Q2 2024 PROG Holdings Inc Earnings Call
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Operator: Good day, and thank you for standing by. Welcome to PROG Holdings' second quarter earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. If you have a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, John Baugh, VP of Investor Relations. Please go ahead.
Operator: Good day, and thank you for standing by. Welcome to PROG Holdings 2nd quarter earnings conference call. At this time, all participants on listen on a mode.
Good day and thank you for standing by welcome to post Holdings' second quarter earnings Conference call. At this time all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session.
Operator: After this presentation, there'll be a question and answer session. As a question during the session, you'll need to press star 1, 1 on your cell phone. You will then hear an automatic message advice in your hand; it's raised.
Speaker Change: During this session you will need to press star one on your telephone you will done in automotive message advising yohan is re leased.
Operator: Please note that today's call for this is being recorded.
Note that today's conference is being recorded I will now hand, the conference over to your Speaker host John Baugh VP of Investor Relations. Please go ahead.
John Baugh: I will now hand a conference over to you, speaker host, John Baugh, B.C. of Investigation, please go ahead.
John Allen Baugh: Thank you and good morning everyone. Welcome to the PROG Holdings second quarter 2024 earnings call. Joining me this morning are Steve Michaels, PROG Holdings President and Chief Executive Officer, and Brian Garner, our Chief Financial Officer. Many of you have already seen a copy of our earnings release issued this morning, which is available on our investor relations website, investor.progholdings.com. During this call,
John Baugh: Thank you, and good morning, everyone. Welcome to the PROG Holdings 2nd quarter 24 earnings call. Joining me this morning is Steve Michaels, PROG Holdings President and Chief Executive Officer, and Brian Garner, our Chief Financial Officer. Many of you have already seen a copy of our earnings release issued this morning, which is available on our Investor Relations website, investor.progholdings.com.
John Allen Baugh: Thank you and good morning, everyone welcome to the <unk> Holdings second quarter 2024 earnings call.
John Allen Baugh: Certain statements we make will be forward-looking, including comments regarding our revised 2024 full-year outlook and our outlook for the third quarter of 2024, the health of our portfolio, and our expectations for write-offs for our progressive leasing segment for the remainder of 2024, our expectations regarding GMV for the third quarter and full year 2024, and our capital allocation priorities, including our ability to continue returning capital to shareholders. Listeners are cautioned not to place undue emphasis on forward-looking statements we make today, all of which are subject to risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statement. We undertake no obligation to update any such statement.
John Allen Baugh: Joining me this morning are Steve Michaels, Parag, Holdings', President and Chief Executive Officer.
John Allen Baugh: Bryan Garner our Chief Financial Officer.
Speaker Change: Many of you have already seen a copy of our earnings release issued this morning, which is available on our Investor Relations website.
Speaker Change: <unk> Dot product holdings Dot com.
John Baugh: During this call, certain statements we make will be forward-looking, including comments regarding our revised 2024 full-year outlook and our outlook for the third quarter of 2024. The health of our portfolio and our expectations for right-offs for our Progressive Leasing segment for the remainder of 2024. Our expectations regarding GMV for the third quarter and full year 2024, and our capital allocation priorities, including our ability to continue returning capital to shareholders.
Speaker Change: During this call.
Speaker Change: Certain statements, we make will be forward looking including comments regarding our revised 2020 for full year outlook and our outlook for the third quarter of 2020 for the health of our portfolio and our expectations for write offs for our progressive leasing segment for the remainder of 2020.
Speaker Change: For.
Speaker Change: Our expectations regarding GMB for the third quarter and full year, 2024, and our capital allocation priorities, including our ability to continue returning capital to shareholders.
John Baugh: Listeners are cautioned not to place undo emphasis on forward-looking statements we make today, all of which are subject to risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. We undertake no obligation to update any such statements.
Listeners are cautioned not to place undue emphasis on forward looking statements. We make today all of which are subject to risks and uncertainties, which could cause actual results to differ materially from those contained in the forward looking statements.
Speaker Change: We undertake no obligation to update any such statements.
John Baugh: On today's call, we will be referring to certain non-GAAP financial measures, including adjusted EBITDA and non-GAAP EPS, which have been adjusted for certain items that may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included with our earnings release. The company believes that these non-GAAP financial measures provide meaningful insight into the company's operational performance and task flows and provides these measures to investors to help facilitate comparison of operating results with prior periods and to assist them in understanding the company's ongoing operational performance.
John Allen Baugh: On today's call, we will be referring to certain non-GAAP financial measures, including adjusted EBITDA and non-GAAP EPS, which have been adjusted for certain items which may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included with our earnings release. The company believes that these non-GAAP financial measures provide meaningful insight into the company's operational performance and cash flows and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding the company's ongoing operational performance. And with that, I would like to turn the call over to Steve Michaels, PROG Holdings President and Chief Executive Officer. Steve?
Speaker Change: On today's call, we will be referring to certain non-GAAP financial measures, including adjusted EBITDA and non-GAAP EPS, which have been adjusted for certain items, which may affect the comparability of our performance with other companies.
Speaker Change: These non-GAAP measures are detailed in the reconciliation tables included with our earnings release.
Speaker Change: The company believes that these non-GAAP financial measures provide meaningful insight into the company's operational performance and cash flows and provides these measures to investors to help facilitate comparisons of operating results with prior periods.
To assist them in understanding the company's ongoing operational performance.
Steve Michaels: With that, I would like to turn the caller over to Steve Michaels, Prague Holdings, President and Chief Executive Officer. Steve.
Speaker Change: With that I would like to turn the call over to Steve Michaels product Holdings, President and Chief Executive Officer, Steve.
Steve Michaels: Thanks, John.
Steven A. Michaels: Thanks, John. Good morning, everyone, and thank you for joining us. Today we are reporting our second quarter results, as well as providing some thoughts on Q3 and our increased 2024 full year financial outlook. Our team delivered a great second quarter, surpassing our expectations for GMV growth and exceeding the high end of our revenue and earnings outlook. Our success is rooted in strong execution, which balances growth with profitability. We've made significant strides in our 2024 priorities focused on enhancing customer and retailer experiences. Deepening integrations with existing partners and marketing directly to consumers.
Steven A. Michaels: Thanks, John.
Steve Michaels: Good morning, everyone. And thank you for joining us. Today, we are reporting our second quarter results, as well as providing some thoughts on Q3 and our increased 2024 full year financial outlook. Our team delivered a great second quarter, surpassing our expectations for GMV growth and exceeding the high end of our revenue and earnings outlook. Our success is rooted in strong execution, which balances growth with profitability. We've made significant strides in our 2024 priorities focused on enhancing customer and retailer experiences, deepening integrations with existing partners, marketing directly to consumers, expanding affiliate relationships through our PROG marketplace, and collaborating with retail partners through omnichannel marketing and promotions.
Steven A. Michaels: Morning, everyone and thank you for joining us.
Speaker Change: Today, we are reporting our second quarter results.
Speaker Change: As well as providing some thoughts on Q3, and our increased 2020 for full year financial outlook.
Speaker Change: Our team delivered a great second quarter, surpassing our expectations for <unk> growth and exceeding the high end of our revenue and earnings outlook.
Our success is rooted in strong execution, which balances growth with profitability.
Speaker Change: We've made significant strides in our 2024 priorities focused on enhancing customer and retailer experiences.
Speaker Change: <unk> integrations with existing partners.
Speaker Change: Marketing directly to consumers.
Steven A. Michaels: Expanding Affiliate Relationships Through Our PROG Marketplace and collaborating with retail partners through omni-channel marketing and promotion. Our customers are positively responding to these initiatives, evidenced by an improvement in our conversion rates and a year-over-year increase in leases originated with new and reactivated customers. Our internal efforts were complemented by lenders higher up in the credit stack having tightened approval rates in recent quarters. This has resulted in some higher-credit-quality applicants entering our funnel. While this shift in credit dynamics doesn't directly convert to GMV one-for-one, these applicants did contribute to our Q2 GMV.
Speaker Change: Expanding affiliate relationships through our prog marketplace.
And collaborating with retail partners through Omnichannel marketing and promotions.
Steve Michaels: Our customers are positively responding to these initiatives, evidenced by improving in our conversion rates and a year-over-year increase in leases originated with new and reactivated customers. Our internal efforts were complemented by lenders, higher up in the credit stack, having tightened approval rates in recent quarters. This has resulted in some higher credit quality applicants entering our funnel. While this shift in credit dynamics doesn't directly convert to GMV one-for-one, these applicants did contribute to our Q2 GMV. We believe we will continue to benefit from this credit tightening as well as the internal growth initiatives I mentioned throughout the remainder of 2024.
Speaker Change: Our customers are positively responding to these initiatives.
Speaker Change: Evidenced by an improvement in our conversion rates and a year over year increase in leases originated with new and reactivated customers.
Speaker Change: Our internal efforts were complemented by lenders higher up in the credit stack, having tightened approval rates in recent quarters.
This has resulted in some higher credit quality applicants entering our funnel.
Speaker Change: While this shift in credit dynamics doesn't directly convert to <unk> one for one these applicators that did contribute to our Q2 <unk>.
Steven A. Michaels: We believe we will continue to benefit from this credit tightening, as well as the internal growth initiatives I mentioned throughout the remainder of 2024. As a reminder, when we issued our outlook in late April, we had just reported a flat year-over-year Q1 GMV quarter, which had rebounded from a slow start to the year. We anticipated retail traffic headwinds in most of our leasable categories to persist in Q2.
We believe we will continue to benefit from this credit tightening as well as the internal growth initiatives I mentioned.
Speaker Change: The remainder of 2024.
Steve Michaels: As a reminder, when we issued our outlook in late April, we had just reported a flat year-over-year Q1 GMV quarter, which had rebounded from a slow start to the year. We anticipated retail traffic headwinds in most of our leaseable categories to persist in Q2. However, we remain confident in our strategic initiatives under grow and hands and expand, and despite ongoing macroeconomic challenges, we are optimistic about achieving low single-digit Q2 GMV growth for our progressive leasing segment. I'm proud of our teams' performance in delivering better-than-expected growth of 7.9% in Q2. Our focus on returning to growth has led to three consecutive quarters of flat-suppolitive year-over-year GMV comparisons, with a notable improvement this quarter.
Speaker Change: As a reminder, when we issued our outlook in late April we had just reported a flat year over year Q1, <unk> quarter, which had rebounded from a slow start to the year.
Speaker Change: We anticipated retail traffic headwinds in most of our leasable categories to persist in Q2. However.
Steven A. Michaels: However, we remain confident in our strategic initiatives under Grow, Enhance, and Expand. And despite ongoing macroeconomic challenges, we are optimistic about achieving low single-digit Q2 GMV growth for our progressive leasing segment. I am proud of our team's performance in delivering better-than-expected growth of 7.9% in Q2. Our focus on returning to growth has led to three consecutive quarters of flat-to-positive year-over-year GMB comparisons, with a notable improvement this quarter. While Brian will dive into the implications the GMV performance will have on our business in the balance of 2024, our recent GMV trend has resulted in our gross leased asset balance, which is the primary driver of future period revenues, ending the quarter close to flat compared to last year.
Speaker Change: However, we remain confident in our strategic initiatives under grow enhance and expand and despite ongoing macroeconomic challenges. We are optimistic about achieving low single digit Q2, GMB growth for our progressive leasing segment.
Speaker Change: I am proud of our team's performance in delivering better than expected growth of seven 9% in Q2.
Speaker Change: Our focus on returning to growth has led to three consecutive quarters of flat to positive year over year GMB comparisons.
Speaker Change: With a notable improvement this quarter.
Steve Michaels: While Brian will dive into the implications of the GMV performance we'll have on our business in the balance of 2024, our recent GMV trend has resulted in our gross leased asset balance, which is the primary driver of future period revenues, ending the quarter close to flat compared to last year. In the second quarter, we achieved consolidated revenue of 592.2 million, surpassing the high end of our outlook range by 17.2 million. Our consolidated adjusted EBITDA reached 72.3 million, resulting in a 12.2% margin, primarily driven by GMV, and supported by a healthy lease portfolio and disciplined spending.
Brian: While Brian will dive into the implications of the <unk> performance will have on our business and the balance of 2020 for our recent <unk> trend has resulted in our gross leased asset balance, which is the primary driver of future period revenues.
Brian: Ending the quarter close to flat compared to last year.
Steven A. Michaels: In the second quarter, we achieved consolidated revenue of $592.2 million, surpassing the high end of our outlook range by $17.2 million. Our consolidated adjusted EBITDA reached $72.3 million, resulting in a 12.2% margin, primarily driven by GMV and supported by a healthy lease portfolio and disciplined spending. We are pleased with the Q2 portfolio yield for the progressive leasing segment. The write-off rate in Q2 was 7.7 percent, consistent with pre-pandemic Q2 2019, and we expect it to be the peak of quarterly write-off rates in 2024.
Speaker Change: In the second quarter, we achieved consolidated revenue of $592 2 million.
Speaker Change: Passing the high end of our outlook range by $17 2 million.
Speaker Change: Our consolidated adjusted EBITDA reached $72 3 million, resulting in a 12, 2% margin, primarily driven by <unk> and supported by a healthy lease portfolio and disciplined spending.
Steve Michaels: We are pleased with the Q2 portfolio yield for the Progressive Leasing segment. The right-off rate in Q2 was 7.7%. Consistent with pre-pandemic Q2 2019, and we expected to be the peak of quarterly right-off rates in 2024. Our non-GAAP, Bluetooth EPS of 92 cents exceeded our expectations and was bolstered by a reduced share count from our share-reported program. We are excited about how the strong performance in the first half of the year positions us for the remainder of 2024.
Speaker Change: We are pleased with the Q2 portfolio yield for the progressive leasing segment.
Speaker Change: The write off rate in Q2 was seven 7%.
System with pre pandemic Q2, 2019, and we expect it to be the peak of quarterly write off rates in 2024.
Steven A. Michaels: Our non-GAAP diluted EPS of $0.92 exceeded our expectations and was bolstered by a reduced share count from our share repurchase program. We are excited about how the strong performance in the first half of the year positions us for the remainder of 2024. Now, let me update you on our strategic pillars, Grow, Enhance, and Expand, which were key contributors to our GMV results in Q2. Under our Grow pillar, focusing on business development with new and existing retail partnerships, we made significant progress in both regional and national markets.
Speaker Change: Our non-GAAP diluted EPS of <unk> 92.
Speaker Change: We exceeded our expectations and was bolstered by a reduced share count from our share repurchase program.
Speaker Change: We are excited about how the strong performance in the first half of the year positions us for the remainder of 2024.
Steve Michaels: Now let me update you on our strategic pillars, Grow and Hands and Expand, which were key contributors to our GMV results in Q2. Under our grow pillar, focusing on business development with new and existing retail partnerships, we made significant progress in both regional and national markets. In the regional space, we onboarded new retailers and extended relationships with existing ones, achieving GMV growth that match the growth rate of our national accounts. The Q2 results in the regional market showed a year-over-year increase in the number of active doors coupled with an increase in GMV per door. Furthermore, despite the substantial growth, we maintain stable sales expenses and portfolio health across our regional market.
Speaker Change: Now, let me update you on our strategic pillars grow enhance and expand which were key contributors to our <unk> results in Q2.
Speaker Change: Under our grow pillar focusing on business development with new and existing retail partnerships, we made significant progress in both regional and national markets.
Steven A. Michaels: In the regional space, we onboarded new retailers and extended relationships with existing ones, achieving GMV growth that matched the growth rate of our national account. Q2 results in the regional market showed a year-over-year increase in the number of active doors coupled with an increase in GMV per door.
Speaker Change: In the regional space, we on boarded new retailers and extended relationships with existing ones, achieving GMB growth that match the growth rate of our national accounts.
Speaker Change: The Q2 results in the regional market showed a year over year increase in the number of active doors, coupled with an increase in <unk> per door.
Steven A. Michaels: Furthermore, despite the substantial growth, we maintain stable sales expenses and portfolio health across our regional accounts. Our PROG Marketplace, also under the Grow Pillar, has delivered over 250% growth year-to-date through June 30th, and we're on track to materially exceed our full year expectations provided during the February earnings call.
Speaker Change: Furthermore, despite the substantial growth, we maintained stable sales expenses and portfolio health across our regional accounts.
Steve Michaels: Our PROG marketplace, also one of the grow pillars, has delivered over 250% growth year-to-date through June 30th. And we're on track to make terribly exceed our full-year expectations provided during the February earnings call. As I've mentioned before, this platform allows customers to shop anytime and anywhere through our mobile app, driving incremental traffic and sales to our network of retail partners. Additionally, our affiliate partnerships with leading retailers offer customers more choices. And last week's Amazon Prime Day, for example, was an extremely successful 2-day event for our marketplace. In terms of direct consumer marketing, we are creating personalized experiences throughout the customer life cycle, making it easy for consumers to utilize our full range of products.
Speaker Change: Our proud marketplace also under the grow pillar has delivered over 250% growth year to date through June 30th.
Speaker Change: And we're on track to materially exceed our full year expectations provided during our February earnings call.
Steven A. Michaels: As I've mentioned before, this platform allows customers to shop anytime and anywhere through our mobile app, driving incremental traffic and sales to our network of retail partners. Additionally, our affiliate partnerships with leading retailers offer customers more choices. And last week's Amazon Prime Day, for example, was an extremely successful two-day event for our marketplace.
Speaker Change: As I've mentioned before this platform allows customers to shop anytime and anywhere through our mobile app driving incremental traffic and sales to our network of retail partners.
Speaker Change: Additionally, our affiliate partnerships with leading retailers offer customers more choices and last week's Amazon Prime day. For example was an extremely successful two day event for our marketplace.
Steven A. Michaels: In terms of direct consumer marketing, we are creating personalized experiences throughout the customer lifecycle, making it easy for consumers to utilize our full range of products. Our investments in segmentation and automation capabilities are improving the customer experience. Under our enhanced pillar, we invested in technology projects, partnering with new and existing retailers to create seamless customer interactions. Through the first half of 2024, we completed two custom e-commerce integrations, including one with a large and long-term retail partner.
Speaker Change: In terms of direct consumer marketing, we are creating personalized experiences throughout the customer lifecycle, making it easy for consumers to utilize our full range of products.
Steve Michaels: Our investments in segmentation and automation capabilities are improving the customer experience. Under our enhanced pillar, we invested in technology projects, partnering with new and existing retailers to create seamless customer interactions. Through the first half of 2024, we completed two custom e-commerce integrations, including one with a large and long-time retail partner. We have a robust pipeline of additional integrations with new and existing retailers for the back half of 2024. Additionally, our search engine optimization efforts are yielding positive results. By consulting our consumer servicing portal, store locator, and shopping experiences under the same domain as the Progressive Leasing website, we have achieved year-to-year growth at organic search traffic and customer applications.
Speaker Change: Our investments in segmentation and automation capabilities are improving the customer experience.
Speaker Change: Under our enhanced pillar, we invested in technology projects, partnering with new and existing retailers to create seamless customer interactions.
Speaker Change: Through the first half of 2024, we completed two customer e-commerce integrations, including one with a large and long time retail partner.
Steven A. Michaels: We have a robust pipeline of additional integrations with new and existing retailers for the back half of 2024. Additionally, our search engine optimization efforts are yielding positive results by consolidating our consumer servicing portal, store locator, and shopping experiences under the same domain as the Progressive Leasing website. We have achieved year-over-year growth in organic search traffic and customer applications. Also, under our enhanced pillar, our PROG Labs R&D group implemented generative AI solutions to boost productivity and improve retailer and customer experiences. PROG Labs rolled out OpenAI's Enterprise Chat GPT and developed a number of internal apps to streamline operations, gain productivity, and reduce demand on technology resources, enabling them to focus on higher-value opportunities.
Speaker Change: We have a robust pipeline of additional integrations with new and existing retailers for the back half of 2024.
Speaker Change: Additionally, our search engine optimization efforts are yielding positive results.
Speaker Change: By consolidating our consumer servicing portal store locator and shopping experiences under the same domain as the progressive leasing website we've.
Speaker Change: We have achieved year over year growth in organic search traffic and customer applications.
Steve Michaels: Also, under our enhanced pillar, our Prague Labs R&D group implemented generative AI solutions to boost productivity and improve retailer and customer experiences. Prague Labs rolled out OpenAI's Enterprise Chat GPT and developed a number of internal apps to streamline operations, gain productivity, and reduce demand on technology resources, enabling them to focus on higher value opportunities. Additionally, our new AI platform scales internal training and equips our sales team with retailer-specific materials, improving compliance and customer conversion. We are piloting several other value-creating, generative AI solutions for both internal and consumer-facing areas, which we will share in the near-term midterm.
Speaker Change: Also under our enhanced pillar, our Prague Labs, R&D group implemented generative AI solutions to boost productivity and improved retailer and customer experiences.
Speaker Change: Prague labs rolled out open AI enterprise chat GPT and developed a number of internal apps to streamline operations.
Speaker Change: Gain productivity and reduced demand on technology resources, enabling them to focus on higher value opportunities.
Steven A. Michaels: Additionally, our new AI platform scales internal training and equips our sales team with retailer-specific materials, improving compliance and customer conversion rates. We are piloting several other value-creating generative AI solutions for both internal and consumer-facing areas, which we will share in the near to midterm. In Q2, under our Expand pillar, we focused on our omni-channel marketing strategy to automate the cross-promotional consumer journey. This approach allows us to personalize offers at a customer segment level, featuring relevant products from our portfolio.
Speaker Change: Additionally, our new AI platform scales internal training and equipped our sales team with retailer specific materials, improving compliance and customer conversion rates.
Speaker Change: We are piloting several other value, creating generative AI solutions for both internal and consumer facing areas, which we will share in the near to mid term.
Steve Michaels: In Q2, under our Expand pillar, we focus on our omni-channel marketing strategy to automate cross-promotional consumer journeys. This approach allows us to personalize offers at a customer segment level, featuring relevant products from our portfolio. We drove incremental progressive-leasing GMV through cross-marketing efforts, which includes successful email campaigns and mobile app integration with four, our buy-now pay-lator product.
Speaker Change: In Q2 under our expand pillar, we focused on our Omnichannel marketing strategy to automate cross promotional consumer journeys.
Speaker Change: This approach allows us to personalize offers at a customer segment level featuring relevant products from our portfolio.
Steven A. Michaels: We drove incremental progressive leasing GMV through cross-marketing efforts including successful email campaigns and mobile app integration with four of our Buy Now, Pay Later products. To summarize, our team delivered an outstanding quarter, making considerable strides on our strategic and financial priorities, which resulted in Q2 exceeding the high end of our revenue and earnings outlook. We improve customer metrics, sustain a healthy lease portfolio, exercise disciplined spending, and achieve GMV growth. By collaborating with our retail partners on omni-channel technology and marketing initiatives, we further increase our balance of share.
Speaker Change: We drove incremental progressive leasing GMB through cross marketing efforts, which include successful E mail campaigns and mobile App integration with for our buy now pay later product.
Steve Michaels: The summarized, our team delivered an outstanding quarter, making considerable strides on our strategic and financial priorities, which resulted in Q2 exceeding the high end of our revenue and earnings outlook. We improved customer metrics, sustained a healthy lease portfolio, exercised disciplined spending, and achieved GMV growth. By collaborating with our retail partners on Omni-Channel technology and marketing initiatives, we further increase balance of share. Our updated outlook takes into account the impact of our strategic initiatives and the benefits we expect from the tightening of the credit stack above us, all set by the current challenges we see to consumer demand posed by the macroeconomic environment.
Speaker Change: To summarize our team delivered an outstanding quarter, making considerable strides on our strategic and financial priorities, which resulted in Q2 exceeding the high end of our revenue and earnings outlook.
Speaker Change: We improved customer metrics sustained a healthy lease portfolio exercise disciplined spending and achieve <unk> growth.
By collaborating with our retail partners on Omnichannel technology, and marketing initiatives, we further increased balance of share.
Steven A. Michaels: Our updated outlook takes into account the impact of our strategic initiatives and the benefits we expect from the tightening of the credit stack above us, offset by the current challenges we see to consumer demand posed by the macroeconomic environment. Our history of successfully navigating dynamic and challenging environments gives us confidence in our ability to adapt as conditions evolve. We expect Q3 GMV to grow in the high single digits, and our updated full-year revenue outlook reflects this GMV outperformance.
Speaker Change: Our updated outlook takes into account the impact of our strategic initiatives and the benefits we expect from the tightening of the credit stack above us.
Speaker Change: Offset by the current challenges, we see consumer demand those by the macroeconomic environment.
Steve Michaels: Our history of successfully navigating dynamic and challenging environments gives us confidence, and our ability to adapt as conditions evolve. We expect Q3 GMV to grow in the high-single digits, and our updated full-year revenue outlook reflects the GMV outperformance. We anticipate our write-offs to remain within our targeted annual range of 6 to 8% while profitably growing GMV.
Speaker Change: Our history of successfully navigating a dynamic and challenging environment gives us confidence in our ability to adapt as conditions evolve.
Speaker Change: We expect Q3 <unk> to grow in the high single digits and our updated full year revenue outlook reflects the <unk> outperformance.
Steven A. Michaels: We anticipate our write-offs to remain within our targeted annual range of 6-8% while profitably growing GMV. Finally, on the topic of capital allocation, our priorities remain unchanged, and we expect to continue to fund growth, look for strategic M&A opportunities, and return excess cash to shareholders through dividends and share repurchase. I'll now turn the call over to our CFO, Brian Garner, for more details on Q2 results and the remainder of the year
Speaker Change: We anticipate our write offs to remain within our targeted annual range of 6% to 8% while profitably growing GMB.
Steve Michaels: Finally, on the topic of capital allocation, our priorities remain unchanged, and we expect to continue to fund growth, look for strategic M&A opportunities, and return excess cash to shareholders through dividends and share repurchases.
Speaker Change: Finally on the topic of capital allocation, our priorities remain unchanged and we expect to continue to fund growth look for strategic M&A opportunities and return excess cash to shareholders through dividends and share repurchases.
Brian Garner: I'll now turn the call over to our CFO, Brian Garner, for more details on Q2 results and remainder of the year outlook. Right?
I'll now turn the call over to our CFO Bryan Garner for more details on Q2 results and the remainder of the year outlook.
Speaker Change: Brian.
Brian Garner: Thanks, Steve, and good morning, everyone. Our strong performance this quarter demonstrates our ability to deliver on our strategic priorities and financial framework, which emphasizes growth alongside a healthy portfolio and prudent spending. For the second quarter in a row, we exceeded GMV expectations and surpassed the high end of our outlook for revenue and earnings. Non-GAAP-diluted EPS of 92 cents per share beat the high end of our outlook by 17 cents.
Brian J. Garner: [inaudible] Thanks, Steve, and good morning, everyone. Our strong performance this quarter demonstrates our ability to deliver on our strategic priorities and financial framework, which emphasizes growth alongside a healthy portfolio and prudent spending. For the second quarter in a row, we exceeded GMV expectations and surpassed the high end of our outlook for revenue and earnings. Non-gap diluted EPS of $0.92 per share beat the high end of our outlook by $0.17. I want to echo Steve's enthusiasm regarding our first half results and how they position us as we move forward in the second half of 2024.
Brian J. Garner: Thanks, Steve and good morning, everyone.
Brian J. Garner: Our strong performance this quarter demonstrates our ability to deliver on our strategic priorities and financial framework, which emphasizes growth alongside a healthy portfolio and prudent spending.
Speaker Change: For the second quarter in a row, we exceeded <unk> expectations and surpassed the high end of our outlook for revenue and earnings.
Speaker Change: non-GAAP diluted EPS of <unk> 92 per share beat the high end of our outlook by <unk> 17.
Brian Garner: I want to echo Steve's enthusiasm regarding our first half result and how it positions us as we move forward in the second half of 2024. Our teams have been driven and diligent throughout an uncertain macro environment over the last several years, and I'm proud of their performance. We are focused on sustainable momentum and strategically navigating the periods ahead. Starting with progressive leasing segment, GMV exceeded our expectations with a 7.9% year-over-year increase, surpassing our initial projection of low-singles.
Speaker Change: I want to Echo Steves enthusiasm regarding our first half results and how it positions us as we move forward in the second half of 2024.
Brian J. Garner: Our teams have been driven and diligent throughout an uncertain macro environment over the last several years, and I'm proud of their performance. We are focused on sustaining our momentum and strategically navigating the period. Starting with the progressive leasing segment, GMV exceeded our expectations with a 7.9% year over year increase, surpassing our initial projection of low single-digit growth. This outperformance reflects the significant stride our teams have made with our strategic initiatives, which are driving GMV performance, and we believe will impact results positively throughout the remainder of the year. Additionally, we benefited from the impact of tightening credit supply above us.
Speaker Change: Our teams have been driven and diligent throughout an uncertain macro environment over the last several years and I'm proud of their performance.
Speaker Change: We are focused on sustained our momentum and strategically navigating the periods ahead.
Speaker Change: Starting with progressive leasing segment, <unk> exceeded our expectations with a seven 9% year over year increase surpassing our initial projection of low single digit growth.
Speaker Change: This outperformance reflects the significant strides our teams have made with our strategic initiatives, which are driving <unk> performance and we believe will impact results positively throughout the remainder of the year.
Speaker Change: Additionally, we benefited from the impact of tightening of credit supply above us.
Brian J. Garner: Our GLA balance at the end of Q2 of 2024 was down 0.7% compared to the same period last year, a material improvement from the previous six quarters of mid-single to low double-digit decline. We expect the GLA balance to turn positive during Q3 and improve throughout the remainder of the year, contributing to the revenue growth implied in our revised outlook. Q2 revenues for the progressive leasing segment declined 0.8% from $574.8 million in Q2 of 2023 to $570.5 million, primarily driven by the gross lease asset balance being down 4.7% as we entered the quarter, partially offset by higher 90-day early purchases as compared to the same period last year.
Speaker Change: Our GLA balance at the end of Q2 of 2024 was down 7% compared to the same period last year a material.
Speaker Change: Improvement from the previous six quarters of mid single to low double digit declines.
Speaker Change: We expect the GLA balance to turn positive during Q3 and improve throughout the remainder of the year contributing to the revenue growth implied in our revised outlook.
Speaker Change: Q2 revenues for the Progressive leasing segment declined 8% from $574 8 million in Q2 of 2000 $23 million to $575 million, primarily driven by the gross lease asset balance being down four 7% as we entered the quarter, partially offset by higher 90 day early purchases.
As compared to the same period last year.
Brian J. Garner: Similar to Q1, revenue outperformed our expectations primarily due to the larger-than-expected portfolio size. The Q2 portfolio performance of Progressive Leasing was better than expected, contributing to earnings results. Additionally, the percentage of customers choosing to exercise their 90-day purchase option has returned to pre-pandemic levels.
Speaker Change: Similar to Q1 revenue outperformed our expectations, primarily due to a larger than expected portfolio size.
Speaker Change: The Q2 portfolio performance progressive leasing with better than expected contributing to earnings results.
Speaker Change: Additionally, the percentage of customers choosing to exercise their 90 day purchase option has returned to pre pandemic levels.
Brian J. Garner: Our gross margin of 32.6% in Q2 of 2024 was 40 basis points lower compared to Q2 of 2023, primarily driven by normalized levels of 90-day purchase periods compared to historic lows in 2023. The provision for leased merchandise write-offs was 7.7% in Q2, which is consistent with the pre-pandemic period of Q2 of 2019 at 7.6%. We expect Q2 to be the high point for quarterly write-offs and anticipate folio results to be within our targeted annual range of six to eight. Progressive Leasing's SG&A expense in Q2 was $74.4 million, a decrease of $3.9 million, or 5%, compared to $78.3 million in the same quarter last year.
Speaker Change: Our gross margin of 32, 6% in Q2 of 2024 was 40 basis points lower compared to Q2 of 2023, primarily driven by normalized levels of 90 day purchases period compared to historic lows in 2023.
Speaker Change: The provision for lease merchandise write offs were seven 7% in Q2, which is consistent with the pre pandemic period of Q2 of 2019 at seven 6%.
Speaker Change: We expect Q2 to be the high point in quarterly write offs and anticipate full year results to be within our targeted annual range of 6% to 8%.
Speaker Change: The rest of the weakening of SG&A expense in Q2 was $74 4 million, a decrease of $3 9 million or 5% compared to $78 3 million in the same quarter last year.
Brian J. Garner: As a percentage of revenue, SG&A expenses decreased by 60 basis points year over year, from 13.6% of revenue in Q2 of 2023 to 13% of revenue in Q2 of 2024. As a reminder, this improvement is primarily due to the restructuring actions taken in Q1 this year. Despite these cost-cutting measures, we have maintained our investment in marketing, sales, and technology to drive GNV. Adjusted EBITDA for Progressive Leasing decreased slightly from $75.6 million and 13.2% of revenue in Q2 of 2023 to $73.8 million and 12.9% of revenue in Q2 of 2024.
Speaker Change: As a percentage of revenue SG&A expenses decreased by 60 basis points year over year from 13, 6% of revenue in Q2 of 2023% to 13% of revenue in Q2 of 2024.
Speaker Change: As a reminder, this improvement was primarily due to the restructuring actions taken in Q1 this year.
Speaker Change: Despite these cost cutting measures, we have maintained our investment in marketing sales and technology to drive <unk>.
Adjusted EBITDA for progressive leasing decreased slightly from $75 6 million and 13, 2% of revenue in Q2 of 2023 to $73 8 million and 12, 9% of revenue in Q2 of 'twenty four.
Brian J. Garner: The adjusted EBITDA margin of 12.9% is at the high end of our 11 to 13% annual margin target for the progressive leisure sector. This segment achieved a strong margin despite a slight decrease in revenue, aided by our Q1 restructuring actions and discipline spending. Q2 2024 consolidated revenues were $592.2 million compared to $592.8 million in the same quarter last year, driven by the smaller portfolio of the progressive leasing segment entering the quarter, offset by GMV growth, along with an increase in customers exercising their 90-day purchase option.
Speaker Change: The adjusted EBITA margin of 12, 9% is at the high end of our 11% to 13% annual margin target for the progressive leasing segment.
Speaker Change: The segment achieved a strong margin despite a slight decrease in revenue aided by our Q1 restructuring actions and disciplined spending.
Speaker Change: Q2, 2024 consolidated revenues were $592 2 million compared to $592 8 million in the same quarter last year, driven by a smaller portfolio of the progressive lease segment entering the quarter offset by GMB growth along with an increase in customers exercising their 90 day purchase option.
Speaker Change: <unk>.
Brian J. Garner: Consolidated adjusted EBITDA was $72.3 million and 12.2% of revenue compared to $75 million and 12.7% in the year-ago period. Looking at our balance sheet, we ended the second quarter of 2024 with $250.1 million in cash and gross debt of $600 million, resulting in a net leverage ratio of 1.26 times trailing 12 months adjusted EBIT. We remain undrawn on our $350 million revolver at the end of the quarter.
Speaker Change: Consolidated adjusted EBITDA was $72 3 million and 12, 2% of revenue compared to $75 million and 12, 7% in the year ago period.
Speaker Change: Looking at our balance sheet. We ended the second quarter of 2024 with $250 1 million in cash and gross debt of $600 million, resulting in a net leverage ratio of one six times trailing 12 months adjusted EBITDA.
Speaker Change: We remain undrawn on our $350 million revolver at the end of the quarter.
Brian J. Garner: We paid a quarterly cash dividend of $0.12 per share in June, and during the quarter, we repurchased 1,030,000 shares of our common stock at a weighted average price of $35.67 per share. We have $438.8 million remaining under a recently reauthorized $500 million share repurchase program. With respect to our view on the remainder of the year, I'll now touch on a few key aspects of our third quarter and a revised full-year outlook, which was provided in this morning's earnings call.
Speaker Change: We paid a quarterly cash dividend of <unk> 12 per share in June and during the quarter, we repurchased $1 million and 30000 shares of our common stock at a weighted average price of $35 67 per share.
Speaker Change: We have $438 $8 million remaining under our recently authorized reauthorized, a $500 million share repurchase program.
Speaker Change: With respect to our view on the remainder of the year I will now touch on a few key aspects of our third quarter and our revised full year outlook, which we provided in this morning's earnings release.
Brian J. Garner: We are optimistic about the remainder of 2024 based on the positive trends we have observed to date. We believe our GMV momentum will carry into the second half of the year. And we expect to end Q3 with a high single-digit GMV comparison year over year. This growth is underpinned by the assumptions that the benefits we experience from credit tightening will continue into the second half of the year, coupled with the ongoing progress with our strategy across grow, enhance, and expand that Steve addressed in detail. We believe these efforts will help us gain market share both regionally and nationally.
Speaker Change: We are optimistic about the remainder of 2024 based on the positive trends, we have observed to date.
Speaker Change: We believe our <unk> momentum will carry into the second half of year and.
Speaker Change: And expect to end Q3 with high a high single digit <unk> comparison year over year.
Steven A. Michaels: This growth is underpinned by the assumptions that the benefits we experienced some credit tightening will continue into the second half of the year, coupled with the ongoing progress with our strategy across grow enhance and expand the Steve addressed in detail.
Steven A. Michaels: We believe these efforts will help us gain market share across both regional and national accounts.
Brian J. Garner: As I mentioned earlier, GMV performance in the first half of the year has improved the GLA balance, which is roughly flat year over year going into Q3, and expected to improve over the remainder of the year. This expected improvement in GLA benefits revenue for the remainder of the year, as reflected in our increased 2024 revenue outlook. As we actively manage the portfolio while growing GMV, performance is expected to remain within our targeted yield. However, Q3 gross margin will have a difficult comparison to Q3 of 2023 for the progressive leasing segment due to the below average levels of 90-day purchases last year.
Speaker Change: As I mentioned earlier <unk> performance.
Speaker Change: In the first half of the year has improved the GLA balance, which is roughly flat year over year going into Q3.
Speaker Change: And expected to improve over the remainder of the year.
Speaker Change: This expected improvement GLA benefits revenue for the remainder of the year as reflected in our increased 2020 for revenue outlook.
Speaker Change: As we actively manage the portfolio, while growing DMV performance.
Speaker Change: As expected to remain within our targeted yields.
Speaker Change: Q3 gross margin will have a difficult comparison to Q3 of 2023 for the progressive leasing segment due to the below average levels of 90 day purchases last year.
Brian J. Garner: Our revised Consolidated Outlook for 2024 calls for revenues in the range of $2.4 to $2.45 billion, adjusted EBITDA to be in the range of $265 to $275 million, and non-GAAP EPS in the range of $3.25 to $3.40. This outlook assumes a continuation of benefits from credit tightening above us, alongside a difficult operating environment with current trends of soft demand for leasable consumer goods, and no material No meaningful increase in the unemployment rates for our consumer base, an effective tax rate for non-GAAP EPS of approximately 28%, and no impact from additional share repurchase.
Speaker Change: Our revised consolidated outlook for 2024 calls for revenues in the range of two four to $2 45 billion adjusted EBITDA to be in the range of 265 to 275 million and non-GAAP EPS in the range of $3 25 to $3 40.
Speaker Change: This outlook assumes a continuation of benefits from credit tightening above us alongside a difficult operating environment with current trends of soft demand for leasable consumer goods no material changes in the company's decisioning posture, no meaningful increase in the unemployment rates for our consumer base.
Speaker Change: An effective tax rate for non-GAAP EPS of approximately 28%.
Speaker Change: And no impact from additional share repurchases.
Brian J. Garner: In summary, this quarter's performance is a testament to our collective effort. Strategic Expertise. Strong execution combined with Credit Friends, which we believe are favorable for our business. We deliver better-than-expected GMV growth, a healthy portfolio, and maintain disciplined spending. Our free cash flow generation allowed us to return capital to shareholders through dividends and share repurchase. We appreciate your interest in PROG Holdings, and I'll now turn the call over to the operator for questions. Operator? Thank you.
Speaker Change: In summary, this quarter's performance is a testament to our collective efforts strategic expertise and strong execution combined with credit trends that we believe are favorable for our business.
Speaker Change: We delivered better than expected <unk> growth, a healthy portfolio and maintained disciplined spending.
Speaker Change: Our free cash flow generation allowed us to return capital to shareholders through dividends and share repurchases.
Speaker Change: We appreciate your interest in Prague Holdings, and I will now turn the call over to the operator for questions operator.
Operator: Thank you. Ladies and gentlemen, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 1-1 again. Please stand by while we compile the Q&A roster. Now, the first question comes from the line of Brad Thomas with KeyBank Capital Markets. Your line is open.
Operator: Thank you, ladies and gentlemen to ask a question you will need to press star one on your telephone and wait by name to be announced to Johnny's question simply press Star. One again, please standby, while we compile the Q&A roster.
Speaker Change: Our first question coming from the line of Brad Thomas with Keybanc capital markets. Your line is now open.
Bradley Bingham Thomas: Hi, good morning, and congratulations on the execution here in the quarter. Steve, I want to just jump in first by talking about some of the growth drivers in the business. And I was hoping you could just give us a little bit more color, maybe even quantify to some extent how you're thinking about the drivers of GMB going forward here in the balance of the year and how much comes from, you know, the established retail base that you have, these important partners, they're still seeing some tough times. How much improvement can you expect from them versus some of the growth initiatives you have?
Bradley Bingham Thomas: Hi, good morning, and congrats on the execution here in the quarter.
Bradley Bingham Thomas: Steve I wanted to just jump in first.
Bradley Bingham Thomas: And talking about some other growth drivers in the business and I was hoping you could just give us a little more color or maybe even quantify to some extent how youre thinking about the drivers of GMB going forward here in the balance of the year and how much comes from.
Bradley Bingham Thomas: Yes.
Speaker Change: Establishing a retail base that you have with important partners, they're still seeing some tough times, how much improvement from them versus some of the growth initiatives that you have.
Thanks.
Steven A. Michaels: Yeah, thanks, Brad. Good morning.
Speaker Change: Yeah, Thanks, Brad good morning.
Speaker Change: Yes, <unk>, we're pleased with <unk> performance and it was it was strong and pretty consistent throughout the quarter I will talk about the second quarter and then.
Speaker Change: We can talk about what we're what's baked into the outlook for the balance of the year.
Steven A. Michaels: Yeah, GMV, we're pleased with the GMV performance, and it was strong and pretty consistent throughout the quarter. I'll talk about the second quarter, and then we can talk about what we're, you know, what's baked into the outlet for the balance of the year. But the team partnered well with our partners to answer your question about existing retailers, and we were able to get a few initiatives that we had been working on for some time over the goal line during the quarter.
Speaker Change: But the teams partnered well with our partners to your to your question about existing retailers and we were able to get a few initiatives that we have been working on for some time over the goal line during the quarter. So that's going to help us with our productivity within existing.
Speaker Change: Existing retail partnerships.
Steven A. Michaels: So that's going to help us with our productivity within existing retail partnerships. The marketing team also had a hand in it, both in the form of partner marketing with our retailers, as well as direct consumer marketing.
Speaker Change: The marketing team also had a hand in it.
Speaker Change: Both in the form of partner marketing with our retailers as well as our direct to consumer marketing.
Steven A. Michaels: And as we called out in the prepared remarks, we're encouraged by the momentum in our regional business. It's been a renewed focus for us, and I'm pleased with the progress that we've made thus far. We're really just getting started, I would say, in that area. We also called out that the credit supply dynamic was at play and probably a little bit more observable this quarter than in previous quarters. We did see evidence of tightened supply above us in the stack, and those apps are not, you know, it's not just about top-of-the-funnel dynamics and apps. It's just one part of the bigger picture.
Speaker Change: And as we called out in the prepared remarks.
Speaker Change: Working encouraged by the momentum in our regional business.
Speaker Change: It's been a renewed focus for us and I'm pleased with the progress that we've made thus far.
Speaker Change: And we're really just getting restarted I would say in that area.
Speaker Change: We also called out that the credit supply dynamic was.
Speaker Change: At play and probably a little bit more observable this quarter than in previous quarters. We did see evidence of tightened supply above us in the stack and in those.
Speaker Change: Those apps or not.
Speaker Change: It's not just about top of the funnel dynamics in apps.
Steven A. Michaels: We have to continually work to improve the experience and remove friction from the onboarding process in order to convert those apps into funded leases. And we made a few improvements, not only in the DTC or direct consumer area but also in particular retail installations there. So we're pleased with the execution because, as you noted, in many of our top retailers, they're still facing down traffic and down comps. And so to be able to have this growth is, you know, we're pleased with that.
Speaker Change: So just one part of the picture, we have to continually work to improve.
Speaker Change: The experience and remove friction from the Onboarding process in order to convert those apps into funded leases and we had a few.
Speaker Change: Improvements.
Speaker Change: Not only in the DTC or direct consumer area, but also in particular retail installations there so.
Speaker Change: We're pleased with the execution because as you noted in many of our.
Speaker Change: In our top retailers theres still facing down traffic in and down comps and so to be able to.
Speaker Change: To have this growth.
Speaker Change: We're pleased with that we expect the momentum to continue in.
Steven A. Michaels: We expect the momentum to continue and to somewhat even accelerate, as evidenced by the fact that we guided to high singles in the third quarter for GMV growth. We did add some retailers, mostly in the SMB space and in the regional space. But we've got a good pipeline and look forward to continuing the growth.
Speaker Change: To somewhat even accelerate as evidenced by the fact that we guided to high singles.
Speaker Change: In the third quarter for <unk> growth.
Speaker Change: We will continue we did add some some retailers in the mostly in the SMB space in the retail in the regional space.
Speaker Change: But.
Speaker Change: We've got a good pipeline and look forward to.
Speaker Change: Continuing the growth.
Steven A. Michaels: That's very helpful, Steven. If I could ask a follow-up question just about, you know, sort of the retail landscape. I think there's news of, you know, cons, filing for bankruptcy today and plans to close at least some stores. You used to partner with them. I don't believe you were in them at all. These are the retailers you partner with that obviously have closed stores and may be at risk of bankruptcy themselves in the future.
Speaker Change: That's very helpful. If I could ask a follow up just about.
Speaker Change: The retail landscape I think there is news.
Speaker Change: Cons.
Speaker Change: Milling at bankruptcy today with plans to close some stores.
Used to partner with them I don't believe here and we're in them at all.
Steven A. Michaels: I guess the question I have is, if you could talk a little bit about your relationship more directly with a customer than just a retailer and how to maybe try and take advantage of situations where there might be someone like a cons that goes away, and how you continue to navigate this landscape where the retail roadmap is changing almost every day.
Speaker Change: So the resource you partner with that I would say close to ours and may be at risk of bankruptcy themselves in the future.
Speaker Change: The question I have is if you could talk a little bit about your relationship more directly with the customer and then just a retailer and how you may be trying to take advantage of situations, where there might be something like content goes away.
Speaker Change: And how you continue to navigate this landscape.
Speaker Change: <unk>.
Speaker Change: Bob.
Speaker Change: Roadmap is changing almost every day.
Steven A. Michaels: Yeah, thank you. And you're right; it is a dynamic environment. And just for clarification, we do not partner with comms currently. But, you know, it is an important thing that I've talked about before, as we've gotten much, much better at that and more sophisticated, I would say over the last number of years. So we have, you know, good visibility into our customers, where we were onboarded from what their purchase habits have been. We're working on AI and other, you know, personalization efforts to try and predict what they may want next.
Speaker Change: Yes. Thank you and you are right it is a dynamic environment.
Speaker Change: And just for clarity, we do not partner with Comms currently but.
Speaker Change: It is it is an important thing that I've talked about before.
Speaker Change: And we've gotten much much better.
Speaker Change: On that and more sophisticated I would say over the last number of years. So we have we have good visibility into our customers, where we were where they were on boarded from what their purchase habits have been we're working on AI and other personalization efforts to try and predict what they may want next but but more.
Steven A. Michaels: But, more fundamentally, you know, we communicate with our customers directly and can say, you know, Mrs. Customer, we, you know, the store in your area has closed. Maybe you'd like to take advantage of the going out of business sale, but after that, we've got these other fine retailers that we partner with in your area that we could direct you to. And in fact, we could create offers for some type of promotional activity or some type of incentive to make sure that they stay in our preferred partner network. So it's a very good touch point that we have. And with this dynamic environment, I think we'll be flexing those muscles more than we probably have in the last number of years.
Speaker Change: <unk> mentally.
Speaker Change: We communicate with our customers directly and.
Steven A. Michaels: Very helpful. Thanks so much.
Speaker Change: Can say.
Mrs customer: Mrs customer.
Mrs customer: The store.
Speaker Change: Your area has closed.
Speaker Change: Maybe you'd like to take advantage of the going out of business sale, but after that we.
Speaker Change: Got these other fine retailers that we partner with in your area that we could direct you to and in fact.
We could create offers.
Speaker Change: For some type of promotional activity or some type of incentive to make sure that they stay in our preferred partner network. So it's a it's a very good touch point that we have.
Speaker Change: With this dynamic environment I think we'll be selecting those muscles more than we probably have in the last number of years.
Speaker Change: Very helpful. Thanks, so much.
Bradley Bingham Thomas: Thanks, Brad.
Thank you.
Hoang Manh Nguyen: Thank you. And for our next question, coming from the line of Hoang Nguyen with City Colony, please let us open it.
Speaker Change: Our next question coming from the line.
Speaker Change: With TD Cowen Your line is now open.
Steven A. Michaels: Hi guys, and congratulations on a very strong quarter. I just wanted to talk about credit tightening a little bit. It looks like from your outlook that you guys are incrementally more positive on the trade down from lenders above. So just one, I just want you to confirm whether that is true, and you know, maybe when we think about the environment right now, inflation is coming down. Maybe things have gotten a little bit better versus maybe three months ago. So I mean, how sustainable do you think this trade down would be and if there is a follow-up?
Speaker Change: Hi, guys.
Speaker Change: Congrats on the very strong quarter.
Speaker Change: I just wanted to talk about credit tightening a little bit it looks like from your outlook. It seems that you guys are incrementally more positive on the trade down from lenders above.
Speaker Change: So just one I just wanted you to confirm.
Speaker Change: Now whether that is true and.
Speaker Change: Maybe when we think about the environment right now inflation is coming down maybe things have gotten a little bit better versus maybe three months ago. So I mean, how sustainable do you think is straight down would be and have a follow up.
Steven A. Michaels: Sure. Well, I would agree with your characterization that we're gradually positive. But it's not just about Trade Down. It's about our execution and the initiatives that we have that are recently deployed, as well as things that we've got on the roadmap. Trade down is a factor in it. We talked about it. You'll remember we kind of were braced for it for a number of years, and it really didn't happen. We started to see some evidence of it in the holiday season of 2023.
Speaker Change: Sure.
Speaker Change: I would agree with your characterization that we're incrementally positive.
Speaker Change: But it's not just about trade down it's about our execution and the.
Speaker Change: The initiatives that we have that are there.
Speaker Change: Recently.
Speaker Change: Deployed as well as things that we've got on the roadmap.
Speaker Change: Trade down as a as a factor in it we talked about it.
Speaker Change: Youll remember, we kind of were braced for it for a number of years and it really didn't happen. We started to see some evidence of it in holiday of 2023 and it was it was into.
Steven A. Michaels: And it was in two, I'll call them facets, like more customers that were coming into the retail environment where we thought, or we observed, were in need of a payment plan. And that doesn't necessarily mean us. It could mean that they were appropriately partnered with a prime provider, and that's fine. But more customers needing a payment plan, and then couple that with less of them being approved by the providers in the stack above us, does tend to have a funnel dynamic for us, which is positive for us.
Speaker Change: I'll call it fast, it's like more and more customers that were coming into the retail environment.
Speaker Change: We thought or we observed were in need of a payment plan and that doesn't necessarily mean us it could mean.
Speaker Change: We are appropriately or partnered with a with a prime provider and that's that's fine, but more customers needing a payment plan and then couple that with.
Speaker Change: Less of them being approved by the providers and the stack above us does tend to have a funnel dynamic for us, which is which is positive for us.
Steven A. Michaels: We read all the public reports from the prime providers, and you'll see that maybe some of their DQs are stabilizing, but, you know... They stabilized because of some tightening efforts on their part. So I'm not calling for an intensity or an increasing benefit.
Speaker Change: We read all the public reports from the prime providers and Youll see that maybe some of their <unk> are stabilizing.
Speaker Change: But.
No.
Speaker Change: They stabilized because of some tightening efforts on their part so I'm not calling for an intensity or <unk>.
Steven A. Michaels: I think the tightened conditions are here, at least for the rest of this year. I don't think they're going to continue to tighten, but the tightened conditions have had an impact on the top of our funnel. And we feel pretty good about that continuing, but more impactfully are the things that we're doing on the execution front. We'll see what the view is for 2025. But right now, we're not calling for increased tightening, but we believe that the tightening that's in the market will stick around.
Speaker Change: Increasing benefit I think the tightened to conditions are here at least for the rest of this year.
Speaker Change: They're going to continue to tighten, but the tightened conditions have had an impact on the top of our funnel and we feel we feel pretty good about that continuing but more impactful here are the things that we're doing on the execution front.
Speaker Change: We will see what the view is for 2025.
But right now.
Speaker Change: We're not calling for increased tightening, but we're we believe that the tightened thats tightening thats in the market will will stick around for a little bit.
Steven A. Michaels: Got it. And maybe about your PROG marketplace, I mean, very strong growth there. Can you talk about how, historically, you guys have been successful in converting a PROC Marketplace relationship into like a direct integration relationship? Thanks.
Speaker Change: Got it and maybe about your marketplace I mean, very strong growth. There I mean can you talk about historically I mean, how I.
Speaker Change: I mean have you guys have been successful in converting market place for relationship into like a direct integration relationship.
Speaker Change: Thanks.
Steven A. Michaels: Yeah, that's a great question, and the marketplace is an exciting area for us. And it's really growing very quickly. Its origins and its start were really because we already partner with some of the best retailers in the country, and it started as just another way for our customers to shop with our retail partners, and it is another proof of us driving traffic back into the retail environment and helping to demonstrate the value that we provide to the retailers that we partner with.
Speaker Change: Yeah.
Speaker Change: Yes, that's a great question and the marketplace is an exciting.
Speaker Change: Area for us.
Speaker Change: Really growing very quickly.
Speaker Change: Its origins and it started from really because we already partner with some of the best retailers in the country and it started with just another way for our customers.
Speaker Change: Two.
Speaker Change: To shop with our with our retail partners.
Speaker Change: It is another evidence of us driving traffic back into the retail environment and helping to demonstrate the value that we provide to the retailers that we partner with.
Steven A. Michaels: It has morphed into some affiliate relationships with some retailers that we don't have partnerships with. We're not going to specifically call out any retailers, but I can tell you that we have had conversations with them and have conversation starters due to the volume coming through on the marketplace. In fact, there was one retailer that we got a call from that we had been having conversations with already, but we got a call from them saying that they had enough volume coming through their customer service line that they wanted to get like a one-page tear sheet for their call center agents to talk about our program, and then it kicked off on the BizDev side too. So we're encouraged about not just the volume of the DTC movement generally but also as a complement to our BizDev partnership efforts.
Speaker Change: It has.
Speaker Change: Morphed into some affiliate relationships, which our retailers that we don't have.
Speaker Change: Partnerships with and we're not going to.
Speaker Change: Specifically call out any retailers, but I can tell you that we have.
Speaker Change: <unk>.
Speaker Change: Had conversations with and had.
Speaker Change: Conversation starters due to the volume coming through on the marketplace. In fact, theres been one retailer that we got a call from.
Speaker Change: M that we have been having conversations with already but we got a call from them, saying that they had.
Enough volume coming through there.
Speaker Change: Their customer service line.
Speaker Change: They wanted to.
Speaker Change: Get like a one page tear sheet for their call center agents to to talk about our program and then it kicks start on the Biz Dev side too. So we're encouraged about just the volume of the DTC motion generally, but also as a complement to our Biz Dev partnership efforts.
Speaker Change: Okay.
Speaker Change: Thank you.
Operator: And our next question comes from the lineup, Bobby Griffin with Raymond James. The line is open. Good morning.
Speaker Change: And our next question coming from the line of Bobby Griffin with Raymond James Your line is open.
Bobby Griffin: Good morning, buddy. Thanks for taking my questions and congratulations on the performance this quarter. Thanks, Bobby.
Good morning, Thanks for taking my questions and congrats on the performance this quarter.
Speaker Change: Thanks, Bobby.
Steven A. Michaels: Steve, I guess I wanted to circle back to the GMV upside and maybe ask it a slightly different way and maybe unpack it a little bit more. But, you know, when you guys saw the upside this quarter, was it a function of the initiatives that you've been working on and we've talked about getting over the finish line sooner? Or is the actual impact from these initiatives greater than maybe what you guys were forecasting, and they're having a greater impact at a quicker rate than maybe the team was thinking the impact from these investments would be contributing?
Steven A. Michaels: Steve I guess, I guess I wanted to circle back to the <unk> upside and maybe ask it a slightly different way and maybe unpack it a little bit more but when you guys saw the upside this quarter was it a function of the initiatives that you've been working on and we've talked about that over the finish line sooner or is the actual impact from these initiatives are greater than maybe what you guys were forecasting and they're in there.
Having a greater impact at a quicker rate than what maybe the team was thinking the impact from these <unk>.
Speaker Change: <unk> will be contributing.
Steven A. Michaels: Yeah, it's a great question. You know, maybe a little bit of both.
Speaker Change: Yes, it's a great question.
Speaker Change: Maybe a little bit of both.
Steven A. Michaels: Initiatives never get over the goal line as quickly as I want them to, so I would never say that it happens sooner. But obviously, we have to partner with the retailer and make sure it gets prioritized if it requires tech resources. So we had a few things that we could do. What I've learned over time is it's difficult, it's dangerous, if you will, to bake in GMV or business results from an initiative that you think or are scheduled to get done in a particular month or in a particular quarter.
Speaker Change: Initiatives never get over the goal line as quickly as I want them too. So I would never say that happens sooner, but obviously, we have to partner with the retailer and make sure it gets prioritized.
Speaker Change: If it if it requires teck resources. So we had a few things that we had.
Speaker Change: What I've learned over time is it's difficult it's dangerous if you will to bake in.
Speaker Change: GMB or business results from an initiative that you think or is scheduled to get done.
Speaker Change: On a particular month or in a particular quarter and so you may see some conservatism from us by thinking it's on the roadmap for Q2, but we haven't baked in the upside in Q2, because we have been burned by that before so maybe yes.
Steven A. Michaels: And so you may see some conservatism from us by thinking, you know, it's on the roadmap for Q2, but we haven't baked in the upside for Q2 because we have been burned by that before. So maybe, yes, through that, some things got done faster than we had planned, which basically means they got done on time as opposed to being delayed. And as far as the impact of those items is concerned, yeah, I mean, I think, on the margin, it's probably slightly better than we were expecting.
Speaker Change: Through that some things got done faster than we.
Speaker Change: <unk> had planned.
Speaker Change: Which basically means they got done on time as opposed to being delayed.
Speaker Change: And as far as the impact of those items.
Speaker Change: Yes, I mean, I think on the margin is probably slightly better than we were expecting and that could.
Steven A. Michaels: That's coupled with, it's hard to unpack that because it could be coupled with just general app funnel dynamics, and that isn't necessarily a trade down. It could just be customers that need a payment plan more, and they're in our market already. And maybe last time they bought during the stimulus period, they paid cash, and this time they're looking for a payment plan. So it's kind of a multiplier effect that we got some initiatives across the goal line, and those initiatives were met with more apps, so it was more productive.
Speaker Change: That's coupled with its hard to unpack that because it could be coupled with just general app funnel dynamics and that isn't necessarily trade down it could just be customers.
Speaker Change: That need it need a payment plan more in there in our market already and.
Speaker Change: Maybe last time they bought during the stimulus period, they paid cash and this time. They are looking for a payment plan. So it's kind of a multiplier effect that we got some initiatives across the go line.
And those initiatives were met with more apps. So it was more productive.
Steven A. Michaels: Okay, perfect, I appreciate that. And then I guess two other quick ones, maybe one for Brian.
Speaker Change: Okay perfect I appreciate that and then I guess two other quick ones, maybe one for Brian.
Brian J. Garner: Just on the lease merchandise write-offs being the high watermark, what is the driver behind that? Is that just a function of kind of how we roll through the rest of the year from a revenue standpoint, or are some leases rolling off the books? And then how much pressure, can you give any color just how much pressure the gross margin might see versus last year in 3Q? I think you called out some dynamics in the 90-day buyouts.
Brian: Just on the.
Speaker Change: Lease merchandise write offs being the high watermark what is the driver behind that is that just a function of kind of how we roll through the rest of the year from a revenue standpoint or is it some leases rolling off the books and then how much pressure can you give any color on just how much pressure.
Speaker Change: The gross margin might see versus last year and <unk> I think you called out some dynamics in the 90 day buyouts.
Brian J. Garner: Yeah, thanks, Bobby. With respect to the write-offs, as you go back over the last few years, Q2 generally has bled down into Q3. So Q3 has been lower than Q2, just from a seasonal perspective. But I think part of what's playing into what we're seeing, and it goes to your second question, is when we talk about trade-down and the benefit we're seeing from the credit providers above us, unsurprisingly, what we've observed with some of these incremental leases, and while many of them are in the early stages, the propensity or the tendency for them to steer towards electing a 90-day purchase seems to be higher than your typical
Speaker Change: Yeah.
Speaker Change: Thanks, Bob Yes, with respect to the write offs as you go back the last few years Q2 generally as is.
Speaker Change: Blood down into Q3, so Q3 has been lower than Q2, just from a seasonal perspective, but I think part of what's playing into.
Speaker Change: What we're seeing and it goes to your second question is.
Speaker Change: When we talk about trade down.
Speaker Change: The benefit we're seeing from the from the credit providers above us unsurprisingly, what we've observed with some of these incremental leases.
Speaker Change: While there are many of them are in the early stages.
Speaker Change: Propensity or the tendency for them to steer towards.
Speaker Change: Electing a 90 day purchase seems to be higher than.
Speaker Change: Your typical lease and so that's going to have and at the same time.
Brian J. Garner: And so that's going to have, and at the same time, you may see some write-off impact from those, but it's early, and we're watching those. So from a gross margin perspective, that higher 90-day is baked into a reduction sequentially from Q2 to Q3 in our anticipated gross margins, and we'll watch that. The yield overall is still very strong, collectively from these pools, and we don't have any level of concern about getting to where we need to be from a profitability standpoint on these leases.
Speaker Change: You may see some write off impact or or from those but it's early and we're watching those so from a gross margin perspective that higher 90 day is it.
Speaker Change: Baked into into <unk>.
Speaker Change: Reduction sequentially from Q2 to Q3, and our anticipated gross margins and we'll watch that the yield overall is still very strong.
Speaker Change: Collectively from these pools and we don't have any levels of concern about about getting to where we need to be from a from a profitability standpoint on these leases. They just tend to skew our appear to skew towards 90 day, a little bit more so that's going to help you.
Brian J. Garner: They just tend to skew or appear to skew towards 90-days a little bit more. So that's going to likely trend more favorable from a write-off perspective, but come with higher 90-days. So that's what we're seeing there. Thank you. I appreciate the detail.
Speaker Change: That's going to likely.
Speaker Change: Trend more favorable from a write off perspective in sight, but come with higher 90 days. So that's that's what we're seeing there.
Bobby Griffin: Thank you. I appreciate the details, and best of luck here in the third quarter.
Speaker Change: Thank you I appreciate the details in a best of luck here in the third quarter.
Bobby Griffin: Thanks, Bobby.
Speaker Change: Thank you.
Operator: And our next question comes from the line of Anthony Chukumba with Blue Capital Markets. Your line is open.
Speaker Change: Next question coming from the line of Anthony <unk> with <unk>.
Speaker Change: With capital markets. Your line is open.
Anthony Chinonye Chukumba: Good morning. Thanks for taking my question, and congratulations on the strong court as well.
Anthony: Good morning, Thanks for taking my question and congrats on the strong quarter as well.
Steven A. Michaels: I just wanted to see if we could get a little bit more color about those cross-marketing efforts, those successful cross-marketing efforts. You mentioned email. If you can just kind of dimensionalize that for us, you know, how are you kind of sharing information with the retailer? Who's sending the email out? Is it, you know, is any of this in their circles? Like, I just want to get a little bit more color on that. Sure. Yeah, the marketing efforts.
Speaker Change: Just wanted to see if we could get a little bit more color about those cross marketing efforts are successful cost marketing efforts you mentioned E. Mail. If you can just kind of dimensionalize that for us like how exactly is that.
Anthony: Yes.
Speaker Change: How are you kind of sharing information with the retailer who is sending the email out is it if any of this.
Anthony: Understood.
Anthony: Wanted to get a little bit more color on that thanks.
Steven A. Michaels: Sure, yeah, the marketing efforts as it relates to partner marketing with our retailers really come in a lot of forms, but I'm very proud of the team. We get a lot of kudos and a lot of positive comments from our retail partners about our marketing team and how they kind of view them as an extension of their marketing team. And so it could be, you know, to your question, it could be a co-branded email that comes from us to our database. We're always very careful about channel conflict, but we can hit the database with a message from one of our partners.
Anthony: Sure Yes.
Speaker Change: The marketing efforts as it relates to the partner marketing with our retailers really come in a lot of forms.
Speaker Change: But I'm very proud of the team, we get a lot of kudos and a lot of.
Positive comments from our retail partners about our marketing team and how they kind of view them as an extension of their marketing team and so it could be.
Speaker Change: To your question it could be.
Speaker Change: Our co branded E mail that comes from Us too.
Speaker Change: To our database.
Speaker Change: We're always very careful about channel conflict, but we could we can hit the database.
Speaker Change: With a message from from one of our partners it could be.
Steven A. Michaels: It could be a promotional campaign, like a reduced IP promo that the retailer promotes. It could be, we have another retailer who does a tremendous amount of mailers promoting the program, and in their particular instance, they have got a name for the leasing program that they promote. But partner marketing is a big and growing part of our efforts. And we've also talked in previous calls about PROG Perks Week, where we have retailers that partner with other retailers, and we'll have a mail piece or an email piece that goes out from us that has two different retail brands on it, each of them offering a promotional item for our consumer.
Speaker Change: Our promotional campaign like a reduced IP promo that the retailer.
Speaker Change: <unk> it could be.
Speaker Change: Another retailer, who does a tremendous amount of mailers promoting the program. They in their particular instance, they have got a name for the leasing program that they promote.
Speaker Change: But the.
Speaker Change: The partner marketing is.
Speaker Change: As a big and growing part of our efforts and we've also I think we've talked in previous calls about.
Speaker Change: Perks week, where we have retailers that partnering with other retailers and we will have a mail piece or an E. Mail piece that goes out from us that has two different retail brands on it and each of them offering a promotional.
Steven A. Michaels: So it takes a lot of different forms. And it's not just email; it's also SEO and digital marketing and display, and other things, most of which is done with partner marketing, but some of which is done just from our DTC efforts as well.
Speaker Change: Item four for our consumer.
Speaker Change: So it takes a lot of different forms and it's not just E mail. It's also.
Speaker Change: SCO and digital marketing and display.
Speaker Change: Other things most of which is done with.
Speaker Change: Partner marketing, but some of which is done just from our DTC efforts as well.
Speaker Change: Got it thank you.
Speaker Change: Thank you.
Operator: And our next question, coming from the line of... Vincent Kentek with BTIG. Your line is open.
Speaker Change: And our next question coming from the line of.
Robert Kenneth Griffin: Vincent <unk> with <unk> Your line is open.
Vincent Albert Caintic: Hey, good morning. Thanks for taking my questions, and I wanted to also echo the great results. First question, I wanted to actually focus on your discussion about the regional account growth. I know, like in the past, investors think about PROG Holdings as being more of a national account and some of the competitors as being regionally focused, so it's interesting and great to see the account growth on the regional side for PROG Holdings. If you could talk about your efforts in more detail, so sort of what you're building up there, what you see as an opportunity, and where we can expect that to go, that would be helpful. Thank you.
Vincent: Hey, good morning, Thanks for taking my questions.
Speaker Change: Wanted to echo the great results.
Speaker Change: First question wanted to actually focus on your.
Speaker Change: And about the regional account growth.
Speaker Change: Like in the past I think investors think about.
Speaker Change: Prague holdings as being more of a national account and some of the competitors as being recently focus those are interesting and great to see the account growth on the regional side for product Holdings. If you could talk about your efforts in more detail sort of what you are building up there what you see as an opportunity and.
Speaker Change: And where we can expect that to go that'd be helpful. Thank you.
Steven A. Michaels: Yeah, thanks, Vincent. Yeah, we, you know, the regional space or the SMB space has been of particular focus, you know, from certainly the competitive set and on in our calls recently. And, and it's been a renewed focus of ours. The way I think about the business is really kind of like you described it bifurcated; there's the enterprise side, and there's a certain way that you support and partner with the largest retailers.
Vincent: Yes, Thanks Vincent.
Speaker Change: Yes, the regional space or the SMB space has been of particular focus from certainly the competitive set in on our calls recently.
Speaker Change: And it's been a renewed focus of ours. The way I think about the business is really kind of like you described it bifurcated. There is the enterprise side and there is.
Speaker Change: There is a certain way that you support and partner with the largest retailers and then there is.
Steven A. Michaels: And then there's, you know, a different motion for the regional players and regions, you know, within the bifurcation of the business regions, they can also be split into pillars with super regionals, regionals, and then what I call the long tail or the small SMB shops, but it's a big business, and there's a lot of business out there to do.
Speaker Change: A different motion for for the regional players in regions.
Speaker Change: Within the bifurcation of the business regions can also be split into pillars with Superregionals regionals, and then what I call the long tail or the or the small SMB shops, but it's a big business and there's a lot of business out there to do and we.
Speaker Change: We compete very well in that space.
Steven A. Michaels: And we, we, compete very well in that space. So, we have had a renewed focus on it. We made a change in leadership that focused on attacking that business. In the quarter, there was a particular focus on reactivating doors that we had maybe lost some productivity in or potentially had gone completely dormant, and we had some success there. And, as I mentioned in the prepared remarks, we saw an increase in doors as well as productivity per door, specifically in the regional space.
Speaker Change: So we have had a renewed focus on it.
Speaker Change: We made a change in leadership that focuses on attacking that business.
Speaker Change: In the quarter there was a particular focus on Ria reactivating doors that we had.
Speaker Change: Maybe lost some productivity in or potentially had gone completely dormant and we had some success there.
Steven A. Michaels: We saw it in the national space as well, but not in the regional space. So that was it. That was key. We did add a few new partnerships, and we expect to continue to do that, but as I've said in the past, the regions are very competitive, and you know, there's all the churn is fairly common. So far, and it's early, but so far, we've achieved these gains without really having to increase the resources in the regional team as it relates to the sales force, either inside or outside. But if we, when we identify high ROI opportunities to increase that team going after that GMV, we'll absolutely do that.
Speaker Change: And as I mentioned in the prepared remarks, we saw an increase in doors as well as productivity per door, specifically in the regional space. We saw it in the national space as well, but but in the regional space. So that was.
Speaker Change: That was key we did add a new.
Speaker Change: A few new partnerships and we expect to continue to do that.
Speaker Change: But as I've said in the past the regions are very competitive and there's churn is fairly common.
Speaker Change: So far.
Speaker Change: And it's early but so far we've achieved these gains without really having to increase the resources in the regional team as it relates to a sales force either inside or outside but if we.
Speaker Change: When we identify high ROI opportunities to increase that team going after that <unk> will absolutely do that.
Vincent Albert Caintic: Okay, great. That's super helpful. Thank you.
Speaker Change: Okay, Great. That's super helpful. Thank you and second question, so a separate topic from what we've been discussing but on regulation.
Vincent Albert Caintic: And second question, so separate topic from what we've been discussing, but on regulation. So there's been, I think two days ago, we saw one of your competitors and the CFPB had their. Disagreements made public, and then separately, the CFPB is going after another one of your competitors. I think they're hearing in Utah this Friday, but wanted to kind of get your broad thoughts about regulation and maybe how those topics affect or how they relate to PROG Holdings.
Speaker Change: So there has been I think two days ago, we saw one of your competitors and the CFPB have there.
Speaker Change: Disagreements made public and then.
Speaker Change: Separately the CFPB is going after another one of your competitors I think they are hearing in Utah. This Friday, but wanted to kind of get your broad thoughts about regulation and maybe how those topics to.
Speaker Change: To the extent they do affect.
Speaker Change: Or how do they relate to our private holdings. Thank you.
Steven A. Michaels: Yeah, I mean, I guess limited comments. We're aware of the activities, as you can imagine, and the multi-year investigations that have led up to those activities. We've read the complaints, but can't comment. We don't generally comment on litigation that we're in, let alone litigation we're not in. It's hard to predict what could happen in the future.
Speaker Change: Yeah, I mean, I guess limited comments, we're aware of the activities as you can imagine in the multiyear investigations that are that.
Speaker Change: That have led up to those activities.
Speaker Change: We've read the complaints, but can't comment we don't generally comment on litigation that were in let alone litigation we're not in.
Speaker Change: It's hard to predict what could happen in the future.
Steven A. Michaels: But it's something we closely monitor and take very seriously, which is, you know, why we work really hard to be a very transparent and flexible provider of our solutions to our customers. And we take that, we're very proud of that, and take that very seriously. As far as
Speaker Change: But it's something we closely monitor and take very seriously, which is why we work really hard to be a very transparent and flex.
Speaker Change: Flexible provider of.
Speaker Change: <unk> solutions to our customers.
Speaker Change: We're very proud of that and take that very seriously.
Speaker Change: As far as.
Steven A. Michaels: This is a highly regulated business. It's been that way for a long time. The states are where a lot of the action is, and these happen to be at the CFPB level. And I guess all I would say as it relates to PROG Holdings is that we're not aware of any investigations of us at this time, whether they be at the federal level or the state level, and we haven't received any written notices or inquiries indicating such. Okay.
Speaker Change: This is a highly regulated business, it's been that way for a long time the states.
Vincent Albert Caintic: That's helpful. Thanks very much.
Speaker Change: Is where a lot of the action is these these happen to be at the CFPB level.
Speaker Change: And I guess, all I would say as it relates to the <unk> holdings were not aware of any.
Speaker Change: Investigations of us at this time, whether they be at the federal level or the state level.
Speaker Change: Haven't received any.
Speaker Change: <unk> written notices or inquiries, indicating such.
Speaker Change: Okay.
Speaker Change: That's helpful. Thanks very much.
Vincent: Thanks Vincent.
Brian Garner: Thank you for joining us this morning and for your continued interest in PROG. Our teams are executing well, and we are excited about our accelerating return to growth. A couple of always with a healthy portfolio performance.
Vincent: Thank you.
Steven A. Michaels: And I'm showing no further questions in the queue at this time. I would now like to send the call back over to Mr. Steve Michaels for any closing remarks.
Vincent: And I'm showing no further questions in the queue at this time I would now like to turn the call back over to Mr. Steve Michaels for any closing remarks.
Vincent: Yeah.
Steven A. Michaels: Thank you, and I'd like to thank you guys again for joining us this morning and for your continued interest in PROG. Our teams are executing well, and we are excited about our accelerating return to growth, coupled always with a healthy portfolio performance. We look forward to updating you again in October with our Q3 results. And we hope you have a great day.
Steven A. Michaels: Thank you and I'd like to thank you guys again for joining US this morning and for your continued interest in Prague. Our teams are executing well and we are excited about our accelerating returned to growth.
Steven A. Michaels: Coupled always with a healthy portfolio performance.
Brian Garner: We look forward to updating you again in October with our Q3 results, and we hope you have a great day.
Steven A. Michaels: We look forward to updating you again in October with our Q3 results.
We hope you have a great day.
Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.
Speaker Change: Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.