
	(Unaudited)
	March 31, 2025	December 31, 2024
	(In Thousands, Except Share Data)
ASSETS:
Cash and Cash Equivalents	$	$
Accounts Receivable (net of allowances of $ in 2025 and $ in 2024)
Lease Merchandise (net of accumulated depreciation and allowances of $ in 2025 and $ in 2024)
Loans Receivable (net of allowances and unamortized fees of $ in 2025 and $ in 2024)
Property and Equipment, Net
Operating Lease Right-of-Use Assets
Goodwill
Other Intangibles, Net
Income Tax Receivable
Deferred Income Tax Assets
Prepaid Expenses and Other Assets
Total Assets	$	$
LIABILITIES & SHAREHOLDERS’ EQUITY:
Accounts Payable and Accrued Expenses	$	$
Deferred Income Tax Liabilities
Customer Deposits and Advance Payments
Operating Lease Liabilities
Debt, Net
Total Liabilities
Commitments and Contingencies (Note 4)
SHAREHOLDERS' EQUITY:
Common Stock, Par Value $ Per Share: Authorized: Shares at March 31, 2025 and December 31, 2024; Shares Issued: at March 31, 2025 and December 31, 2024
Additional Paid-in Capital
Retained Earnings

Less: Treasury Shares at Cost
Common Stock: Shares at March 31, 2025 and at December 31, 2024	()	()
Total Shareholders’ Equity
Total Liabilities & Shareholders’ Equity	$	$

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

PROG HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)


	2025	2024
	(In Thousands, Except Per Share Data)
REVENUES:
Lease Revenues and Fees	$	$
Interest and Fees on Loans Receivable

COSTS AND EXPENSES:
Depreciation of Lease Merchandise
Provision for Lease Merchandise Write-offs
Operating Expenses

OPERATING PROFIT
Interest Expense, Net	()	()
EARNINGS BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE


NET EARNINGS	$	$
EARNINGS PER SHARE
Basic	$	$
Diluted	$	$
CASH DIVIDENDS DECLARED PER SHARE:
Common Stock	$	$
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
Diluted

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

PROG HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2025	2024
	(In Thousands)
OPERATING ACTIVITIES:
Net Earnings	$	$
Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
Depreciation of Lease Merchandise
Other Depreciation and Amortization
Provisions for Accounts Receivable and Loan Losses
Stock-Based Compensation
Deferred Income Taxes	()	()
Impairment of Assets

Non-Cash Lease Expense	()	()
Other Changes, Net	()
Changes in Operating Assets and Liabilities:
Additions to Lease Merchandise	()	()
Book Value of Lease Merchandise Sold or Disposed
Accounts Receivable	()	()
Prepaid Expenses and Other Assets
Income Tax Receivable and Payable

Accounts Payable and Accrued Expenses	()	()
Customer Deposits and Advance Payments	()	()
Cash Provided by Operating Activities
INVESTING ACTIVITIES:
Investments in Loans Receivable	()	()
Proceeds from Loans Receivable
Purchases of Property and Equipment	()	()
Proceeds from Sale of Property and Equipment


Cash Used in Investing Activities	()	()
FINANCING ACTIVITIES:
Repayments on Revolving Facility	()


Dividends Paid	()	()
Acquisition of Treasury Stock	()	()

Issuance of Stock Under Stock Option and Employee Purchase Plans
Cash Paid for Shares Withheld for Employee Taxes	()	()
Debt Issuance Costs	()
Cash Used in Financing Activities	()	()
Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period	$	$
Net Cash Paid (Received) During the Period:
Interest	$	$
Income Taxes	$	$	()

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1.

reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products.

Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and e-commerce website partners in the United States and Puerto Rico (collectively, "POS partners"). It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers.

Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs, with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers.

PROG Holdings’ ecosystem of financial technology offerings also includes Four Technologies, Inc. ("Four"), a Buy Now, Pay Later ("BNPL") company that allows shoppers to pay for merchandise through interest-free installments. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not a reportable segment for the three month period ended March 31, 2025 as its financial results are not significant to the Company's condensed consolidated financial results.

Accounting Policies and Estimates

See Note 1 to the consolidated financial statements in the 2024 Annual Report for an expanded discussion of accounting policies and estimates.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Dilutive Effect of Share-Based Awards

Weighted Average Diluted Shares Outstanding

Approximately and weighted-average share-based awards were excluded from the computation of diluted earnings per share during the three months ended March 31, 2025 and 2024, respectively, as the awards would have been anti-dilutive for the periods presented.

months. Progressive Leasing does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through early buyout options or through payment of all required lease payments. The agreements are cancellable at any time by either party without penalty.

All of Progressive Leasing's customer agreements are considered operating leases. The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under the lease ownership agreements. Initial lease payments made by the customer upon lease execution are recognized as deferred revenue and are amortized as lease revenue over the estimated lease term on a straight-line basis. Initial lease payments and other payments collected in advance of being due or earned are recognized as deferred revenue within customer deposits and advance payments in the accompanying condensed consolidated balance sheets. All other customer lease billings are earned prior to the lease payment due date and are recorded net of related sales taxes as earned. Payment due date terms include weekly, bi-weekly, semi-monthly and monthly frequencies. Revenue recorded prior to the payment due date results in unbilled receivables recognized in accounts receivable, net of allowances, in the accompanying condensed consolidated balance sheets. Lease revenues are recorded net of a provision for uncollectible renewal payments.

Initial direct costs related to lease purchase agreements are capitalized as incurred and amortized as operating expense over the estimated lease term. The capitalized costs have been classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.

period, which Vive may renew if the cardholder remains in good standing.

Vive acquires the loan receivable from its third-party bank partners at a discount from the face value of the loan. The discount is comprised of a merchant fee discount and a promotional fee discount, if applicable.

The merchant fee discount represents a pre-negotiated, nonrefundable discount that generally ranges from % to % of the loan face value. The discount is designed to cover the risk of loss related to the portfolio of cardholder charges and Vive's direct origination costs. The merchant fee discount and origination costs are presented net in the condensed consolidated balance sheets in loans receivable. Cardholders generally have an initial period that the card is active. The merchant fee

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

period. If the loan receivable is paid off or charged off during the period, the remaining net merchant fee discount is recognized as interest and fees on loans receivable at that time.

The discount from the face value of the loan on the acquisition of the loan receivable from the merchant through the third-party bank partners may also include a promotional fee discount, which generally ranges from % to %. The promotional fee discount is intended to compensate the holder of the loan receivable (i.e., Vive) for deferred or reduced interest rates that are offered to the cardholder for a specified period on the outstanding loan balance (generally for six, or months). The promotional fee discount is amortized as interest and fees on loans receivable in the condensed consolidated statements of earnings on a straight-line basis over the promotional interest period (i.e., over six, or months, depending on the promotion). If the loan receivable is paid off or charged off prior to the expiration of the promotional period, the remaining promotional fee discount is recognized as interest and fees on loans receivable at that time. The unamortized promotional fee discount is presented net within loans receivable in the condensed consolidated balance sheets.

The customer is typically required to make monthly minimum payments of at least % of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically % to %, are compounded daily for cards that do not qualify for deferred or reduced interest promotional periods. Interest income, which is recognized based upon the amount of the loans outstanding, is recognized as interest and fees on loans receivable when earned if collectibility is reasonably assured. For credit cards that provide deferred interest, if the balance is not paid off during the promotional period or if the cardholder defaults, interest is billed to the customers at standard rates and the cumulative amount owed is charged to the cardholder account in the month that the promotional period expires. The Company recognizes interest revenue during the promotional period based on its historical experience related to cardholders that fail to pay off balances during the promotional period if collectibility is reasonably assured.

Annual fees are charged to cardholders at the commencement of the loan and on each subsequent anniversary date. Annual fees are deferred and recognized into revenue on a straight-line basis over a one-year period. Under the provisions of the credit card agreements, Vive also may assess fees for missed or late payments, which are recognized as revenue in the billing period in which they are assessed if collectibility is reasonably assured. Annual fees and other fees are recognized as interest and fees on loans receivable in the condensed consolidated statements of earnings.

million and $ million, net of allowances, as of March 31, 2025 and December 31, 2024, respectively.

The Company maintains an accounts receivable allowance, which primarily relates to its Progressive Leasing operations. The Company’s policy is to record an allowance for uncollectible renewal payments based on historical collection experience. Other qualitative factors, such as current and forecasted business trends, are considered in estimating the allowance. Given the significant uncertainty regarding the impacts of inflation, elevated interest rates, unemployment rates, and/or tariffs on our business, a high level of estimation was involved in determining the allowance. Therefore, actual future accounts receivable write-offs may differ materially from the allowance. The provision for uncollectible renewal payments is recorded as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. For customer lease agreements that are past due, the Company's policy is to write off lease receivables after 120 days.

$ Net Book Value of Accounts Written Off()()Recoveries Accounts Receivable Provision Ending Balance$ $

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

salvage value generally over months. Depreciation is accelerated upon early buyout. All of Progressive Leasing's merchandise, net of accumulated depreciation and allowances, represents on-lease merchandise.

The Company records a provision for write-offs using the allowance method. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based on historical write-off experience. Other qualitative factors, such as current and forecasted customer payment trends, are considered in estimating the allowance. Given the significant uncertainty regarding the impacts of inflation, elevated interest rates, unemployment rates, and/or tariffs on our business, a high level of estimation was involved in determining the allowance as of March 31, 2025. Actual lease merchandise write-offs may differ materially from the allowance as of March 31, 2025. For customer lease agreements that are past due, the Company's policy is to write off lease merchandise after 120 days.

$ Net Book Value of Merchandise Written off()()Recoveries Provision for Write-offs Ending Balance$ $

Vendor Incentives and Rebates Provided to POS Partners

Progressive Leasing has agreements with some of its POS partners that require additional consideration to be paid to the POS partner, including payments for exclusivity, rebates based on lease volume originations generated through the POS partners, and payments to the POS partners for marketing or other development initiatives to promote additional lease originations through these POS partners. Payments made to POS partners as consideration for them providing exclusivity to Progressive Leasing for lease-to-own transactions with customers of the POS partner are expensed on a straight-line basis over the exclusivity term. Rebates are accrued over the period the POS partner is earning the rebate, which is typically based on quarterly or annual lease origination volumes. Payments made to POS partners for marketing or development initiatives are expensed on a straight-line basis over the period the POS partner is earning the funds or the specified marketing term. Progressive Leasing expensed $ million and $ million for such additional consideration to POS partners during the three months ended March 31, 2025 and 2024, respectively. Expenses related to additional consideration provided to POS partners are classified within operating expenses in the condensed consolidated statements of earnings.

million and $ million of outstanding receivables from customers of Four as of March 31, 2025 and December 31, 2024, respectively.

Economic conditions and loan performance trends are closely monitored to manage and evaluate exposure to credit risk. Trends in delinquency rates are an indicator of credit risk within the loans receivable portfolio, including the migration of loans between delinquency categories over time. Charge-off rates represent another indicator of the potential for future credit losses. The risk in the loans receivable portfolio is correlated with broad economic trends, such as current and projected unemployment rates, stock market volatility, and changes in medium and long-term risk-free rates, which are considered in determining the allowance for loan losses and can have a material effect on credit performance.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Prepaid Expenses and Other Assets

$ Prepaid Lease Merchandise Prepaid Software Expenses Unamortized Initial Direct Costs on Lease Agreement Originations Other Assets Prepaid Expenses and Other Assets$ $

The Company incurs costs to implement cloud computing arrangements ("CCA") that are hosted by third-party vendors. Implementation costs associated with CCA are capitalized when incurred during the application development phase and are recorded within prepaid software expenses above. Amortization is calculated on a straight-line basis over the contractual term of the arrangement and is included within computer software expense as a component of operating expenses in the condensed consolidated statements of earnings.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

$ Accrued Salaries and Benefits Accrued Sales and Personal Property Taxes Income Taxes Payable

Uncertain Tax Positions

Accrued Vendor Rebates Other Accrued Expenses and Liabilities Accounts Payable and Accrued Expenses$ $

Debt

On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $ million senior revolving credit facility (the "Revolving Facility"). Under the credit agreement, as amended, all borrowings and commitments will mature or terminate on November 15, 2029. The Company uses the Revolving Facility when necessary to provide for working capital and capital expenditures, to finance future permitted acquisitions, and for other general corporate purposes. The Company incurred a total of $ million of lender and legal fees related to the Revolving Facility and amendments thereto, which were recorded within prepaid expenses and other assets in the condensed consolidated balance sheets and will be deferred and amortized through the maturity date. The Company had $ million of outstanding borrowings under the Revolving Facility as of December 31, 2024, which was subsequently repaid in full in January 2025. The Company had outstanding borrowings and $ million total available credit under the Revolving Facility as of March 31, 2025.

On November 26, 2021, the Company entered into an indenture in connection with an offering of $ million aggregate principal amount of its % senior unsecured notes due 2029 (the "Senior Notes"). The Senior Notes were issued at % of their par value. Interest payments on the Senior Notes are payable semi-annually on May 15 and November 15 of each year, which commenced on May 15, 2022. The Senior Notes will mature on November 15, 2029. The Senior Notes are general unsecured obligations of the Company and are guaranteed by certain of the Company’s existing and future domestic subsidiaries.

The net proceeds from the Senior Notes were used to fund the purchase price, and related fees and expenses, of the Company’s tender offer to purchase $ million of the Company’s common stock in 2022. The remaining proceeds were used for additional share repurchases in 2023.

At March 31, 2025, the Company was in compliance with all covenants related to its outstanding debt. See Note 7 to the consolidated financial statements in the 2024 Annual Report for further information regarding the Company's indebtedness.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

restricted stock units and performance share units to certain employees, which vest over one to periods for certain units or upon the achievement of specified performance conditions for other units. The weighted average fair value of the restricted stock and performance share awards was $, which was based on the fair market value of the Company’s common stock on the dates of grant. The Company also issued performance share units which may be earned after a vesting period by achieving specified levels of total shareholder return ("TSR") of the Company’s common stock relative to the TSR of the S&P 600 Small Cap Index. The fair value of the TSR performance share units was $, which was based on a grant date value using a Monte Carlo simulation model. The Company will recognize the grant date fair value of the restricted stock units and TSR performance share units as stock-based compensation expense over the requisite service period of one to . The Company will recognize the grant date fair value of the performance units as stock-based compensation expense over the estimated vesting period based on the Company's projected assessment of the performance conditions that are probable of being achieved in accordance with ASC 718, Stock-based Compensation.

Shareholders' Equity

)$() $ $ $ $

Cash Dividends, $ per share

— — — — — ()()Stock-Based Compensation— — — — — Reissued Shares — — ()— ()Repurchased Shares()()— — — — ()Net Earnings— — — — —

Balance, March 31, 2025

()$() $ $ $ $

Treasury Stock

Common Stock

Additional
Paid-in Capital

Retained Earnings

Total Shareholders’ Equity

(In Thousands)

Amount

Balance, December 31, 2023

()

Cash Dividends, $ per share

—

()

Stock-Based Compensation

—

Reissued Shares

—

()

—

()

Repurchased Shares

()

—

()

Net Earnings

—

Balance, March 31, 2024

()

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2.

$ $ $ $ $

The Company maintains the PROG Holdings, Inc. Deferred Compensation Plan, which is an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. The liability is recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets. The liability represents benefits accrued for plan participants and is valued at the quoted market prices of the participants’ investment elections, which consist of equity and debt "mirror" funds. As such, the Company has classified the deferred compensation liability as a Level 2 liability.

Financial Assets and Liabilities Not Measured at Fair Value for Which Fair Value is Disclosed

Vive's loans receivable are measured at amortized cost, net of an allowance for loan losses and unamortized fees in the condensed consolidated balance sheets. In estimating fair value for Vive's loans receivable, the Company utilized a discounted cash flow methodology. The Company used various unobservable inputs reflecting its own assumptions, such as contractual future principal and interest cash flows, future loss rates, and discount rates (which consider current interest rates and are adjusted for credit risk, among other factors).

Four's loans receivable, net of an allowance for loan losses and unamortized fees, are included within loans receivable, net in the condensed consolidated balance sheets and approximated fair value based on a discounted cash flow methodology.

On November 26, 2021, the Company entered into an indenture in connection with its offering of $ million aggregate principal amount of its Senior Notes due in 2029. The Senior Notes are carried at amortized cost in the condensed consolidated balance sheets and are measured at fair value for disclosure purposes. The fair value of the Senior Notes was estimated based on quoted market prices in less active markets and has been classified as Level 2 in the fair value hierarchy.

$ $ $ $ $ Loans Receivable, Net$ $ $ $ $ $

NOTE 3.

$ Unamortized Fees()()Loans Receivable, Amortized Cost Allowance for Loan Losses()()

Loans Receivable, Net of Allowances and Unamortized Fees1

$ $

1 Loans Receivable, Net of Allowances and Unamortized Fees attributable to Four was $ million and $ million as of March 31, 2025 and December 31, 2024, respectively.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

% %Between 700 and 600 % %600 or less % %

Four - Proprietary Risk Category:

Category A % %Category B % %Category C % %

The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year:


As of March 31, 2025 (In Thousands)	2025	2024	2023 and Prior	Revolving Loans	Total
Vive - FICO Score Category:
700 or greater	$	$	$	$	$
Between 700 and 600
600 or less

Four - Propriety Risk Category:
Category A
Category B
Category C
No Score Identified
Total Amortized Cost	$	$	$	$	$

Gross Charge-offs by Origination Year for the Three Months Ended March 31, 2025	$	$	$	$	$

% %60-89 Days Past Due % %90 or More Days Past Due % %Past Due Loans Receivable % %Current Loans Receivable % %Balance of Credit Card Loans on Nonaccrual Status$ $

Balance of Loans Receivable Greater than 90 Days Past Due and Still Accruing Interest and Fees

$ $

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

$ Provision for Loan Losses Charge-offs()()Recoveries Ending Balance$ $

NOTE 4.

million for pending legal and regulatory matters for which it believes losses are probable and the amount of the loss can be reasonably estimated. The Company records its best estimate of the loss to legal and regulatory liabilities in accounts payable and accrued expenses in the condensed consolidated balance sheets. The Company estimates the aggregate range of reasonably possible loss in excess of accrued liabilities for such probable loss contingencies is immaterial. Those matters for which a probable loss cannot be reasonably estimated are not included within the estimated ranges.

At March 31, 2025, the Company estimated that the aggregate range of loss for all material pending legal and regulatory proceedings for which a loss is reasonably possible, but less likely than probable (i.e., excluding the contingencies described in the preceding paragraph), is immaterial. Those matters for which a reasonable estimate is not possible are not included within estimated ranges and, therefore, the estimated ranges do not represent the Company's maximum loss exposure. The Company’s estimates for legal and regulatory accruals, aggregate probable loss amounts and reasonably possible loss amounts are all subject to the uncertainties and variables described above.

Regulatory Inquiries

In April 2020, Progressive Leasing entered into a settlement (the "FTC Settlement") with the Federal Trade Commission ("FTC") to resolve allegations by the FTC that certain of Progressive Leasing’s advertising and marketing practices violated the FTC Act. Progressive Leasing did not admit any violations of the FTC Act or any other laws in connection with the FTC Settlement. Under the terms of the FTC Settlement, Progressive Leasing paid $ million to the FTC and agreed to enhance certain of its compliance-related activities, including augmenting disclosures to its customers and expanding its POS partner monitoring programs. Progressive Leasing further agreed to submit compliance reports or produce other requested documents and information to the FTC upon written request by the FTC.

During the third quarter of 2024, Progressive Leasing received a written request from the FTC to evidence Progressive Leasing’s compliance with the FTC Settlement by providing the FTC with information and documents, including those related to customer complaints and advertising and marketing materials. The FTC’s request is not a civil investigative demand. The Company is fully cooperating with the FTC in responding to the FTC’s request for information and documents.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

million settlement, which was paid by the Company during the first quarter of 2024.

During the third quarter of 2023, Progressive Leasing experienced a cybersecurity incident affecting certain data and IT systems of Progressive Leasing. Promptly after detecting the incident, the Company engaged third-party cybersecurity experts and took immediate steps to respond to, remediate and investigate the incident. Law enforcement was also notified. Based on the Company's investigation, the Company determined that the data involved in the incident contained a substantial amount of personally identifiable information, including social security numbers, of Progressive Leasing's customers and other individuals. With the assistance of its cybersecurity experts, the Company located the Progressive Leasing customers and other individuals whose information was impacted and notified them, consistent with state and federal requirements. The Company also took a number of additional measures to demonstrate its continued support and commitment to data privacy and protection.

As a result of the cybersecurity incident, Progressive Leasing has become subject to multiple lawsuits which allege, among other things, the incurrence of various types of damages arising out of the incident. All of these lawsuits have been consolidated into a single action in the United States District Court for the District of Utah (the "District Court"). The plaintiffs filed a consolidated complaint on April 19, 2024. On June 24, 2024, Progressive Leasing filed a motion to dismiss the complaint, which was granted in part and denied in part on January 16, 2025.

Progressive Leasing intends to vigorously defend itself against the lawsuit; however, at this time, the Company is unable to determine or predict the outcome of this lawsuit or reasonably provide an estimate or range of the possible losses, if any. The Company also maintains cybersecurity insurance coverage, subject to a $ million retention, to limit the exposure to losses such as those related to the cybersecurity incident and lawsuits stemming therefrom; however, there can be no assurance that such insurance coverage will be adequate to cover all of the losses, costs and expenses related thereto or that the insurers will agree to cover such losses, costs and expenses.

Other Contingencies

Management regularly assesses the Company’s insurance deductibles, monitors the Company's litigation and regulatory exposure with the Company's attorneys and evaluates its loss experience. The Company also enters into various contracts in the normal course of business that may subject it to risk of financial loss if counterparties fail to perform their contractual obligations.

Off-Balance Sheet Risk

The Company, through its Vive segment, had unconditionally cancellable unfunded lending commitments totaling $ million and $ million as of March 31, 2025 and December 31, 2024, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represent the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5.

million since the inception of the restructuring activities in 2022. These costs were primarily comprised of early contract termination costs related to certain independent sales agreements and a third party service and marketing agreement, employee severance within Progressive Leasing, and operating lease right-of-use ("ROU") asset impairment charges related to the relocation of the Vive corporate headquarters to the Company's corporate office building and a reduction of management and information technology space. The Company will continue to monitor the impacts of changes in macroeconomic conditions on its businesses and may take additional steps to further adjust the Company's cost structure based on unfavorable changes in these conditions, which may result in further restructuring charges in future periods.

The Company did not have any significant restructuring expenses during the three months ended March 31, 2025.

$ $ $

Right-of-Use Asset Impairment1

Property and Equipment Impairment

Early Contract Termination Costs

Other Restructuring Activities Total Restructuring Expenses$ $ $ $

1 To determine the amount of impairment for vacated office space, the fair value of the right-of-use asset is calculated based on the present value of the estimated net cash flows related to the right-of-use asset.

$ $ $ Charges Cash Payments() ()()

Balance at March 31, 2025

$ $ $ $

(In Thousands)

Severance

Early Contract Termination Costs

Other Restructuring Activities

Total

Balance at December 31, 2023

Charges

Cash Payments

()

Balance at March 31, 2024

NOTE 6.

reportable segments: Progressive Leasing and Vive.

Progressive Leasing partners with traditional and e-commerce retailers, primarily in the consumer residential electronics, furniture and appliance, mobile phones and accessories, jewelry, mattresses, and automobile electronics and accessories industries to offer a lease-purchase solution primarily for customers who may not have access to traditional credit-based financing options. It does so by offering leases with monthly, semi-monthly, bi-weekly and weekly payment frequencies.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

interest-free installments. Four is not a reportable segment for the three month periods ended March 31, 2025 and 2024 as its financial results are not significant to the Company's consolidated financial results. The revenues, loss before income taxes, and assets of Four are included within Other, along with the Company's other strategic initiatives.

Factors Used by Management to Identify the Reportable Segments

The Company's reportable segments are based on the operations of the Company that the chief operating decision maker ("CODM") regularly reviews to analyze performance and allocate resources among business units of the Company. The Company's CODM is its President and CEO.

Segment Assets and Segment Profit or Loss

The CODM evaluates operating segment performance and decides how to allocate resources based on segment revenues and earnings (loss) before income tax expense. The Company determines earnings (loss) before income tax expense for all reportable segments in accordance with U.S. GAAP. The CODM uses this information to evaluate the profitability of the Company's reportable segments and make decisions on future business plans.

The Company incurred various corporate overhead expenses for certain executive management, legal, human resources, finance, facilities, audit, risk management, technology, and other overhead functions during the three months ended March 31, 2025 and 2024. Corporate overhead expenses incurred are primarily reflected as expenses of the Progressive Leasing segment and an immaterial amount was allocated to the Vive segment and Other. The allocation of corporate overhead costs to Progressive Leasing, Vive and Other was consistent with how the CODM analyzed performance and allocated resources among the segments of the Company.

$ Vive Other Total Assets$ $

The following is a summary of capital expenditures by segment:


	Three Months Ended March 31,
(In Thousands)	2025	2024
Capital Expenditures:1
Progressive Leasing	$	$
Vive
Other
Total Capital Expenditures	$	$

1Capital expenditures primarily consists of internal-use software, as well as computer hardware and furniture and equipment.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

$ $ $

Interest and Fees on Loans Receivable2

Total Revenues

Significant Segment Expenses:3

Depreciation of Lease Merchandise

Provision for Lease Merchandise Write-offs

Selling, General and Administrative

Provision for Loan Losses

Total

Other Segment Items:

Depreciation and Amortization4

Restructuring Expenses

Interest Expense5

Interest Income5

() ()

Total

Earnings (Loss) Before Income Tax Expense

$ $()$()$

1 Revenue within the scope of ASC 842, "Leases."

2 Revenue within the scope of ASC 310, "Receivables." Also included within Interest and Fees on Loans Receivable for the Other category is $ million of subscription fee and interchange revenue within the scope of ASC 606, "Revenues from Contracts with Customers."

3 The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

4 Excludes depreciation of lease merchandise, which is not included in the CODM's measure of depreciation and amortization.

5 Intersegment interest income and expense of $ million are included within the amounts shown.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

$ $ $

Interest and Fees on Loans Receivable2

Total Revenues

Significant Segment Expenses:3

Depreciation of Lease Merchandise

Provision for Lease Merchandise Write-offs

Selling, General and Administrative

Provision for Loan Losses

Total

Other Segment Items:

Depreciation and Amortization4

Restructuring Expenses

Interest Expense5

Interest Income5

() ()()

Total

Earnings (Loss) Before Income Tax Expense

$ $ $()$

1 Revenue within the scope of ASC 842, "Leases."

3 The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

4 Excludes depreciation of lease merchandise, which is not included in the CODM's measure of depreciation and amortization.

5 Intersegment interest income and expense of $ million are included within the amounts shown.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Information: Except for historical information contained herein, the matters set forth in this Form 10-Q are forward-looking statements. These statements are based on management’s current expectations and plans, which involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "anticipate," "believe," "could," "estimate," "expect," "intend," "plan," "project," "would," "should," and similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the filing date of this Quarterly Report and which involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. These risks and uncertainties include factors that could cause our actual results and financial condition to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Annual Report") and in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the filing date of this Quarterly Report.

The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three months ended March 31, 2025 and 2024, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2024 Annual Report.

Business Overview

PROG Holdings, Inc. ("we," "our," "us," the "Company," or "PROG Holdings") is a financial technology holding company that provides transparent and competitive payment options to consumers. PROG Holdings has two reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products.

Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and e-commerce website partners (collectively, "POS partners"). It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers.

Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers.

Four Technologies, Inc. ("Four") is a Buy Now, Pay Later ("BNPL") company that allows shoppers to pay for merchandise through four interest-free installments. Four’s proprietary platform capabilities and its base of customers and retailers expand PROG Holdings’ ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer financial technology offerings. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not expected to be a reportable segment in 2025 as its financial results are not expected to be significant to the Company's consolidated financial results in 2025. Four's financial results are reported within "Other" for segment reporting purposes.

PROG Holdings also owns Build, a credit building financial management tool. Build is not expected to be a reportable segment in 2025 as its financial results are not expected to be significant to the Company's consolidated financial results in 2025. Build's financial results are reported within "Other" for segment reporting purposes.

Macroeconomic and Business Environment

Progressive Leasing entered the first quarter of 2025 with a larger lease portfolio, as measured by its gross leased asset balance, which resulted in an increase in revenues when compared to the first quarter of 2024. Despite the increase in demand for our lease-to-own offerings during 2024, the Company continues to operate in a challenging macroeconomic environment. For example, one of Progressive Leasing's major POS partners filed for bankruptcy in late 2024, resulting in the permanent closure of many of its stores. The loss of this POS partner resulted in an unfavorable impact on Progressive Leasing's GMV in the first quarter of 2025.

Progressive Leasing customer payment delinquencies were elevated at the end of 2024 and during the first quarter of 2025, which prompted us to tighten our decisioning posture to maintain a healthy lease portfolio. The higher delinquencies resulted in the provision for lease merchandise write-offs, as a percentage of lease revenues, increasing to 7.4% in the first quarter of 2025 compared to 7.0% in the same period in 2024, but still within the Company's targeted annual range of 6% to 8%.

Due to inflationary pressures in recent years, the cost of living remains significantly higher than it was prior to 2020, particularly with respect to housing, food and gas costs. We believe the increased cost of living has had a disproportionate negative effect on the customers we serve and an unfavorable impact on our GMV and financial performance in the first quarter of 2025. We believe the inflationary pressures, the cost of living and elevated interest rates for extended periods, coupled with uncertainty in the overall macroeconomic environment, including recent changes in tariff-related policies, also unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners.

Highlights

The following summarizes significant financial highlights from the three months ended March 31, 2025:

•We reported revenues of $684.1 million, which was a 6.6% increase compared to the $641.9 million we reported for the first quarter of 2024, as a result of a larger lease portfolio entering the first quarter of 2025.

•GMV decreased by $16.6 million for Progressive Leasing and increased by $4.7 million for Vive in the first quarter of 2025, compared to the same period in the prior year. The decrease in GMV for Progressive Leasing was due to the bankruptcy of a major POS partner in late 2024 and tightening of our decisioning posture. We believe the reduction in GMV was also driven by inflationary pressures, elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering when compared to the same period in the prior year. The increase in GMV for Vive was due to the expansion of loan origination programs associated with Vive's national retail merchants. GMV from our Other operations increased by $71.1 million, due to an increase in Four loan originations in the first quarter of 2025 compared to the first quarter of 2024.

•Earnings before income taxes increased to $47.2 million compared to $31.6 million in the same period in 2024. The increase was primarily driven by lower restructuring costs and increased revenues. The increase in earnings before income taxes was partially offset by increases in the provision for lease merchandise write-offs, provision for loan losses, and certain sales, general and administrative expenses.

Key Operating Metrics

Gross Merchandise Volume. We believe GMV is a key performance indicator of our Progressive Leasing and Vive segments, as it provides the total value of new leases and loans written into our portfolio over a specified time period. GMV does not represent revenues earned by the Company, but rather is a leading indicator we use in forecasting revenues the Company may earn in the short-term. Progressive Leasing's GMV is defined as the retail price of merchandise acquired by Progressive Leasing, which it then expects to lease to its customers. GMV for Vive and Other are defined as gross loan originations.

The following table presents our GMV for the Company for the periods presented:


	Three Months Ended March 31,				Change
(In Thousands)	2025		2024		$		%
Progressive Leasing	$	401,962	$	418,512	$	(16,550)	(4.0)	%
Vive	36,272		31,602		4,670		14.8
Other	119,863		48,791		71,072		145.7
Total GMV	$	558,097	$	498,905	$	59,192	11.9	%

Progressive Leasing's GMV decreased compared to the first quarter of 2024 due to the bankruptcy of a major POS partner in late 2024 and tightening of our decisioning posture. We believe the reduction in GMV was also driven by inflationary pressures, an elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering when compared to the same period in the prior year. E-commerce channels generated 16.8% of Progressive Leasing's GMV in the first quarter of 2025 compared to 16.3% in the first quarter of 2024. The increase in Vive's GMV was due to the expansion of loan origination programs associated with Vive's national retail merchants when compared to the same period in the prior year. GMV from Other increased due to an increase in Four loan originations.

Active Customer Count. Our active customer count represents the total number of customers that have an active lease agreement with Progressive Leasing, or an active loan with Vive or our other operations. Active customer counts include customers that may have an active lease or loan agreement with more than one segment. The following table presents our active customer count for each segment and Other:


As of March 31 (In Thousands)	2025	2024
Active Customer Count:
Progressive Leasing	828	819
Vive	88	83
Other	388	99

The number of active customers for Progressive Leasing and Vive was essentially flat compared to the same period in the prior year. The increase in the number of customers for Other was the result of continued growth in Four and our other strategic businesses.

Key Components of Earnings Before Income Tax Expense

In this MD&A section, we review our condensed consolidated results. For the three months ended March 31, 2025 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Revenues. We separate our total revenues into two components: (i) lease revenues and fees and (ii) interest and fees on loans receivable. Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Interest and fees on loans receivable represents merchant fees, finance charges and annual and other fees earned on outstanding loans in our Vive segment and, to a lesser extent, from Four and our other strategic businesses.

Depreciation of Lease Merchandise. Depreciation of lease merchandise reflects the expense associated with depreciating merchandise leased to customers by Progressive Leasing.

Provision for Lease Merchandise Write-offs. The provision for lease merchandise write-offs represents the estimated merchandise losses incurred but not yet identified by management and adjustments for changes in estimates for the allowance for lease merchandise write-offs.

Operating Expenses. Operating expenses include personnel costs, the provision for loan losses, restructuring expenses, sales acquisition expense, computer software expense, stock-based compensation expense, intangible asset amortization, professional services expense, advertising, bank service charges, fixed asset depreciation, occupancy costs, and decisioning expense, among other expenses.

Interest Expense, Net. Interest expense, net consists of interest incurred on the Company's Senior Notes and senior secured revolving credit facility (the "Revolving Facility"). Interest expense is presented net of interest income earned on the Company's deposits in cash and cash equivalents.

Results of Operations – Three months ended March 31, 2025 and 2024


	Three Months Ended March 31,				Change
(In Thousands)	2025		2024		$		%
REVENUES:
Lease Revenues and Fees	$	651,557	$	620,550	$	31,007	5.0	%
Interest and Fees on Loans Receivable	32,531		21,320		11,211		52.6
	684,088		641,870		42,218		6.6
COSTS AND EXPENSES:
Depreciation of Lease Merchandise	460,443		431,571		28,872		6.7
Provision for Lease Merchandise Write-Offs	48,018		43,141		4,877		11.3
Operating Expenses	119,306		127,341		(8,035)		(6.3)
	627,767		602,053		25,714		4.3
OPERATING PROFIT	56,321		39,817		16,504		41.4
Interest Expense, Net	(9,090)		(8,250)		(840)		10.2
EARNINGS BEFORE INCOME TAX EXPENSE	47,231		31,567		15,664		49.6
INCOME TAX EXPENSE	12,513		9,601		2,912		30.3
NET EARNINGS	$	34,718	$	21,966	$	12,752	58.1	%

Revenues

Information about our revenues by source and reportable segment is as follows:


	Three Months Ended March 31, 2025								Three Months Ended March 31, 2024
(In Thousands)	Progressive Leasing		Vive		Other		Total		Progressive Leasing		Vive		Other		Total
Lease Revenues and Fees	$	651,557	$	—	$	—	$	651,557	$	620,550	$	—	$	—	$	620,550
Interest and Fees on Loans Receivable	—		15,660		16,871		32,531		—		16,051		5,269		21,320
Total	$	651,557	$	15,660	$	16,871	$	684,088	$	620,550	$	16,051	$	5,269	$	641,870

The increase in Progressive Leasing revenues was primarily due to a larger lease portfolio entering the period, as measured by its gross leased asset balance, resulting from the 9.1% increase in GMV for the fourth quarter of 2024 as compared to the fourth quarter of 2023. Progressive Leasing revenues also increased due to higher early buyouts in the first quarter of 2025 compared to the same quarter in 2024. Vive revenues declined slightly due to a smaller loan portfolio entering the first quarter of 2025 as compared to the first quarter of 2024. The increase to Other revenue was primarily driven by an increase in Four's GMV as compared to the same period in 2024, due to increased loan originations.

Operating Expenses

Information about certain significant components of operating expenses for the first quarter of 2025 as compared to the first quarter of 2024 is as follows:


	Three Months Ended March 31,				Change
(In Thousands)	2025		2024		$		%
Personnel Costs1	$	45,156	$	44,705	$	451	1.0	%
Stock-Based Compensation	7,902		6,642		1,260		19.0
Occupancy Costs	895		1,367		(472)		(34.5)
Advertising	4,158		3,694		464		12.6
Professional Services	9,640		6,546		3,094		47.3
Sales Acquisition Expense2	8,257		7,905		352		4.5
Computer Software Expense3	7,547		7,287		260		3.6
Bank Service Charges	2,958		2,952		6		0.2
Other Sales, General and Administrative Expense	12,303		9,162		3,141		34.3
Sales, General and Administrative Expense	98,816		90,260		8,556		9.5
Provision for Loan Losses	14,362		11,049		3,313		30.0
Depreciation and Amortization	6,122		8,018		(1,896)		(23.6)
Restructuring Expense	6		18,014		(18,008)		(100.0)
Operating Expenses	$	119,306	$	127,341	$	(8,035)	(6.3)	%

1 Personnel costs excludes stock-based compensation expense, which is reported separately in the operating expense table.

2 Sales acquisition expense includes vendor incentives and rebates to POS partners (excluding retailer marketing and development initiatives), external sales commissions, amortization of initial direct costs and amounts paid to various POS partners to be their exclusive provider of lease-to-own solutions.

3 Computer software expense consists primarily of software subscription fees, licensing fees and non-capitalizable software implementation costs.

Professional services increased $3.1 million compared to the same period in 2024, primarily due to a $3.0 million increase at Progressive Leasing resulting from higher technology-related costs and an increase in legal costs. Professional services also increased $0.1 million at Vive.

Other sales, general and administrative expense increased $3.1 million compared to the same period in 2024, primarily due to a $2.8 million increase within our Other operations, due to higher processing fees from our continued GMV growth at Four and our other strategic operating expenses.

Provision for loan losses increased $3.3 million compared to the same period in 2024. The increase was primarily the result of a $2.6 million increase in the provision for loan losses for our Other operations, due to the continued growth of our Four business and our other strategic operations. The provision for loan losses at Vive also increased $0.7 million resulting from a higher allowance for loan receivable losses primarily driven by uncertainty in the overall macroeconomic environment.

Restructuring expense decreased $18.0 million at Progressive Leasing compared to the same period in 2024. In 2025, there were no new restructuring activities and the expense was not significant. For the same period in 2024, restructuring costs included $7.8 million associated with the early termination of an independent sales agent agreement, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, $4.1 million of employee severance within Progressive Leasing and $0.1 million of other restructuring costs.

Other Costs and Expenses

Depreciation of lease merchandise. Depreciation of lease merchandise increased by 6.7% during the three months ended March 31, 2025 compared to the same period in 2024. The increase was primarily due to growth in the Company's lease portfolio entering the first quarter of 2025. As a percentage of lease revenues and fees, depreciation of lease merchandise increased to 70.7% from 69.5% in the prior year quarter, primarily due to a higher level of early buyouts during the three months ended March 31, 2025 as compared to the same period in 2024.

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs increased $4.9 million compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.4% during the first quarter of 2025 from 7.0% in the same period in 2024. The increase was due to higher write-offs and delinquencies in the first quarter of 2025 compared to the same period in 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of March 31, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Interest expense, net. Information about interest expense and interest income is as follows:


	Three Months Ended March 31,				Change
(In Thousands)	2025		2024		$		%
Interest Expense, Net:
Interest Expense	$	9,964	$	9,676	$	288	3.0	%
Interest Income	(874)		(1,426)		552		(38.7)
Total Interest Expense, Net	$	9,090	$	8,250	$	840	10.2	%

Earnings Before Income Tax Expense

Information about our earnings before income tax expense by reportable segment is as follows:


	Three Months Ended March 31,				Change
(In Thousands)	2025		2024		$		%
EARNINGS BEFORE INCOME TAX EXPENSE:
Progressive Leasing	$	48,625	$	35,453	$	13,172	37.2	%
Vive	(833)		918		(1,751)		nmf
Other	(561)		(4,804)		4,243		(88.3)
Total Earnings Before Income Tax Expense	$	47,231	$	31,567	$	15,664	49.6	%

nmf - Calculation is not meaningful

The loss before income tax expense within Other primarily relates to losses from our other strategic operations. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Income Tax Expense

Income tax expense increased to $12.5 million for the three months ended March 31, 2025 compared to $9.6 million in the prior year comparable period, primarily due to higher earnings before income tax expense. The effective income tax rate was 26.5% for the three months ended March 31, 2025 compared to 30.4% for the same period in 2024. The decrease in the effective income tax rate was primarily the result of discrete income tax expense in 2024 related to uncertain tax position liabilities.

Overview of Financial Position

The major changes in the condensed consolidated balance sheet from December 31, 2024 to March 31, 2025 include:

•Cash and cash equivalents increased $117.6 million to $213.3 million during the three months ended March 31, 2025. For additional information, refer to the "Liquidity and Capital Resources" section below.

•Accounts receivable, net of allowances, decreased $13.6 million primarily due to a 32.7% decrease in Progressive Leasing's GMV for the first quarter of 2025 as compared to the fourth quarter of 2024 and seasonally higher customer payment trends in the first quarter.

•Lease merchandise, net of accumulated depreciation and allowances, decreased $124.8 million due primarily to a 32.7% decrease in Progressive Leasing's GMV for the first quarter of 2025 as compared to the fourth quarter of 2024. Seasonally higher exercises of early buyouts during the first quarter also contributed to the decrease.

•Accounts payable and accrued expenses increased $17.6 million primarily due to a $20.9 million increase to income taxes payable as compared to December 31, 2024.

•Debt, net decreased $49.7 million due to repayment in January 2025 of the $50.0 million balance that was outstanding on the Revolving Facility as of December 31, 2024.

Liquidity and Capital Resources

General

We expect that our primary capital requirements will consist of:

•Reinvesting in our business, including buying merchandise for the operations of Progressive Leasing. Because we believe Progressive Leasing will continue to grow over the long-term, we expect that the need for additional lease merchandise will remain a major capital requirement;

•Making merger and acquisition investment(s) to further broaden our product offerings; and

•Returning excess cash to shareholders through periodically repurchasing stock and/or paying dividends.

Other capital requirements include (i) expenditures related to software development; (ii) expenditures related to our corporate operating activities; (iii) personnel expenditures; (iv) income tax payments; (v) funding of loans receivable for Vive and Four; and (vi) servicing our outstanding debt obligations.

Our capital requirements have been financed through:

•cash flows from operations;

•private debt offerings;

•bank debt; and

•stock offerings.

As of March 31, 2025, the Company had $213.3 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of gross indebtedness.

Cash Provided by Operating Activities

Cash provided by operating activities was $209.9 million and $135.7 million during the three months ended March 31, 2025 and 2024, respectively. The $74.2 million increase in operating cash flows was primarily due to an increase in cash received from exercises of early lease buyout options, a $15.2 million decrease in cash paid for lease merchandise, and a $7.6 million decrease in cash payments on accounts payable and accrued expenses. Operating cash flows were negatively impacted by a $4.1 million increase in cash paid for taxes when compared to the same period in 2024. Other changes in cash provided by operating activities are discussed above in our discussion of results for the three months ended March 31, 2025.

Cash Used in Investing Activities

Cash used in investing activities was $4.1 million and $3.6 million during the three months ended March 31, 2025 and 2024, respectively. The $0.5 million increase in investing cash outflows was primarily the result of an $88.9 million increase in cash investments in loans receivable due mainly to growth in Four loan originations. This increase in loan originations was partially offset by a $88.3 million increase in proceeds from loans receivable, primarily due to an increase in Four loan repayments.

Cash Used in Financing Activities

Cash used in financing activities was $88.2 million during the three months ended March 31, 2025 compared to $34.7 million during the same period in 2024. Cash used in financing activities during the three months ended March 31, 2025 was primarily for the repayment of $50.0 million that was drawn on our revolving credit facility during the fourth quarter of 2024, $26.1 million for share repurchases and $5.3 million paid for cash dividends. Cash used in financing activities during the three months ended March 31, 2024 consisted of no debt repayment, $24.4 million of share repurchases and $5.2 million paid for cash dividends.

Share Repurchases

We purchase our stock in the market from time to time as authorized by our Board of Directors. Effective February 21, 2024, the Company's Board of Directors reauthorized the repurchase of Company common stock at an aggregate purchase price of up to $500 million under the Company's existing share repurchase program, with such reauthorized share repurchase program to be extended for a period of three years from February 21, 2024, or until the $500 million aggregate purchase price of Company common stock purchased pursuant to the reauthorized share repurchase program has been met, whichever occurs first.

The Company repurchased 935,992 shares for $26.1 million during the three months ended March 31, 2025. That amount does not include any excise tax that may be assessed on those repurchases. As of March 31, 2025, we had the authority to purchase additional shares up to our remaining authorization limit of $335.2 million.

Dividends

On February 26, 2025, our Board of Directors declared a quarterly cash dividend in the amount of $0.13 per share of outstanding common stock, which was paid on March 25, 2025. Aggregate dividend payments during the three months ended March 31, 2025 were $5.3 million. While we expect to continue paying quarterly cash dividends in future periods, the future payment of dividends, if permitted, will be at the sole discretion of our Board of Directors and will depend on our capital allocation strategy at that time as well as other factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant.

Debt Financing

On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350.0 million senior revolving credit facility (the "Revolving Facility"). On November 15, 2024, the Company entered into an amendment to the Revolving Facility, the primary purpose of which was to extend the maturity date of the Revolving Facility from November 24, 2025 to November 15, 2029.

The Revolving Facility includes an uncommitted incremental facility increase option ("Incremental Facilities") which, subject to certain terms and conditions, permits the Company at any time prior to the maturity date to request an increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $300.0 million. As of March 31, 2025, the Company had no outstanding balance and $350.0 million remaining available for borrowings on the Revolving Facility.

The Revolving Facility is fully secured and contains certain financial covenants, which include requirements that the Company maintain ratios of (i) total net debt to EBITDA of no more than 2.50:1.00 and (ii) consolidated interest coverage of no less than 3.00:1.00. The Company will be in default under the Revolving Facility if it fails to comply with these covenants, and all borrowings outstanding may become due immediately. As of March 31, 2025, the Company was in compliance with the financial covenants set forth in the Revolving Facility and believes it will continue to be in compliance in the future.

On November 26, 2021, the Company entered into an indenture in connection with its offering of $600 million aggregate principal amount of its senior unsecured notes due 2029 (the "Senior Notes"). The Senior Notes were issued at 100.0% of their par value with a stated fixed annual interest rate of 6.00%. Interest accrues on the outstanding balance and is payable semi-annually. The Senior Notes are general unsecured obligations of the Company and are guaranteed by certain of the Company's existing and future domestic subsidiaries.

The indenture discussed above contains various other covenants and obligations to which the Company and its subsidiaries are subject while the Senior Notes are outstanding. The covenants in the indenture may limit the extent to which, or the ability of the Company and its subsidiaries to, among other things: (i) incur additional debt and guarantee debt; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) issue certain preferred stock or similar equity securities; (v) make loans and investments; (vi) sell assets; (vii) incur liens; (viii) enter into transactions with affiliates; (ix) enter into agreements restricting the ability of the Company’s subsidiaries to pay dividends; and (x) consolidate, merge or sell all or substantially all of the Company’s assets. The indenture also contains customary events of default for transactions of this type and amount. The Company was in compliance with these covenants at March 31, 2025 and believes that it will continue to be in compliance in the future.

Commitments

Income Taxes

During the three months ended March 31, 2025, we made net tax payments of $0.3 million. Within the next nine months, we anticipate making estimated tax payments of $80.2 million for United States federal income taxes and state income taxes.

Deferred income tax liabilities as of March 31, 2025 were $64.4 million. Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods.

Leases

We lease management and information technology space for corporate functions under operating leases expiring at various times through 2028. Our corporate and segment management office leases contain renewal options for additional periods ranging from three to five years.

Contractual Obligations and Commitments

Future interest payments on the Company's variable-rate debt are based on a rate per annum equal to, at our option, (i) the Secured Overnight Financing Rate ("SOFR") plus a margin within the range of 1.5% to 2.5% for revolving loans, based on total leverage, or (ii) the administrative agent's base rate plus a margin ranging from 0.5% to 1.5%, as specified in the agreement. Future interest payments related to our Revolving Facility are based on the borrowings outstanding at that time and may be different depending on future borrowing activity and interest rates. The Company had no outstanding borrowings under the Revolving Facility as of March 31, 2025.

On November 26, 2021, the Company issued $600 million aggregate principal amount of Senior Notes that bear a fixed annual interest rate of 6.0%. Interest accrues on the outstanding balance and is payable semi-annually. The Senior Notes will mature on November 15, 2029.

The Company has no long-term commitments to purchase merchandise nor does it have significant purchase agreements that specify minimum quantities or set prices that exceed our expected requirements for three months.

Unfunded Lending Commitments

The Company, through its Vive business, had unconditionally cancellable unfunded lending commitments totaling approximately $459.8 million and $461.1 million as of March 31, 2025 and December 31, 2024, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represented the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Critical Accounting Policies

Refer to the 2024 Annual Report.

Recent Accounting Pronouncements

Refer to Note 1 to the condensed consolidated financial statements for a discussion of recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2025, we had no outstanding borrowings under our Revolving Facility. Borrowings under the Revolving Facility are indexed to the SOFR or the prime rate, which exposes us to the risk of increased interest costs if interest rates rise. Based on the fact that the Company had no variable-rate debt outstanding as of March 31, 2025, a hypothetical 1.0% increase or decrease in interest rates would not affect interest expense.

We do not use any significant market risk sensitive instruments to hedge commodity, foreign currency or other risks, and hold no market risk sensitive instruments for trading or speculative purposes.

ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures.

An evaluation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, was carried out by management, with the participation of the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as of the end of the period covered by this Quarterly Report on Form 10-Q.

This evaluation is performed to determine if our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures, however, are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Based on management’s evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of the date of the evaluation to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Changes in Internal Control Over Financial Reporting.

There were no changes in the Company’s internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

From time to time, we are party to various legal proceedings arising in the ordinary course of business. While any proceeding contains an element of uncertainty, we do not currently believe that any of the outstanding legal proceedings to which we are a party will have a material adverse impact on our business, financial position or results of operations. However, an adverse resolution of a number of these items may have a material adverse impact on our business, financial position or results of operations. For further information, see Note 4 in the accompanying condensed consolidated financial statements under the heading "Legal and Regulatory Proceedings," which discussion is incorporated by reference in response to this Item 1.

ITEM 1A.RISK FACTORS

The Company does not have any updates to its risk factors disclosure from that previously reported in the 2024 Annual Report.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents our share repurchase activity for the three months ended March 31, 2025:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 1
January 1, 2025 through January 31, 2025	—	$	—	—	$	361,349,309
February 1, 2025 through February 28, 2025	320,000	28.74		320,000	352,152,789
March 1, 2025 through March 31, 2025	615,992	27.47		615,992	335,230,801
Total	935,992			935,992

1 Share repurchases are conducted under authorizations made from time to time by the Company’s Board of Directors. The authorization, effective February 21, 2024, provided the Company with the ability to repurchase shares up to a maximum amount of $500 million. Subject to the terms of the Board's authorization and applicable law, repurchases may be made at such times and in such amounts as the Company deems appropriate. Repurchases may be discontinued at any time.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

During the three months ended March 31, 2025, none of our directors or executive officers , modified or any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

ITEM 6.EXHIBITS


EXHIBIT NO.						DESCRIPTION OF EXHIBIT



31.1*						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

31.2*						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

32.1*						Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*						Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						XBRL Taxonomy Extension Labels Linkbase Document

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

104						The cover page from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL (included in Exhibit 101)

*Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		PROG Holdings, Inc.
			(Registrant)

Date:	April 23, 2025	By:	/s/ BRIAN GARNER
			Brian Garner
			Chief Financial Officer
			(Principal Financial Officer)


Date:	April 23, 2025	By:	/s/ MATT SEWELL
			Matt Sewell
			Vice President, Financial Reporting
			(Principal Accounting Officer)

PROG Holdings, Inc. - Quarter Report: 2025 March (Form 10-Q)

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