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Introduction & Market Context
Upbound Group Inc (NASDAQ:UPBD) released its second quarter 2025 earnings presentation on July 31, showing revenue growth of 7.5% year-over-year despite facing headwinds in its traditional Rent-A-Center business. The company, which focuses on providing financial solutions to underserved consumers, maintained its full-year guidance, suggesting confidence in its second-half performance.
The presentation comes after a strong first quarter where the company exceeded analyst expectations, though recent trading shows the stock has retreated from those gains. According to the latest data, Upbound shares closed at $24.36, down 1.62% in the most recent session, and remain well below their 52-week high of $38.43.
Upbound’s mission centers on "Elevating Financial Opportunity (SO:FTCE11B) for All" through its three core business segments: Acima (virtual lease-to-own), Brigit (subscription FinTech), and Rent-A-Center (traditional lease-to-own stores).
As shown in the following mission statement from the company’s presentation:
Quarterly Performance Highlights
Upbound reported consolidated revenue of $1.2 billion for Q2 2025, representing a 7.5% increase year-over-year. However, net income declined to $15.5 million, down $18.4 million from the same period last year. Non-GAAP diluted earnings per share came in at $1.12, up 7.7% year-over-year, while adjusted EBITDA rose 7.0% to $133.2 million.
The company’s year-to-date net cash provided by operating activities showed significant improvement at $145.6 million, an increase of $85.1 million compared to the prior year period.
The following slide summarizes the key financial metrics for the quarter:
Upbound’s business model is built around three complementary segments serving approximately 2.8 million active customers. The company generated $4.5 billion in revenue over the last twelve months, with $499 million in adjusted EBITDA and $131 million in free cash flow.
This overview of the company’s structure and scale is illustrated in the following slide:
Segment Analysis
Performance varied significantly across Upbound’s three main business segments, with the newer digital businesses outperforming the traditional retail operation.
Acima, the company’s virtual lease-to-own platform, continued its strong performance with gross merchandise volume (GMV) growth of 16.0% year-over-year. The segment also reported improvements in both net earnings margin and adjusted EBITDA margin, up 50 and 40 basis points respectively. Application growth approached 20% compared to the prior year.
Brigit, which was acquired in Q1 2025, showed robust growth with revenue increasing nearly 40% year-over-year. The financial wellness platform grew its paying subscriber base by 24.1% and increased cash advance volume by 21.1% compared to Q2 2024.
In contrast, the traditional Rent-A-Center business faced challenges with same-store sales declining 4.0% year-over-year, though gross margin improved by 80 basis points. The lease charge-off rate increased slightly by 10 basis points sequentially.
The following slide provides a concise overview of each segment’s performance:
Looking at Acima’s performance in more detail, the segment has now delivered seven consecutive quarters of GMV growth. The lease charge-off rate increased slightly to 9.3% in Q2 2025 from 8.9% in Q1 2025, but remains in line with historical levels. Furniture represents the largest product category at 39.8% of rental revenue, followed by wheel & tire at 23.1%.
The detailed performance metrics for Acima are shown in the following charts:
Brigit, the newest addition to Upbound’s portfolio, continues to show strong momentum. The subscription-based financial wellness platform derives 70% of its revenue from subscriptions, with expedited transfers (21%) and marketplace offerings (9%) providing additional revenue streams. Paying users have grown consistently, reaching 1,320,000 in Q2 2025, up from 788,000 in Q2 2023.
The following slide illustrates Brigit’s growth trajectory:
Financial Position & Outlook
Upbound ended the quarter with $276.3 million in liquidity and a net debt of $1.5 billion, resulting in a net leverage ratio of 3.0x. The company’s target net leverage ratio is 2.0x, indicating debt reduction remains a priority. Capital expenditures for the quarter were $18.2 million, while dividends paid totaled $22.1 million.
For the full year 2025, Upbound maintained its revenue guidance of $4.60-$4.75 billion and free cash flow projection of $150-$200 million. The company slightly narrowed its adjusted EBITDA guidance to $515-$535 million (from $510-$540 million previously) and raised the low end of its non-GAAP diluted EPS guidance to $4.05-$4.40 (from $4.00-$4.40).
For Q3 2025, the company expects revenues of $1.05-$1.15 billion, adjusted EBITDA of $120-$130 million, and non-GAAP diluted EPS of $0.95-$1.05.
The following slide details the company’s guidance:
Strategic Initiatives
Looking ahead, Upbound outlined strategic priorities for each of its business segments for the remainder of 2025.
For Acima, the focus is on driving repeat business through customer-centric approaches, expanding merchant relationships through digital advancements, and improving margins. Brigit’s strategy centers on maintaining growth momentum, developing new products, and fostering collaboration across the Upbound ecosystem. The Rent-A-Center segment is prioritizing digital evolution, capital and cost efficiency, and enhanced underwriting and risk management.
These strategic priorities are illustrated in the following slide:
While Upbound faces challenges, particularly in its traditional Rent-A-Center business and with a leverage ratio above target levels, the company’s maintained guidance suggests management confidence in achieving its full-year objectives. The strong performance of Acima and Brigit indicates that the company’s digital transformation and diversification strategy is gaining traction, potentially offsetting headwinds in the traditional retail segment.
As the company continues to execute on its mission of "elevating financial opportunity for all," investors will be watching closely to see if Upbound can deliver on its second-half expectations and make progress toward its target leverage ratio of 2.0x.
Full presentation:
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