel: Seemingly saw growth in both customer base and a retailer network.

Mitchell E. Fadel: We also continue to develop our direct to consumer options with the virtual it seem a marketplace, where our customers can shop at various merchants across the country, including Unintegrated merchants dislike eligible products and then or at least with a female.

Mitchell E. Fadel: See my return a year over year revenue growth in the fourth quarter, driven by 19 per cent increase in G. M V.

Mitchell E. Fadel: The investments we've made in our technology and product offerings are beginning to pay off with G. M V momentum throughout the fourth quarter.

Mitchell E. Fadel: Importantly were driving G. M V growth warming disciplined and underwriting with a C. My losses stable throughout the year.

Mitchell E. Fadel: Our disciplined and targeted approach to underwriting, combined with normalizing customer behavior, drove material year-over-year profitability improvement with full-year 2023 gross margins increasing 340 basis points and adjusted EBITDA margins increasing 490 basis points versus 2022. Rent-A-Center remains focused on offering a broader product lineup as well as an enhanced digital experience. We expanded our merchandise lineup with new products in our existing categories while adding new product verticals such as jewelry and tires in the fourth quarter.

Mitchell E. Fadel: Ah discipline to targeted approach to underwriting combined with normalizing customer behavior drove material year over year profitability and from with four year 2023 gross margins increasing.

Mitchell E. Fadel: And 40 basis points, and adjusted EBITDA margins, increasing 490 basis points versus 2022.

Mitchell E. Fadel: It ran the center remained focused on offering a broader product lineup as well as an enhanced digital experience.

Mitchell E. Fadel: We expanded our merchandise lineup with new products in our existing categories, while adding new product critical such as jewelry and tires in the fourth quarter.

Mitchell E. Fadel: Whether in the showroom or our extended aisle web channel, our product mix continues to grow and evolve to meet our customers' needs. These efforts are driving improvements in customer growth and retention, with recent portfolio growth positioning Rent-A-Center for continued success in 2024. 2023 also included a significant milestone for our parent company, which was the announcement of our corporate name change to Upbound Group. This reflects our combined platform which enables us to meet our customers wherever they are, whether in our stores, leading retailers across the country, or online. Creating Upbound Group was part of our initiative to evaluate our current structure and how we manage the business to position us for long-term growth and adjust to the dynamic environment in which we operate. Through this initiative, we've developed an enhanced shared service model where business units are supported by centralized resources that utilize best practices and involve co-workers across the organization to drive productivity, creativity, and efficiency.

Mitchell E. Fadel: Whether in the showroom or our extended out web channel our product Mexican 10 years to grow and evolve to meet our customers needs.

Mitchell E. Fadel: These efforts are driving improvements in customer growth and retention with recent portfolio positioning around a center for continued success in 2024.

Mitchell E. Fadel: 2023 also included a significant milestone for our parent company, which was the announcement of our corporate name changed to upfront group.

Mitchell E. Fadel: It reflects our combined platform, which enables us to meet our customers wherever they are whether in our stores, leading retailers across the country or online.

Mitchell E. Fadel: Creating me up on a group was part of our initiative to evaluate our current structure and how we manage the business to position as for long term growth and adjusted a dynamic environment in which we operate.

Mitchell E. Fadel: Through this initiative, we've developed an enhanced shared service model, where the business units are supported by centralized resources are utilized best practices and include coworkers across the organization that drive productivity creativity and efficiency.

Mitchell E. Fadel: Our latest efforts in this new operating model include leveraging the capabilities of ACIMA underwriting and data scientists across the consolidated business, which has produced promising early results that should benefit us in 2024 and beyond. 2023 marked a rebound year as both segments improved their loss rates relative to the challenging environment experienced in 2022. We're pleased with our risk and account management efforts and have proven our ability to grow our customer base while identifying targeted areas of risk and opportunities to maintain losses within an acceptable range. We remain committed to pursuing a balanced approach to our capital allocation as well, as evidenced by the growth strategy we highlighted at our investor day last May, our focus on deleveraging the balance sheet, and our ongoing returns of capital to our shareholders.

Mitchell E. Fadel: Our latest efforts in this new operating my uncle, leveraging the capabilities of a female underwriting and data scientists across the consolidated business, which is British promising earlier thoughts that should benefit as in 2024 and beyond.

Mitchell E. Fadel: 2023 market rebound burish, both segments improve their loss rates relative to the challenging environment experienced in 2022.

Mitchell E. Fadel: We're pleased with our risk and account management efforts in improving our ability to grow our customer base, while identifying targeted areas of risk and opportunities to maintain losses within an acceptable range.

Mitchell E. Fadel: We remain committed to pursuing a balanced approach to our capital allocation as well as evidenced by the growth strategy. We highlighted at our Investor Day last me our focus on deleveraging the balance sheet and our ongoing returns of capital to our shareholders.

Mitchell E. Fadel: Collectively, these initiatives produced a strong year, built the foundation for our future, and positioned Upbound for additional profitable growth as we move into 2024. Let's now discuss our financial results on slide four. Our full-year results included revenue of $4 billion, adjusted even at $456 million, and non-GAAP diluted earnings per share of $3.55, each of which finished at or towards the high end of our increased guidance from the third quarter. Our full-year free cash flow of approximately $147 million finished below our guidance, almost entirely driven by stronger-than-expected GMB growth at Acima and replenishment of inventory at Rent-A-Center during the holidays. ACIMA finished 2023 with the largest portfolio values we have seen in the last two years, and Rent-A-Center hit its largest ending portfolio balance since mid-2022.

Mitchell E. Fadel: Collectively these initiatives produce a strong year built a foundation for our future and positioned upbound for additional profitable growth as we move into 2024.

Speaker Change: That's not discuss our financial results on slide four or.

Mitchell E. Fadel: Full year results included revenue of $4 billion, adjusted EBITDA $456 million and non-GAAP diluted earnings per share of $3.55 each of which finished at or towards the high end of our increased guidance from the third quarter.

Mitchell E. Fadel: Our four year free cash flow of approximately $147 million finish blow our guidance almost entirely driven by stronger than expected G. M V growth at the Sema.

Mitchell E. Fadel: And or a punishment of inventory or rent a senator during the holiday season.

Mitchell E. Fadel: <unk> finished 2023 with the largest portfolio values, we have seen in the last two years.

Mitchell E. Fadel: And rent a center hit its largest ending portfolio balanced since mid 2022.

Mitchell E. Fadel: We're very pleased that both segments showed sequential and year-over-year portfolio growth through year-end. The growth experience in the fourth quarter was driven by a number of factors, including the strategic initiatives from 2023 that I mentioned earlier. Additionally, both segments expanded and diversified their product offerings.

Mitchell E. Fadel: We're very pleased with both segments showed sequential and year over year portfolio growth through your end.

Mitchell E. Fadel: The growth experience in the fourth quarter was driven by a number of factors, including the strategic initiatives from 2023 that I mentioned earlier.

Mitchell E. Fadel: All segments expanded and diversified their product offerings.

Mitchell E. Fadel: At Acima, we continue to broaden our merchant partners while also working to generate more activity within our existing merchant partners. Demand was above our expectations across most categories and produced 19% year-over-year GMB growth, despite overall lower approval rates in the quarter than in 2022. We also continue to test, learn, and iterate as we work to expand our LTO solutions and incorporate credit offerings to further benefit our large customer base and leverage our new Upbound operating model. Optimizations are ongoing to find the best outcomes for our customers, partners, and business. We spent the second half of 2023 integrating systems with Concur Credit, formerly known as Genesis Financial, enhancing the risk models by leveraging our proprietary data, and piloting both the general purpose credit card and the private label card.

Mitchell E. Fadel: Female we continue to broaden our merchant partners. While also working you generate more activity within our existing merchant network.

Mitchell E. Fadel: Demand with above our expectations across most categories can produce 19% year over year G. M V growth. Despite overall lower approval rates in the quarter than 2022.

Mitchell E. Fadel: We also continue to test learning iterate as we work to expand our <unk> solutions and incorporate credit offerings to further benefit our large customer base and leverage our new Upbound operating model.

Mitchell E. Fadel: <unk> or I'm going to find the best outcomes for our customers partners being business.

Mitchell E. Fadel: We spent the second half of 2023 integrating systems with concur credit, formerly known as Genesis financial enhancing the risk models by leveraging our proprietary data and piloting both the general purpose credit card and the private label card.

Mitchell E. Fadel: That work has positioned us to ramp up the business throughout 2024, after which we'll be able to further evaluate the timing and the size of the opportunity. As we noted on our last call, we believe the non-prime consumer has been and we expect will continue to be resilient in this macro environment. From an underwriting standpoint, the continued performance of the broader economy helped guide our decisions on risk and led to full-year loss rates and improved 40 basis points at Rent-A-Center and 130 basis points at CEMA. While certain aspects of the economy seem to have stabilized, the consumer does remain under pressure, and we'll maintain our vigilant approach as we seek to balance top-line growth objectives with prudent risk management, utilizing our proprietary data analytics resources. In the second half of the year, we opportunistically repurchased 1.7 million shares, representing approximately 3% of the shares outstanding.

Mitchell E. Fadel: That work has positioned us to ramp up the business route 2024, after which will be able to further evaluate the timing and the size of the opportunity.

Mitchell E. Fadel: We noted on our last caller, we believe the Nonprime consumer has been and we expect will continue to be resilient and this macro environment.

Mitchell E. Fadel: From an underwriting standpoint, the continued performance of the broader economy help guide her decisions on risk and let the full year loss rates and improved 40 basis points. It ran a center and 130 basis points of the female.

Mitchell E. Fadel: Well certain aspects of the economy seem to stabilize the consumer does remain under pressure and will maintain are vigilant approaches we seek to bounce top line growth objectives with prudent risk management utilizing our proprietary data analytics resources.

Mitchell E. Fadel: And the second half of the year, we opportunistically repurchased 1.7 million shares representing approximately 3% of shares outstanding.

Mitchell E. Fadel: In 2024, we expect to continue to prioritize investments in our business, debt reduction, and supporting our dividends. We may also capitalize on future windows with opportunistic share repurchases if we believe the near-term share price diverges from the long-term value we expect to create. On slide five, we can see the details behind our segment levels. At Acima, year-over-year revenue trends improved throughout 2023, culminating in a return to top-line growth in the fourth quarter. The SEMA's revenues in 2023 were supported by year-over-year improvements in the number of total merchant locations, active locations, which are defined as locations with at least one lease transaction in the quarter, and total funded leases. The average ticket size was also up. ACIMA's commitment to providing first-class service and support to our retail partners has expanded our merchant network while also securing, with select retailers, elevated prominence or exclusivity for our offers.

Mitchell E. Fadel: In 2024, we expect to continue to Prioritise investments in our business.

Mitchell E. Fadel: That reduction and supporting our dividend.

Mitchell E. Fadel: We may also capitalized on future windows with opportunistic share repurchases. If we believe the near term share price diverge is from the longterm value we expect to create.

Mitchell E. Fadel: And slide five we can see the details behind our segment level performance.

Mitchell E. Fadel: At a female year over year revenue transit proof throughout 2023, culminating in a return to top line growth in the fourth quarter.

Mitchell E. Fadel: It seem as revenues in 2023 were supported by year over year improvements and the number of total merchant locations active locations, which are defined as locations with at least one lease transactions in the quarter and total funded leases where the average ticket size was also up slightly.

Mitchell E. Fadel: Ah seem as commitment to providing first class service and support our retail partners is expanded our merchant network, while also securing with select retailers elevated prominence or exclusivity for our offerings.

Mitchell E. Fadel: GMB improved sequentially throughout the year, finishing 2023 with 19% year over year growth in the fourth quarter. The acceleration started in earnest late in the third quarter and was sustained throughout the holiday shopping season, and we believe this momentum is positioned SEMA for strong growth in 2024. The FEMA's loss rate declined 130 basis points from 10.6% in 2022 to 9.3% in 2023.

Mitchell E. Fadel: DNV improve sequentially throughout the year, finishing 2023 with 19% year over year growth in the fourth quarter.

Mitchell E. Fadel: The acceleration started in earnest late in the third quarter and with sustained throughout the holiday shopping season, and we believe this momentum as physician to see him or her strong growth in 2024.

Mitchell E. Fadel: The theme is loss rate declined 130 basis points from 10.6% in 2022% to 9.3% in 2023, we carefully adjusted our decisioning algorithms across the year in response to economic development and will continue to optimize our underwriting decisions to help reduce inappropriate risk adjusted return for the business.

Mitchell E. Fadel: We carefully adjusted our decisioning algorithms across the year in response to economic developments and will continue to optimize our underwriting decisions to help produce an appropriate risk-adjusted return for the business. With the improvement in the loss rate relative to the prior year, ASEMA realized 35% year-over-year growth in adjusted EBITDA at $294 million. And that represents the largest full-year adjusted EBITDA amount for ASEMA in its history, and we look forward to building out such strong results. Rent-A-Center ended the year with its highest portfolio balance since the first half of 2022 and its highest customer count across the year.

Mitchell E. Fadel: With the improvement in the lottery relative to the prior year Asemia realized 35% year over year growth and adjusted EBITDA that $294 million and that represents the largest full year adjusted EBITDA amount for <unk> and its history.

Mitchell E. Fadel: Forward to building opposite strong results.

Mitchell E. Fadel: Brennan Center ended the year with its highest portfolio balance since the first half of 2022 and its highest customer count across the year.

Mitchell E. Fadel: Our tactical marketing approach benefited our portfolio balance throughout the year with our 50 Drops in 50 Days program over the summer to celebrate our 50th anniversary and a similar but more compressed campaign during the first part of the holidays. However, revenue and adjusted EBITDA were both down against difficult counts from 2022 but in line with our expectations for the year. The early part of the year was softer in terms of revenues and deliveries, but we saw favorable portfolio growth in the back half of the year due largely to improved customer retention and an uptick in the number of open leases. An important factor in Reno Center's performance was the strength of the web channel, which had 31% more visits and 16% more orders than the prior year, with a share of revenue from that channel reaching 26% of 100 basis points

Mitchell E. Fadel: Our tactical marketing approach benefited our portfolio balance throughout the year with our 50 drops in 50 days program over the summer to celebrate our 50th anniversary and a similar but more compressed campaign in the first part of the holiday season.

Mitchell E. Fadel: Revenue and adjusted EBITDA with both down against difficult camps from 2022, but in line with our expectations for the year.

Mitchell E. Fadel: The early part of the year with softer in terms of revenues and deliveries, but we saw favorable portfolio growth in the back half of the year due largely to improve customer attention and an uptick in the number of open leases.

Mitchell E. Fadel: An important factor in rent a finished performance with the strength of the web channel.

Mitchell E. Fadel: Which hosted 31 per cent more visits and 16% more orders than the prior year with a share of revenue from that channel, reaching 26% of 100 basis points versus 2022.

Mitchell E. Fadel: We continue to invest in our strong physical retail presence across local communities alongside our innovative digital footprint so that our customers may interact with us wherever and whenever they prefer. Rent-a-Center's losses improved 40 basis points in 2023 to 4.5%, with steady sequential improvement from 4.8% in the first quarter to 4.2% in the fourth quarter. This favorability resulted from underwriting adjustments earlier in the year combined with declining fuel prices for consumers and a reduction in inflationary pressure. Past due rates, which are an early indicator of potential loss rates, finished 2023 flat to the prior year.

Mitchell E. Fadel: We continue to invest in our strong physical retail presence across local communities alongside our innovative digital footprint. So that our customers may interact with us wherever and whenever they prefer.

Mitchell E. Fadel: <unk> centres losses, and grew 40 basis points in 20, 23% to 4.5% with steady sequential improvement from 4.8% in the first quarter to 4.2% in the fourth quarter.

Mitchell E. Fadel: This favorability resulted from underwriting adjustments earlier in the year combined with declining fuel prices for consumers and a reduction in inflationary pressures.

Mitchell E. Fadel: Past due rate, which are an error early indicator of potential loss rates finished 2023 flat to the prior year.

Mitchell E. Fadel: Gross margins were generally consistent with our historical average, with adjusted EBITDA and operating margins returning to pre-COVID levels last seen in 2019. Overall, we believe the Rent-A-Center Portfolio is well-positioned for solid performance in 2024. Our priorities for 2024 build off the strategy we outlined at our investor day and the achievements we delivered in 2023. For ACIMA, we plan to continue to grow our top line with small and medium-sized businesses, as well as expand our push into large regional and national enterprise-level accounts. As we continue to widen our merchant network, we are equally committed to deepening penetration with our existing retail partners and generating more leases per merchant per month. The key to achieving that goal will be to offer superior differentiated service to our customers and our merchants, which we expect to drive higher rates of engagement and retention.

Mitchell E. Fadel: Gross margins were generally consistent with our historical average with adjusted EBITDA, an operating margins returning to pre COVID-19 levels last seen in 2019.

Mitchell E. Fadel: Overall, we believe Reno sooner portfolio as well positioned for solid performance in 2024.

Mitchell E. Fadel: Our priorities for 2024 built off the strategy, we outlined at our Investor day, and the achievements we delivered in 2023.

Mitchell E. Fadel: For a scene, where we plan to continue to grow our top line with small and medium sized businesses as well as expand our pushing to large regional and national enterprise level accounts.

Mitchell E. Fadel: As we continue to widen our merchant network were equally committed to deepening penetration with our existing retail partners in January more leases per merchant per month.

Mitchell E. Fadel: The key to achieving that goal will be offer superior differentiated service to our customers and our merchants, which we expect to drive higher rates of engagement and retention.

Mitchell E. Fadel: For our customers, we are focused on having the right products available on the right terms that meet their needs. For our retailers, we are focused on providing proven and flexible solutions for their business and their customers while continuing to simplify the integration process. ASEMA's overall value proposition combines the best of in-store and online shopping at leading retailers with point-of-sale solutions plus a staff model for higher traffic locations through the integration of our Acceptance Now business into the Estima platform. The migration of Now and it is FEMA infrastructure is expected to be complete by the end of the first quarter with the transition of the final two major retailers currently in process.

Mitchell E. Fadel: Our customers we are focused on having the right price available on the right terms that meet their needs.

Mitchell E. Fadel: Retailers or focused on providing proven and flexible solutions for their business and their customers will continuing to simplify the integration process.

Mitchell E. Fadel: Seamless overall value proposition combines the best of in store and online shopping at leading retailers with point of sale solutions plus.

Mitchell E. Fadel: Ah staff model for higher traffic locations through the integration of our acceptance now business into the Athima platform.

Mitchell E. Fadel: The migration of <unk> infrastructure is expected to be complete by the end of the first quarter with the transition to the final two major retailers currently in process.

Mitchell E. Fadel: As we discussed last quarter, the legacy A&L business will benefit from the enhanced virtual underwriting capabilities and customer experiences at CMOS, and we've seen that benefit from retailers that have already been converted. Our underwriting approach is built on an individualized assessment of each customer and each transaction within the context of the broader economic environment. Our robust decisioning is a key contributor to our profitability and margin profile, which we will supplement in 2024 with a dedication to optimizing efficiencies across our organization. Ridership's plan for 2024 builds off the momentum built in the back half of 2023. In 2024, Brennan Center will focus on continuing to serve its customers with desirable name-brand products in hard goods, consumer electronics, jewelry, and automotive. Additionally, as we add digital touchpoints with our customers, whether via text, email, in-app, or on the website, we can offer them relevant and time-limited promotions for exclusive deals and products. Our 12 drops of Christmas promotion created awareness, drove interest, and helped compound the seasonal lift we saw in December.

Mitchell E. Fadel: As we discussed last quarter the legacy in our business will benefit from the enhanced spiritual underwriting capabilities and customer experience is see movies and we've seen that benefit from retailers that have already been converted.

Mitchell E. Fadel: Our underwriting approach is built on an individualized assessment of each customer in each transaction within the context of the broader economic environment.

Mitchell E. Fadel: A robust decisioning as a key contributor to our profitability of margin profile, which will supplement in 2024 with a dedication optimizing efficiencies across our organization.

Mitchell E. Fadel: <unk> plan for 2024 build off the momentum of built in the back half of 2023.

Mitchell E. Fadel: In 2024 rent a center will focus on continuing to serve its customers with desirable name brand products in our goods consumer electronics jewelry and automotive verticals.

Mitchell E. Fadel: Additionally, as we add digital touch points with our customers whether it be a text E mail in app or on the website, we can offer them relevant and time limited promotions for exclusive deals and products.

Mitchell E. Fadel: At 12 drops of Christmas promotional created awareness drove interest and helped compound the seasonal left we saw in December we.

Mitchell E. Fadel: We also deployed optimizations to our online product recommendation engine that led to more relevant product suggestions, higher engagement, and a better user experience. Throughout 2023, marketing and personalization efforts created the largest year in our history for RenoCenter.com, with web visits, as I mentioned, up 31% and web orders up 16% year over year. We know that the combination of the right products in the right offices, available across our physical and digital channels will enhance our value proposition. We expect our stores to remain at the center of our customer relationships, while we are preparing for more growth in the online channel. An important element of this initiative is a rollout of a new point-of-sale system, which leverages updated technology to enhance scalability, resiliency, reporting, and automation. As our online activity continues to grow, and as we see surges in demand during promotional campaigns or holiday seasons, this infrastructure will help us deliver a reliable and seamless experience to our customers, whether in-store or online. The new platform will also allow us to receive more timely and granular data to make more informed and quicker decisions.

Mitchell E. Fadel: We also deployed optimization surround line product recommendation engine that led to more relevant product suggestions higher engagement and better user experiences.

Mitchell E. Fadel: Route 2023, marketing and personalization efforts created the largest here in our history for answer Dotcom with web visits as I mentioned up 31% and web orders up 16% year over year, and we know that the combination of the right products and the right offers.

Mitchell E. Fadel: Available across our physical and digital channels will enhance our value proposition that consumers.

Mitchell E. Fadel: We expect our store should remain at the center of our customer relationships, where we are preparing for more growth in the online chin.

Mitchell E. Fadel: An important element of this initiatives as a roll out of a new point of sale system, which leverages updated technology to enhance scalability resiliency reporting and automation.

Mitchell E. Fadel: Online activity continues to grow and as we see surges in demand during promotional campaigns are holiday seasons. This infrastructure will help us deliver reliable and seamless experience to our customers whether in store or online.

Mitchell E. Fadel: The new platform it'll also allow us to receive more timely and granular data to make more informed and quicker decisions.

Mitchell E. Fadel: The nationwide rollout of the new POS system is underway, and we're excited about laying the groundwork to improve our productivity and support our future growth with enhanced flexibility and capability. Turning upward at the holding company level, our priorities for 2024 will be driven, as always, by our focus on creating sustainable long-term value. For our business segments, we'll continue to prioritize making our processes more efficient, ensuring our people and platforms collaborate to share best practices across our organization. In addition, we're committed to actively managing our expenses to protect and improve our margin profile. For our customers, we'll continue to evaluate new solutions beyond LTO that elevate their financial opportunities and enable us to support them more often and with more. And for our shareholders, we'll continue to focus on thoughtfully allocating capital to fund investments in our business while supporting our dividend and deleveraging. Now, before I hand it off to FAMI, I'd like to emphasize how proud I am of our whole team for their focus, their determination, and delivering such strong And with that, I will turn the call over to FAMI.

Mitchell E. Fadel: The nationwide rollout of the new pass system is underway and we're excited about laying the groundwork to improve our productivity and support our future growth with enhanced flexibility and capabilities.

Mitchell E. Fadel: Turning outbound at the holding company level of our priorities for 2024 will be driven as always by our focus on creating sustainable long term value.

Mitchell E. Fadel: For our business segments will continue to prioritise, making our processes more efficient ensuring our people aren't platforms collaborate to share best practices are crosser organization.

Mitchell E. Fadel: In addition, we're committed to actively managing our expenses to protect and improve our margin profile.

Mitchell E. Fadel: For our customers will continue to evaluate new solutions beyond L. T O that elevate their financial opportunities and enable us to support them more often and with more insights.

Mitchell E. Fadel: And for our shareholders will continue to focus on thoughtfully allocating capital a fund investments in our business, while supporting our dividend and deleveraging plans.

Family: And before I handed off to family I would like to emphasize on Friday, and with a by our whole team for their focus their determination and delivering such strong results. Your unwavering commitment to supporting our customers and our merchants is what makes our company special and I really really appreciate it and thank you and would that let me turn the call over to family.

Fahmy Kuttum: Thank you, Mitch, and good morning, everyone. I'll start today with a review of the fourth quarter and 2023 results and discuss our fiscal year 2024 guidance, after which we will take questions, beginning on page 7 of the presentation.

Family: Thank you mentioned and good morning, everyone.

Family: I'll start today with a review of the fourth quarter and 2023 results and to discuss our fiscal year 2024 guidance after which we will take questions.

Family: Beginning on page seven of the presentation.

Fahmy Kuttum: Consolidated revenue for the fourth quarter was up 2.8% year-over-year, with SEMA up 6.6% and Rent-A-Center down 1.7%. Rentals and fees revenues were up 4.3%, reflecting higher portfolio values for both businesses during the fourth quarter. Merchandise sales revenues decreased 5.6% due to fewer customers electing earlier purchase options.

Family: Consolidated revenue for the fourth quarter was up 2.8% year over year with a seam of up 6.6% and rent a center down 1.7 per cent.

Family: A rental then fees revenues were up 4.3%, reflecting higher portfolio values for both benefit during the fourth quarter.

Family: Merchandise sales revenues decreased 5.6% due to fewer customers electing earlier purchase options.

Fahmy Kuttum: Consolidated gross margin was 50.3% and increased 30 basis points year over year with improvements in both the ASEMA segment and the Rent-A-Center segment. Consolidated non-GAAP operating expenses, excluding skip-stolen losses and depreciation and amortization, were up mid-single digits, led by a low teens increase in general and administrative costs as a result of certain corporate investments in technology and people and higher incentive-based compensation tied to company performance in addition to mid-single-digit increases in both store labor and other store expenses. The consolidated skipped and stolen loss rate was 7.5%, unchanged from the prior year period and in line with our expectations.

Family: Consolidated gross margin was 53% and increased 30 basis points a year over year with improvements in both the <unk> segment and the rent a center segment.

Family: Consolidated non-GAAP operating expenses, excluding skip stolen losses, and depreciation and amortization, we're up mid single digits.

Family: Led by low teens increase in general and administrative costs as a result of certain corporate investments in technology and people at higher incentive based compensation tied to company performance. In addition to mid single digit increases in about store labor and other store expenses.

Family: The consolidated skip stolen loss rate was 7.5% unchanged from the prior year period and in line with our expectations.

Fahmy Kuttum: On a sequential basis, the consolidated loss rate increased 50 basis points due to a modest uptick in the ACIMA segment, driven primarily by the Legacy Acceptance Now business. Putting the pieces together, Consolidated Adjusted EBITDA of $107.6 million decreased 2.2% year-over-year as higher ESIMA segment EBITDA was offset by lower Rent-A-Center segment EBITDA and higher corporate costs. Adjusted EBITDA margin of 10.6% was down approximately 50 basis points compared to the prior year period, with approximately 20 basis points of margin contraction for ESEMA, approximately 10 basis points of contraction for Rent-A-Center, and a 40 basis points increase in corporate costs as a percent of sales. I will provide more detail on the segment results in a moment. Looking below the line, fourth quarter net interest expense was $28 million compared to $26 million in the prior year. This was due to an approximately 200 basis points year-over-year increase in variable benchmark rates that affected our variable rate debt, which was approximately $881 million at quarter end. The effective tax rate on a non-GAAP basis was 24.6% compared to 25.8% for the prior year period.

Family: On a sequential basis to consolidated loss rate increased 50 basis points due to a modest uptick in the SMS segment, Jeremy primarily by the legacy acceptance now business.

Family: Putting the pieces together consolidated adjusted EBITDA of 107.6 million decreased 2.2% year over year is higher estimates segment EBITDA was offset by lower rent a center segment EBITDA at higher corporate cost.

Family: Adjusted EBITDA margin of 10.6 per cent was down approximately 50 basis points compared to the prior year period with approximately 20 basis points of margin contraction for Assira, approximately 10 basis points of contraction for rent a center at a 40 basis points increase in corporate cost of a percent of sales.

Speaker Change: I will provide more detail on the segment results in a moment.

Family: Looking below the line fourth quarter net interest expense was $28 million compared to $26 million in the prior year.

Family: Due to approximately 200 basis points a year over year increase in a favourable benchmark rates that affected our variable rate debt, which was approximately $881 million at quarter end.

Family: The effective tax rate on a non-GAAP basis was 24.6% compared to 25.8% for the prior year period.

Fahmy Kuttum: The diluted average share count was 55.5 million shares in the quarter. Gap's gap loss per share was $0.21 in the fourth quarter compared to earnings per share of $0.05 in the prior year period. After adjusting for special items that we believe do not reflect the underlying performance of our business, non-GAAP diluted EPS was $0.81 in the fourth quarter of 2023 compared to $0.86 in the prior year period. Due to stronger-than-expected GMV growth out of SEMA in the fourth quarter, we deployed our fourth-quarter free cash flow and an additional $37 million toward inventory investment, compared to $44 million of free cash flow generated in the prior year period. In the fourth quarter, we distributed a quarterly dividend of $0.34 per share, and we repurchased approximately 800,000 shares in the quarter.

Family: The diluted average share count was 55.5 million shares in the quarter.

Family: Gap loss per share was 21, and the fourth quarter compared to earnings per share of five cents in the prior year period.

Family: After adjusting for special items that we believe do not reflect the underlying performance of our business non-GAAP diluted EPS was 81 cents in the fourth quarter of 2023 compared to 86 cents in the prior year period.

Family: Due to a stronger than expected G. M V growth at a seam on the fourth quarter, we deployed our fourth quarter free cash flow and an additional $37 million toward inventory investments compared to $44 million a free cash flow generated in the prior year period.

Family: And the fourth quarter, we distributed a quarterly dividend at 34 cents per share and we repurchased approximately 800000 shares in the quarter.

Fahmy Kuttum: We finished the fourth quarter with a net leverage ratio of approximately 2.7 times, up from 2.5 times in the third quarter. As previously reported, we increased the dividend to $0.37 per share with our January 2024 payment. Drilling down to the segment results, starting on page 8.

Family: We finished the fourth quarter with a net leverage ratio of approximately 2.7 times up from two and a half times in the third quarter.

Family: As previously reported we increase the dividend 37 cents per share with our January 2024 payment.

Family: Drilling down to the segment results starting on page eight.

Fahmy Kuttum: For ACIMA, GMV year-over-year trends continued to improve sequentially in the fourth quarter, and we returned to positive year-over-year GMV... GMV increased 19% year-over-year in the fourth quarter, an improvement from a 1.4% decrease in the third quarter. GMV growth was above our expectations and was driven by year-over-year growth and some key underlying drivers, with active merchant locations up mid-single digits, applications up over 20% due to strong demand, and average ticket size up high single digits. Those tailwinds were partially offset by lower approval rates across all major categories.

Family: For a <unk> year over year trends continue to improve sequentially in the fourth quarter and will return to positive year over year Jam V growth.

Family: <unk> increased 19% year over year in the fourth quarter and improvement for a 1.4% decrease in the third quarter.

Family: TMV growth with above our expectation that was driven by year over year growth in some key underlying drivers with active merchant locations up mid single digits applications up over 20% you'd have strong demand an average ticket side of high single digits.

Family: Those tailwinds are partially offset by lower approval rate across all major categories.

Fahmy Kuttum: The value of assets under lease was up mid-teens both year over year and sequentially, and it was the highest level since the fourth quarter of 2021. Revenues increased 6.6% year-over-year, including a 9.6% increase in rental and fees revenue. Merchandise sales revenues decreased 3.9% year over year due to fewer customers electing the earliest purchase option, with a mix of those transactions for the fourth quarter returning to pre-pande

Family: The value of assets under lease was up mid teens, both year over year and sequentially and what the highest level since the fourth quarter of 2021.

Family: Revenues increased $6, 6% year over year, including a 9.6% increase in rentals and fees revenue.

Family: Merchandise sales or revenue decreased 3.9% year over year due to fewer customers electing the earliest purchase option with a with a mix of those transactions for the fourth quarter returning to pre pandemic levels.

Fahmy Kuttum: Skip Stolen Losses for the Acima Virtual Platform were 7.9%, 10 basis points higher sequentially and 10 basis points lower year over year. Losses for the Legacy Acceptance Now staff business were in the double digits and drove the sequential increase in the FEMA consolidated results, in line with our expectations. We have continued tightening underwriting at ANOW to optimize performance.

Family: Skip stolen losses for their seem of virtual platform, where seven 9%.

Family: 10 basis points higher sequentially, and 10 basis points lower year over year.

Family: Losses for the legacy acceptance now staff business, where in the double digits and drove the sequential increase in the Simo consolidated results in line with our expectations.

Family: We have continued tightening underwriting a now to optimize performance and more importantly, we are in the process of completing the migration of some of our larger merchant partners from the a now under our underwriting decision engine over to the Asemia platform.

Fahmy Kuttum: And more importantly, we are in the process of completing the migration of some of our larger merchant partners from the ANOW underwriting decision engine over to the Acima platform. We expect to finish this transition in the first quarter of 2024. This will strengthen our underwriting capabilities and should reduce loss rates as lease cohorts from the legacy system wind down throughout the year. On a combined basis, including a CIMA virtual and a now, the loss rate was 9.9% of sales. 100 basis points increased from the prior year period and 50 basis points higher than the third quarter. Operating costs excluding skip-stolen losses were up approximately $8.4 million in the fourth quarter or 120 basis points as a percent of sales due to higher labor costs as well as increased marketing investment.

Family: We expect to finish this transition in the first quarter of 2024.

Family: This will strengthen our underwriting capabilities and should reduce loss rates as lease cohorts from the legacy system wind down throughout the year.

Family: On a combined basis, including assume a virtual andi now the loss rate with 9.9% of sales of 100 basis points increase from the prior year period at 50 basis points higher than the third quarter.

Family: Operating costs, excluding skip stolen losses were up approximately $8.4 million in the fourth quarter or 120 basis points of a percent of sales due to higher labor costs as well as increased marketing investments.

Fahmy Kuttum: Adjusted EBITDA of $75 million was up 4.7% year-over-year, primarily due to a 6.6% increase in revenue that was partially offset by a 3.6% increase in cost of goods sold. Adjusted EBITDA margin of 14.8% decreased 20 basis points year-over-year, while gross margins expanded approximately 190 basis points. For the Rent-A-Center segment, at year-end, the lease portfolio value was up 1.5% year-over-year, an improvement of 420 basis points from the end of the third quarter. Total segment revenues decreased 1.7% year-over-year and improved from a 4.2% decrease in the third quarter. The decrease in revenues was driven by a 12.2% decrease in merchandise sales due primarily to fewer customers electing early purchase options compared to the prior year period. Fourth quarter rental and fees revenue declined 80 basis points, an improvement from a 3.2% decline in the third quarter. Same-store sales decreased 1.6% year-over-year in the fourth quarter, compared to a 4% decrease in the third quarter.

Family: Adjusted EBITDA of $75 million was up $4, 7% year over year, primarily due to a $6 6% increase in revenue that was partially offset by 3.6% increase in cost of goods sold.

Family: Adjusted EBITDA margin of 14.8% decreased 20 basis points, a year over year, while gross margins expanded approximately 190 basis points.

Family: For the rent a center segment at year end, the lease portfolio value was up 1.5% year over year and improvement of 420 basis points from the end of the third quarter.

Family: Total segment revenues decreased 1.7% year over year and improved from a 4.2% decrease in the third quarter.

Family: The decrease in revenues was driven by a 12.2% decrease in merchandise sales due primarily to fewer customers electing early purchase options compared to the prior year period.

Family: Fourthquarter rental and fees revenue declined 80 basis points, an improvement from a 3.2% decline in the third quarter.

Family: Same store sales decreased 1.6% year over year in the fourth quarter compared to a 4% decrease in the third quarter.

Fahmy Kuttum: Skip Stolen Losses continue to improve driven by ongoing underwriting and account management efforts, decreasing 160 basis points year-over-year and 10 basis points sequentially to 4.2%. Past-due rates also decreased year over year, with 30-day past-due rates averaging 3.1% for the fourth quarter, compared to 3.5% for the prior year period. Adjusted EBITDA margin for the fourth quarter decreased 10 basis points year-over-year to 14.5%, primarily due to the deleveraging effect of lower revenues on less variable costs. This is reflected by a 190 basis point year-over-year increase in the ratio of non-GAAP operating expenses, excluding skip-stolen losses as a percent of revenue, even though expense dollars decreased year over year. Adjusted EBITDA margin decreased 50 basis points from the third quarter, primarily reflecting normal seasonality in addition to higher marketing and labor expenses. For the Mexico segment, adjusted EBITDA was higher year over year, and the franchise segment adjusted EBITDA was lower.

Family: Skip stolen losses continued to improve driven by ongoing underwriting and account management efforts decreasing 160 basis points and year over year, and 10 basis points sequentially in at 4.2%.

Family: Past few rates also decrease year over year with 30 day past few rates, averaging 3.1% for the fourth quarter compared to 3.5% for the prior year period.

Family: Adjusted EBITDA margin for the fourth quarter decreased 10 basis points, a year over year to 14.5% primarily due to the deleveraging effect of lower revenues on less variable costs.

Family: This is reflected by 190 basis point year over year increase in the ratio of non-GAAP operating expenses, excluding skip stolen lawsuits as a percent of revenue, even though expense decreased year over year.

Family: Adjusted EBITDA margin decreased 50 basis points from the third quarter, primarily reflecting normal seasonality. In addition to hire marketing and labor expenses.

Family: For the Mexico segment, adjusted EBITDA was higher year over year and franchise segment adjusted EBITDA was lower.

Fahmy Kuttum: Non-GAAP corporate expenses were approximately 12% higher compared to the prior year, primarily due to higher projected performance-based compensation than in 2022. On a consolidated basis, the company finished 2023 on a strong note, meeting or exceeding the high end of the initial full year guidance that we provided in February 2023 for revenue, adjusted EBITDA, and non-GAAP diluted EPS. Full-year consolidated revenues of $4 billion were at the high end of our initial guidance, while adjusted EBITDA of $456 million was approximately 15% higher than the original midpoint. The non-GAAP diluted EPS of $3.55 was 29% higher than the midpoint of our initial guidance, significantly exceeding our expectations. Let's shift to the 2024 financial outlook. Note that references to growth or decreases generally refer to year-over-year changes unless otherwise stated.

Family: non-GAAP corporate expenses, where approximately 12% higher compared to the prior year, primarily due to higher projected performance based compensation then in 2022.

Family: On a consolidated basis. The company finished 2023 on a strong note meeting or exceeding the high end of the initial full year guidance that we provided in February of 2023 for revenue adjusted EBITDA and non-GAAP diluted EPS.

Family: Full year consolidated revenues of 4 billion or at the high end of our initial guidance for adjusted EBITDA $456 million was approximately 15% higher than the original midpoint.

Family: The non-GAAP diluted EPS of $3.55 was 29% higher than the midpoint of initial guidance significantly exceeding our expectations.

Family: Let's shift two to 2024 financial outlook.

Family: Note that references to growth or decreases generally refer to a year over year changes unless otherwise stated.

Family: For the full year, we expect to generate revenue of $4 billion to $4.2 billion, and adjusted EBITDA $455 million to $485 million, which excludes stock based compensation of approximately $25 million.

Fahmy Kuttum: For the full year, we expect to generate revenue of $4 to $4.2 billion and adjusted EBITDA of $455 to $485 million, which excludes stock-based compensation of approximately $25 million. We are projecting consistent adjusted EBITDA margins in 2020. Fully diluted non-GAAP earnings per share is expected to be $3.55 to $4.00, which assumes a fully diluted average share count of 55.7 million shares with no share repurchases throughout the year.

Family: We are projecting consistent adjusted EBITDA margins with 2023.

Family: Fully diluted non-GAAP earnings per share is expected to be $3.55 to $4, which assumes a fully diluted average share count of 55.7 million shares with no share repurchases throughout the year.

Family: We're also projecting $100 million to $130 million of free cash flow net interest expense of $105 million to $110 million and an effective tax rate on a non-GAAP basis of 25.5% to 26.5%.

Fahmy Kuttum: We are also projecting $100 to $130 million of free cash flow, net interest expense of $105 to $110 million, and an effective tax rate on a non-GAAP basis of 25.5% to 26.5%. We do not have share repurchases or M&A activity included in our guidance for 2024. Our forecast assumes a macroeconomic backdrop consistent with current conditions, along with three rate cuts by the Fed across the year, as we experienced in the fourth quarter of 2023. The free cash flow range will ultimately be determined by the level of consumer demand and resulting growth in GMV and the portfolio. The cash flow, which is dedicated to investing in profitable leases, reduces our overall free cash flow in the short term but should support stronger results later as we benefit from a larger portfolio.

Family: We do not have share repurchases or M&A activity included in our guidance for 2024.

Family: Our forecast assumes a macroeconomic backdrop consistent with current conditions, along with three rate cuts by the fed across the year.

Family: As we experienced in the fourth quarter of 2023.

Family: Free cash flow range will ultimately be determined by the level of consumer demand and resulting growth in G M B and the portfolio.

Family: The cash flows dedicated to investing and profitable leases reduces our overall free cash flow in the short term, but should support stronger results later as we benefit from a larger portfolio.

Family: For the <unk> segment, we expect G. M V to increase mid to high single digits with a high single digit increase in revenue we.

Family: We expect gross margins to contracts from the prior year, especially especially in the first half of the year due to a more normalised tax season, and the impact of promotions offered in the fourth quarter.

Fahmy Kuttum: For the ACIMA segment, we expect GMV to increase mid to high single digits, with a high single-digit increase in revenue. However, we expect gross margins to contract from the prior year, especially in the first half of the year due to a more normalized tax season and the impact of promotions offered in the fourth quarter. Consolidated ASEMA losses for the year are expected to be relatively flat to the prior year, with higher losses in the first half of the year than the second half due to the elevated legacy ANOW portfolio, which will wind down as the year progresses.

Family: Consolidated Athima losses for the year are expected to be relatively flat to the prior year with higher losses in the first half of the year then the second half due to the elevated legacy a now portfolio, which will wind down a year progresses.

Family: Adjusted EBITDA margin expect it to be in the mid teens range consistent with 2023.

Family: For the <unk> Center segment, we expect a portfolio revenues and same store sales to be flat to up low single digits.

Family: Loss rates are projected to be stable to 2023 levels adjusted EBITDA margin and expect it to be in the mid teens range consistent with 2023.

Fahmy Kuttum: Adjusted EBITDA margin is expected to be in the mid-teens range consistent with 2023. For the Rent-A-Center segment, we expect the portfolio, revenues, and same-store sales to be flat to up low single digits. Loss rates are projected to be stable to 2023 levels.

Family: We expect to Mexico in franchising businesses will generate similar results of 2023, and we expect corporate cost a whole steady as a percentage of consolidated revenue year over year.

Fahmy Kuttum: Adjusted EBITDA margin is expected to be in the mid-teens range, consistent with 2023. We expect the Mexico and franchising businesses will generate similar results in 2023. And we expect corporate costs to hold steady as a percentage of consolidated revenue year over year. As we are still testing and learning with the new general purpose and private label credit cards, this forecast does not include any meaningful contribution from those initiatives in 2024.

Family: As we are still testing and learning with a new general purpose in private level credit cards. This forecast does not include any meaningful contribution from those initiatives in 2024.

Family: As we proceed through the year, we will continue to evaluate our progress and the resolve stemming from our new partnership.

Family: The 2024 plan does not incorporate the benefit of any material trade down. However, we are closely monitoring lenders as said above us and retailer waterfalls and specifically the proposed rule changes around the credit card late fees.

Fahmy Kuttum: As we proceed through the year, we will continue to evaluate our progress and the results stemming from our new partnership. The 2024 plan does not incorporate the benefit of any material trade-down, however, we are closely monitoring lenders that sit above us in retailer waterfalls, and specifically the proposed rule changes around credit card late fees. If the CFPB's new rule is finalized as proposed, then credit card late fees could decline meaningfully.

Family: If the <unk> new role is finalized as proposed that credit card late fees could decline meaningfully.

Family: One possible reaction from card issuer would be to manage credit more tightly which may cause effected consumers and retailers to explore alternatives, including the <unk> offering.

Family: This potential trade down could cause more consumers with a stronger and more resilient credit profile relative to the to the traditional LCL customer base to apply for a lease.

Fahmy Kuttum: One possible reaction from card issuers would be to manage credit more tightly, which may cause affected consumers and retailers to explore alternatives, including the LTO offer. This potential trade-down could cause more consumers with a stronger and more resilient credit profile relative to the traditional LTO customer base to apply for a lease. Although our guidance for 2024 does not include any meaningful impact from trade down, whether from a typical recession or regulatory action.

Family: Although our guidance for 2024 does not include any meaningful impact from trade down whether from a typical recession or regulatory actions such developments could represent a potential tailwind to our business.

Family: In terms of the first quarter total consolidated revenue is expected to be up low to mid single digits year over year.

Family: We expect losses at the <unk> centre segment to be in line with the first quarter of 2023.

Fahmy Kuttum: Such developments could represent a potential tailwind to our business. In terms of the first quarter, total consolidated revenue is expected to be up low to mid-single digits year over year. We expect losses at the Rent-A-Center segment to be in line with the first quarter of 2023. ASEMA consolidated losses are expected to be consistent with the fourth quarter.

Family: Ah Sema consolidated losses are expected to be consistent with the fourth quarter.

Family: Adjusted EBITDA margins are expected to be in the high single digit range.

Family: Interest expense tax rate and share count are expected to be similar to the fourth quarter of 2023.

Family: Resulting in a non-GAAP EPS range of 70 to 80 cents.

Family: We expect consolidated adjusted EBITDA margins to expand following in the first quarter due to normal seasonality coming off tax season, and higher earlier purchase options and improvement in loss of that both segments, especially at a theme as the back book from the legacy now business winds down and <unk>.

Fahmy Kuttum: Adjusted Ibiza margins are expected to be in the high single digits range. Interest expense, tax rate, and share count are expected to be similar to the fourth quarter of 2023, resulting in a non-GAAP EPS range of 70 cents to 80 cents. We expect consolidated adjusted EBITDA margins to expand following the first quarter due to normal seasonality coming off the tax season and higher earlier purchase options, and Improvement and Losses at both segments, especially at Acima as the back book from the legacy A-NOW business winds down and Acima GMV growth throughout 2024. Moving the capital allocation. Our overall strategy remains the same. Our proven business model generates strong operating cash flows over time, and our disciplined capital allocation framework deploys it in support of our strategic priorities.

Family: Throughout 2024.

Family: Moving the capital allocation.

Family: Our overall strategy remains the same are proven business model generate strong operating cash flows overtime and are disciplined capital allocation framework deployed in support of our strategic priorities.

Family: Our top priority remains investing in the business to position us for ongoing success, we will continue to invest in delivering a lease portfolio that meets our return objectives, while investing in new channels like the credit card partnership ended our digital capabilities that improve the customer and retailer experience and further enhance our competitive position we.

Family: Committed to our strong regular dividend and strengthening our balance sheet by reducing debt over time.

Fahmy Kuttum: Our top priority remains investing in the business to position us for ongoing success. We will continue to invest in delivering a lease portfolio that meets our return objectives while investing in new channels like the credit card partnership and in our digital capabilities that improve the customer and retailer experience and further enhance our competitive position. We are committed to our strong regular dividend and strengthening our balance sheet by reducing debt over time. In addition, we will evaluate other strategic deployments of capital, including opportunistic share repurchases and inorganic growth opportunities as they arise.

Family: And Additionally, we will evaluate other strategic deployment of capital, including opportunistic share repurchases and inorganic growth opportunities as they arise.

Family: Based on the strength of our results and our outlook for 2024, we recently raised our dividend by three per quarter we.

Family: We expect the balance of our free cash flow. This year will go towards deleveraging as we advanced towards our long term target net leverage ratio of one five times.

Family: The net leverage ratio of 2.7 times as of year end reflected the impact of $69 million debt paydown across the year and an increase in working capital needs at year end to support GMB growth.

Fahmy Kuttum: Based on the strength of our results and our outlook for 2024, we recently raised our dividend by three cents a quarter. We expect the balance of our free cash flow this year will go towards deleveraging as we advance towards our long-term target net leverage ratio of one and a half times. The net leverage ratio of 2.7 times as of year-end reflected the impact of $69 million of debt paydown across the year and an increase in working capital needs at year-end to support GMV growth.

Family: Concluding on slide 12 on February 27, we will celebrate the one year anniversary of our new abound ticker on the NASDAQ exchange.

Fahmy Kuttum: As Mitch stated last year, a rebranding represents a transition to an enterprise operating structure that will enhance and coordinate our collective efforts on strategic planning operations risk management innovations and digital investments.

Fahmy Kuttum: We have made headway across each of those areas and those gains have set the business on a positive trajectory going into this year.

Fahmy Kuttum: Concluding on slide 12, on February 27th, we will celebrate the one-year anniversary of our new upbound ticker on the NASDAQ Exchange. As Mitch stated last year, our rebranding represents a transition to an enterprise operating structure that will enhance and coordinate our collective efforts in strategic planning, operations, risk management, innovations, and digital investment. We have made headway across each of those areas, and those gains have set the business on a positive trajectory going into this year. We feel confident in our current competitive position and underwriting capabilities that can balance the uncertainty in the market while producing strong margins at both of our major business segments. In 2024, we expect our continued customer service focus, a disciplined approach to risk management, and a hyper-focus on cost controls will help us deliver sustainable growth and strong risk-adjusted returns.

Fahmy Kuttum: We feel confident in our current competitive position and underwriting capabilities that can balance the uncertainty in the market, while producing strong margin that both of our major business segments.

Fahmy Kuttum: In 2024, we expect our continued customer service focus disciplined approach to risk management and hyper focus on cost controls will help us deliver sustainable growth and strong risk adjusted returns.

Fahmy Kuttum: Our leadership team is optimistic on the opportunities ahead of us and is confident in our ability to execute on our objectives for the year ahead.

Speaker Change: Thank you for your time. This morning, operator, you May know open the line for questions.

Fahmy Kuttum: Yeah.

Fahmy Kuttum: As a reminder to ask a question you eat <unk> one one on your telephone and wait for them to be announced to withdraw. Your question. Please personal one one again please stand by.

Speaker Change: Can a roster.

Speaker Change: One moment for first question.

Fahmy Kuttum: Our first question comes from the lineup Kyle Joseph from Jeffries. Your line is open.

Fahmy Kuttum: Our leadership team is optimistic about the opportunities ahead of us and confident in our ability to execute on our objectives for the year ahead. Thank you for your time this morning. Operator, you may now open the line for questions. Thank you. And as a reminder, to ask a question, you need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by.

Speaker Change: Hey, good morning, and thanks for taking my questions.

Speaker Change: Just on the free cash flow and in twenty-three, let's think came in a little bit below your guidance and that really just a function of the better growth at a <unk> or the better <unk>.

Speaker Change: Hey, how good morning, Yeah, that's what.

Speaker Change: That's what's causing a lower free cash flow for the year as we stated a G. M V came it above our expectations and so you'll have an impact on the short term on free cash flow, but will benefit from the longer in the long run from a higher portfolio.

Operator: We can pause the Q&A roster for one moment for our first question. Our first question will come from the line of Kyle Joseph from Jeffreys. Your line is open. Hey, good morning.

Kyle Joseph: And thanks for taking my questions. Just on the pre-cash flows in 23, it looks like it came in a little bit below your guidance. Is that really just a function of the better growth at Acima or the better GMB growth at Acima? Hey Kyle, good morning.

Speaker Change: Okay. Thanks skin segway.

Kyle Joseph: Obviously, yeah <unk> was really strong in the fourth quarter and that kind of a new runway and was there any sort of one time things related to holiday sales in China connect GMB in the fourth quarter versus year revenue outlook at the segment.

Fahmy Kuttum: Yeah, that's what that's causing a lower free cash flow for the year. As we stated, the GMV came in above our expectations. And so you'll have an impact on the short term on free cash flow but will benefit in the long run from a higher portfolio. Great, thanks. Good segue. Obviously, yeah, GMB was really strong in the fourth quarter.

Fahmy Kuttum: Hi, good morning countless Mitch.

Fahmy Kuttum: I wouldn't I wouldn't call, 19%, the new the new run right although.

Fahmy Kuttum: I will tell you, it's held up really well going into this year.

Fahmy Kuttum: Guidance for and I'll come back to that in a second guidance for twenty-four is mid to high single digits on and G. M V for a seamless. So we certainly expect to continue in fact there'll be higher than that at the beginning of the year.

Mitchell E. Fadel: Is that kind of the new run rate? Was there any sort of, you know, one-time things related to holiday sales of just trying to, you know, connect GMB in the fourth quarter versus your revenue outlook for the second quarter? Hey, good morning, Kyle. This is Mitch.

Mitch: Get a little lower as we camp over the plus 19% in the fourth quarter and in fact January.

Mitchell E. Fadel: I wouldn't call 19% the new run rate, although I will tell you it's held up really well going into this year. You know, our guidance for, and I'll come back to that in a second, guidance for 24 is mid to high single digits on GMV for ACIMA, so we certainly expect it to continue. In fact, it'll be higher than that at the beginning of the year, but it'll get a little lower as we camp over the plus 19% in the fourth quarter.

Mitchell E. Fadel: Within the 15% range in February looking to repeat that so firewood, obviously February it's not done yet, but we're talking about 15% in January and looking about the same so far at least in February so really strong momentum.

Mitchell E. Fadel: You know, we're seeing mid to high single digit GMB growth for the year, because it will get a little tougher as we get later in the year, but.

Mitchell E. Fadel: And in fact, January was in the 15% range, and February is looking to repeat that. So far, obviously, February is not done yet, but we're talking about 15% in January and looking about the same so far, at least in February. So really strong momentum. You know, we're saying mid to high single-digit GMB growth for the year because it will get a little tougher as we get later in the year, but when he's comping over 19, you know, in the fourth quarter. But it is really strong.

Mitchell E. Fadel: Capron over 19.

Mitchell E. Fadel: You know in the fourth quarter, but really strong, but obviously, it's a 19% really strong so far this year and we're really happy with the demand in the overall performance of the seam of keeping delinquencies flat with all that growth and.

Mitchell E. Fadel: Good underwriting everything we just talked about it and the and the prepared comments, but a lot of momentum Lotta new merchants.

Mitchell E. Fadel:

Mitchell E. Fadel: In fact, we I think it was on one of the slides or it is on one of the size, we added 6% merging growth.

Mitchell E. Fadel: Obviously, it's 19 percent, really strong so far this year, and we're really happy with the demand and the overall performance of the schema, keeping delinquencies flat with all that growth and, you know, good underwriting, everything we just talked about in the prepared comments. But a lot of momentum, a lot of new merchants. In fact, I think it was on one of the slides, or it is on one of the slides, we added 6% merchant growth. Our productivity per merchant went way up in the quarter, about a 25% increase in productivity per merchant. Our direct-to-consumer business almost doubled the business from last year in the fourth quarter. Our e-com did double in the quarter, you know, smaller numbers, but those numbers doubled. So, you know, every aspect of their business is going really well. I got it.

Mitchell E. Fadel: Our productivity per merchant went way up in the quarter about 25% increase in productivity per merchant or direct to consumer.

[noise] doubled.

The business from last year in the fourth quarter R. E Com did double in the quarter smaller numbers, but those numbers doubled. So you know every every every aspect of their business is going really well.

Got it yeah, that's great and then last one for me and I can hop back in the <unk> She's talked about.

Like what merchandise, you're seeing really strong growth in Athima and then some.

Others by your not seen the garage and it really kind of consumer electronics and that tire and then how the furniture in mass has been churning as well and that's the last one for me thanks guys.

Kyle Joseph: Yeah, that's great. And then last one for me, and I can hop back in the queue, but just talk about, you know, what merchandise you're seeing really strong growth in at Acima? And then some, or you know, others where you're not seeing the growth? Is it really kind of consumer electronics? Is it tires?

Sure Kyle Yeah in the fourth quarter, we had great growth in every segment every category.

Speaker Change: We're in.

Even the furniture, that's obviously had a lot of a lot of headwinds.

Mitchell E. Fadel: And then how are furniture and mattresses trending as well? And that's the last one for me. Thanks, guys. Sure, Kyle. Yeah, in the fourth quarter, you know, we had great growth in every segment, every category that we're in. You know, even furniture, which has obviously had a lot of headwinds.

We grew and all of them are the ones you mentioned everything we're in it was pretty consistent across the board.

Of course, you know.

The again, it's not just a matter of our current merchants just.

You know more productivity within the current merchants, we're adding a lot of merchants like I said, 6% growth.

Mitchell E. Fadel: But we grew in all of them, all the ones you mentioned, everything we're in. It was pretty consistent across the board. Course, you know, again, it's not just a matter of our current merchants, just, you know, more productivity within the current merchants. We're adding a lot of new merchants. Like I said, 6% growth and more coming in the first quarter. So adding merchants and getting more productivity in each category are driving those numbers. Yeah, and maybe just to add to that, Tal, we saw it across the board, as Mitch said. Of course, in the fourth quarter, you'll have a run-up in jewelry and consumer electronics.

More coming in the first quarter so.

Adding merchants name getting more productivity in each category.

Is driving those numbers.

Just to add to that power saw it across the board is Mitch said of course in the fourth quarter, you'll have a run up and jewelry and consumer electronics being one of the more riskier segments for US we are able to to make sure that we're monitoring that from an underwriting standpoint, but even in furniture, we talked about as being up Oh.

All by 20% in the furniture category it was up over 30% in the fourth quarter and that's a reflection of adding.

Fahmy Kuttum: You know, being one of the more riskier segments for us, we're able to, you know, make sure that we're monitoring that from an underwriting standpoint. But even in furniture, we talked about apps being up overall by 20% in the furniture category. It was up over 30% in the fourth quarter, and that's a reflection of adding merchants and going exclusive on ashley.com, which is one of our biggest accounts. And doing that gives us more apps to look at. We actually had lower approval rates in the quarter.

Merchants and going exclusive on actually Dot com, which is one of our biggest biggest accounts.

And doing that it gives us more apt to look at we actually had a lower approval rates in the quarter. So we were able to be a little bit more selective and still grow GMB year over year, Yeah. I think that's a great AD amex growth with lower approval rate the 19% growth Sir.

Okay very helpful. Thanks, a lot for answering my questions.

Thanks gap.

Thank you one moment for our next question.

Our next question comes lineup Bobby Griffin from Raymond James Your line is open.

Mitchell E. Fadel: So we were able to be a little bit more selective and still grow GMB year over year. Yeah, I think that's a great add-on. That's growth with lower approval rates than 19% growth.

Hey, good morning, <unk>, Thanks for taking the questions and congrats on good into the air.

Thanks.

Kyle Joseph: Great, very helpful. Thanks a lot for answering my questions. Thanks, Kyle.

So I guess, we're <unk>.

I want to maybe just unpack the GMB growth and it seem a little bit more possible. It's been a few moments there look to 19% I'm pretty notable slipped from trends in I would say you know <unk> at least from investors side that retail was just okay, probably during four Q and maybe even in the categories you guys do.

Operator: One moment for our next question. Our next question will come from Bobby Griffin from Raymond James. Your line is open. Hey, good morning everybody.

Bobby Griffin: Thanks for taking the questions and congrats on a good end to the year. Thanks, Bobby. Good morning.

Mitchell E. Fadel: So I guess first, Mitch, I want to maybe just unpack the GMB growth and its team a little bit more, if possible, and spend a few moments there. Look, the 19% is a pretty notable flip from trends. And I would say, you know, our checks, at least from the investor side, that retail was just okay, probably during 4Q, and maybe even in the categories you guys do, it was a little less than okay. So can you maybe unpack what you saw there?

A little less and okay. So you can you can you may be impact.

What you saw then what do you think is driving the success to slip this pretty meaningfully here in the fourth quarter.

Sure sure Bobbie Good question I think you know.

At the end of the day were taken share.

Just to cut the cut to the chase and when I say, we're we're taking sure there's different ways of taking sure you can.

When an account taken away from from someone else you can get in a better position with that account because you are because you're servicing a better or the or the flow is better.

Mitchell E. Fadel: And what do you think is driving the success to flip this pretty meaningfully here in the fourth quarter? Sure, sure, Bobby. Good question. I think, you know, at the end of the day, we're taking share. Just to cut to the chase, and when I say we're taking share, there are different ways of taking share. You can.

The he can't flow whatever.

So you can get in first position, whether it with retailers that have more than one else'll option in the store, we had some where we got exclusivity in the store. We had some we took took the account from a competitor.

Mitchell E. Fadel: You know, when an account is taken away from someone else, you can get in a better position with that account because you're servicing them better, or the, or the, flow is better, you know, the account flow, whatever. So you can get in first position with retailers that have more than one LTO option in their store. We had some where we got exclusivity in the store. We had some where we took the account from a competitor. So it's a combination of all those things.

So it's a combination of all of those things I think when you sum it all up were taken share and and one of the big successes of the seamer as you know Bobby <unk> is a fantastic one of the things we love three years ago three years ago last week, when we acquired assume with their sales team.

Out in the field and with a strong sales team is the way the company built with a diverse sales team and really go after the regional and SMB accounts.

Mitchell E. Fadel: I think when you sum it all up, we're taking a share. And one of the big successes of Acima, as you know, Bobby, Acima has a fantastic, one of the things we loved three years ago, three years ago last week when we acquired Acima with their sales team out in the field and with a strong sales team as the way the company built with a diverse sales team and really went after the regional and SMB accounts. And, of course, we've got the enterprise team, too.

And of course, we've got the enterprise team too. So we've got a multipronged diverse approach where this fantastic sales team between the people out in the field and some inside sales support your over 100 people probably about 125 people on total and they just keep adding accounts in service in those accounts well and we just keep keep.

Mitchell E. Fadel: So we've got a multi-pronged, diverse approach where this fantastic sales team, between the people on the field and some inside sales support, you've got over 100 people, probably about 125 people in total. And they just keep adding accounts and servicing those accounts well, and we just keep adding, not only adding merchants but getting in a better position with merchants being the first ones they run, and as long as we approve that customer, then they don't run them through anybody else, things like that, taking accounts, taking market share. And then we're going, you know, we got some good regional wins, we got some national wins, you know, on the board, you know, some bigger accounts, like Ashley that Fannie mentioned, and we got the enterprise team going after the big accounts, but, as you know, the biggest accounts have such a long sales cycle.

Keep adding not only adding merchants, but getting in better position with merchants being first one they run and as long as we approve that customer then they don't run them through anybody else things like that taking accounts taking market share and then we got we got some good regional wins, we got some national wins.

You know on on the board some bigger accounts like Ashley that family mentioned, the you know we got the enterprise team going after the big accounts, but as you know the biggest accounts are such a long sales cycle. We don't just rely on going after those big accounts were were were grown merchants, whether we get a big account or not we don't rely on that were.

In the in.

In the conversation with every one of the larger counts, but like I said the sales cycle. So darn long, we don't put all our eggs in that basket were we have much more of a diversified growth strategy.

Mitchell E. Fadel: We don't just rely on going after those big accounts; we're, we're, we're growing merchants, whether we get a big account or not, we don't rely on that we're in the conversation with every one of the large accounts, but like I said, the sales cycle is so darn long, we don't put all our eggs in that basket, where we have much more of a diversified growth strategy. You know, our in that the sales team is one of our differentiators; there are other differentiators that that sales team uses, like the options we have for retail partners to be virtual, or they can we can staff stores if they're high enough volume; they can do either, or some stores can be staffed. Some can be virtual.

And that's in the sales team is one of our Differentiators. There's other differentiators that that sales team uses like.

The options, we have for retail partners to be virtual or.

They can we can staff stores, if they're high enough volume they can do either or some stores can be staff. Some can be virtual we've got a great e-commerce platform.

We've got you know full online capabilities for any retailer that once the once you the full online checkout capabilities I mean for any retailer that wants to use it.

And a lot of them do.

And then the direct to consumer.

Assume a marketplace doubled year over year. So I think when you put it all together we've got a lot of.

Diverse growth vehicles, not everything all in one basket and were taken market share.

Very good that's helpful and I guess and secondly for me you know.

Mitchell E. Fadel: We've got a great e-com platform. You know, we've got full online capabilities for any retailer that wants to use full online checkout. I mean, for any retailer that wants to use it, and a lot of them do.

I don't want to call one quarter, a huge flipping trend, but decided to hypothetically speaking if this does kind of build from here can you talk a little about the scale of the organization and kind of will you need to scale up for this type of growth from an opex standpoint, or his organization at a at a good scale really on both sides of the business <unk>.

Mitchell E. Fadel: And then the direct-to-consumer, the Acima marketplace, you know, doubled year over year. So I think when you put it all together, we've got a lot of diverse growth vehicles, not everything all in one basket, and we're taking market share. Very good, that's helpful. And I guess, secondly, for me, you know, tough, I don't want to call one quarter a huge flip in trend, but just hypothetically speaking, if this does, you know, kind of build from here, can you talk a little bit about the scale of the organization and kind of, you know, will you need to scale up for this type of growth from an off X standpoint, or is the And what would it kind of flow through at?

Tours as well as the seamer that if we start to see kind of more sticky meaningful GMB growth you guys can handle it and what would it kind of flowed through at.

I think we're at a good scale you know, we we mentioned.

Amy mentioned something about the 2024 outlook were able to keep the the <unk> building scale and by adding things a lot of technical invest technology investments and so forth.

The we're able to keep our percentage or corporate overhead percentage.

The same as last year, which which you know.

I think going forward when you start talking about 25 and beyond you know we talk about leveraging the revenue growth obviously this year.

Mitchell E. Fadel: I think we're on a good scale. You know, we mentioned, Fannie mentioned when you saw about the 2024 outlook, we're able to keep the, the, by building scale, and by adding things, a lot of technical invest, technology investments, and so forth. We're able to keep our, our percentage, our corporate overhead percentage, the same as last year, which, which, you know, I think going forward, when you start talking about 25 and beyond, you know, we But I think this year, we've got the investments already in place, keeping the percentage the same because with revenue growth, you should actually see it go down a little bit. But because of some of those investments we've had to make, they're in there. And, and so I don't think you would have to go over that.

Keeping keeping that percentage flat and then seeing leveraged down the road is the revenue growth, but I think this year. We've got the investments are already in there keeping the percentage of the same because with revenue growth you should actually see it go down a little bit, but because of some of those investments we've had to make their in there.

And so I don't think you would have to go over that and I think actually if you want to look longer term like 25 in 2006, you'd be talking leverage against that number.

Yeah, very good probably died of hydro as.

Sorry about that I, just heard a high growth that we're talking about especially at a at a seamer, obviously being a virtual business. You can you can really scale that business up without adding a lot of expenses.

Pretty good.

Oh Dear I appreciate the details best of luck, you're finishing out the first quarter.

Thanks, Bob.

One moment for our next question.

And our next question comes from the lineup Bryan Thomas from Keybanc capital markets. Your line is open.

Mitchell E. Fadel: And I think actually, if you want to look longer term, like 25 and 26, you'd be talking leverage against it. Very good, Bobby. I appreciate it. I'm sorry, Bobby, I was just gonna say the high growth that we're talking about, especially at Acima, obviously being a virtual business, you can really scale that business up without adding a lot of expense. Very good. Yep, that's great to hear. I appreciate the details. Best of luck here finishing out the first quarter.

Good morning, Thanks for taking my questions.

Wanted to kick off with maybe one more follow up on the G. M D dynamic it seems so.

That you know it seems to have such a great momentum here right now.

Wondering if you cut the data and you look at how many are new customers to see my versus repeat <unk>.

Bobby Griffin: Thanks, Bobby. One moment for our next question, and our next question will come from the line of Brad Thomas from KeyBank Capital Markets. Your line is open. Good morning.

Perhaps who's new to rent to own or if you have any data. It's a banner Iraq customer previously just curious about that.

Brad Thomas: Thanks for taking my questions. I wanted to kick off with maybe one more follow-up on the GMV dynamic that seems, you know, seems to have such great momentum here right now. I'm wondering if you cut the data and you look at how many are new customers to Acima versus repeat customers, perhaps who's new to Rent2Own, or, if you have any data, if they've been a RAC customer previously, just curious about that dynamic. Yeah, there's not as much overlap between the Acima customer and the Rent-A-Center customers as you might guess it is, certainly. The customer going in shopping for retail and getting denied or maybe not having traditional financing options; there is a pretty big difference between them, and we don't see a whole lot of overlap.

Yeah, there's not not as much overlap between the athima customer in the restaurant or customer as you might guess it is it certainly.

Of course, as we look at the demographics they they.

There is a bit of a spread between them the customer going in shopping for retail and and getting denied or maybe not having traditional financing options. There is a pretty big difference between them and we don't see a whole lot of overlap. We see you know as you probably know Brad.

The repeat business is extremely strong and rent a center of course, you get every product under one under one roof. It ran a center and it's a little more you know the demographics, a little different than the assume a customer so you.

Depending on the year, we we see as much as 70% repeat business and rent asunder seamless about half that from a repeat business standpoint.

Mitchell E. Fadel: We see, you know, as you probably know, Brad, the repeat business is extremely strong at Rent-A-Center. Of course, you can get every product under one roof at Rent-A-Center, and it's a little more, the demographics are a little different than the ASIMA customers. So, you know, depending on the year, we see as much as 70% repeat business in Rent-A-Center. ASIMA is about half that from a repeat business standpoint, something we're always trying to grow because, you know, they, again, it's more diversified. If they got tires somewhere, or they got furniture somewhere, it may be a few years before they come back and use ASIMA, and we only count repeat business if it's within a period of time. I think it's 12 months when we count it as repeat business. You know, we do get a lot of repeat business. I guess the short answer is we get a lot of it more renaissance than we do at Acima, just by virtue of the way the business models work.

Something we're always trying to grow because.

They.

Again, it's more diversified if they got tyre somewhere they got furniture somewhere that it may be a few years before they come back and use his semen, we only count repeat business if it's.

Within a period of time I think it's I think it's 12 months when we counted as repeat business. So.

You know, we do get a lot of repeat visits I guess the short answer is we get a lot of it more renison and we do it a seam of <unk> the virtue of the way the business models work, but.

I think we're the expansion of the consumer base Cup.

Well, let me put it this way if 35% percent roughly of a seamless customers are repeat business, obviously, 65% of new so a lot of new customers coming through the pipeline more sort of semen and rent a center because you know we're getting them through all those retail partnerships, you're talking about 30 over 35000 retail <unk>.

Mitchell E. Fadel: But, you know, I think where the expansion of the consumer-based company... Well, let me put it this way. If 35%, roughly of Acima's customers are repeat business, obviously, 65% are new. So a lot of new customers are coming through the pipeline, more so at Acima than Rent-A-Center, because, you know, we're getting them through all those retail partnerships. You're talking about over 35,000 retail partner stores that you could lease to Acima, not to mention the direct-to-consumer stuff. And, you know, I say 35,000, and then a website like Wayfair is one customer, right? So there are an awful lot of places that LTO is becoming much more popular and much more mainstream through these retail partnerships. And a lot of new people are being exposed to it. And I think, especially if the economy gets any worse going forward, even more people will be exposed to it.

Partner stores that you could do a leaf and deceive and not to mention the direct to consumer stuff and 30.

I'd say 35000, and then our website like Wayfair is one customer. So there's an awful lot of places that <unk> is becoming much more popular and much more mainstream through these really retail partnerships and a lot of new people are being exposed to it absolutely and I think.

Especially if the economy gets any worse going forward you know even more people will get exposed to it more people need it and you know family mentioned the you know the credit card fee late fee kind of thing could affects them accrual rates above us and we we may get more trade down going forward, we didn't build that in but it certainly could be a tailwind for so a lot of people.

<unk> and a lot of people getting exposed to it every day.

Absolutely that's that's helpful Mitch.

And just ask a question about underwriting as you think about the segments.

Mitchell E. Fadel: More people will need it. You know, Fannie mentioned the credit card fee, late fee kind of thing could affect some approval rates above us, and we may get more trade down going forward. We didn't build that in, but it certainly could be a tailwind for us.

Can you just talk about more about how you feel about the underwriting and and potential needs to tighten on the horizon versus opportunities to maybe loosen.

Yeah.

The underwriting and we've talked about it a few times and there is a continuous process of us to evaluate where we are where the market is and where we are compared to our competitors.

Fahmy Kuttum: So a lot of people need LTO, and a lot of people are getting exposed to it every day. Absolutely, that's helpful, Mitch. And just to ask the question about underwriting, as you think about the segment, can you just talk a little bit more about how you feel about the underwriting and potential needs to tighten on the horizon versus opportunities to maybe loosen? Yeah, Brad, underwriting, and we've talked about it a few times, it's a continuous process for us to evaluate where we are, where the market is, and where we are compared to our competitors You know, from an underwriting standpoint, we try to optimize our decisioning for EBITDA dollars.

And it really was a good sign for us to be able to really read reduce the approval rates in the fourth quarter and still have have that Ah gross.

I'm an option from Ah underwriting standpoint, we try to optimize our decision a four EBITDA dollars and a yield that we've seen specifically at Ah Simo over the last 12 months has given us the opportunity to be very opportunistic on where we want to lean in and also we're very confident we can identify pockets.

Of risk going forward, but that that high the higher yields allow us the ability to absorb potentially higher losses down the road, if the macro worsens and still generate those mid teens. So if we feel good about our capabilities to manage it and produce the returns that we're looking for yeah.

Mitchell E. Fadel: And the yield that we've seen specifically at ACIMA over the last 12 months has given us the opportunity to be very opportunistic on where we want to lean in, and we're also very confident we can identify pockets of risk going forward, but that high yield, the higher yields allow us the ability to absorb potentially higher losses down the road if the macro worsens and still generate those mid-teens. So we feel good about our capabilities to manage it and produce the returns that we're looking for at SEMA. You know, we mentioned that we're taking our legacy business; we only have two more large retailers to convert, and that'll be done by the end of the first quarter. So we're excited about the early results of accounts we've already switched over there.

The other exciting thing about the underwriting is not just.

The sema.

We mentioned that we're taking our legacy business, we only have two more large retailers to convert and that'll be done by the end of the first quarter.

So.

That that we're excited about the early results of of accounts, we've already switched over there you know.

Again getting in line compared to the underwriting that acceptance now was using and.

We're excited about that because after we get through his family mentioned, if we get the first half of the year the losses come down from where they are now based on the consolidated losses come down after those accounts run through and then we'd have all of it now on it looking at some of those best practices. Some of the great tool through the Sema uses and using them on the rent a center side is.

Mitchell E. Fadel: Again, getting in line compared to the underwriting that AcceptanceNow was using, and we're excited about that because after we get through, as Fannie mentioned, after we get through, you know, the first half of the year, the losses come down from where they are now based on the consolidated losses come down after those accounts run through, and then we'll have all of ANow on it. Looking at some of those best practices, some of the great tools that Acima uses, and using them on the Rent-A-Center side as we get into 2024 is exciting.

We get into 2024 as exciting so there's some there's some potential tailwinds on an underwriting we talk a lot about <unk> now, but even on rent asunder using some of that same team to to influence and put some of the same tools on rent asunder that can not only not only you know most of us most.

Mitchell E. Fadel: So there's some potential tailwinds on underwriting. You know, we talk a lot about ANow, but even on Rent-A-Center, using some of that same team to influence and put some of the same tools on Rent-A-Center that can not only, you know, most people only think of underwriting. Well, if it's better underwriting, you reduce your losses. But one of the things you learn when you really dig in is better underwriting also finds green shoots of things you can improve that maybe you weren't approving before. So it can also drive volume because if it's so much more sophisticated and targeted, you don't have to cut out whole swaths of a particular group or, you know, if a customer looks like this, you cut out the whole group, a particular Whereas, And when it's better sophisticated and targeted, you certainly can. Maybe you can improve half of what you would have turned down in that group that's got a particular vantage score or whatever. So it can find your volume, too.

People only think of underwriting wealth, it's better underwriting you reduce your losses, but but one of the things you learn when you're really when you really dig in it's better underwriting also find few green shoots of things you can approve that maybe maybe you weren't approving before so can also drive volume because.

Because it's so much more sophisticated and targeted you don't have to cut out whole swathes of a particular.

Group or.

If a customer looks like this you cut out the whole the whole group of particular score or whatever whereas.

When it's better sophisticated and targeted you certainly can maybe you can approve half of what you would have turned down in that group. That's got a particular vantage score or whatever so.

You know it can it can find your volume two so we're excited about.

Some of those things that once we get the acceptance now done of how can how can some of those same tools help Brenda center you know.

Drive more volume with lower losses as well so the underwriting is real.

And there's two things that.

Brad Thomas: So we're excited about some of those things that, once we get acceptance now done, how some of those same tools can help Rent-a-Center drive more volume with lower losses as well. So the underwriting is a real lot. There are two things that we really loved about Acima three years ago when we bought it, the organization that Aaron Albright had built was the underwriting capabilities, and we're seeing that, and then the sales team I was talking about earlier, the way it was such a diverse growth vehicle versus, you know, you only going after a certain type of account. We have competitors that only we know that we compete with, and there are some good competitors that go after But we're in all of them, whether it's one team on the small accounts, another team on the regional accounts, another team on the big accounts, the enterprise accounts you'd call them. And even though we see different competitors in each one of those buckets, we're the only one in every one of those games, and it feels really good.

That we really loved about <unk> three years ago, when we bought it about the organization that Aaron already built was the the underwriting capabilities and we're seeing that and then the sales team I was talking about earlier the way it was such a diverse growth vehicle versus you know.

You know.

You're only going after a certain type of account yoga competitors that only.

That we that we.

There's some good competitors that go after just the SMB accounts and then there's other competitors that only we only compete with one we're going after the big accounts and but we're in all of them, whether it's one teams on the smaller counts and other themes on the regional accounts. Another team on the big accounts, the enterprise accounts he'd calm and even though we see different.

Editors and each one of those buckets what are the only one in every one of those games and it feels really good in this week.

As seamless built on this small SMB business, we've added the enterprise team and it's.

Those were the two things we loved about it was the way they approach the sales and that and that's the great sales team some of the great people. They have on that team and have had since the beginning as well as the underwriting and we're seeing we're seeing the fruits of.

Brad Thomas: And that's the way, you know, Asim was built on that small SMB business. We've added the enterprise team, and those were the two things we loved about it, the way they approached sales and the great sales team, some of the great people they have on that team and have had since the beginning, as well as underwriting. And we're seeing the fruits of that, of all those things now. It's very, very helpful. If I could squeeze in one more here, just on how to think about gross margin and modeling it for the year. Sammy, it strikes me that probably mixing towards the SEMA away from RAC would be one of the more powerful drivers, just in terms of how the margin rate on a consolidated basis plays out.

Of all those things now.

Mhm, that's very very helpful.

If I could squeeze in one more here just just on how to think about gross margin and modeling for the year Sammy It strikes me that probably mix towards the seem away from rack would be one of the more powerful drivers just in terms of how the margin great on a consolidated basis plays out but anything else, we should think about.

Fahmy Kuttum: But anything else we should think about as we think about baking the cake on the gross margin for the year? Yeah, I think that's right between the mix of Rent-A-Center and ACIMA. You know, looking into 2024 for Rent-A-Center, expect gross margins to be relatively flat year over year. For ACIMA, you know, the guide has us coming down a little bit year over year, especially in the first half of the year. We have some tough comps in Q1 and Q2 compared to 2023.

<unk> as you think about taking the cake.

Gross margin for the year.

Yeah, I think that's that's right between the mix of a British center and <unk> you know for looking into 2024 for for rent a center expect to have mark gross margins to be relatively flat year over year for a <unk>. The guide has is coming down a little bit you're over year, especially in the first.

<unk> half of the year, we have some tough cops.

Q1, and Q2 compared to 2023, and we talked about you know the early payout options and fewer customers electing that we expect that to continue this year, but maybe not to the same degree more normalized more normalized and if you look at Q1 of last year. The gross margin expanded almost 500 basis points are over 500.

Brad Thomas: And we talked about, you know, the early payout options and fewer customers electing that. We expect that to continue this year, but maybe not to the same degree, more normalized, more normalized. And if you look at Q1 of last year, the gross margin expanded almost 500 basis points, or over 500 basis points. And so we don't expect to do that again in the first quarter of 2024, but it'll be close to that. So we expect it to be slightly down from that. So it's more of a cadence of the first half being a little bit lower than 2023 and then catching up in the second half. Perfect. Thanks so much.

Hundred basis points, and so we don't expect to do that again in the first quarter of 2024.

But it will be close to that so we expect it to be slightly down from that so it's more of a cadence of first half being a little bit lower than 2023, and then catching up in the second half of the year.

Perfect. Thanks, so much.

Brad Thomas: Thanks, Brett. One moment for our next question, and the next question will come from the line of Anthony Chukumba from Loop Capital Markets. Your line is open.

Thanks, Greg.

One moment for our next question.

And our next question comes from the lineup Anthony <unk> from the capital markets. Your line is open.

Anthony Chukumba: Good morning, and thanks for taking my question. I wanted to focus just a little bit on the Rent-A-Center business. You had a nice sequential improvement in terms of comps.

Good morning, and thanks for taking my question wanted to focus just a little bit on the <unk> Centre business you have a nice.

Sequential improvement in terms of comps.

Mitchell E. Fadel: And you mentioned in your prepared remarks, you know, some new product categories, jewelry and tires. I guess my question is, how much do you think that jewelry and tires contributed to that sequential improvement in your fourth quarter rent-a-center comp? And also, related to that, you know, do you think that the credit tightening above you contributed to either the rent-a-center comp improvement or the, you know, the really strong GMV growth in a SEMA? Thanks. Sure, Anthony, and good morning.

And you mentioned in your prepared remarks.

Some new product categories of jewelry and tires.

I guess my question is.

You know how much do you think the jewelry and tires contributed.

Two that sequential improvement in your fourth quarter rent a center comp and also related to that do you think that credit.

Credit tightening above you.

Tribute to either the rent a center.

Improvement or not.

The the really strong GMB growth in a steamer thanks.

Sure, it's Anthony and good morning, rather sooner those new products that we put in in the fourth quarter pretty really small contribution I would I would give them a little bit of credit, but not much ah quite honestly, but a little bit and obviously, we expect them to grow in 2024.

Mitchell E. Fadel: Rent-A-Center, those new products that we put in in the fourth quarter, a pretty, really small contribution. I'd give them a little bit of credit, but not much, quite honestly, but a little bit. And obviously, we expect them to grow in 2024, but it was pretty late in the year. So the thing probably that helped Rent-A-Center more than that was, you know, overall, the extended aisle that we added to all year, adding products in, not necessarily new categories, but new, a lot more product offerings on the website, where instead of, let me give you an example, the 20 living rooms maybe that we had on a fast ship to our Now a customer can shop all of Ashley's products on the website and, you know, special order anything on there through our Rent-A-Center store. So I think the extended aisle on there there's so many more, probably like 6,000 more products or something.

But it was pretty it was pretty late in the year. So.

The thing about the thing probably that help renison or more than that.

As you know overall the extended IL that we added to all year, adding products and not necessarily new categories, but knew a lot more product offerings on the website, where instead of.

Going through the let me give you. An example, the 20 living rooms may be that we have on a fast ship to our stores that are Schwartz could get on a weekly basis from say, an Ashley furniture from their manufacturing side of Ashley furniture, now a customer could chop the all of ashley's products on the website and that and.

Special order anything on there through I rent is finished store so I think the extended aisle.

And there there's so many more private was 6000 more products or something I mean, it's a huge number more products on there and that's really where the growth of rent a finished coming from and with as I mentioned in my prepared comments over 30% more web visit 16% more orders coming through there, so and thats, what tighter underwriting as well.

Mitchell E. Fadel: I mean, there are a huge number more products on there, and that's really where the growth of Rent-A-Center is coming from, and, as I mentioned in my prepared comments, over 30% more web visits, 16% more orders coming through there. So, and that's what tighter underwriting as well. So you know, when I say orders coming through, those are approved orders coming through, and we got 16% more. So you know, I think the extended aisle is more the story at Rent-A-Center.

Well.

So you know when I say orders coming through those orders that those are approved orders coming through.

And we got 16% more.

So.

I think the extended aisle is more of the story and render center I think certainly the demand is there the consumers still under pressure.

Anthony Chukumba: I think certainly the demand is there, but the consumer is still under pressure. And, you know, the good part about that business, the reason it turned 50 years old last year, is that when the consumer is under pressure, we get more trade down. And when things are better, you know, we get better performance from our base. And that's the resiliency of the business, why it's why it goes through very well during any cycle.

And you know the good part about their business. The reason that turned 50 years old last furious when the consumers under pressure.

We get more trade down and when things are better yeah, we get better performance from our base and that's the resiliency of the of the business of why it why it goes very well through any cycle, but I think the.

Mitchell E. Fadel: But I think the second part of your question, yeah, I think tightening above us has to be helping. You know, when we look at Vantage scores, and people ask us all the time about trade down, you know, we saw it early last year in the scores coming through, then it kind of leveled off. We've actually seen a lot; we've seen them go back up by just a couple of points, though, you know, in the last, say, 6-8 weeks.

The second part of your question, Yeah, I think I think tightening above us has to be helping you know when we look at vantage scores and people ask us all the time about trade down we saw it early last year and the scores coming through then it kind of levels off we've actually seen a look we've seen them go back up just a couple of points, though you know and the last to say.

Well, that's gonna be six eight weeks. So you know they went up early last year leveled off now we're seeing them pick up again, a little bit here recently, so yeah and then it's not all just about that score either right. Some of its mindset. If the customer you know goes into rent a center because they're not they don't Wanna commit maybe two.

Mitchell E. Fadel: So, you know, they went up early last year, leveled off, and now we're seeing them tick up again a little bit here recently. So, yeah, and it's not all just about that score, either, right?

Mitchell E. Fadel: Some of it's the mindset if the customer, you know, goes in to rent a center because they don't want to commit, maybe, to a contract, and they just rent it and see what happens to their finances over the next few months. So, it's a much more flexible way to acquire things, obviously, because you get a return any time. It's a much more flexible way to acquire things for your home than a revolving account or finance contract where you can't just give it back to the retailer. So, You know, I think trade downs are part of the story, not just when you look at vantage scores or, or credit scores or something like that. I think mentality is always part of the trade down when the economy worsens.

A contract and they're they're just rent it and see see what happens in there to their finances over the next few months. So it's a much more flexible.

Way to acquire things, obviously, because you're returning anytime it's much more flexible way to acquire things for your home than than than a revolving account or finance contract, where you can't just give it back to the to.

To the retailer so.

I think I think trade down some part of the story not just when you look at vantage scores or or credit scores or something like that I think mentality as part of that is always part of the trade down when when the economy worsened. So yeah. I think that's that's that's certainly part of it and both the <unk> Center side.

Mitchell E. Fadel: So yeah, I think that's, that's certainly part of it. And both the ACIMA side and the rent. Got it. Now that's a helpful perspective.

Got it now that's helpful perspective, and then just real quickly you mentioned going exclusive with Ashley furniture can you just remind us.

Anthony Chukumba: And then, just real quickly, you mentioned going exclusive with Ashley Furniture. Can you just remind us, I guess, how many LTO providers they had previously? And when did you go?

How many L. Two providers that may have previously when did you go.

Mitchell E. Fadel: And do you think that was a meaningful contributor to the SEMA GMB? Yeah, Ashley also has a lot of licensees. So when we say exclusive with them, we're talking about corporate stores, which I think there are over 100 corporate stores. We were splitting them; there were two LTOs in there before, now there's just us. And the website was split between two LTOs, and now it's just us. So we've been with them a long time, but we're splitting the account, and now it's 100% ours. You know, I don't know the number.

And do you think that was meaningful contribute to a cinema GMB growth.

Yeah on the on the.

Of course, absolutely also has a lot of licensees. So when we say exclusive with them, we're talking about corporate stores, which I think there is over 100 hundred corporate stores, we were splitting them those two L. T O as in there before now there's just us and the website was split between two L deals and now it's just so we've been with them a long.

Time, but we're splitting the account and now it's 100 per cent for that you know I don't know that number I I mean, I imagine it was probably worth a couple of points of the 19% of two or three I'm looking at <unk>.

Mitchell E. Fadel: I mean, I imagine it was probably worth a couple of points to the 19%, though, you know, two or three, I'm looking at FAMI, two or 3%, probably out of 19. It's not insignificant, but it's not the whole thing either.

Two or three per cent, probably either 19, it wasn't it's not insignificant.

Anthony Chukumba: There's a lot of growth up there. Got it, very helpful, thank you so much. Thanks Anthony. One moment for our next question. And our next question will come from the line of Alex Fuhrman from Craig Halem. Your line is open.

But it's not the whole thing either there's a lot there's a lot of growth out there.

Got it very helpful. Thank you so much thanks.

Thanks Anthony.

One moment for next question.

And our next question comes from the line of Alex Firmin from Craig Taylor.

Alex Joseph Fuhrman: Hey guys, thanks for taking my question and congratulations on a really strong year. Mitch, you mentioned that you've been having some success adding merchants to Acima that aren't fully integrated with the platform. Can you talk a little bit about how that works and what categories you've been able to do that in? And just over time, I mean, how much growth could that potentially unlock?

And is open.

Hey, guys. Thanks for taking my question and congratulations on a really strong year, you mentioned that you've been having some success, adding Martin at it would seem that that aren't fully integrated with the platform can you talk a little bit about how that works and what category on the <unk>.

You've been able to do that in and and and just over time, you mean, how much growth could that potentially unlocked for ya.

Mitchell E. Fadel: Well, you're asking me to get technical now, Alex, but I'll do the best I can. Good morning. Yeah, when I mentioned the unaffiliated merchants, I was talking about the Acima marketplace, where you can go on there, and you'll see a partner. We were just talking about Ashley.

Oh, you're asking me to get technical now, Alex but I'll do the other the other the best that can get morning.

Yes.

When I mentioned, the unaffiliated merchants I'm talking about the Sema marketplace, where you can go on there and you'll see a partner, we're just talking about actually you'll see a partner like Ashley what we're certainly integrated with them and and so forth and you'll see another partner on there like best buy where we're not fully integrated with them. We don't we're not.

Mitchell E. Fadel: You'll see a partner like Ashley where we're certainly integrated with them and so forth. Then you'll see another partner on there like Best Buy where we're not fully integrated with them. We're not on their website, but yet, our customers can shop at Best Buy and put it on Acima Lease if they go at it through the Acima marketplace.

Our website, but yet our customers can shop best buy and put it on this theme Elise if they go at it through a seamer through the Athima marketplace.

Fahmy Kuttum: So we can take unaffiliated partners like that and put them on there. So when you say what's the growth potential of that, I mean, it's almost any retailer out there. The largest retailers in the world, you can put them on there, and then our customers can shop there. So we've got some already that are unaffiliated. I mentioned Best Buy, and there are a few others on there that are unaffiliated, and more will be added every quarter. And, of course, we're partial to the ones we're affiliated with to put on there as well. Not every single one of our partners wants to be on there. They would rather us be their partners in their stores, but most do.

So we can take on affiliated partners like that and put them on there. So when you say, what's the growth potential of that I mean, it's almost any retailer out there.

The largest retailers in the world you can put on there and then our customers can shop. There. So you know we've got some already that are unaffiliated I mentioned I mentioned, the best buy and there's a few others on there that are unaffiliated, but and more will be added really every quarter.

And of course, we were.

Partial to the ones, who are affiliated with [laughter] to put on there as well not every single one of our partners wants to be on there that just rather us be their partner in their stores, but most do and so we put them on there but but.

Alex Joseph Fuhrman: And so we put them on there. And you can find any of our partners on there, even local partners through something we call Find A Store. So if you're shopping in one particular area, you can find one of our partners there. But as far as nationwide ones go, to answer your question, really, the sky's the limit as far as how much we can add there. Like I said, it doubled in the fourth quarter, and the GMV from it.

And you can find any of our partners on there even local partners through through something we call find the store. So if you're shopping in one particular area you can find one of our partners there, but as far as nationwide ones.

To answer your question really the Sky's the limit as far as how much we can add there and like I said it doubled in in the fourth quarter. The the G. M V from yeah now as to what we think about it is just giving customers more choices and more options and we really want to be false seminar in our product category lineup. So we want to make sure they have access.

Mitchell E. Fadel: Yeah, and Alex, the way we think about it is just giving customers more choices and more options, and we really want to be fulsome in our product category lineups. We want to make sure they have access to all the major categories, whether it's furniture, electronics, appliances, and all of the above. So when we look to round out the unintegrated with the integrated, it's making sure that we have all the product categories kind of filled out.

Yes to all the major categories, whether it's furniture electronics appliances.

And all of the above so when we look out to round out the unintegrated with the integrated it's may making sure that we have all the product categories filled out.

Fahmy Kuttum: Terrific, guys. That's really helpful. Thank you both. Thanks, Phil. Thank you. One moment for our next question. Our next question comes from Hale Holden from Barclays. Your line is open.

Terrific I, that's really helpful. Thank you both.

Thanks.

Thank you one moment for our next question.

And our next question comes from <unk> from Barclays. Your line is open.

Brian Hollenden: Good morning. Thank you. On the potential to change credit card late fees, does that change your outlook for the private label credit cards that you're looking at this spring, or the economics around that potential launch?

Hi, Good morning, Thank you on a potential to change credit card late fees does that change your outlook for the private label private label credit cards that you're looking at the spring on economics around my potential launch.

Brian Hollenden: Hi Hale. Good morning. No, it doesn't.

Hi, Good morning, no. It doesn't I think you know all of the credit card providers are finding ways to maybe offset some of those rule changes in our partnership is no exception to that.

Fahmy Kuttum: I think, you know, all of the credit card providers are finding ways to maybe offset some of those rule changes, and our partnership is no exception to that. We're even more bullish about the opportunity just based on the feedback we're getting from some of our retailers, and specifically larger retailers, around the benefit of having two products under one umbrella and one integration. So, if anything, we're more bullish about the opportunity.

We're even more bullish about the opportunity just based on the feedback we're getting from some of our retailers and specifically the more the larger retailers around the benefit of having two products under one umbrella and one integration.

So if anything were more bullish about the opportunity.

Brian Hollenden: Great. Thank you so much. Thanks, y'all. I need, And I'm not sure we have any further questions in the queue.

Great. Thank you so much.

Thanks.

Thank you.

And I'm not sure any further questions Q I'd like to turn the call back over to Mitch Fidel for any closing remarks.

Mitchell E. Fadel: I'd like to turn the call back over to Mitch Fadel for any closing remarks. Thank you, Victor. And thank you, everyone, for your continued interest in our business. As we discussed today, we're awfully proud of what we achieved last year. We look forward to updating you throughout the year on our progress in 2024. We certainly believe our team's focus on the customer and on our retail partners and new partners and existing partners and so forth will continue to create opportunities for growth at Upbound, whether you're talking to Seymour, on the Rent-A-Center side, and create value for our investors.

Thank you Victor and thank you everyone for your.

Vineyard interest in our business as we discussed today were awfully proud of what we achieved last year, we look forward to update new across the year on our progress in 2024, we.

We certainly believe our team's focus on the customer and on our retail partners in new partners, an existing partners and so forth will continue to create opportunities for growth that an outbound whether you are talking to see more of the rent a center side and.

Operator: So we appreciate you. We appreciate all of our hardworking teammates out there in the field. And with that, I'll just wish everyone a great day. Operator, you can now disconnect. Thank you, everyone. Thank you for participating in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day. Thank you for watching!

And create value for our investors. So we appreciate you. We appreciate all of our hardworking teammates out there in the in the field and with that I'll just wish everyone. A great day, an operator you can now disconnect. Thank you everyone.

Thank you for participating in today's conference include the program you May now disconnect <unk> have a great day.

[music].

Okay.

[music].