Q3 2025 Upbound Group Earnings Call

October 30, 2025

Operator: All participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Chesnut, Head of IR. Please go ahead.

After the speaker's presentation, there will be a question and answer session.

I ask a question. During this session you will need to press star one one on your telephone.

We'll then hear an automated message advising your hand is raised to withdraw your question.

Please press Star one again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Jeff Chesnut head of IR. Please go ahead.

Good morning, and thank you all for joining us to discuss our bound group's performance for the third quarter of 2025, we issued our earnings release. This morning before the market open and our release and all related materials, including a link to the live webcast are available on our website at Investor day.

Jeff Chesnut: Good morning, and thank you all for joining us to discuss Upbound Group's performance for Q3 of 2025. We issued our earnings release this morning before the market opened, and the release and all related materials, including a link to the live webcast, are available on our website at investor.upbound.com. On the call today, we have Fahmi Karam, our CEO. As a reminder, some of the statements provided on this call are forward-looking and are subject to factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release as well as in the company's SEC filings. Upbound Group undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. This call will also include references to non-GAAP financial measures.

Bound dot com on.

On the call today, we have family column, our CEO as a reminder, some of the statements provided on this call are forward looking and are subject to factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release as well as in the company's SEC filings.

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

This call will also include references to non-GAAP financial measures. Please refer to today's earnings release, which can be found on our website for a description of the non-GAAP financial measures and the reconciliations to the most comparable GAAP financial measures.

Jeff Chesnut: Please refer to today's earnings release, which can be found on our website, for a description of the non-GAAP financial measures and the reconciliations to the most comparable GAAP financial measures. Finally, Upbound Group is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. Please refer to our website for the only authorized webcasts. With that, I'll turn the call over to Fahmi.

Finally, a bound group is not responsible for and does not editor guarantee the accuracy of our earnings teleconference. Transcripts provided by third parties. Please refer to our website for the only authorized webcasts with that I'll turn the call over to Amy.

Thank you, Jeff and good morning, everyone.

Fahmi Karam: Thank you, Jeff, and good morning, everyone. Our business is organized around a simple but powerful statement, which is to elevate financial opportunity for all. As the consumer environment changes, our customers' needs evolve as well, and our business is constantly adapting in response. As we accelerate the pace of innovation and capitalize on our differentiated strengths, it's critical that we have the right people to help us deliver on our mission. That's why I'm excited to share that we strengthened our executive team by adding two proven leaders with a deep knowledge of our consumers and a track record of building new capabilities, transforming businesses, and ultimately creating value. I am pleased to welcome our new Chief Financial Officer, Hal Khouri, who we announced today, and our new Chief Growth Officer, Rebecca Wooters, who we announced a few weeks ago.

Our business is organized around a simple, but powerful statement, which is to elevate financial opportunity for all.

As the consumer environment changes, our customers' needs evolve as well and our business is constantly adapting in response.

As we accelerate the pace of innovation and capitalize on our differentiated strengths. It's critical that we have the right people to help us deliver on our mission.

That's why I'm excited to share that we strengthened our executive team by adding two proven leaders with a deep knowledge of our consumers and a track record of building new capabilities transforming businesses and ultimately creating value.

I am pleased to welcome our new Chief Financial Officer, how Curry, who we announced today and our new Chief growth Officer, Rebecca <unk>, who we announced a few weeks ago.

<unk> was most recently the CFO of go easy a leading non prime focused lender in Canada with relevant experience in point of sale financing as well as a lease to own retail platform.

Fahmi Karam: Hal was most recently the CFO at goeasy Ltd., a leading non-prime focused lender in Canada with relevant experience in point-of-sale financing as well as a lease-to-own retail platform. Prior to joining goeasy Ltd., Hal was the CFO for Walmart Canada Bank and JPMorgan Chase Canada Bank. Rebecca, our new Chief Growth Officer, was previously the Chief Digital Officer for Signet Jewelers, where she transformed the business into a digital omni-channel retailer across several brands. Before her role at Signet, Rebecca held several growth leadership positions at Citibank, including Chief Customer Experience Officer for the North America Consumer Group. Together with our experienced existing team, these new business leaders will help us elevate the customer experience, bringing data-driven, targeted offerings to market for our customers and retailers while accelerating our growth.

Prior to joining <unk>, how is the CFO for Walmart, Canada Bank and J P. Morgan Chase, Canada Bank.

Rebecca our new Chief growth Officer was previously the Chief Digital officer for Signet Jewelers, where he transformed the business into a digital omnichannel retailer across several brands.

Before her role at Cigna, Rebecca help held several growth leadership positions at Citibank, including Chief customer experience officer for the North America Consumer group.

Together with our experienced existing team. These new business leaders will help us elevate the customer experience, bringing data driven targeted offerings to market for our customers and retailers, while accelerating our growth.

I'm thrilled to welcome them, both to abound and our whole team looks forward to working with them to drive our business forward.

Fahmi Karam: I'm thrilled to welcome them both to Upbound, and our whole team looks forward to working with them to drive our business forward. Moving on to the quarter. Upbound delivered another quarter of strong results with revenue up 9% year-over-year to $1.16 billion and adjusted EBITDA up 5.7% year-over-year to $123.6 million. At Rent-A-Center, we're seeing encouraging sequential improvement in same-store sales while maintaining robust 16.2% adjusted EBITDA margins through operational efficiencies and digital enhancements. We're now expecting same-store sales to approach flat to positive comps in Q4 based on these promising trends. At Brigit, we maintained impressive momentum with revenue growth of 40% and subscriber growth of 27% year-over-year while successfully expanding the product suite.

Moving onto the quarter.

A bound delivered another quarter of strong results with revenue up 9% year over year to one $1 6 billion and adjusted EBITDA of five 7% year over year to $123 6 million.

I rent a center, we're seeing encouraging sequential improvement in same store sales, while maintaining robust 16, 2% adjusted EBITDA margins through operational efficiencies and digital enhancements.

We're now expecting same store sales to approach flat to positive comps in the fourth quarter based on these promising trends.

Ah Bridget we maintained impressive momentum with revenue growth of 40% and subscriber growth of 27% year over year, while successfully expanding the product suite.

And at a FEMA. Despite recent further tightening of our underwriting in targeted areas. We delivered the eighth consecutive quarter of GMB growth, which was 11% in the third quarter, whilst our passing a milestone achievement of working with more than 100000 merchant locations across its history.

Fahmi Karam: At Acima, despite recent further tightening of our underwriting in targeted areas, we delivered the eighth consecutive quarter of GMV growth, which was 11% in Q3, while surpassing a milestone achievement of working with more than 100,000 merchant locations across its history. Let's move to slide 4 to discuss our market and our consumers. As we noted in the past, our customers are accustomed to economic uncertainty, and they are attuned to key signals in the macro backdrop that it will eventually translate into their spending priorities. Those signals are generally tied to demand in the labor market, where recent reports suggest job growth is slowing, and price levels, where the cumulative effect of inflation and the potential for tariff-related price adjustments is pressuring our consumers' collective confidence.

So, let's move to slide four to discuss our market and our consumers.

As we noted in the past our customers are accustomed to economic uncertainty and they are tuned to key signals in the macro backdrop that it will eventually translate into their spending priorities.

Those signals are generally tied to demand in the labor market, where recent reports suggest job growth is slowing and price levels, where the cumulative effect of inflation and the potential for tariff related price adjustments is pressuring our consumers collective confidence.

These dynamics impact demand from our core customers, putting topline pressure on our lease businesses as well as affecting payment behavior, both of which influenced the quarterly results.

Fahmi Karam: These dynamics impact demand from our core customers, putting top-line pressure on our lease businesses as well as affecting payment behavior, both of which influence the quarterly results. Although there are near-term effects, these conditions should add more and more consumers looking for low weekly payments for quality durable goods at Rent-A-Center and Acima, as well as Brigit's liquidity solutions and financial wellness tools. Before getting into the details of the quarter, I want to address the lower margin and higher loss performance at Acima. While we have maintained a conservative risk posture company-wide in response to a choppy macro backdrop, recent monthly vintage yields at Acima have been under pressure, resulting in slightly higher losses and lower overall margins. As a result, Acima moved to an incrementally more conservative risk stance across the Q3.

Although there are near term effects. These conditions should add more and more consumers looking for low weekly payments for quality durable goods at rent a center and the sema as well as bridges liquidity solutions and financial wellness tools.

Before getting into the details of the quarter I.

I want to address the lower margin and higher loss performance at a female.

While we have maintained a conservative risk posture companywide in response to a choppy macro backdrop.

Monthly vintage yields at our CMO have been under pressure, resulting in slightly higher losses and lower overall margins.

As a result, our sema moved to an incrementally more conservative risk stance across the third quarter.

While these vintages will impact losses in the fourth quarter and the underwriting changes will impact the fourth quarter of GMB growth. It is important to note that we believe are tailored responses are already proving to be effective and positively impacting outcomes in the August and September vintages based on early performance indicators.

Fahmi Karam: While these vintages will impact losses in the Q4 and the underwriting changes will impact the Q4's GMV growth, it is important to note that we believe our tailored responses are already proving to be effective in positively impacting outcomes in the August and September vintages based on early performance indicators. Unless the macro environment sees meaningful changes, we do not expect further mitigation will be warranted to achieve Acima's targeted growth and margin profile in 2026. Moving to slide 5, let's review the key themes from each segment for the Q3. As mentioned, Acima delivered its 8th consecutive quarter of GMV growth, up 11% year over year, and is on track to deliver high single digits to low double-digit GMV growth for the year.

Unless the macro environment sees meaningful changes, we do not expect further mitigation will be warranted to achieve a seamless targeted growth and margin profile in 2026.

Moving to slide five let's review the key themes for each segment for the third quarter.

As mentioned, our sema delivered its eighth consecutive quarter of GMB growth up 11% year over year and is on track to deliver high single digits to low double digit <unk> growth for the year.

Revenue growth was 10, 4% and EBITA margin was 12% a decline from the year ago period related to the 50 basis point uptick in this quarter's lease charge off rate and lower gross margins.

Fahmi Karam: Revenue growth was 10.4% and the EBITDA margin was 12%, a decline from the year ago period related to the 50 basis point uptick in this quarter's lease charge-off rate and lower gross margins. Gross margins and losses were impacted by softness in recent vintages that I'd already mentioned. Despite continuously lowering approval rates throughout the year, Acima booked a cohort of leases in Q2 with elevated early defaults, mainly to new customers in our e-commerce channel that select retailers. In response, Acima implemented a targeted tightening strategy through Q2 and Q3 and added additional identity validation tools starting in July to drive performance improvements. Those efforts have been effective, with the August vintage now performing within our acceptable yield and loss ratio ranges.

Gross margins and losses were impacted by softness in recent vintages that I've already mentioned.

Despite continuously lowering approval rates throughout the year as sema booked a cohort of leases in the second quarter with elevated early defaults, mainly to new customers in our e-commerce channels at select retailers.

In response as CMO implemented a targeted tightening strategy through the second and third quarters and added additional identity validation tool starting in July to drive performance improvements.

Those efforts have been effective with the August vintage and outperforming within our acceptable yield and loss ratio ranges.

We are confident in our CMO has successfully optimizing decisioning for the evolving macro backdrop and observed trends through October have reinforced that view.

Fahmi Karam: We are confident Acima has successfully optimized its decisioning for the evolving macro backdrop, and observed trends through October have reinforced that view. In addition, gross margins were affected by the jewelry category growth as a portion of total GMV, especially at the expense of the furniture category, which hasn't fully rebounded from the pandemic-related pull forward. Acima's focus on the jewelry vertical has been intentional as it has enabled both GMV growth and diversification from the furniture category. Relative to furniture, jewelry sees a higher proportion of customers electing the first early purchase option, which is a lower margin outcome for Acima. Even so, the category is profitable and Acima values the acquisition of new customers through this channel as Acima can subsequently introduce those customers to the direct-to-consumer marketplace for future leases in jewelry or other product categories.

In addition, gross margins were affected by the jewelry category growth as a portion of total G. M D.

Especially at the expense of the furniture category, which hasnt fully rebounded from the pandemic related pull forward.

A seamless focus on the jewelry vertical has been intentional.

It has enabled both <unk> growth and diversification from the furniture category.

But relative to furniture jewellery receive a higher proportion of customers electing the first early purchase option, which is a lower margin outcome for FEMA.

Even so the category is profitable and assume a valued the acquisition of new customers through this channel as sema can subsequently introduce those customers to the direct to consumer marketplace for future leases and jewelry or other product categories.

Importantly, neither of the shift in our seamless portfolio performance in the second quarter vintages, nor the gross margin impact from jewelry expansion was related to loosening underwriting standards and.

Fahmi Karam: Importantly, neither the shift in Acima's portfolio performance in the Q2 vintages nor the gross margin impact from jewelry's expansion was related to loosening underwriting standards. In fact, Acima has received 14% more lease applications year to date relative to the prior year period while reducing corresponding approval rate by approximately 200 basis points. As Acima recognized the early performance behavior, we repositioned our underwriting strategy and lowered approval rates each month to maintain the long-term lease charge-off rate inside the upper boundary of its target range. Acima's loss rate for this quarter and the Q4 will be impacted by these vintages as the tightening will limit GMV and revenue growth, creating a denominator effect that will result in higher lease charge-off rates as the final leases from these vintages run through the portfolio.

In fact, the Sema has received 14% more lease applications year to date relative to the prior year period, while reducing corresponding approval rate by approximately 200 basis points.

At the Sema recognize the early performance behavior, we repositioned, our underwriting strategy and lowered approval rates each month to maintain a long term lease charge off rate inside the upper boundary of our target range.

A seamless loss rate for this quarter and the fourth quarter will be impacted by these vintages as the tightening will limit <unk> and revenue growth, creating a denominator effect that will result in higher lease charge off rates as the final leases from these vintages run through the portfolio.

Aside from the pandemic related pull forward.

A seamless focus on the jewelry vertical has been intentional as it has enabled both GMP growth and diversification from the furniture category.

Our underwriting and risk management teams are laser focused on monitoring the health of our customers and the health of our portfolio and we're confident that the actions already taken will help preserve a balanced and sustainable growth algorithm in the years to come.

Fahmi Karam: Our underwriting and risk management teams are laser-focused on monitoring the health of our customers and the health of our portfolio, and we're confident that the actions already taken will help preserve a balanced and sustainable growth algorithm in the years to come. Moving on to Brigit. Brigit continues to move fast while building for scale. This quarter's results featured year-over-year revenue growth of 40% and active subscriber growth of nearly 27%. Brigit also tested new products to further meet the needs of our customers, such as line of credit. In parallel, Brigit has experimented with new marketing strategies to drive even more efficiency in marketing spend, all while maintaining a net advance loss rate in the 3% range.

But relative to furniture jewellery sees a higher proportion of customers electing the first early purchase option, which is a lower margin outcome for FEMA.

Even so the category is profitable and assume a valued the acquisition of new customers through this channel at the Sema can subsequently introduce those customers to the direct to consumer marketplace for future leases and jewelry or other product categories.

Moving onto Bridget.

Richard continues to move fast while building for scale.

This quarter's results featured year over year revenue growth of 40% and active subscriber growth of nearly 27%.

Bridget also tested new products to further meet the needs of our customers such as line of credit in.

In parallel <unk> has experimented with new marketing strategy to drive even more efficiency in marketing spend all while maintaining a net advance loss rate in the 3% range.

In fact that <unk> had received 14% more lease applications year to date relative to the prior year period, while reducing corresponding approval rate by approximately 200 basis points.

Just as important Richard contributed to a bounds bottomline.

Fahmi Karam: Just as important, Brigit contributed to Upbound's bottom line by generating $9.3 million of adjusted EBITDA at a margin of more than 16% while achieving impressive top-line growth. At Rent-A-Center, the takeaway is the steady progress the team has made towards recapturing the volume that was impacted in Q4 last year when we strategically exited a product category and leveraged a broad tightening strategy to maintain our optimal risk profile. Same-store sales for the quarter improved 40 basis points sequentially from -4% to 3.6% below last year, while delivering an EBITDA margin over 16% and a lease charge-off rate that was 20 basis points improved from Q3 2024. Between the current trend line and the upcoming holiday season, we believe same-store sales growth should approach flat to positive in Q4.

By generating $9 3 million of adjusted EBITDA at a margin of more than 16%, while achieving impressive topline growth.

At rent a center the takeaways the steady progress the team has made towards recapturing the volume that was impacted in the fourth quarter of last year, when we strategically exited a product category and leverage a broad timing strategy to maintain our optimal risk profile.

A seamless loss rate for this quarter and the fourth quarter will be impacted by these vintages as the tightening will limit DMV and revenue growth, creating a denominator effect that will result in higher lease charge off rates as the final leases from these vintages run through the portfolio.

Same store sales for the quarter improved 40 basis points sequentially from a negative 4% to three 6% below last year, while delivering an EBITDA margin over 16% and all of these charge off rate that was 20 basis points improved from the third quarter of 2024.

Between the current trend line in the upcoming holiday season, we believe same store sales growth should approach flat to positive in the fourth quarter. As we've said before rent a center will continue to focus on improving efficiencies and generating strong free cash flow until broader macro conditions, either improve for our core customers or create more.

Moving onto Bridget.

Richard continues to move fast while building for scale.

This quarter's results featured year over year revenue growth of 40% and active subscriber growth of nearly 27%.

Fahmi Karam: As we've said before, Rent-A-Center will continue to focus on improving efficiencies and generating strong free cash flow until broader macro conditions either improve for our core customers or create more trade-down opportunities to spur top-line growth. Let's cover the consolidated financial results for Q3 on slide 6. Q3 revenue of $1.16 billion with a 9% increase from the year ago period, mainly powered by growth at Acima plus the addition of Brigit. The business generated $123.6 million of adjusted EBITDA, which was up 5.7% against Q3 2024. An adjusted EBITDA margin of 10.6%, which was down 30 basis points year over year, driven by lower margins at the Acima segment. non-GAAP diluted EPS was $1, which is 5.3% higher than the year ago quarter.

Bridget also tested new products to further meet the needs of our customers such as line of credit in.

Trade down opportunities to spur topline growth.

In parallel Bridget has experimented with new marketing strategy to drive even more efficiency in marketing spend all while maintaining a net advance loss rate in the 3% range.

Let's cover the consolidated financial results for Q3 on slide six.

Third quarter revenue of $1, one 6 billion with a 9% increase from the year ago period.

Just as important contributor to our bounds bottom line.

We powered by growth at a female plus the addition of bridgette.

By generating $9 3 million of adjusted EBITDA at a margin of more than 16%, while achieving impressive topline growth.

The business generated $123 6 million of adjusted EBITDA, which was up five 7% against Q3 2024, and adjusted EBITDA margin of 10, 6%, which was down 30 basis points year over year, driven by lower margins at the Sema segment.

At rent a center that takeaway is the steady progress. The team has made towards recapturing the volume that was impacted in the fourth quarter of last year, when we strategically exited a product category and leverage a broad timing strategy to maintain our optimal risk profile.

non-GAAP diluted EPS was $1, which is five 3% higher than the year ago quarter.

The top line adjusted EBITDA and non-GAAP diluted EPS results were each within or above the target range as provided on last quarter's earnings call.

Fahmi Karam: The top line adjusted EBITDA and non-GAAP diluted EPS results were each within or above the target ranges provided on last quarter's earnings call. Upbound generated more than $50 million of free cash flow in the Q3, resulting in a year-to-date free cash flow total of $167 million. Upbound's non-GAAP tax rate this quarter was 24.5%. That was lower than our recent run rate in the 26% area due to a discrete one-time item related to provision to return adjustments. Essentially, an estimate from January was refined in September and flowed through the tax rate in the Q3. On slide 7, let's discuss our progress on the strategic priorities for 2025 that we outlined earlier this year. Acima's initiatives this quarter focus on its merchant portfolio and the customer experience.

Ah bound generated more than $50 million of free cash flow in the third quarter, resulting in a year to date free cash flow total of $167 million.

Our bounds non-GAAP tax rate this quarter was 24, 5%.

That was lower than our recent run rate and a 26% area due to a discrete one time item related to provision to return adjustments.

Essentially an estimate from January was refined in September and flow through the tax rate in the third quarter.

Trade down opportunities to spur topline growth.

Let's cover the consolidated financial results for Q3 on slide six.

On slide seven let's discuss our progress on the strategic priorities for 2025 that we outlined earlier this year.

Third quarter revenue of $1, one 6 billion with a 9% increase from the year ago period, mainly powered by growth at a FEMA plus the addition of Brigid.

Our <unk> initiatives this quarter focus on its merchant portfolio and the customer experience.

One of his seamless growth drivers has been its consistent ability to add new merchants, whether on the SMB side or even a top 25 furniture retailer like living spaces, which went live earlier this month.

Fahmi Karam: One of Acima's growth drivers has been its consistent ability to add new merchants, whether on the SMB side or even a top 25 furniture retailer like Living Spaces, which went live earlier this month. In Q3, we recognized a major milestone on that front as Acima activated its 100,000 merchant location. While continuing to enroll new retailers through both integrated and light-touch options, Acima is also working to energize existing accounts that we believe have the potential to generate a higher volume of profitable leases. By reinforcing our relationships and optimizing our value proposition, Acima has re-engaged hundreds of merchants so far with more to come. For our customers, Acima rolled out upgrades to the account management tool to enable more self-service options while also adding a refer-a-friend program.

In Q3, we recognized a major milestone on that front as a FEMA activated its 100000 merchant location.

non-GAAP diluted EPS was $1, which is five 3% higher than the year ago quarter.

While continuing to enroll new retailers through both integrated and light touch options. Sema is also working to energize existing accounts that we believe have the potential to generate a higher volume of profitable leases.

The top line adjusted EBITDA and non-GAAP diluted EPS results were each within or above the target range as provided on last quarter's earnings call.

Ah bound generated more than $50 million of free cash flow in the third quarter, resulting in a year to date free cash flow total of $167 million.

By reinforcing our relationships and optimizing our value proposition as sema has re engage hundreds of merchants so far with more to come.

For our customers as <unk> rolled out upgrades to the account management tools enable more self service options, while also adding our refer a friend program.

Our bounds non-GAAP tax rate this quarter was 24, 5%.

That was lower than our recent run rate and a 26% area due to a discrete one time item related to provision to return adjustments.

On prior calls this year I've described how our AI powered lease ability engine unlocks the ability for consumers to shop for durable goods in store and online.

Fahmi Karam: On prior calls this year, I've described how our AI-powered leaseability engine unlocks the ability for consumers to shop for durable goods in-store and online. Now, Acima has added the in-store tap-to-lease capability for our virtual lease cards. This means a customer can use the Acima app to shop in any store for any approved durable good within their approved limit and check out by tapping the virtual lease card. There's no retailer setup or involvement, and the consumer can shop with confidence. While traditional retailer integrations will remain an important acquisition channel for Acima, we're excited about serving our returning customers in a way that maximizes their privacy, convenience, and confidence. Across the Q3, Brigit's momentum grew as the team accelerated testing of innovative new financial solutions and trialed new customer acquisition channels.

Essentially an estimate from January was refined in September and flow through the tax rate in the third quarter.

And now as Sema has added the in store attached to lease capability for our virtual lease cards.

On slide seven let's discuss our progress on the strategic priorities for 2025 that we outlined earlier this year.

This means a customer can use the sema app to shop in any store for any approved durable good within their approved limit and check out by tapping the virtual lease cards there.

Our <unk> initiatives this quarter focus on its merchant portfolio and the customer experience.

No retailer setup or involvement in the consumer can shop with confidence.

One of our seamless growth drivers has been its consistent ability to add new merchants, whether on the SMB side or even a top 25 furniture retailer like living spaces, which went live earlier this month.

While traditional retailer integrations will remain an important acquisition channel for FEMA. We're excited about serving our returning customers in a way that maximizes their privacy convenience and confidence.

In Q3, we recognized a major milestone on that front as a FEMA activated its 100000 merchant location.

Across the third quarter Richard's momentum grew as the team accelerated testing of innovative new financial solutions and trial of new customer acquisition channels.

For example, rich its new line of credit product, which is in beta testing offering consumers access to credit of up to $500 to provide liquidity for recent or upcoming purchases.

Fahmi Karam: For example, Brigit's new line of credit product, which is in beta testing, offering consumers access to credit of up to $500 to provide liquidity for recent or upcoming purchases. The amount bridges the gap between smaller-ticket BNPL offerings and the larger-ticket lease-to-own solutions like those offered by Acima and Rent-A-Center. In light of these new products, Brigit is evolving its marketing strategy toward a more holistic mix, diversifying both the channels we invest in and the creative content we produce. Our always-on creative pipeline has become a key differentiator that enables faster iteration, richer insights, and more scalable growth. Brigit is expanding marketing channels beyond digital and social media platforms, including highlighting its capability in real-world locations where the use case is immediate and relevant.

By reinforcing our relationships and optimizing our value proposition of Sema has re engage hundreds of merchants, so far with more to come.

The amount bridges the gap between smaller ticket be NPL offerings, and the larger ticket lease to own solutions like those offered by of Sema and rent a center.

For our customers as CMO rolled out upgrades to the account management tools enable more self service options, while also adding our refer a friend program.

In light of these new products Bridget is evolving its marketing strategy toward a more holistic mix diversifying both the channels, we invest in and to creative content we produce.

On prior calls this year I've described how our AI powered lease ability engine unlocks the ability for consumers to shop for durable goods in store and online.

Our always on creative pipeline has become a key differentiator that enables faster iteration richer insights and more scalable growth.

And now as Sema has added the in store attached to lease capability for our virtual lease cards.

Virgin is expanding marketing channels beyond digital and social media platforms, including highlighting its capability in real world locations, where the use cases are immediate and relevant.

This means a customer can use the sema app to shop in any store for any approved durable good within their approved limit and check out by tapping the virtual lease card.

Theres no retailer setup or involvement in the consumer can shop with confidence.

This is incremental to the in store marketing collaborations between Virgin and rent a center, which when scales can reach its nearly 1700 stores plus a seamless hundreds of SaaS locations and turn thousands of outbound customer facing coworkers into Bridget brand ambassadors.

Fahmi Karam: This is incremental to the in-store marketing collaboration between Brigit and Rent-A-Center, which when scaled can reach its nearly 1,700 stores, plus Acima's hundreds of staff locations, and turn thousands of Upbound's customer-facing coworkers into Brigit brand ambassadors. At Rent-A-Center, the Q3 yielded a number of operational improvements as the business focuses on streamlining the customer experience, improving account management, and reducing the expense base by implementing efficiencies. During the quarter, we upgraded the supporting infrastructure of the rentacenter.com website to elevate its scalability and reliability for high-volume events like Black Friday and Cyber Monday while enhancing the mobile-friendly interface. We put it to an early test with a major promotion in September, which had more volume than last year's Black Friday, and it performed flawlessly.

Across the third quarter Richard's momentum grew as the team accelerated testing of innovative new financial solutions and trial of new customer acquisition channels for.

At rent a center third quarter yielded a number of operational improvements as the business focuses on streamlining the customer experience improving account management and reducing the expense base by implementing efficiencies.

For example, rich its new line of credit product, which is in beta testing offering consumers access to credit of up to $500 to provide liquidity for recent or upcoming purchases.

During the quarter, we upgraded the supporting infrastructure of the rent a center dot com website, the elevated scalability and reliability for high volume events like Black Friday, and cyber Monday, while enhancing the mobile friendly interface.

The amount of bridges the gap between smaller ticket be NPL offerings, and the larger ticket lease to own solutions like those offered by FEMA and rent a center.

We put it through an early test with a major promotion in September which had more volume than last year's Black Friday and it performed flawlessly.

In light of these new products Bridget is evolving its marketing strategy towards a more holistic mix diversifying both the channels, we invest in and to creative content we produce.

And for the customers were an online transaction isn't approved the site now and vice into to their nearest store to complete the application process, which boosted rent a center's topline in the period.

Fahmi Karam: For the customers where an online transaction isn't approved, the site now invites them to their nearest store to complete the application process, which boosted Rent-A-Center's top line in the period. We also launched a refer-a-friend campaign and revamped our loyalty reward program, which should drive deliveries entering the holiday season. The Rent-A-Center team has executed extremely well in a tough environment. Same-store sales have improved sequentially, our guide is to work towards being flat to positive in Q4. Coworkers are fully engaged and excited for the holiday push as the stores are primed with great products. Relative to historical levels, our stores have a higher percentage of new inventory, which has been proven to increase conversion rates and deliveries.

Our always on creative pipeline has become a key differentiator that enables faster iteration richer insights and more scalable growth.

We also launched the refer a friend campaign and revamped our loyalty reward program, which should drive deliveries entering the holiday season.

Virgin is expanding marketing channels beyond digital and social media platforms, including highlighting its capability in real world locations, where the use cases are immediate and relevant.

The rent a center team has executed extremely well in a tough environment and same store sales have improved sequentially and our guide is to work towards being flat to positive in the fourth quarter.

This is incremental to the in store marketing collaborations between Virgin and rent a center.

Which one scale can reach its nearly 1700 stores plus a seamless hundreds of staff locations and turn thousands of outbound customer facing coworkers into Bridget brand ambassadors.

Co workers are fully engaged and excited for the holiday push as the stores are prime with great products.

Relative to historical levels, our stores have a higher percentage of new inventory, which has been proven to increase conversion rates and deliveries.

Our rent a center third quarter yielded a number of operational improvements as the business focuses on streamlining the customer experience improving account management and reducing the expense base by implementing efficiencies.

In addition to our great value proposition, having the right inventory at the right store offers to the right customer positions us well for the fourth quarter and heading into 2026.

Fahmi Karam: In addition to our great value proposition, having the right inventory at the right store offers the right customer positions us well for Q4 and heading into 2026. All of these are separate initiatives across each of our largest segments, but they share a common set of guiding principles, which is to introduce our brands to new consumers, optimize our product suite, elevate the shopping experience, and deliver value to our customers and retailers in each interaction they have with us. Let's now turn into the segment results and then discuss our outlook for the balance of 2025, after which I'll take some questions. Acima's GMV grew by $48 million in Q3 compared to the year-ago period, which is 11% GMV growth for Q3 of 2024.

During the quarter, we upgraded the supporting infrastructure of the rent a center dot com website to elevate its scalability and reliability for high volume events like Black Friday, and cyber Monday, while enhancing the mobile friendly interface.

All of these are separate initiatives across each of our largest segments, but they share a common set of guiding principles.

Which is to introduce our brands to new consumers optimize our product suite elevate the shopping experience and deliver value to our customers and retailers in each interaction they have with us.

We put it to an early test with a major promotion in September which had more volume than last year's Black Friday and it performed flawlessly.

Let's now turn into the segment results and then discuss our outlook for the balance of 2025, after which I'll take some questions.

And for the customers were an online transaction isn't approved the site now invited into to their nearest store to complete the application process, which boosted rent a center's topline in the period.

A seamless DMD grew by $48 million in the third quarter compared to the year ago period.

We also launched the refer a friend campaign and revamped our loyalty reward program, which should drive deliveries entering the holiday season.

Which is 11% GMB growth for the third quarter of 2024.

To deliver that growth as Hema continued to add new merchants of all sizes and across product categories.

Fahmi Karam: To deliver that growth, Acima continues to add new merchants of all sizes and across product categories, and this quarter received nearly 13% more lease applications than the year ago period. Acima's approval rate on those applications declined 280 basis points from last year's Q3. Evidence of Acima's focus on delivering top-line growth balanced with prudent underwriting that evolves with the macro backdrop. From an operational standpoint, furniture continues to represent our largest product category at approximately 40% of GMV in the quarter. That category is still working through the demand pull forward from the pandemic era and more recently with new tariffs. The industry expectations for more normalized level of demand are looking into the back half of 2026 at the earliest.

And this quarter received nearly 13% more lease applications in the year ago period.

A seamless approval rate on those applications declined 280 basis points from last year's third quarter evidence of a seamless focus on delivering topline growth balanced with prudent underwriting that evolves with the macro backdrop.

Co workers are fully engaged and excited for the holiday push as the stores are prime with great products.

Relative to historical levels, our stores have a higher percentage of new inventory, which has been proven to increase conversion rates and deliveries.

From an operational standpoint furniture continues to represent our largest product category at approximately 40% of <unk> in the quarter.

In addition to our great value proposition, having the right inventory at the right store offers to the right customer positions us well for the fourth quarter and heading into 2026.

That category is still working through the demand pull forward from the pandemic era and more recently with new tariffs. So the industry expectations for more normalized level of demand are looking into the back half of 2026 at the earliest.

All of these are separate initiatives across each of our largest segments, but they share a common set of guiding principles.

Which is to introduce our brands to new consumers optimize our product suite elevate the shopping experience and deliver value to our customers and retailers in each interaction they have with us.

Even so we can grow GM being that category by adding new merchants and by becoming a bigger share of our existing merchant business.

Fahmi Karam: Even so, we can grow GMV in that category by adding new merchants and by becoming a bigger share of our, of our existing merchants business. As Acima grows its network of retailer relationships, it continues to maintain a broad and diverse lineup of merchants with the top 10 representing less than 1/3 of the quarter's GMV. Several of those top retailers appear only on the Acima marketplace, where our returning customers can start their next leasing journey. GMV from the marketplace was up 150% year over year in Q3 and over 10% sequentially. Acima revenues grew more than 10% year over year, which was the 7th consecutive quarter of double-digit growth.

And I've seen the growth its network of retailer relationships. It continues to maintain a broad and diverse lineup of merchants with a top 10, representing less than one third of the quarters GMB.

Let's now turn into the segment results and then discuss our outlook for the balance of 2025, after which I will take some questions.

Several of those top retailers up here only on the CMO marketplace, where our returning customers can start their next leasing journey.

<unk> grew by $48 million in the third quarter compared to the year ago period.

Which is 11% GMB growth for the third quarter of 2024.

<unk> from the marketplace was up 150% year over year in the third quarter and over 10% sequentially.

To deliver that growth as Hema continued to add new merchants of all sizes and across product categories.

Our CMO revenues grew up more than 10% year over year, which was the seventh consecutive quarter of double digit growth.

And this quarter received nearly 13% more lease applications in the year ago period.

Adjusted EBITDA was down 40 basis points against the third quarter of 2024, and adjusted EBITDA margins were 12% a decline from 13, 3% in a year ago period, driven by the gross margin impact from the expansion of the jewelry segment combined with the increase in lease charge off rate.

Fahmi Karam: Adjusted EBITDA was down 40 basis points against Q3 2024, and adjusted EBITDA margins were 12%, a decline from 13.3% in the year ago period, driven by the gross margin impact from the expansion of the jewelry segment, combined with the increase in lease charge-off rates. The LCO rate of 9.7% compared to 9.2% in Q3 2024 and finished 20 basis points above our high end of our target range of 9.5%. As I noted earlier, we believe our swift and tactical actions across the quarter will maintain the loss rate within our targeted range in the medium term. Let's move to slide 9 and review Brigit's results for Q3.

From an operational standpoint furniture continues to represent our largest product category at approximately 40% of <unk> in the quarter.

The LCL rate of nine 7% compared to nine 2% in the third quarter of 2024 and finished 20 basis points above our high end of our target range of nine 5%.

As I noted earlier, we believe our swift and tactical actions across the quarter or maintain the loss rate within our targeted range in the medium term.

Even so we can grow GM being that category by adding new merchants and by becoming a bigger share of our existing merchants business.

Let's move to slide nine and review bridges results for the third quarter.

Bridget finished Q3 with more than $1 4 million paid subscribers, which was a 27% increase from the year ago period, and a nine 4% increase sequentially.

And I've seen the grows its network of retailer relationships. It continues to maintain a broad and diverse lineup of merchants with a top 10, representing less than one third of the quarters GMB.

Fahmi Karam: Brigit finished Q3 with more than 1.4 million paid subscribers, which was a 27% increase from the year ago period and a 9.4% increase sequentially. ARPU, or average revenue per user, was $13.74 on a monthly basis, an 11.4% increase from Q3 2024 and a 2.2% lift sequentially. ARPU's continued expansion represents the strength of marketplace performance, higher expedited transfer revenue, and a mix shift to the premium subscription tier. Brigit originated approximately $390 million in cash advances this quarter. That's up 19% year over year and nearly 10% sequentially, reflecting the value that our customers are discovering with not only the product offerings, but also the transparent subscription-based pricing model.

ARPA or average revenue per user was $13.74 on a monthly basis and 11, 4% increase from the third quarter of 2024, and a two 2% lift sequentially.

Several of those top retailers, if you're only on the CMO marketplace, where our returning customers can start their next leasing journey.

<unk> from the marketplace was up 150% year over year in the third quarter and over 10% sequentially.

Our police continued expansion represents the strength of marketplace performance higher expedited transfer revenue and a mix shift to the premium subscription tier.

Our CMO revenues grew up more than 10% year over year, which was the seventh consecutive quarter of double digit growth.

Bridget originated approximately $390 million in cash advances this quarter, that's up 19% year over year and nearly 10% sequentially.

Adjusted EBITDA was down 40 basis points against the third quarter of 2024, and adjusted EBITDA margins were 12% a decline from 13, 3% in the year ago period, driven by the gross margin impact from the expansion of the jewelry segment combined with the increase in lease charge off rate.

Reflecting the value that our customers are discovering with not only the product offerings, but also the transparent subscription based pricing model.

For the third quarter bridges cash advance like loss rate was three 3%, which was up 30 basis points from the year ago period, due primarily to Bridget testing into new marketing channels, and new custom segments, who are overall profitable.

The LCL rate of nine 7% compared to nine 2% in the third quarter of 2024 and finished 20 basis points above our high end of our target range of nine 5%.

Fahmi Karam: For Q3, Brigit's cash advance loss rate was 3.3%, which was up 30 basis points from the year-ago period, due primarily to Brigit testing into new marketing channels and new custom segments who are overall profitable. The sequential increase was in line with the seasonal trends and reflected a similar increase in 2024 from Q2 to Q3. As we test out new products and gain traction with more consumers, the loss rate will fluctuate seasonally and should remain in the low single-digit range. Brigit recorded $57.7 million of revenue for Q3, which represents an increase of 40% from the year-ago quarter. Subscriptions were nearly 70% of Brigit's Q3 revenue, with expedited transfer fees and marketplace income representing the balance.

As I noted earlier, we believe our swift and tactical actions across the quarter will maintain the loss rate within our targeted range in the medium term.

The sequential increase was in line with the seasonal trends and reflected a similar increase in 2024 from the second quarter to the third quarter.

Let's move to slide nine and review British results for the third quarter.

As we test out new products and gain traction with more consumers the loss rate will fluctuate seasonally it should remain in the low single digit range.

Bridget finished Q3 with more than $1 4 million paid subscribers, which was a 27% increase from the year ago period, and a nine 4% increase sequentially.

Bridget recorded a $57 $7 million of revenue for the third quarter, which represents an increase of 40% from the year ago quarter.

ARPA or average revenue per user was $13.74 on a monthly basis and 11, 4% increase from the third quarter of 2024, and a two 2% lift sequentially.

Subscriptions were nearly 70% of bridges third quarter revenue with expedited transfer fees and marketplace income representing the balance.

Richard realized adjusted EBITDA of $9 3 million for the third quarter, representing an adjusted EBITDA margin of 16, 1%, which wasn't expected decrease from last quarter's results as Bridget marketing and customer acquisition spend ramped up across the quarter.

Our fluids continued expansion represents the strength of marketplace performance higher expedited transfer revenue and a mix shift to the premium subscription tier.

Fahmi Karam: Brigit realized adjusted EBITDA of $9.3 million for Q3, representing an adjusted EBITDA margin of 16.1%, which was an expected decrease from last quarter's results as Brigit's marketing and customer acquisition spend ramped up across the quarter. When we announced the Brigit acquisition in last December, we guided to a full year 2025 results of $215 million to $230 million of revenue and $25 million to $30 million of adjusted EBITDA before reclassification of administrative costs to Upbound's corporate segment. I'm pleased to share that after adjusting for the 31 January closing date, Brigit is tracking to achieve or exceed the midpoint of the ranges we provided. On slide 10, we'll review Rent-A-Center's performance.

Bridget originated approximately $390 million in cash advances this quarter, that's up 19% year over year and nearly 10% sequentially.

When we announced the Bridger acquisition and last December we guided to a full year 2025 results of $215 million to $230 million of revenue and $25 million to $30 million of adjusted EBITDA before reclassification of administrative cost to a balanced corporate segment.

Reflecting the value that our customers are discovering with not only the product offerings, but also the transparent subscription based pricing model.

I'm pleased to share that after adjusting for the January 31 closing date, Bridget is tracking to achieve or exceed the midpoint of the ranges we provided.

The sequential increase was in line with the seasonal trends and reflected a similar increase in 2024 from the second quarter to the third quarter.

On Slide 10, we'll review rent a center's performance.

In the third quarter the rent a center segment reported $461 million of revenue down four 7% from a year ago quarter due in part to a higher store count in the third quarter of 2024, as we sold 55 stores to a franchisee last September.

Fahmi Karam: In Q3, the Rent-A-Center segment reported $461 million of revenue, down 4.7% from a year-ago quarter, due in part to a higher store count in Q3 2024 as we sold 55 stores to a franchisee last September. This outcome was consistent with expectations we highlighted on our last call. Same-store sales were down 3.6% year over year, mostly stemming from certain underwriting adjustments we implemented in Q4 of last year. Rent-A-Center's Q3 same-store sales improved sequentially from Q2 as the team's revenue enablement initiatives are showing promising early returns. For example, on deliveries, which are a leading indicator of near-term future revenues, they were up 3.8% in Q3 compared to a year-ago period.

As we test out new products and gain traction with more consumers the loss rate will fluctuate seasonally it should remain in the low single digit range.

Bridget recorded $57 7 million of revenue for the third quarter, which represents an increase of 40% from the year ago quarter.

This outcome was consistent with expectations, we highlighted on our last call.

Same store sales were down three 6% year over year, mostly stemming from certain underwriting adjustments, we implemented in the fourth quarter of last year.

Subscriptions were nearly 70% of bridges third quarter revenue with expedited transfer fees and marketplace income representing the balance.

Rent a center's third quarter same store sales improved sequentially from the second quarter as the team's revenue enablement initiatives are showing promising early returns.

Richard realized adjusted EBITDA of $9 3 million for the third quarter, representing an adjusted EBITDA margin of 16, 1%, which wasn't expected decrease from last quarter's results as bridge, it's marketing and customer acquisition spend ramped up across the quarter.

For example on deliveries, which are a leading indicator of near term future revenues. They were up three 8% in the third quarter compared to a year ago period.

Rent a center's adjusted EBITDA was $74 7 million down five 5% from the third quarter of 2024, due primarily to less rental income off of smaller lease portfolio value.

Fahmi Karam: Rent-A-Center's adjusted EBITDA was $74.7 million, down 5.5% from Q3 2024, due primarily to less rental income off a smaller lease portfolio value. The lease charge-off rate for Q3 finished at 4.7%, which improved 20 basis points from the year ago period while holding flat sequentially, in line with the guidance given on our prior call. Rent-A-Center's adjusted EBITDA margin was 16.2%, which was down 10 basis points from the year ago period, but up 160 basis points sequentially thanks to the team's effort to realize operational efficiencies, focus on account management, while also beginning to comp over last year's changes. Let's review our liquidity and capital allocation priorities on slide 11.

The loss rate for the third quarter finished at four 7%, which improved 20 basis points from the year ago period, while holding flat sequentially in line with the guidance given on our prior call.

I'm pleased to share that after adjusting for the January 31 closing date, Bridget is tracking to achieve or exceed the midpoint of the ranges we provided.

Rent a center's adjusted EBITDA margin was 16, 2%, which was down 10 basis points from the year ago period, but up 160 basis points sequentially. Thanks to the team's effort to realize operational efficiencies focus on account management, while also beginning to comp over last year's changes.

On Slide 10, we'll review rent a center's performance.

In the third quarter the rent a center segment reported $461 billion of revenue down four 7% from a year ago quarter due in part to a higher store count in the third quarter of 2024, as we sold 55 stores to a franchisee last September.

Let's review, our liquidity and capital allocation priorities on slide 11.

This outcome was consistent with expectations, we highlighted on our last call.

We finished the third quarter with over $350 million in liquidity between cash on hand, and our revolver availability.

Fahmi Karam: We finished Q3 with over $350 million in liquidity between cash on hand and our revolver availability. Our net leverage ratio was approximately 2.9 times on 30 September, generally consistent with Q1 and Q2. During August, we capitalized on favorable market conditions to refinance our Term Loan B, which now matures in 2032. In the same transaction, we also upsized the facility to $875 million and used the incremental $75 million to reduce our revolver balance and enhance liquidity. Our business has generated approximately $167 million of free cash flow year to date, up notably from approximately $122 million in the prior year. Due to recent changes in tax policy, Upbound's near-term liquidity should be supplemented by about $150 million in savings from cash tax payments.

Same store sales were down three 6% year over year, mostly stemming from certain underwriting adjustments, we implemented in the fourth quarter of last year.

Our net leverage ratio was approximately two nine times on September 30th generally consistent with Q1 and Q2.

Rent a center's third quarter same store sales improved sequentially from the second quarter and the team's revenue enablement initiatives are showing promising early returns.

During August we capitalize on favorable market conditions to refinance our term loan b, which now matures in 2032.

For example on deliveries, which are a leading indicator of near term future revenues. They were up three 8% in the third quarter compared to a year ago period.

In the same transaction, we also upsized the facility to $875 million and use the incremental $75 million to reduce our revolver balance and enhanced liquidity.

Rent a center's adjusted EBITDA was $74 7 million down five 5% from the third quarter of 2024, due primarily to less rental income off of smaller lease portfolio value.

Our business has generated approximately 167 million of free cash flow year to date up notably from approximately $122 million in the prior year.

The loss rate for the third quarter finished at four 7%, which improved 20 basis points from the year ago period, while holding flat sequentially in line with the guidance given on our prior call.

Due to recent changes in tax policy, our bounds near term liquidity should be supplemented by about $150 million in savings from cash tax payments.

The bonus depreciation provisions in the new tax legislation will help drive a tax benefit of $50 million in 2025, and approximately a $100 million in 2026 compared to the company's previous forecasts.

Fahmi Karam: The bonus depreciation provisions in the new tax legislation will help drive a tax benefit of $50 million in 2025 and approximately $100 million in 2026 compared to the company's previous forecasts. That cash flow supports our capital allocation priorities, which are designed to position the company for sustainable growth by investing in our business, strengthening our balance sheet through deleveraging, and supporting our shareholder return program, which currently focuses on our regular dividend of $1.56 per share, as well as opportunistic buybacks. We are confident that our disciplined capital allocation strategy will fund responsible and profitable growth while creating long-term shareholder value. Let's move to slide 12 and review our financial outlook, starting with a quick update on the economic backdrop and consumer behavior.

That cash flow supports our capital allocation priorities, which are designed to position the company for sustainable growth by investing in our business strengthening our balance sheet through deleveraging and supporting our shareholder return program, which currently focuses on a regular dividend of $1 56 per share as well as opportunistic buybacks.

Let's review, our liquidity and capital allocation priorities on slide 11.

We finished the third quarter with over $350 million in liquidity between cash on hand, and our revolver availability.

Our net leverage ratio was approximately two nine times on September 30th generally consistent with Q1 and Q2.

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We are confident that our disciplined capital allocation strategy will fund responsible and profitable growth, while creating long term shareholder value.

During August we capitalize on favorable market conditions to refinance our term loan b, which now matures in 2032.

Let's move to slide 12, and review our financial outlook, starting with a quick update on the economic backdrop in consumer behavior.

In the same transaction, we also upsized the facility to $875 million and use the incremental $75 million to reduce our revolver balance and enhanced liquidity.

As we signaled on our last call, we expected certain suppliers to a rent a center segment would respond to broader macroeconomic factors with price changes, which we recently received.

Fahmi Karam: As we signaled on our last call, we expected certain suppliers to our Rent-A-Center segment would respond to broader macroeconomic factors with price changes, which we recently received. Although Rent-A-Center's inventory costs will be modestly increasing, we are modeling corresponding refinements to the weekly payment rate and the lease terms to deliver affordability to our customers and stability to our margins. Acima will use similar levers as appropriate based on observed price changes at its merchants. Across the year, our customers have shown both resilience and prudence in their decision-making. As we look ahead to the holiday season with optimism, we remain aware that market dynamics and consumer sentiment can shift rapidly. Accordingly, we will remain nimble and flexible as we navigate the balance of the year.

Our business has generated approximately $167 million of free cash flow year to date up notably from approximately $122 million in the prior year.

Although rent a center's inventory costs will be modestly increasing we are modeling corresponding refinements to the weekly payment rate and the lease term to deliver affordability to our customers and stability to our margins.

Due to recent changes in tax policy, our bounds near term liquidity should be supplemented by about $150 million in savings from cash tax payments.

Simo will use similar levers as appropriate based on observed price changes at its merchants.

Across the year, our customers have shown both resiliency and prudence in their decision making as.

As we look ahead to the holiday season with optimism, we remain aware that market dynamics and consumer sentiment can shift rapidly.

Accordingly, we will remain nimble and flexible as we navigate the balance of the year.

With that background and in light of our Cmos underwriting tightening mentioned earlier, we are adjusting the updated full year guidance, we provided last quarter.

Fahmi Karam: With that background, and in light of Acima's underwriting tightening mentioned earlier, we are adjusting the updated full year guidance we provided last quarter. Revenue should be in the range of $4.6 billion to $4.75 billion, adjusted EBITDA in the $500 million to $510 million range, and non-GAAP EPS in the range of $4.05 to $4.15. At the segment level for Q4, we expect our recent tightening actions at Acima to yield GMV growth in the mid-single-digit area, while still delivering full year GMV growth in the high-single digits to the low-double-digit area that we guided to earlier this year. Acima's top line should be up low-double digits with EBITDA margins slightly lower than a year-ago period as the underperforming vintages flow through the P&L.

Revenue should be in the range of $4 6 billion to $4 75 billion adjust.

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We are confident that our disciplined capital allocation strategy will fund responsible and profitable growth, while creating long term shareholder value.

Adjusted EBITDA in the 500 million to $510 million range and non-GAAP EPS in the range of $4 five to $4 15.

Let's move to slide 12, and review our financial outlook, starting with a quick update on the economic backdrop in consumer behavior.

At the segment level for the fourth quarter, we expect our recent tightening actions that are similar to yours GMB growth in the mid single digit area, while still delivering full year GMB growth in the high single digits to the low double digit area that we guided to earlier this year.

As we signaled on our last call, we expected certain suppliers to a rent a center segment would respond to broader macroeconomic factors with price changes, which we recently received.

A seamless topline should be up low double digits with EBITDA margins slightly lower than a year ago period as the underperforming vintages flow through the P&L.

Although rent a center's inventory cost will be modestly increasing we are modeling corresponding refinements to the weekly payment rate and the lease term to deliver affordability to our customers and stability to our margins.

Loss rates should be slightly worse sequentially and peak in the fourth quarter and the 10% area before improving in the first quarter of 2026 as a softer second quarter and early third quarter 2025 vintages worked their way through the portfolio.

Fahmi Karam: Loss rates should be slightly worse sequentially and peak in Q4 in the 10% area before improving in Q1 of 2026 as the softer Q2 and early Q3 2025 vintages work their way through the portfolio. Rent-A-Center should see a low to mid-single-digit decline year-over-year on the top line, while the lease charge-off rate will be better than last year and relatively flat sequentially. At Brigit, we expect revenue to be up high single digits sequentially, with low double-digit adjusted EBITDA margins driven by the ramp-up in marketing and customer acquisition spend that I mentioned earlier. For corporate costs, we expect the impact to adjusted EBITDA in Q4 to be consistent with the year ago period. At the corporate level, our net interest expense in Q4 should be in line with Q3.

Our CMO will use similar levers as appropriate based on observed price changes at its merchants.

Across the year, our customers have shown both resiliency and prudence in their decision making as.

As we look ahead to the holiday season with optimism, we remain aware that market dynamics and consumer sentiment can shift rapidly.

Rent a center should see a low to mid single digit decline year over year on the topline while at least charge off rate will be better than last year and relatively flat sequentially.

Accordingly, we will remain nimble and flexible as we navigate the balance of the year.

Bridget we expect revenue to be up high single digits sequentially with low double digit adjusted EBITDA margins driven by the ramp up in marketing and customer acquisition spend that I mentioned earlier.

With that background and in light of a seamless underwriting tightening mentioned earlier, we are adjusting the updated full year guidance, we provided last quarter.

Revenue should be in the range of $4 6 billion to $4 75 billion adjust.

For corporate costs, we expect the impact to adjusted EBITDA in Q4 to be consistent with the year ago period.

Adjusted EBITDA in the 500 million to $510 million range and non-GAAP EPS in the range of $4 five to $4 15.

Also at the corporate level, our net interest expense in Q4 should be in line with Q3.

We expect the tax rate to be approximately 26% with an average diluted share count for the year of approximately $58 8 million shares.

Fahmi Karam: We expect a tax rate to be approximately 26% with an average diluted share count for the year of approximately 58.8 million shares. We'll provide a more in-depth update on our 2026 outlook on our next call, but I'd like to share our early look for Acima. Absolute dollar growth will depend on how strong the holiday shopping season is in Q4, and obviously the macro backdrop entering the year. Assuming a stable macro environment, we're projecting to achieve the growth and margin profile for Acima that we've targeted in the past, including annual GMV and revenue up in the high single digit to low double digit territory, losses in the 9% to 9.5% area for the year, with adjusted EBITDA margins in the low to mid-teens range. Let's wrap up with a few key takeaways.

At the segment level for the fourth quarter, we expect our recent tightening actions at a seamless youll GMB growth in the mid single digit area, while still delivering full year GMB growth in the high single digits to the low double digit area that we guided to earlier this year.

We will provide a more in depth update on our 2026 outlook on our next call.

Like to share our early look for FEMA.

Absolute dollar growth will depend on how strong the holiday shopping season is in the fourth quarter and obviously the macro backdrop entering the year.

A seamless topline should be up low double digits with EBITDA margins slightly lower than a year ago period as the underperforming vintages flow through the P&L.

So assuming a stable macro environment, we're projecting to achieve the growth and margin profile for a CMO that we've targeted in the past, including annual GNP and revenue up in the high single digit to low double digit territory losses in the nine to nine 5% area for the year with adjusted EBITDA margins in the low to mid teens range.

Rent a center should see a low to mid single digit decline year over year on the topline while at least charge off rate will be better than last year and relatively flat sequentially.

Let's wrap up with a few key takeaways.

A bounce progress this quarter underscores that our digital transformation is moving at pace with new technologies, and AI powered solutions already enhancing customer experiences and operational efficiency.

Fahmi Karam: Upbound's progress this quarter underscores that our digital transformation is moving at pace, with new technologies and AI-powered solutions already enhancing customer experiences and operational efficiency. Innovation remains at the heart of our strategy as we continue to launch new products, refine our platforms, and explore fresh approaches to serve our customers better. Importantly, our rich consumer data set, built from millions of interactions, provides unique insights that drive smarter decision-making and unlock new opportunities for growth. The management team is coming together with the addition of Hal and Rebecca, two seasoned leaders who will help us capitalize on new opportunities for growth. These strengths, combined with our talented team's commitment and dedication, position Upbound to deliver value to our customers, merchants, and shareholders across all market cycles. Thank you all for your time this morning. Operator, you may now open the line for questions.

Ah Bridget we expect revenue to be up high single digits sequentially with low double digit adjusted EBITDA margins driven by the ramp up in marketing and customer acquisition spend that I mentioned earlier.

Innovation remains at the heart of our strategy as we continue to launch new products refine our platforms and explore fresh approaches to serve our customers better.

For corporate costs, we expect the impact to adjusted EBITDA in Q4 to be consistent with the year ago period.

Also at the corporate level, our net interest expense in Q4 should be in line with Q3.

Importantly, our rich consumer datasets built for millions of interactions provides unique insights that drive smarter decision, making and unlock new opportunities for growth.

We expect the tax rate to be approximately 26% with an average diluted share count for the year of approximately $58 8 million shares.

The management team is coming together with the addition of Hal and Rebecca two seasoned leaders, who will help us capitalize on new opportunities for growth.

We will provide a more in depth update on our 2026 outlook on our next call.

Like to share our early look for FEMA.

These strengths combined with our talented team's commitment and dedication position are bound to deliver value to our customers merchants and shareholders across all market cycles.

Absolute dollar growth will depend on how strong the holiday shopping season is in the fourth quarter and obviously the macro backdrop entering the year.

Thank you all for your time. This morning, operator, you May now open the line for questions.

So assuming a stable macro environment, we're projecting to achieve the growth and margin profile for a CMO that was targeted in the past, including annual G. M B and revenue up in the high single digit to low double digit territory losses in the nine to nine 5% area for the year with adjusted EBITDA margins in the low to mid teens range.

Yeah.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.

Operator: Thank you. Our first question comes from Kyle Joseph from Stephens. The floor is yours.

Let's wrap up with a few key takeaways.

Ah bounce progress this quarter underscore that our digital transformation is moving at pace with new technologies, and AI powered solutions already enhancing customer experiences and operational efficiency.

Our first question comes from Kyle Joseph from Stephens the floor is yours.

Hey, good morning, guys. Thanks for taking my questions.

Kyle Joseph: Hey, good morning, guys. Thanks for taking my questions. I mean, just wanna get a sense for the underwriting changes at Acima. Obviously, you guys talked about GMV in, I think, the mid-single digits in Q4. You know, how do we think about growth in that segment given the underwriting changes? Should we think about that being a little bit suppressed, call it, for the next 12 months till we lap those underwriting changes?

I just wanted to get a sense for the the underwriting changes that Athena, obviously, you guys talked about <unk> and I think the mid single digits in the in the fourth quarter, but you know how.

Innovation remains at the heart of our strategy as we continue to launch new products refine our platforms and explore fresh approaches to serve our customers better.

How do we think about growth in that segment given the underwriting changes should we think about that being a little bit suppressed call. It for the next 12 months until we lap those underwriting changes.

Importantly, our rich consumer datasets built for millions of interactions provides unique insights that drive smarter decision, making and unlock new opportunities for growth.

Good morning, Kyle Thanks for the question, Yeah look I think for our Cmos <unk> very pleased with the quarter up 11%, especially when you think about it comping over last year's percentage the underwriting changes will impact our <unk> in the fourth quarter, our guide for the fourth.

The management team is coming together with the addition of Hal and Rebecca two seasoned leaders, who will help us capitalize on new opportunities for growth.

Fahmi Karam: Morning, Kyle. Thanks for the question. I think for Acima's GMV, very pleased with the quarter up 11%, especially when you think about it comping over last year's percentage. The underwriting changes will impact GMV in the Q4, or guide for the Q4 is up mid-single digits. Keep in mind also that we had also had a 15% growth in the Q4 last year, you are comping off a decent number. Long term, I think we will get back into the high single digits, low double digits throughout 2026. As we stated in our prepared remarks, you know, we are very aware of the environment.

These strengths combined with our talented team's commitment and dedication position are bound to deliver value to our customers merchants and shareholders across all market cycles.

Quarter Izmit up mid single digits.

Thank you all for your time. This morning, operator, you May now open the line for questions.

Keep in mind also that we also had a 15% growth in the fourth quarter last year. So you are comping off of a decent number.

Yeah.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced until you. All your question. Please press star one again, please standby, while we compile the Q&A roster.

Long term I think we will get back into the high single digits low double digits throughout 2026, as we stated in our prepared remarks.

You know the environment, we are very aware of the environment, It's very uncertain out there with a lot of different moving parts and the macro backdrop, especially when you think about our core consumer. So we are very mindful of the environment. We're in despite that our ability to continue to add new merchant.

Our first question comes from Kyle Joseph from Stephens the floor is yours.

Fahmi Karam: It's very uncertain out there with a lot of different moving parts in the macro backdrop, especially when you think about our core consumer. We are very mindful of the environment we're in. Despite that, our ability to continue to add new merchants into the mix and continue to add both small, medium-sized businesses as well as the regional win that we announced today and onboarded earlier this month, that's what gives us confidence that we can continue to grow in that high single digit, low double digit area really throughout 2026.

Hey, good morning, guys. Thanks for taking my questions.

Just wanted to get a sense for the the underwriting changes that Athena, obviously, you guys talked about <unk> and I think the mid single digits in the in the fourth quarter, but how.

<unk> into the mix and continue to add both small medium sized businesses as well as the regional win that we are we announced today and on boarded earlier. This month, that's what gives us confidence that we can continue to grow in the high single digit low double digit area are really throughout 2026.

Good morning, Kyle Thanks for the question, Yeah look I think for our Cmos <unk> very pleased with the quarter up 11%, especially when you think about it comping over last year's percentage Ah the underwriting changes will impact our <unk> in the fourth quarter, our guide for the fourth.

Got it that's helpful and yes kind of.

On the macro uncertainty kind of thing.

Kyle Joseph: Got it. That's helpful. Yeah, you know, kinda on the macro uncertainty, kinda seeing different loss trends across your segments. I mean, just, yeah, would love to get kinda how you're thinking about the consumer. Is it, you know, so specific that it, you know, the Acima consumer is seeing different trends than the Rent-A-Center consumer? Just, yeah, wanna get your sense for, you know, how the consumer is doing given all the uncertainty.

Loss trends across your segments.

I mean, yes, we'd love to get kind of how youre thinking about the consumer.

So specific that you know the sema can consumers seeing different trends in the rack consumer or just wanted to get your sense for that.

Quarter has been up mid single digits.

Keep in mind also that we also had a 15% growth in the fourth quarter last year. So you are comping off of a decent number long term I think we will get back into the high single digits low double digits throughout 2026, as we stated in our prepared remarks.

Consumer is doing given all the uncertainty.

Sure, Yes, the consumer we've characterized it in the past calls as they are still stressed and I think that continues to be the case you have the impact of of inflation now for a few years and it takes a toll on the consumer that is generally in cash strapped and thinking about our core.

Fahmi Karam: Sure. The consumer, you know, we've characterized it in the past, Kyle, as, you know, still stressed, and I think that continues to be the case. You have the impact of inflation now for a few years, and that takes a toll on a consumer that is generally cash-strapped. If you think about our core consumer, especially on the Rent-A-Center side, you know, making somewhere between $25,000 and $30,000 of annual income. Acima may be a little bit higher than that in the $50,000 to $60,000 range, and Brigit is somewhere in between. You know, that cumulative effect of inflation definitely hurts disposable income, and it has an impact on both demand and payment behavior.

Consumer, especially on the rent a center side, you know, making somewhere between 25 and 30000 of annual income.

But despite that our ability to continue to add new merchants are into the mix and continue to add both small medium sized businesses as well as the regional win that we are we announced today and on boarded earlier. This month, that's what gives us confidence that we can continue to grow in the high single digit low double digit area.

Our CMO, maybe a little bit higher than that in the 50 to 60000 range and bridges somewhere somewhere in between that cumulative effect of inflation definitely hurts disposable income and it has an impact on both demand and in payment behavior.

Of course, it also helps us from a standpoint of trade down, which we saw you know ending last year and into the beginning of this.

Fahmi Karam: Of course, it also helps us from a standpoint of trade down, which we saw, you know, ending last year and into the beginning of this year. Generally speaking, consumer confidence is pretty low. You got wage growth slowing. You got the job market seeming to slow down a bit. Round of layoffs being announced this week and last week. You have the tariff inflation potential, and you have the government shutdown. You got a lot of things that are kind of pointing to a lot of uncertainty in the market, which is really why we decided to go ahead and take an even more conservative stance from an underwriting standpoint. You mentioned the difference between Rent-A-Center and Acima.

Really throughout 2026.

This year, but generally speaking.

Got it that's helpful and yes, it's kind of odd.

Speaking consumer confidence is a it's pretty low you got a wage growth slowing and got the job market are seeming to slow down a bit.

On the macro uncertainty kind of thing.

Different loss trends across your segments.

Yes, I would love to get kind of how youre thinking about the consumer.

A round of layoffs being announced.

This week and last week.

The tariff and inflation.

So specific.

Inflation and potential and I had a government shutdown. So you've got a lot of things that are kind of point to a lot of uncertainty in the market, which is really why we decided to go ahead and take out even more conservative stance from an underwriting standpoint and you.

The sema can consumers seeing different trends in the rack consumer or just wanted to get your sense for.

The consumer is doing given all the uncertainty.

Sure, Yes, the consumer we've characterized it in the past calls.

You mentioned the difference between rent a center and Sema I think there is a difference between the consumers as I. Just mentioned there is obviously some overlap but there is a difference between the consumers and <unk>.

They are still stressed and I think that continues to be the case you have the impact of of inflation now for a few years and it takes a toll on the consumer that is generally cash strapped and if you think about our core consumer, especially on the rent a center side, you know, making somewhere between 25 and 30000 of.

Fahmi Karam: I think there is a difference between the consumers, as I just mentioned. There is obviously some overlap, but there is a difference between the consumers. From an underwriting standpoint, you know, with Rent-A-Center, you're thinking about, you know, consumer, whether it's new or returning, whether it comes through our store or online. Where Acima, you also have the retailer component in there, and you have a more diversified product category mix. You throw in kind of what we're seeing this year. You know, Rent-A-Center, we had broad-based cuts last year, and so it's benefiting from that this year, and our loss rates have been relatively stable, sequentially and down year over year.

And from.

From an underwriting standpoint, you know with rent a center are you thinking about consumer whether it's new or returning whether it comes through our store online or a CMO. You also have the retailer component in there and you have a more diversified product category mix and.

Of annual income a CMO, maybe a little bit higher than that in the 50 to 60000 range and in British somewhere somewhere in between that cumulative effect of inflation definitely hurts disposable income and it has an impact on both demand and in payment behavior of course. It also helps us from a standpoint of.

You throw in kind of what we're seeing this year rent a center, we've got a broad base cuts last year and so it's benefiting from that this year and in our loss rates have been relatively stable sequentially and down year over year and with a female we started seeing it in the second quarter and we had to adjust.

Trade down, which we saw you know ending last year.

<unk> of this.

This year, but.

Generally speaking consumer confidence is a it's pretty low you've got a wage growth slowing and got the job market are seeming to slow down a bit.

Fahmi Karam: With Acima, you know, we started seeing it in Q2, and we had to adjust kind of slightly after Rent-A-Center. There is some overlap, but there are some differences. Obviously, depending on when we actually tightened, you start seeing that through the P&L and some of the ratios.

I slightly after rent a center. So there is some overlap but there are some differences and obviously depending on what when we actually tightened you start seeing that through the P&L and some of the ratios.

A round of layoffs being announced.

This week and last week.

Have the tariff and inflation.

Inflation and potential and I have a government shutdown. So you've got a lot of things that are kind of point to a lot of uncertainty in the market, which is really why we decided to go ahead and take out even more conservative stance.

Yeah.

Got it really helpful. One last one for me on.

Kyle Joseph: Yeah, really helpful. One last one from me. On the Rent-A-Center segment, it seems like some positive developments there guiding towards, you know, trending towards flat or positive. You know, what's driving that? Is it a function of lapping underwriting? Is it e-com growth? Just, you know, what's the reason for the outlook for improvement there?

The rack segment.

It seems like some positive developments there guiding towards.

Underwriting standpoint and you.

Turning towards flat or positive you know, what's what's driving that is it a function of lapping underwriting is the E com growth.

What was the reason for the outlook for improvement there.

Yeah right of center had a really nice quarter in a pretty.

From an underwriting standpoint with rent a center are you thinking about you know consumer whether it's new or returning whether it comes through our store or online where I see what you also have the retailer component in there and you have a more diversified product category mix and <unk>.

Fahmi Karam: Yeah. Rent-A-Center had a really nice quarter in a pretty tough environment, especially when you think about, you know, kind of being our seasonally low quarter in the summer months. To see the improvement in same-store sales, still negative, but an improvement of 40 basis points from the last quarter. You know, as you said, our guide is now to be approaching flat to hopefully slightly positive in the Q4. I think, you know, what we can point to is a lot of great execution by the team. We've also done some strategic initiatives around refer a friend. We've also revamped our loyalty program. We're trying to push folks from online into the store, and that's had a positive impact on our results.

Environment, especially when you think about you know kind of being our seasonally low quarter in this in the summer months and so to see the improvement in same store sales are still negative, but an improvement of 40 basis points from the.

The last quarter and you know as you said our diet is not to be approaching flat to hopefully slightly positive in the in the fourth quarter and I think you know what we can point to is a lot of great execution by the team.

We've also done some strategic initiatives around refer a friend we've also revamped our loyalty.

Program.

And we're trying to push folks from online into the store and that's had a positive impact on our results had a positive impact on conversion rates as well as our loss performance and so and I mentioned in our prepared remarks that you know we feel really good about our inventory position going into into the holiday.

Fahmi Karam: It's had a positive impact on conversion rates, as well as our loss performance. I mentioned in our prepared remarks that, you know, we feel really good about our inventory position going into the holiday season. All that, plus comping some of the changes that we made last year, really will start comping those in Q4. That's what gives us the confidence that we're gonna continue to improve. Rent-A-Center is definitely stabilized and hopefully inflecting towards positive in the Q4.

Got it really helpful. One last one from me.

On Ah.

Iraq segment.

It seems like some positive developments there guiding towards comp.

Season, so all of that plus Comping. Some of the changes that we made last year are really will start comping those in the fourth quarter. That's what gives us the confidence that we're going to continue to improve rent a center is definitely stabilized and hopefully inflicting towards positive in the fourth quarter.

Turning toward flat or positive.

What what's driving that is it a function of lapping underwriting is the E com growth.

What was the reason for the outlook for improvement there.

Yeah, I rent a center had a really nice quarter in a pretty tight.

Okay.

Great. Thanks.

Taking my questions.

Kyle Joseph: Great. Thanks for taking my questions.

Thank you for your question.

Operator: Thank you for your question. Our next question comes from John Hecht of Jefferies. The floor is yours.

Yeah.

Our next question comes from John Hecht of Jefferies. The floor is yours.

Good morning, guys. Thanks, very much for taking my questions.

John Hecht: Morning, guys. Thanks very much for taking my question. Yeah, really focusing on Brigit. You know, good ARPU growth year-over-year and quarter-over-quarter. You know, I mean, I guess, what are you learning about that customer, the customer acquisition opportunities, the cross-sell opportunities? Maybe you did provide a, you know, some detail on this in the prepared remarks, but I'm wondering if you can give us a little bit more about what you're learning and the opportunity that presents.

Really focusing on Bridget.

Good ARPA growth year over year and quarter to quarter.

I guess, what are you learning about that customer the customer acquisition opportunities. The cross sell opportunities. Maybe you did provide some detail on this in the prepared remarks, but I'm wondering if you can give us a little bit more about what you're learning in the opportunity that presents.

We've also done some strategic initiatives around refer a friend we've also revamped our loyalty.

Program.

And we're trying to push folks from online into the store and that's had a positive impact on our results had a positive impact on conversion rates as well as our loss performance and so and I mentioned in our prepared remarks that we feel really good about our inventory position going into into the holiday.

Good morning, John Thanks for the thanks for the question Yeah Bridge. It continues to outperform our expectations are really across the board. We mentioned it on the last couple of calls around their ability to really adapt and listened to their customer base and develop products and that really is.

Fahmi Karam: Morning, John. Thanks for the question. Yeah. Brigit continues to outperform our expectations, really across the board. We mentioned it on the last couple calls around their ability to really adapt and listen to their customer base and develop products that really address people's concerns and address people's worries. That's what we're seeing. You asked what are we seeing that's working. I think the answer to that is the cash flow underwriting piece.

The season, so all of that plus copying some of the changes that we made last year are really will start comping those in the fourth quarter. That's what gives us the confidence that we're going to continue to improve rent a center is definitely stabilized and hopefully inflicting towards positive in the fourth quarter.

Dress People's concerns and and dress People's worries and that's what we're seeing you know you asked what you know what are we seeing that.

Working and I think the answer to that is the cash flow underwriting piece I think that that level of transparency that insight into the customer and getting to know them.

Fahmi Karam: I think that level of transparency, that insight into the customer and getting to know them, that's something that we think we can leverage across our platform, whether it's through their new product offerings or eventually into the Acima and Rent-A-Center business. You know, as far as other things that we're picking up on. You know, as we said, we are testing out new marketing channels, just trying to broaden our base and really drive subscriber growth. You know, we've had 2 consecutive quarters now of over 25% subscriber growth. We look to continue to push more and more subscribers. Then once we come in, have them, you know, stick around.

That's something that we think we can leverage across our platform whether it's their.

Yeah.

Great. Thanks for taking my questions.

Thank you for your question.

There are new product offerings or eventually into the sema and rent a center business.

Yeah.

Our next question comes from John Hecht of Jefferies. The floor is yours.

And as far as other things that we're picking up on you know as we said where we are testing out new marketing channels, just trying to broaden our base in and really drive subscriber growth. You know we've had two consecutive quarters now of over 25%.

Good morning, guys. Thanks, very much for taking my questions.

Yes, really focusing on bridge.

Good <unk> growth year over year and quarter to quarter.

I guess, what are you learning about that customer.

Or acquisition opportunities the cross sell opportunities maybe you did provide some detail on this in the prepared remarks, but I'm wondering if you can give us a little bit more about what you're learning in the opportunity that presents.

Subscriber growth, we look to continue to to push more and more subscribers and then once we come in have them.

Stick around and the retention rates have definitely improved as we've gotten more and more content into the bundle as well as developing that line of credit product that we've talked about now that goes up to $500 of advance at a time, so very happy with where bridge. It is both from a top line growth in this abstract subscribe.

Fahmi Karam: The retention rates have definitely improved as we've gotten more and more content into the bundle. As well as the, you know, developing that line of credit product that we've talked about now that goes up to $500 of advance at a time. Very happy with where Brigit is, both from a top-line growth and a subscriber growth. We've leaned into some of the marketing channels and marketing expense. Pleased that they're still able to generate mid-teens EBITDA margins and really ready for a big holiday push, where we hope to have even more subscribers join the platform.

Or growth, we've leaned into some of the marketing channels and marketing expense, but pleased that are they are still able to generate mid teens EBITDA margins and really ready for a big holiday push where we hope to have even more subscribers joined the platform.

That really address people's concerns and and dress People's worries and that's what we're seeing.

You asked what what are we seeing that.

Working and I think the answer to that is the cash flow underwriting piece I think that that level of transparency that insight into the customer and getting to know them.

Okay.

Helpful. And then you know it would be.

John Hecht: Okay. That's helpful. You know, the appointment of the chief revenue officer with a focus on AI endeavors. Maybe can you give us an update of, you know, what you're learning in terms of the application of AI and how that could benefit the business in the intermediate term?

Appointment of the Chief revenue officer with a focus on AI endeavors, maybe can you give us.

That's something that we think we can leverage across our platform whether it's.

An update of.

What you're learning in terms of the application of AI and how they can benefit the business.

There are new product offerings or eventually into the sema and rent a center business.

The immediate term.

Sure as a chief growth officer, when I can give her a new title John with the Chief revenue officer, but Ah Ah, but they'll havent havent, even Rebecca joined has been it's been fantastic. She had been in the building now for a for a month and you know what she brings is a whole new perspective on data analytics.

And as far as the other thing that we're picking up on you know as we said where we are testing out new marketing channels, just trying to broaden our base in and really drive subscriber growth. You know we've had two consecutive quarters now of over 25% subscriber growth, we look to continue to to push more and more subscribed.

Fahmi Karam: Sure. It's Chief Growth Officer. We're gonna give her a new title, John Hecht, with the Chief Revenue Officer. No, having Rebecca Wooters join has been fantastic. She's been in the building now for a month. You know, what she brings is a whole new perspective on data analytics, deriving a lot of the decisions we're going to make. You know, then hopefully pushing the ball forward on the AI front and pushing our roadmap on the AI front even further and faster. We've developed a set of, you know, hopefully high impact use cases that we wanna roll out from an AI standpoint, while also, you know, being very mindful of cost.

Driving a lot of the decisions, we're going to make and hopefully pushing the ball forward on the on the AI front and pushing our roadmap on the AI front, even even further and faster.

And then once we come in have them stick around and the retention rates have definitely improved as we've gotten more and more content into the bundle as well as developing that line of credit product that we've talked about now that goes up to $500 of advance at a time, so very happy with where brigid.

So we've developed a set of hopefully high impact use cases that we want to roll out from an AI standpoint, while also being very mindful of cost, but but no that's going to really push our growth forward and really enhanced our capabilities. So you know we're focused on enhancing the customer experience.

It is both from a top line growth in this abstract subscriber growth we believe.

Fahmi Karam: Know that's gonna really push our growth forward and really enhance our capabilities. You know, we're focused on enhancing the customer experience across all of our major brands. Then also giving our coworkers the tools to better serve our customers and our partners. Hopefully along the way, getting some efficiencies, you know, across the organization. She's done it before. She has very relevant experience in this area. A proven track record of transformation and especially digital transformation. We're excited to have her as part of the team.

Leaned into some of the marketing channels and marketing expense, but pleased that they're still able to generate mid teens EBITDA margins.

Cross all of your brands and then also giving our coworkers the tools to better serve our customers and our partners and hopefully along the way of getting some efficiencies.

And really ready for a big holiday push where we hope to have even more subscribers joined the platform.

Okay. That's helpful and then.

Across the across the organization so.

The appointment of the Chief revenue officer with a focus on AI endeavors, maybe can you give us.

She has done it before she has a very relevant experience in this area.

Update of.

<unk> proven track record of transformation and especially digital transformation. So we're excited to have her as part of the team.

What you're learning in terms of the application of AI and how they can benefit the business.

The intermediate term.

Great. Thank you very much.

John Hecht: Great. Thank you very much.

Thank you for your question.

Operator: Thank you for your question. Our next question comes from Vincent Caintic from BTIG. The floor is yours.

Our next question comes from Vincent <unk> from.

She brings is a whole new perspective on data analytics driving a lot of the decisions, we're going to make and hopefully pushing the ball forward on the on the AI front and pushing our roadmap on the AI front, even even further and faster.

<unk> the floor is yours.

Hey, good morning, Thanks for taking my questions and thanks for all the detail.

Vincent Caintic: Hey, good morning. Thanks for taking my questions. Thanks for all the detail this morning, particularly on that bonus depreciation. That's very interesting. If I could switch back to Acima and then another credit question. First off, maybe a bit of a broader one. Looking back through that June or July impact or when there was perhaps a negative inflection, if you could talk in more detail about maybe what you were seeing at that time. Was it particular customers or particular categories that you had to tighten during that time? In terms of the GMV growth, it's nice to see that you still had 11% GMV growth and still having, you know, mid-single digits for Q4.

Hum.

Good morning, particularly that bonus depreciation that's very interesting.

If I could switch back to see Matt and that's another credit question.

So we've developed a set of hopefully high impact use cases that we want to roll out from an AI standpoint, while also being very mindful of cost, but but no that's going to really push our growth forward and really enhance our capabilities. So we're focused on enhancing the customer experience cros.

So first off maybe a bit of a broader one.

Looking back through that June or July impact or when there was perhaps a negative inflection if you could talk in more detail.

How about maybe what you were seeing at that time was it particular customers or particular categories that you had the tightened.

All of our major brands.

During that time and then.

And then also giving our coworkers the tools to better serve our customers and our partners and hopefully along the way of getting some efficiencies, but you know across the across the organization. So she's done it before she has a very relevant experience in this area.

In terms of the GMB growth since it's nice to see that you still had 11% GDP growth and still having mid single digits for fourth quarter.

Maybe if you could break out.

Vincent Caintic: Maybe if you could break out, you know, how much of that growth is coming from new merchants versus maybe some pressure in some of the existing customers and existing merchants. If you could break out the, you know, where the continued growth is coming from. Thank you.

How much of that growth is.

Coming from new merchants versus maybe some pressure in some of the existing customers and existing merchants if you could break out.

Moving track record of transformation, and especially digital transformation. So we're excited to have her as part of the team.

The continued growth is coming from thank you.

Sure. Good morning, Vincent Thanks for the question I'll start with your first one around the you know.

Great. Thank you very much.

Fahmi Karam: Sure. Good morning, Vincent. Thanks for the question. I'll start with your first one around Acima and credit really throughout Q2 and into Q3. As we said in our prepared remarks, we've been lowering our approval rates pretty consistently this year. We've been down 200 or 300 basis points year over year, pretty much all year long. What we saw was a combination of things. I think the biggest driver is just overall softness in performance and overall softness in yields.

Thank you for your question.

Sema and credit them through the really throughout the second quarter and into the into the third quarter and you know as we said in our prepared remarks, we've been lowering our approval rates pretty consistently this.

Our next question comes from Vincent.

<unk> the floor is yours.

Hey, good morning, Thanks for taking my questions and thanks for all the detail.

This year, we'd been down.

Hum.

Two or 300 basis points.

Morning, particularly that bonus depreciation that's very interesting.

Year over year pretty much all year long, but what we saw was a combination of things I think the biggest drivers overall softness and performance and overall softness in the yields and so as I said, we when we saw that through our early performance indicators, but we reacted relatively quickly.

If I could switch back to <unk>.

Another credit question.

So first off maybe a bit of a broader one.

Looking back through June and July impact or when there was perhaps a negative inflection if you could talk in more detail.

Fahmi Karam: As I said, when we saw that through our early performance indicators, we reacted relatively quickly and tried to tackle those in certain pockets, including the e-com business that we called out during the prepared remarks. You know, picking off those, you know, pieces wasn't enough. We started seeing worse and worse performance into June and into July. We had to take, I would say, more drastic underwriting tightening in the summer months. We really saw the impact of that in August, which, you know, again, this is a pretty short-lived asset.

How about maybe what you were seeing at that time was it particular customers or particular categories that you had the tightened.

Tried to tackle those and certain product or certain pockets, including that E. Com business that we call we called out we called out during the prepared remarks.

During that time and then.

In terms of the GMB growth since it's nice to see that you still had 11% GDP growth, it's still having mid single digits for fourth quarter.

But you know picking off those pieces wasn't enough, we started seeing worse and worse performance into June and into July and so we have to take I would say more drastic underwriting tightening in the months in the summer months.

Maybe if you could break out.

How much of that growth is.

Coming from new merchants versus maybe some pressure in some of the existing customers and existing merchants if you could break out.

And we really saw the impact of that and into August which again. This is a pretty short lived asset you can start seeing the results pretty quickly when you make some of these some of these changes and and we saw that so again. It was the combination of of just overall macro tightening we've is.

The continued growth is coming from thank you.

Sure. Good morning, Vincent Thanks for the question I'll start with your first one around the sema.

Fahmi Karam: You can start seeing the results pretty quickly when you make some of these, some of these changes, and we saw that. Again, as a combination of just overall macro tightening, as well as certain pockets in our portfolio. The good news is we reacted very quickly. We've already had a conservative kind of posture in underwriting. Again, we're only about 20 basis points above our high end of our target range. We think we'll peak in Q4 in the 10% area, and then it will start coming down into the first part of 2026, and then improve from there.

Well as certain pockets in our in our portfolio and the good news is we reacted very quickly a wee bit we've already had a conservative posture and in underwriting. So so again, we're only about 20 basis points above our high end of our target range, We think will peak in the fourth quarter and the 10%.

This year, we've been down.

Two or 300 basis points.

Year over year pretty much all year long, but what we saw was a combination of things I think the biggest drivers overall softness in performance and overall softness in the yields and so as I said, we when we saw that through our early performance indicators, but we reacted relatively quickly.

Area and then it will start coming down into a into the first part of 2026, and then improve from from from there.

As far as the GMP goes yeah, I think as you said a very nice to see despite all the tightening that we've done this year to still grow 11% in the quarter coming off of again, a strong comp last year as well as far as where the growth is coming from you know the bucket.

Fahmi Karam: As far as the GMV goes, yeah, I think, as you said, you know, very nice to see, despite all the tightening that we've done this year, to still grow 11% in the quarter coming off of, again, a strong comp last year as well. As far as where the growth is coming from, you know, to bucket it, I think about 90% is coming from new merchants, and about 10% is coming from productivity of existing merchants. Really that 10% of productivity is coming from our staffed locations as we continue there, that transition from the legacy Acima to the Acima platform and ramping up, you know, the larger accounts from a staffed perspective. Then direct-to-consumer.

Tried to tackle those and certain product or certain pockets, including that E. Com business that we call we called out we called out during the prepared remarks.

But you know picking off those pieces wasn't enough, we started seeing worse and worse performance into June and into July and so we have to take I would say more drastic underwriting tightening.

I think about 90% is coming from new merchants and about 10% is coming from productivity of existing merchants.

In the months in the summer months.

And really that 10% of productivity is coming from our staffed locations as we continue there that transition from the legacy a now city of Sema platform and granting up.

And we really saw the impact of that and into August which again. This is a pretty short lived asset you can start seeing the results pretty quickly when you make some of these some of these changes and we saw that so again. It was the combination of of just overall macro tightening we've oh.

The larger accounts from our staff, our pur perspective, and then direct to consumer you've heard us talk a little bit about direct to consumer over the last few quarters that grew over 150%.

Fahmi Karam: You've heard us talk a little bit about direct-to-consumer over the last few quarters. That grew over 150%. This quarter is getting close to about 7% of our overall GMV. That's becoming a bigger and bigger part of our story and the GMV story and will going forward as we continue to innovate on new tools to give more power to the consumer, using our app.

As well as certain pockets in our in our portfolio.

And the good news is we reacted very quickly.

This quarter is getting close to about 7% of our overall G. N V. So that's becoming a bigger and bigger part of our of our story and DNV story and going forward as we continue to innovate on new tools to give more power to the consumer using our using our.

We've already had a conservative posture and in underwriting so.

So again, we're only about 20 basis points above our high end of our target range, We think will peak in the fourth quarter and the 10% area and then it will start coming down into a into the first part of 2026, and then improve from from from there.

So.

So we definitely had to take a little bit of a step back and it's going to hurt a little bit of growth, but we think that's the right thing to do given all the uncertainty that I mentioned and a.

Fahmi Karam: We definitely had to take a little bit of a step back, and it's gonna hurt a little bit of growth, but we think that's the right thing to do given all the uncertainty that I mentioned and, you know, focus on making sure that our losses stick within our target range and that we're able to generate the right profitability for the leases that we book.

Focus on making sure that our loss of stick within our target range and then we're able to generate the right profitability for the leases that we book.

Okay. That's super helpful detail. Thank you.

Vincent Caintic: Okay, great. That's super helpful detail. Thank you. Switching to Brigit, but kind of a similar question since it's a new business for us, so trying to if you could help us on how to think about this environment, and how the business operates in this environment. You know, if maybe some macro uncertainty, would Acima headwinds be similar for Brigit, or conversely, is this actually a time for Brigit to be leaning in, and be growing when perhaps the consumer is stressed? Thank you.

Switching to bridge it but kind of similar question since it's a.

About 90% is coming from new merchants and about 10% is coming from productivity of existing merchants.

It's a new business for us.

If you could help us on how to think about this environment and how the business operates in this environment.

And really that 10% of productivity is coming from our staffed locations as we continue there that transition from the legacy <unk> platform and ramping up.

Maybe some macro uncertainty.

With a schema headwinds be similar for Bridget or Conversely, if there's actually a time for bridge to be leaning in.

The larger accounts from our staff, our pur perspective, and then direct to consumer you've heard us talk a little bit about direct to consumer over the last few quarters of.

And be growing.

When perhaps the consumers stressed thank you.

I think more of the latter Vincent I think its a time for us to lean in and help our consumers are obviously, we have a lot of tools and financial literacy tools budgeting tools, but also the liquidity tools become more and more are in demand and you know.

Fahmi Karam: I think more the latter, Vincent. I think it's a time for us to lean in and help our consumers. Obviously, we have a lot of tools and financial literacy tools, budgeting tools, but also the liquidity tools become more and more in demand. You know, we've talked a little bit about that new product that we're very proud of, and it's still early days and still in testing mode, but the adoption of that product has surpassed our expectations. No, I think this environment lends itself really across all of our brands. I mentioned it during our prepared remarks that, you know, some of these things will have some short-term and near-term impacts to our P&L.

That grew over 150% this quarter is getting close to about 7% of our overall G. N V. So that's becoming a bigger and bigger part of our of our story and to the <unk> story and going forward as we continue to innovate on new tools to give more power.

We've talked a little bit about that new product that we're very proud of and it's still so early days and still in testing mode, but the adoption of that product has been has surpassed our expectations and so so no I think this environment lends itself really across all of our brands I mentioned that during our prepared remarks.

To the consumer using are using our app. So.

So we definitely had to take a little bit of a step back and it's going to hurt a little bit of growth, but we think that's the right thing to do given all the uncertainty that I mentioned and our.

You know some of these things will have some short term and near term impact to our P&L, but the environment is very conducive for consumers looking for you know low weekly payments looking for deals looking for access to either durable goods on the rent a center in a seamless side or just general liquidity.

Focus on making sure that our loss of stick within our target range and then we're able to generate the right profitability for the leases that we book.

Fahmi Karam: The environment is very conducive for consumers looking for, you know, low weekly payments, looking for deals, looking for access to either durable goods on the Rent-A-Center and Acima side, or just general liquidity for everyday needs on the Brigit side. No, I think this is a time for us to make sure we're there for our consumers, especially as things potentially could get worse from here. I do think it lends itself very well for all of our brands, including Brigit.

Okay. That's super helpful detail. Thank you.

Switching to bridge it by kind of similar question since it's a it's a new business for us.

If you could help us on how to think about this environment and how the business operates in this environment.

<unk> four for everyday needs on the bridge side. So so no I think this is a time for us to make sure. We're there for our consumers.

Maybe some macro uncertainty.

With a female headwinds be similar for Bridget or Conversely, if there's actually a time for bridge to be leaning in.

If things potentially it could get worse from here I do think it lends itself very well for all of our brands, including Bridget.

And be growing.

Yeah.

When perhaps the consumer stressed thank you.

Okay, great very helpful. Thank you.

Vincent Caintic: Okay, great. Very helpful. Thank you.

Thank you for your question.

Yeah.

Operator: Thank you for your question. Our next question comes from Hoang Nguyen of TD Cowen. The floor is yours.

Our next question comes from Hong Nguyen of TD Cowen.

The floor is yours.

Thank you and thanks for including me.

Hoang Nguyen: Thank you, and thanks for including me. I want to touch a little bit on Rent-A-Center. It looks like it's a very opposite performance versus Acima this quarter, reflecting to the positive side. I guess my question is, I mean, is this it? Is there any other headwinds in the coming quarters for Rent-A-Center that, you know, that we may want to take note? What gives you the confidence from here that maybe Rent-A-Center is now back to humming, you know, should we turn to somewhat, you know, the growth level that you indicated back in your investor day?

I wanted to touch on a little bit on rent a center it looks like it's a very opposite performance places sema. This quarter is affecting to the positive side I guess my question is I.

We've talked a little bit about that new product that we're very proud of and it's still so early days and still in testing mode, but the adoption of that product.

I mean is this it.

Has been has surpassed our expectations. So so no I think this environment lends itself really across all of our brands I mentioned that during my prepared remarks that some of these things will have some short term and near term impact to our P&L, but the environment is very conducive for consumers.

Is there any other headwind in the coming quarters with rent a center.

And we may want to take note and what gives you the confidence from here that maybe Brendan Center is now as to how many you know should return to somewhat.

And the corporate level.

Indicated.

Looking for you know low weekly payments looking for deals looking for access to either durable goods on the rent a center in a seamless side or just general liquidity four for everyday needs on the bridge side. So so no I think this is a time for us to make sure. We're there for our consumers.

Yesterday.

Thanks Al and good morning, Yeah, no outside of just the general macro that we've mentioned and we touched on on the on the call you know as I said in our rent a center really performed well this quarter of coming off of a tough second quarter in a tough first quarter.

Fahmi Karam: Thanks, Hoang. Good morning. Yeah, no, outside of just the general macro that we've mentioned and we touched on the call. You know, as I said, you know, Rent-A-Center really performed well this quarter, coming off a tough Q2 and a tough Q1, after the underwriting changes we made last year and trying to recapture some of that volume. You know, as I said in our prepared remarks, you know, the team is very energized here around some of the promotions and some of the inventory we have on hand for the Q4. Nothing major from a headwind standpoint. Great to see the trends improve in Q3.

Especially as things potentially it could get worse from here I do think it lends itself very well for all of our brands, including Bridget.

After the underwriting changes, we made last year in trying to recapture some of that some of that volume, but you.

You know as I said in our prepared remarks, you know the team is very energized here around some of the promotions and some of the inventory we have on hand for the for the fourth quarter. So nothing major from a headwind standpoint, great to see the trends improve in Q3 and really now we're gearing up for a <unk>.

Okay, great very helpful. Thank you.

Thank you for your question.

Yeah.

Our next question comes from Hong Nguyen of TD Cowen the.

The floor is yours.

Thank you.

Thanks for including me.

I want to touch on a little bit on rent a center it looks like it's a very opposite performance.

Big holiday season.

Fahmi Karam: Really now we're gearing up for a big holiday season, with a lot of great products in there. Losses are stable to down year over year. When you look at our delinquencies are also down year over year. Feel like from an underwriting standpoint, we got that kind of locked in, and now we just need to go push on deliveries. I know the team is ready to do that. I wouldn't point to anything from a headwind standpoint. I think the takeaway from the Rent-A-Center business is very positive, coming out of a, you know, a rough H1 of the year and, you know, starting to comp over some of the changes we made in 2024.

With a lot of great products and their losses are are stable to down year over year. When you look at our delinquencies are also down year over year. So feel like from an underwriting standpoint, we've got that are kind of locked in and now we just need to go push on on deliveries and I know the team is ready.

This quarter is affecting to the positive side I guess my question is I.

I mean is this it.

Is there any other headwind in the coming quarters for Renova under that.

And we may want to take note.

And what gives you the confidence from here that maybe weren't in center is now past the Hamlin should return to somewhat.

<unk> ready to do that so I wouldn't point to anything from a headwind standpoint, I think the as a takeaway from the rent a center business is very positive coming out of a.

The growth level.

Indicated.

Yesterday.

A rough first half of the year and you know starting to top over some of the comp over some of the changes we made in 2024.

Thanks, Hi, good morning, Yeah, no outside of just the general macro that we've mentioned and we touched on on the on the call you know as I said rent a center really performed well this quarter I'm coming off of a tough second quarter in a tough first quarter.

Got it and maybe another question on the <unk> side I think.

Hoang Nguyen: Got it. Maybe another question on the Acima side. I think, I think in the H2 of last year, you also mentioned some sort of softening in, I guess, the lower end of your consumers there. Then you tighten a little bit. I guess versus last year, I mean, how should we think about, you know, the degree of tightening that you guys are doing this time or have done this time versus last time? How serious a problem it is this time versus last year?

I think in the second half of last year, you also mentioned.

Some sort of softening in the lower end of your consumers.

After the underwriting changes, we made last year in trying to recapture some of that some of that volume, but you know as I said in our prepared remarks. The team is very energized here around some of the promotions and some of the inventory we have on hand for the for the fourth quarter. So nothing major from a headwind.

I guess and then you tightened a little bit.

Versus last year.

How should we think about the degree of tightening that you guys are doing at this time I have done this time versus last time.

And how serious a problem at this time versus last year.

Standpoint.

Great to see the trends improve in Q3, and really now we're gearing up for a big holiday season, with a lot of great products and their losses are are stable to down year over year. When you look at our delinquencies are also down year over year. So.

Yeah, I think there is I think the deterioration that we saw in the second and third quarter definitely was worst than last year, but I think as I said you know our our risk posture has been relatively conservative now for quite some time, even last year and into into this.

Fahmi Karam: Yeah. I think there is I think the deterioration that we saw in the Q2 and Q3 definitely was worse than last year, Hoang. I think as I said, you know, our risk posture has been relatively conservative now for quite some time, even last year and into this year. We've had to adjust even further. You know, I think the cuts that we've made over the summer are a little bit more broad-based than what we did last year. Maybe to a certain degree, we may be over tightened at this point.

Feel like from an underwriting standpoint, we got that are kind of locked in and now we just need to go push on on deliveries and I know the team is ready ready to do that so I wouldn't point to anything from a headwind standpoint, I think the is that the takeaway from the rent a center business is very positive coming.

This year and we've had to adjust even further you know I think the cuts that we've made over the summer are a little bit more broad based than what we did last year.

And maybe to to a certain degree with maybe over tightened at this point, but I'd, rather take that position with all the uncertainty in the market get our metrics back down into the role of our losses back down into kind of the high end of that range and and see how this plays out over the next few months.

Fahmi Karam: I'd rather take that position with all the uncertainty in the market, get our metrics back down or our losses back down into, kind of the high end of that range, and see how this plays out over the next few months. You know, maybe some of the things that I mentioned as far as the macro, solve themselves, and then maybe we'll feel like we can then get back to where we were pre, Q2 of this year. Generally speaking, you know, the team is very focused on our portfolio, the health of the consumer, and feel like we've corrected what we've seen in earlier this year and positioned now to grow from this point going forward.

Coming out of a a.

A rough first half of the year and you know starting to comp over some of the our comp over some of the changes we made in 2024.

Got it and maybe another question on the <unk> side I think.

You know maybe some of the things that I mentioned as far as the macro solve themselves and then maybe we will feel like we can we can then get back to where we were pre Q2 of this year, but but generally speaking you know the team is very focused on our portfolio. The health of the consumer and feel like we've corrected what we see.

I think in the second half of last year, you also mentioned.

Some sort of softening in the lower end up your consumers.

I guess and then you tightened a little bit.

Versus last year.

How should we think about the degree of tightening that you guys are doing this time I have been at this time versus last time.

And earlier this year in position now to to grow from this point going forward.

And how serious a problem. It is this time versus last year.

Got it thank you.

Thank you for your question.

Hoang Nguyen: Got it. Thank you.

Yeah, I think there is I think the deterioration that we saw in the second and third quarter definitely was worse than last year, but I think as I said you know our our risk posture has been relatively conservative now for quite some time, even last year and into into this.

Okay.

Operator: Thank you for your question. Our next question comes from Bobby Griffin of Raymond James. The floor is yours.

Our next question comes from Bobby Griffin of Raymond James the floor is yours.

Good morning, guys. Thanks for taking the questions.

Bobby Griffin: Good morning, guys. Thanks for taking the questions. Okay, Mike, I guess first, can you maybe talk about the pathway for Acima to return back to kind of that growth algo in 2026 with the current credit environment? I guess what I'm asking is the GMV growth picking up next year that you guys are kind of flagging that you think is a possibility? Is that predicated on credit conditions changing? It's more just on the function that we are gonna, you know, you are tightening, so you're seeing that come down here in Q4. I would think that GMV growth would carry forward unless you see some opportunities for like new customer wins or further trade down or something. Maybe just help us connect those dots.

Hey, Mike I guess first can you maybe talk about the pathway for Siem and return back to kind of that growth. Although in 26 with the current credit environment and I guess, what I'm asking is is the GMB growth picking up next year that you guys are kind of flat and do you think there is a possibility is that predicated on credit can.

Each year and we've had to adjust even further you know I think the cuts that we've made over the summer are a little bit more broad based than what we did last year.

And maybe to to a certain degree with maybe over tightened at this point, but I'd, rather take that position with all the uncertainty in the market get our metrics back down into that although our losses back down into kind of the high end of that range and and see how this plays out over the next few months.

Additionally, changing and it's more just the function that we are going to you are tightening so youre seeing that come down here in <unk>. So I would think that GMB growth with carrying forward unless you see some opportunities for like new customer wins or further trade down or something so maybe just help us connect those dots.

Yeah, Bobby Thanks for the thanks for the question I definitely think it will be harder for us to achieve those and I think if you think about the cadence for 2026, we may start off a little bit slow, but then ramp up in the second half of the year as we start comping. Some of these changes that we've been talking about this morning, but you said it I mean it.

Fahmi Karam: Bobby, thanks for the question. I definitely think it will be harder for us to achieve those. I think if you think about the cadence for 2026, we may start off a little bit slow, but then ramp up in the second half of the year as we start comping some of these changes that we've been talking about this morning. You said it. I mean, what gives us confidence in hitting the high single digits and low double digits is our ability to grow our merchant count, continue to focus on our existing merchants and increasing productivity there, whether it's through smarter and more personalized marketing efforts across the board, and then our direct-to-consumer channel.

Speaking you know the team is very focused on our portfolio the health of the consumer and feel like we've corrected what we've seen in earlier this year in position now to to grow from this point going forward.

What gives us confidence in hitting the high single digits and low double digits as our ability to grow our merchant count continue to focus on our existing merchants and increasing productivity there.

Got it thank you.

Thank you for your question.

Okay.

Our next question comes from Bobby Griffin of Raymond James the floor is yours.

Whether it's through smarter and more personalized marketing efforts across the board and then our direct to consumer channel all those things, but really the adding the merchants a piece of it is going to be the key for us to continue that growth out of sema, including some of the more pronounced wins that we.

Good morning, guys. Thanks for taking the questions.

Hey, Mike I guess first can you can you maybe talk about the pathway for Siem and return back to kind of that growth. Although in 2006 with the current credit environment and I guess, what I'm asking is is the GMB growth picking up next year that you guys are kind of flat and do you think there is a possibility is that predicated on credit.

Fahmi Karam: All those things, really the adding the merchants piece of it is gonna be the key for us to continue the growth at Acima, including some of the more pronounced wins that we mentioned on the call earlier this morning. Yes, there are gonna be some headwinds from a credit standpoint, but I think just our ability, again, to add merchants into our network, and some of the tools that we're building for our returning customers, I think that's what gives us the confidence to get back into that high single digit, low double digit range for GMV into 2026.

Mentioned on the call earlier this.

This morning, so yes, there are going to be some headwinds from a credit standpoint, but I think just our ability again to add merchants into our network and some of the tools that we're building it for our returning customers I think that's what gives us the confidence to get back into that high single digit low double digit range for GMP into into 2020.

It's changing.

And it's more just on the function that we are going to you are tightening so youre seeing that come down here in <unk>. So I would think that GMB growth would carry forward unless you see some opportunities for like new customer wins or further trade down or something so maybe just help us connect those dots.

Six.

Okay, and then maybe on just the tax benefits from the tax changes I mean, I know you guys talked about your standard capital allocation policy, but leverage is still close to turn above the target.

Bobby Griffin: Okay. Then maybe on just the tax benefits and the tax changes. I mean, I know you guys talked about your, your standard capital allocation policy, but, you know, leverage is still close to turn above the target. You know, you, you mentioned some more uncertainty out there today. Is the right way to think of that is first call really is plow back into deleverage, or is there capital calls on the business outside of growth that you need from an investment in systems or something as we go into 2026? Just trying to understand near term capital needs, and uses of cash a little bit better.

Yeah, Bobby Thanks for the thanks for the question I definitely think it will be harder for us to achieve those and I think if you think about the cadence for 2026, we may start off a little bit slow, but didn't ramp up in the second half of the year as we start comping. Some of these changes that we've been talking about this morning, but you said it.

You mentioned some more uncertainty out there today. So is the right way to think of that as first call really is plowed back in deleverage or is there a capital calls on the business outside of growth that you need from an investment in systems or something as we go into 'twenty six I'm trying to understand near term capital needs.

I mean, what gives us confidence in hitting the high single digits and low double digits as our ability to grow our merchant count continue to focus on our existing merchants and increasing productivity there.

Uses of cash a little bit better.

Yeah.

Yeah, you know I don't think our priorities change Bobby I think you know.

Whether it's through smarter and more personalized marketing efforts across the board and then our direct to consumer channel all those things, but really the adding the merchants a piece of it is going to be the key for us to continue the growth out of sema, including some of the more pronounced wins that we met.

Fahmi Karam: You know, I don't think our priorities change, Bobby. I think, you know, we're always looking for ways to reinvest in the business to spur growth and sustainable growth. I don't think that changes. You know, the $150 million or so that we mentioned on the call based on the new tax policy definitely gives us a little bit more flexibility around that growth, but also gives us a little bit more flexibility to pay down debt a little bit faster, while also leaving us some dry powder for optionality, whether it's, you know, tack on M&A or opportunistic share buybacks.

He's looking for ways to reinvest in the business to to spur growth and sustainable growth. So I don't think that changes you know the $150 million or so that we mentioned on the call based on the new tax policy definitely gives us a little bit more flexibility around that growth.

And on the call earlier.

But also gives us a little bit more flexibility to pay down debt a little bit faster, while also leaving us some dry powder for optionality, whether it's you know tack on M&A or opportunistic share buybacks, but you know our mode right now just given everything that we've talked about this morning is probably going to be on the conservative side and using that excess cash to either invest in that.

Fahmi Karam: You know, our mode right now, just given everything that we've talked about this morning, is probably gonna be on the conservative side and using that excess cash to either invest in the business or pay down some debt. A really nice tailwind for us from a free cash flow standpoint, being able to, you know, improve free cash flow this year and then obviously over $100 million next year from a cash tax standpoint. It's a big benefit.

Business or pay down pay down some.

Six.

Okay, and then maybe on just the tax benefits in the tax changes I mean, I know you guys talked about your standard capital allocation policy, but leverage is still close to turn above the target.

But quite a bit of a really nice tailwind for us from a from a free cash flow standpoint, being able to improve.

Improve our free cash flow this year and then obviously over 100 million next year from a from a cash tax standpoint, it's a it's a big big benefit.

You mentioned some more uncertainty out there today. So is the right way to think of that as first call really is plowed back into deleverage or is there a capital calls on the business outside of growth that you need from an investment in systems or something as we go into 'twenty six I'm trying to understand near term capital needs.

I appreciate the details best of luck here on the holiday quarter.

Bobby Griffin: Yep. Appreciate the details. Best of luck here on the holiday quarter.

Thanks Robby.

Thanks for your question.

Fahmi Karam: Thanks, Bobby.

Operator: Thanks for your question. Our next question comes from Bill Reuter from Bank of America.

Our next question comes from Bill Reuter from Bank of America.

Uses of cash a little bit better.

Okay.

Good morning, I just have two.

Yeah, I don't think our priorities change Bobby I think you know, we're always looking for ways to reinvest in the business to to spur growth and sustainable growth. So I don't think that changes the $150 million or so that we mentioned on the call based on the new tax policy definitely gives us a little bit more flexibility.

Bill Reuter: Good morning. I just have two. You previously just mentioned opportunistic M&A. I would think given all the uncertainty, the profitability of potential businesses may be difficult to get a good handle on, and it might lead to a little more caution. However, you do have the $150 million coming in, as you just mentioned, or lower tax payments. Can you talk a little bit about how you're viewing M&A at this point?

You previously just mentioned opportunistic M&A I would think given all the uncertainty the profitability.

Essential businesses may be difficult to get a good handle on when that might lead to a little more caution.

However, you do have the 150 million coming in as you just mentioned or lower tax payments can you talk a little bit about how you're viewing them at all at this point.

Around that growth.

But it also gives us a little bit more flexibility to pay down debt a little bit faster, while also leaving us some dry powder for optionality, whether it's you know tack on M&A or opportunistic share buybacks, but you know our mode right now just given everything that we've talked about this morning is probably going to be on the conservative side and using that excess cash to either invest in that.

Good morning, Bill Yeah, I think building off what I just mentioned on Bobby's question I think look we're always looking to expedite our strategic plan, whether it's you know.

Fahmi Karam: Morning, Bill. Yeah, I think, you know, building off what I just mentioned on Bobby's question, I think, look, we're always looking to expedite our strategic plan, whether it's, you know, through technology or some of the AI fronts or just doing a little tack on acquisitions that, you know, improve our product offering to our core customer. As I mentioned, I think on our last call, you know, we also have a lot of opportunity with the three big brands that we have now to reinvest in those, and we have plenty of growth opportunities with what we have, and we're still in the early days of integrating the Brigit offerings. You know, we like being in the mix. We like taking looks.

Their technology or some of the AI, France are just doing a little tack on act.

Business or pay down pay downs.

The acquisitions that you know improve our product offering to our core customer but.

But quite a bit of a really nice tailwind for us from a from a free cash flow standpoint, being able to improve.

But as I mentioned I think on our last call. We also have a lot of opportunity with the with the three three big brands that we have now to reinvest in those and they have plenty of growth opportunities with what we have and we're still in the early days of of of integrating the Bridget offerings. So so you know we we like being.

Improve our free cash flow this year and then obviously over 100 million next year from a from a cash tax standpoint, its a big a big benefit.

I appreciate the details best of luck here on the holiday quarter.

Thanks Robyn.

Thanks for your question.

The mix, we'd like taking looks nothing imminent at this point, but as I mentioned, our stance is going to be more conservative and probably being a paying down debt, but we also like to be actively looking on ways to add.

Our next question comes from Bill Reuter from Bank of America.

Fahmi Karam: Nothing imminent at this point. As I mentioned, our stance is gonna be more conservative and probably paying down debt. We also like to be actively looking on ways to, you know, add on to our product mix and our product offerings, looking to serve our customers in different ways. I never rule it out, but at this point in time, you know, we are focused on delevering.

Good morning, I just have two.

You previously just mentioned opportunistic M&A I would think given all the uncertainty the profitability.

Add onto our our product mix and our product offerings looking to serve our customers in different ways. So I never rule it out but at this point in time.

Essential businesses may be difficult to get a good handle on and that might lead to a little more caution.

We are focused on delevering.

Got it and then just secondarily, you mentioned, new merchant growth being a probably a core part of trying to get to that low double digit growth of the same in the next year has there been a I guess, how does the pipeline look for new potential customers makes it versus maybe where that pipeline with a year ago and that's all for me. Thank you.

However, you do have the 150 million coming in as you just mentioned or lower tax payments can you talk a little bit about how you're viewing them at all at this point.

Bill Reuter: Got it. Just secondarily, you mentioned new merchant growth being probably a core part of trying to get to that low double-digit growth of Acima in the next year. Have there been, I guess, how does the pipeline look for new potential customers versus maybe where that pipeline was a year ago? That's all for me. Thank you.

Good morning, Bill Yeah, I think it's building off what I just mentioned on Bobby's question I think look we're always looking to expedite our strategic plan, whether it's you know.

Sure Yeah look I think the pipeline is strong and we've talked about before you know the lead time to winning some at least on the on the bigger names. There's a long lead time and it takes effort both on the from an RFP standpoint, as well as integrating.

Through technology or some of the AI, France are just doing a little tack on.

Fahmi Karam: Sure. Look, I think the pipeline is strong. We've talked about before, you know, the lead time to winning some, at least on the bigger names. There's a long lead time, and it takes effort both from an RFP standpoint as well as integrating and from a point-of-sale standpoint. Our focus right now is trying to be less reliant on integration with retailers and developing tools where we can operate, grow volumes, you know, either through returning customers or through technology. The pipeline is good. We're not waiting around for integrations. We are doing things either direct-to-consumer, as I mentioned, or through our returning customer base to help grow GMV.

Acquisitions that improve our product offering to our core customer.

But as I mentioned I think on our last call.

We also have a lot of opportunity with the with the $3 three big brands that we have now to reinvest in those and they have plenty of growth opportunities with what we have and we're still in the early days of of of integrating the Bridget offerings. So so you know, we we like being in the mix, we like taking looks nothing.

From our point of sales standpoint, so our focus right. Now is is trying to be less reliant on a on an integration with retailers in developing tools, where we can operate grow volumes you know either through returning customers or through technology. So so the pipeline is good we're not waiting around for.

Imminent at this point, but as I mentioned, our stance is going to be more conservative and probably being a paying down debt, but we also like to be actively looking on ways to add.

For integrations, we're doing things that are direct to consumer as I mentioned or through our returning customer base to help grow G. M b, but our bread and butter is growing merchants and that's going to be continue to be a important acquisition channel for us and so our sales team.

Add onto our our product mix and our product offerings looking to serve our customers in different ways. So I'd never rule it out but at this point in time.

Fahmi Karam: Our bread and butter is growing merchants, and that's going to be and continue to be a important acquisition channel for us. Our sales team is hyper-focused on growing merchant count, and the pipeline remains strong.

M is hyper focused on growing merchant count and the pipeline remains strong.

We are focused on delevering.

Thanks, a lot.

Thanks for your question.

[Analyst]: Thanks a lot.

This does conclude the Q&A portion of the session.

Operator: Thanks for your question. This does conclude the Q&A portion of this session. I would now like to turn it over to Fahmi Karam, CEO, for closing remarks.

Now I'd like to turn it over to Danny kind of CEO for closing remarks.

Thank you operator, and thank you to everyone, who joined US today for an update on our Q3 performance and our outlook for the balance of 2025 before.

Fahmi Karam: Thank you, operator, and thank you to everyone who joined us today for an update on our Q3 performance and our outlook for the balance of 2025. Before we conclude, I'd like to again welcome our two new senior leaders to the organization and extend my sincere gratitude to all of my colleagues at Upbound. Thank you for your unwavering contributions and support of our mission, our values, and our customers. Thanks, everyone. Have a great day.

Before we conclude I'd like to again welcome our two new senior leaders to the organization and extend my sincere gratitude to all of my colleagues at about thank you for your unwavering contributions in support of our mission our values and our customers. Thanks, everyone and have a great day.

From our point of sales standpoint, so our focus right. Now is is trying to be less reliant on on integration with retailers in developing tools, where we can to operate grow volumes you know either through returning customers or through technology. So so the pipeline is good we're not waiting around for.

Yeah.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

For integrations, we're doing things either direct to consumer as I mentioned or through our returning customer base to help grow G. M b, but our bread and butter is growing merchants and that's going to be continue to be a important acquisition channel for us and so our sales team.

M is hyper focused on growing merchant count and the pipeline remains strong.

Thanks, a lot.

Thanks for your question.

This does conclude the Q&A portion of the session.

Now I'd like to turn it over to Tammy kind of CEO for closing remarks.

Thank you operator, and thank you to everyone, who joined US today for an update on our Q3 performance and our outlook for the balance of 2025 before.

Yeah.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

[music].

Okay.

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Good day and thank you for standing by welcomed into Q3 2025 Outbound Group Inc. Earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone you will then hear an automated.

Message advising your hand is raised.

Draw. Your question. Please press Star one again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Jeff Chesnut head of IR. Please go ahead.

Good morning, and thank you all for joining us to discuss outbound group's performance for the third quarter of 2025, we issued our earnings release. This morning before the market open and our release and all related materials, including a link to the live webcast are available on our website at investor.

Bound dot com.

The update or revise any forward looking statements, except as required by law.

Finally, our bank group is not responsible for and does not editor guarantee the accuracy of our earnings teleconference. Transcripts provided by third parties. Please refer to our website for the only authorized webcasts with that I'll turn the call over to Amy.

Thank you, Jeff and good morning, everyone.

Our business is organized around a simple, but powerful statement, which is to elevate financial opportunity for all.

As the consumer environment changes, our customers' needs evolve as well and our business is constantly adapting in response.

As we accelerate the pace of innovation and capitalize on our differentiated strengths. It's critical that we have the right people to help us deliver on our mission.

I am pleased to welcome our new Chief Financial Officer, how Curry, who we announced today and our new Chief growth Officer, Rebecca leaders, who we announced a few weeks ago.

How was most recently the CFO of <unk>, a leading non prime focused lender in Canada with relevant experience at point of sale financing as well as a lease to own retail platform.

Prior to joining <unk>, how is the CFO for Walmart, Canada Bank, and Jpmorgan Chase, Canada Bank.

And Rebecca our new Chief growth Officer was previously the Chief Digital officer for Signet Jewelers, where he transformed the business into a digital omnichannel retailer across several brands.

Before her role at Cigna, Rebecca help held several growth leadership positions at Citibank, including Chief customer experience officer for the North America Consumer group.

I'm thrilled to welcome them, both to abound and our whole team looks forward to working with them to drive our business forward.

Moving onto the quarter.

<unk> delivered another quarter of strong results with revenue up 9% year over year to $1 6 billion and adjusted EBITDA up five 7% year over year to $123 6 million.

Our rent a center, we're seeing encouraging sequential improvement in same store sales, while maintaining robust 16, 2% adjusted EBITDA margins through operational efficiencies and digital enhancements.

We're now expecting same store sales to approach flat to positive comps in the fourth quarter based on these promising trends.

Ah Bridget we maintained impressive momentum with revenue growth of 40% and subscriber growth of 27% year over year, while successfully expanding the product suite.

And that of FEMA. Despite recent further tightening of our underwriting in targeted areas. We delivered the eighth consecutive quarter of GMB growth, which was 11% in the third quarter, whilst our passing a milestone achievement of working with more than 100000 merchant locations across its history.

Let's move to slide four to discuss our market and our consumers.

As we noted in the past our customers are accustomed to economic uncertainty and they are attuned to key signals in the macro backdrop that it will eventually translate into their spending priorities.

These dynamics impact demand from our core customers, putting topline pressure on our lease businesses as well as affecting payment behavior, both of which influenced the quarterly results.

Before getting into the details of the quarter.

I want to address the lower margin and higher loss performance at our CMO.

While we have maintained a conservative risk posture companywide in response to a choppy macro backdrop reset.

<unk> monthly vintage yields at our CMO have been under pressure, resulting in slightly higher losses and lower overall margins.

As a result of sema moved to an incrementally more conservative risk stands across the third quarter.

While these vintages will impact losses in the fourth quarter and the underwriting changes will impact the fourth quarter GMB growth. It is important to note that we believe are tailored responses are already proving to be effective and positively impacting outcomes in the August and September vintages based on early performance indicators.

Unless the macro environment sees meaningful changes, we do not expect further mitigation will be warranted to achieve a seamless targeted growth and margin profile in 2026.

Moving to slide five let's review the key themes for each segment for the third quarter.

As mentioned <unk> delivered its eighth consecutive quarter of GMB growth up 11% year over year and is on track to deliver high single digits to low double digit <unk> growth for the year.

Revenue growth was 10, 4% and the EBITDA margin was 12% a decline from the year ago period related to the 50 basis point uptick in this quarter is lease charge off rate and lower gross margins.

Gross margins and losses were impacted by softness in recent vintages that I had already mentioned despite.

<unk> lowering approval rates throughout the year as sema booked a cohort of leases in the second quarter with elevated early defaults, mainly to new customers in our e-commerce channels at select retailers.

In response to Sema implemented a targeted tightening strategy through the second and third quarters and added additional identity validation tool starting in July to drive performance improvements.

Those efforts have been effective with the August vintage and outperforming within our acceptable yield and loss ratio ranges.

We are confident in our CMO has successfully optimizing decisioning for the evolving macro backdrop and observed trends through October have reinforced that view.

In addition, gross margins were affected by the jewelry category growth as a portion of total GMB.

Especially at the expense of the furniture category, which had been fully rebounded from the pandemic related pull forward.

A seamless focus on the jewelry vertical has been intentional as it.

It has enabled both GMB growth and diversification from the furniture category.

But relative to furniture jewellery receive a higher proportion of customers electing the first early purchase option, which is a lower margin outcome for sema.

Even so the category is profitable and assume a value of the acquisition of new customers through this channel at Sema and subsequently introduce those customers to the direct to consumer marketplace for future leases and jewelry or other product categories.

Importantly, neither of the shift in our seamless portfolio performance in the second quarter vintages, nor the gross margin impact from jewelry as expansion was related to loosening underwriting standards and.

In fact that <unk> had received 14% more lease applications year to date relative to the prior year period, while reducing corresponding approval rate by approximately 200 basis points.

As a CMO recognize the early performance behavior, we repositioned, our underwriting strategy and lowered approval rates each month to maintain a long term lease charge off rate inside the upper boundary of our target range.

Moving onto Bridget.

Richard continues to move fast while building for scale.

This quarter's results featured year over year revenue growth of 40% and active subscriber growth of nearly 27%.

Bridget also tested new products to further meet the needs of our customers such as line of credit.

In parallel <unk> has experimented with new marketing strategy to drive even more efficiency in marketing spend all while maintaining a net advanced loss rate in the 3% range.

Just as important rigid contributed to outbound bottomline by generating $9 3 million of adjusted EBITDA at a margin of more than 16%, while achieving impressive top line growth.

Same store sales for the quarter improved 40 basis points sequentially from a negative 4% to three 6% below last year, while delivering an EBITDA margin over 16% and a lease charge off rate that was 20 basis points improved from the third quarter of 2024.

Trade down opportunities to spur topline growth.

Let's cover the consolidated financial results for Q3 on slide six.

Third quarter revenue of $1 6 billion with a 9% increase from the year ago period, mainly powered by growth at a FEMA plus the addition of bridgette.

non-GAAP diluted EPS was $1, which is five 3% higher than the year ago quarter.

The top line adjusted EBITDA and non-GAAP diluted EPS results were each within or above the target range as provided on last quarter's earnings call.

Ah bound generated more than $50 million of free cash flow in the third quarter, resulting in a year to date free cash flow total of $167 million.

<unk> non-GAAP tax rate this quarter was 24, 5%.

That was lower than our recent run rate and a 26% area due to a discrete one time item related to provision to return adjustments.

Essentially an estimate from January was refined in September and flow through the tax rate in the third quarter.

On slide seven let's discuss our progress on the strategic priorities for 2025 that we outlined earlier this year.

Our <unk> initiatives this quarter focus on its merchant portfolio and the customer experience.

In Q3, we recognized a major milestone on that front as the sema activated its 100000 merchant locations.

While continuing to enroll new retailers through both integrated and light touch options assume is also working to energize existing accounts that we believe have the potential to generate a higher volume of profitable leases.

By reinforcing our relationships and optimizing our value proposition as sema has re engage hundreds of merchants so far with more to come.

For our customers as <unk> rolled out upgrades to the account management tools enable more self service options, while also adding our refer a friend program.

On prior calls this year I've described how our AI powered lease ability engine unlocks the ability for consumers to shop for durable goods in store and online.

And now as <unk> has added the in store attached to lease capability for our virtual these cards.

This means a customer can use the <unk> app to shop in any store for any approved durable good within their approved limit and checkout by tapping the virtual lease cards there.

No retailer setup or involvement in the consumer can shop with confidence.

While traditional retailer integrations will remain an important acquisition channel for our Sema, We're excited about serving our returning customers in a way that maximizes their privacy convenience and confidence.

Across the third quarter Richard's momentum grew as the team accelerated testing of innovative new financial solutions, and Trialed, new customer acquisition channels.

For example bridge its new line of credit product, which is in beta testing offering consumers access to credit of up to $500 to provide liquidity for recent or upcoming purchases.

The amount bridges the gap between smaller ticket be NPL offerings, and the larger ticket lease to own solutions like those offered by our Sema and rent a center.

In light of these new products Bridget is evolving its marketing strategy toward a more holistic mix diversifying both the channels, we invest in and to creative content we produce.

Our always on creative pipeline has become a key differentiator that enables faster iteration richer insights and more scalable growth.

Virgin is expanding marketing channels beyond digital and social media platforms, including highlighting its capability in real world locations, where the use cases are immediate and relevant.

This is incremental to the in store marketing collaboration between bridging and rent a center.

Each one scales can reach its nearly seven 700 stores plus a seamless hundreds of SaaS locations and turn thousands of outbound customer facing co workers into Bridget brand ambassadors.

During the quarter, we upgraded the supporting infrastructure of the Rad Center Dot com website to elevated scalability and reliability for high volume events like Black Friday, and cyber Monday, while enhancing the mobile friendly interface.

We put it through an early test with a major promotion in September which had more volume than last year's Black Friday and it performed flawlessly.

And for the customers. We are an online transaction isn't approved the site now and vice into to their nearest store to complete the application process, which boosted rent a center's topline in the period.

We also launched a our FERC brand campaign and revamped our loyalty reward program, which should drive deliveries entering the holiday season.

The rent a center team has executed extremely well in a tough environment same store sales have improved sequentially and our guide is to work towards being flat to positive in the fourth quarter.

Co workers are fully engaged and excited for the holiday push as the stores are prime with great products.

Relative to historical levels, our stores have a higher percentage of new inventory, which has been proven to increase conversion rates and deliveries.

In addition to our great value proposition, having the right inventory at the right store offers to the right customer positions us well for the fourth quarter and heading into 2026.

All of these are separate initiatives across each of our largest segments, but they share a common set of guiding principles.

Which is to introduce our brands to new consumers optimize our product suite elevate the shopping experience and deliver value to our customers and retailers in each interaction they have with us.

Let's now turn into the segment results and then discuss our outlook for the balance of 2025, after which I'll take some questions.

A seamless DMV grew by $48 million in the third quarter compared to the year ago period, which is 11% GMB growth for the third quarter of 2024.

To deliver that growth as Hema continued to add new merchants of all sizes and across product categories and this quarter received nearly 13% more lease applications in the year ago period.

From an operational standpoint furniture continues to represent our largest product category at approximately 40% of <unk> in the quarter.

That category is still working through the demand pull forward from the pandemic era and more recently with new tariffs. So the industry expectations for a more normalized level of demand are looking into the back half of 2026 at the earliest.

Even so we can grow <unk> in that category by adding new merchants and by becoming a bigger share of our existing merchant business.

And I've seen the growth its network of retailer relationships and continues to maintain a broad and diverse lineup of merchants with a top 10, representing less than one third of the quarter GMB.

Several of those top retailers, if you're only on the CMO marketplace, where our returning customers can start their next leasing journey.

<unk> from the marketplace was up 150% year over year in the third quarter and over 10% sequentially.

Our CMO revenues grew more than 10% year over year, which was the seventh consecutive quarter of double digit growth <unk>.

Adjusted EBITDA was down 40 basis points against the third quarter of 2024, and adjusted EBITDA margins were 12% decline from 13, 3% in the year ago period, driven by the gross margin impact from the expansion of the jewelry segment combined with the increase in lease charge off rate.

The <unk> rate of nine 7% compared to nine 2% in the third quarter of 2024 and finished 20 basis points above our high end of our target range of nine 5%.

As I noted earlier, we believe our swift and tactical actions across the quarter will maintain the loss rate within our targeted range in the medium term.

Let's move to slide nine and review bridges results for the third quarter.

Bridget finished Q3 with more than $1 4 million paid subscribers, which was a 27% increase from the year ago period, and a nine 4% increase sequentially.

<unk> our average revenue per user was $13 74 on a monthly basis and 11, 4% increase from the third quarter of 2024, and a two 2% lift sequentially.

Or blues continued expansion represents the strength of marketplace performance higher expedited transfer revenue and a mix shift to the premium subscription tier.

Bridgette originated approximately $390 million in cash advances this quarter, that's up 19% year over year, and nearly 10% sequentially, reflecting the value that our customers are discovering with not only the product offerings, but also the transparent subscription based pricing model.

For the third quarter bridges cash advance light loss rate was three 3%, which was up 30 basis points from the year ago period, due primarily to Bridget testing into new marketing channels.

And new custom segments, who are overall profitable.

The sequential increase was in line with the seasonal trends and reflected a similar increase in 2024 from the second quarter to the third quarter as.

As we test out new products and gain traction with more consumers the loss rate will fluctuate seasonally and should remain in the low single digit range.

Bridget recorded $57 7 million of revenue for the third quarter, which represents an increase of 40% from the year ago quarter.

Subscriptions were nearly 70% of bridges third quarter revenue with expedited transfer fees and marketplace income representing the balance.

Richard realized adjusted EBITDA of $9 3 million for the third quarter, representing an adjusted EBITDA margin of 16, 1%, which wasn't expected decrease from last quarter's results as bridget's marketing and customer acquisition spend ramped up across the quarter.

I am pleased to share that after adjusting for the January 31 closing date, Bridget is tracking to achieve or exceed the midpoint of the ranges we provided.

On Slide 10, we will review rent a center's performance.

This outcome was consistent with expectations, we highlighted on our last call same.