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PROG Holdings Inc (NYSE:PRG) reported second-quarter 2025 results on July 23, showing resilience in the face of challenges from a major retail partner bankruptcy. The company’s stock jumped 11.85% in premarket trading to $32.00, reflecting positive investor reaction to the earnings beat and raised guidance.
Executive Summary
PROG Holdings delivered consolidated revenues of $604.7 million in Q2 2025, representing a 2.1% year-over-year increase. The company reported net earnings of $38.5 million, up 13.9% from the prior year, while non-GAAP diluted earnings per share reached $1.02, a 10.9% improvement over Q2 2024.
"Our results demonstrate the resilience of the Leasing business, the strong execution in Progressive Leasing, the outstanding performance of Four Technologies, and the advancement of technology initiatives within Progressive Leasing," said Steve Michaels, President and CEO of PROG Holdings, according to the presentation.
As shown in the following chart of quarterly headline results:
Quarterly Performance Highlights
The company’s consolidated revenue growth of 2.1% was primarily driven by its BNPL business, Four Technologies, which saw GMV growth of 166.5% and achieved its second consecutive quarter of positive pre-tax income. This growth helped offset challenges in the Progressive Leasing segment.
PROG Holdings’ adjusted EBITDA reached $73.5 million, a 1.7% increase from Q2 2024, while maintaining a consistent adjusted EBITDA margin of 12.2% of consolidated revenues. The company’s non-GAAP EPS growth of 10.9% outpaced revenue growth, indicating improved operational efficiency.
The following chart illustrates PROG Holdings’ consolidated performance trends over the past five quarters:
A detailed comparison of Q2 2025 results versus the prior year shows significant improvement in profitability metrics despite modest revenue growth:
Segment Analysis
Progressive Leasing, the company’s largest segment, faced headwinds in Q2 2025. GMV (Gross Merchandise Value) declined 8.9% year-over-year to $413.9 million, primarily due to the bankruptcy of a large national retail partner (Big Lots (NYSE:BIG)) and tighter decisioning criteria. Despite these challenges, segment revenue remained relatively stable at $569.7 million, just 0.1% below the prior year.
The segment’s write-offs as a percentage of revenue improved to 7.5%, down 20 basis points from Q2 2024, demonstrating the company’s focus on portfolio health. However, adjusted EBITDA for Progressive Leasing decreased 5.6% to $69.7 million, with margins contracting 70 basis points to 12.2%.
The following chart shows Progressive Leasing’s performance metrics over the past five quarters:
A detailed breakdown of Progressive Leasing’s Q2 2025 performance compared to Q2 2024 reveals the impact of the challenging retail environment:
Big Lots Impact Analysis
The bankruptcy of Big Lots, which was a top 5 retail partner for Progressive Leasing, had a significant impact on the company’s performance. The presentation included an illustrative breakdown of the financial impact, showing an estimated $43 million reduction in GMV for Q2 2025, with additional effects expected throughout the year.
The following table details the estimated impact of the Big Lots bankruptcy on Progressive Leasing’s 2025 results:
Despite this setback, PROG Holdings demonstrated resilience by growing other parts of its business and maintaining overall profitability. The company’s diversification strategy, particularly the growth of Four Technologies, helped mitigate the impact of losing a major retail partner.
Financial Position and Capital Allocation
PROG Holdings maintained a strong financial position, generating $279.8 million in operating cash flow during the first six months of 2025. The company continued its share repurchase program, buying back 0.9 million shares for $25.7 million during Q2 2025.
As of June 30, 2025, the company held $222.0 million in cash and cash equivalents against $600 million in gross debt, resulting in a net leverage ratio of 1.38x (based on trailing 12-month adjusted EBITDA).
The following slide details the company’s cash flow and debt position:
Forward Guidance
In a sign of confidence, PROG Holdings raised its full-year 2025 outlook, increasing the low end of its revenue guidance and raising both earnings and adjusted EBITDA projections. The company now expects total revenues between $2.45 billion and $2.5 billion, up from the previous range of $2.425 billion to $2.5 billion.
Net earnings guidance was revised to $120-125 million (previously $109-125 million), while diluted EPS is now projected at $2.91-3.06, up from $2.62-3.01 previously. Non-GAAP diluted EPS is expected to be $3.20-3.35, compared to the previous range of $2.90-3.30.
The revised outlook assumes a continued difficult environment, no major changes in decisioning, and an effective tax rate of approximately 27%.
The following table presents the company’s updated full-year 2025 outlook:
For Q3 2025, PROG Holdings expects total revenues between $580 million and $595 million, with net earnings of $26-28 million and adjusted EBITDA of $57-62 million. Diluted EPS is projected at $0.63-0.68, with non-GAAP diluted EPS of $0.70-0.75.
The Q3 2025 outlook is detailed in the following table:
Strategic Initiatives
According to CEO Steve Michaels, the company is focusing on several strategic initiatives, including preserving portfolio health, expanding balance of share with key retail partners, and creating a seamless, personalized customer journey. Management expects these efforts to drive sustainable and profitable growth with continued execution.
The growth of Four Technologies represents a significant diversification strategy, providing an alternative revenue stream that complements the traditional leasing business. This segment achieved its second consecutive quarter of positive pre-tax income, suggesting that the company’s investment in this area is beginning to pay off.
The presentation also highlighted the advancement of technology initiatives within Progressive Leasing, which should enhance operational efficiency and customer experience going forward.
PROG Holdings’ ability to raise guidance despite the significant impact of the Big Lots bankruptcy demonstrates management’s confidence in the underlying strength of the business and its ability to navigate challenges in the retail environment.
Full presentation:
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