PRG - Earnings call transcript Q2 2021

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Operator

Good morning and welcome to the PROG Holdings, Inc. Q2 2021 Conference Call. [Operator Instructions] I'd now turn the conference over to John Baugh, VP of Investor Relations. Please go ahead.

John Baugh

Thank you, and good morning, everyone. Holdings XXXX PROG call. the to second earnings quarter Welcome

Many PROG are and Garner, Joining issued already this Officer. on earnings morning is Investor of Michaels, a our you Holdings copy seen Financial morning, Brian me this release and Relations Steve website President our have Officer; Chief Chief available which of our Executive investors.progholdings.com.

our I results and non-GAAP safe statements. certain harbor we not emphasis to them the facilitate now in Steve performance. of are no flows any to turn and call to periods including forward-looking such These earnings outlook to affect statements, harbor Michaels. will found may prior earnings for our content adjusted end company's to be that the statements. the forward-looking, earnings share are we from including make the investors There operating EBITDA, that, Steve? our non-GAAP certain at provision cash to results can The the comparability have adjusted measures company share be which Listeners During these and undue earnings included release. update of to company's will we our our full earnings provision can forward-looking will detailed non-GAAP financial of the performance. provides statements and and The I today's with to EPS, latest insight are reconciliation XXXX which EBITDA tables believes identifies materially this with release. risks financial be call call, non-GAAP of EBITDA, with to measures, actual GAAP to measures cautioned referring risks into On be meaningful place cause certain and call, operational non-GAAP per your for differ With net that additional in for per filing. year our found the obligation understanding that companies. our forward-looking other assist updated performance provide these over in non-GAAP ongoing want statements XX-K been that items comparisons the on measures undertake may help operational performance attention safe and adjusted

Steve Michaels

growth good navigate We're acceleration to from year grew financial XX.X% the prior increase GMV and everyone. John, continue excited period, an GMV an we our Leasing Progressive results, to for the QX. QX of Thanks, growth, the morning, report landscape in reflect as of our which pandemic. XX.X% over the segment

against pandemic, in penetration national XX% scaling represented the shutdowns is this continued Leasing's the largely of e-commerce. grew driven was and the in GMV of E-commerce during the comparison occurring depths in quarter by XXX% the accounts Progressive GMV. and second large retail of While GMV of quarter growth XXXX increased

We continue to e-commerce meaningful of be the to driver expect a future. growth in

transact solutions journey of and increasingly partners they consumers. with announced, our when new and potential with a from for choose. We've integration plug positive will platforms. e-commerce offer enhanced We these discussions the and some capabilities already our allow deployment WooCommerce The where that one-click utilize experience that retailers X As recently reduce them believe of our by existing we're we we've to and multi-channel engaged consumer's POS application in Magento from the updated we allow retailers momentum time and these plug-ins. with the enhancements seen that purchase and be updates checkout to play

XX.X% rate delivered a Leasing period. Progressive as in the year strong mentioned, I GMV to the As compared quarter growth prior

year half in XXXX, QX year-over-year more our growth. with the be expect of the will QX towards GMV We the weighted rate back of heavily peak growth

there that the full payments, and the deliver see believe tax beyond. impact we through should to of we child remain of which potentially including a uncertainties, mid-to-high year credit number teens GMV for continue growth rest XXXX. XXXX will will of note We the We monthly

While early purchase spike that growth. following payment similar data saw the will we portfolio headwind is very benefited to as options limited, in single a not but spike is the large to that our a served stimulus expectation we checks performance, GMV see

We levels. continue POS from that the partners financing to below credit remains our the across hear POS use of spectrum pre-pandemic

quarter year, the million XX.X%. an revenues compared second Our $XXX $XXX last increase million in of to were

size, from continued balance improvement the levels. Our portfolio performance. asset strong revenue our driven higher benefited XX-day although margins was added QX, buyouts the of late they growth in declined still peak portfolio performance from are XXXX, GMV as in a pre-pandemic leased Gross by our in to period. than strong

experience and delinquencies EBITDA range the driving to our annual more near to we XX%. continue XX% above historic our of lows, write-offs During quarter, typical

a to Our consumers adjusted $XXX.X of of $XX.X margin merchandise Miami-based through completed that company for a revenues. million X XX.X% we last of was XX.X% an Technologies, pay EBITDA interest-free the acquisition million allows versus BNPL year, increase Recently, installments. for Four of

subsidiary Inc. options. and separate We're leading about is the are retailers We delivers pleased offer about for PROG growth builds that Four additional Technologies payment value creation customers business their an continue has excited looking a our and and to Leasing direct-to-consumer upon Four value Progressive Holdings exceptional Vive combining and how Four agreed excited strategy of opportunity the team with to proposition to as

our and our of and disclosed new retail the well payments result us as Four increase equity-based are in the quarter. used believe The current repurchased the in to of acquisition term, approximately leverage also Four will XX customers, results the partners. As business. during GMV of we could value as and financial buybacks, cash multiyear think second metrics additional a potential near performance-based Most the net in and with we several cash of strategically our $XX team. paid company LTO offerings in We the stock also the XX-Q, the quarter the database expect importantly, million addition large growth our platform growth allow the core be for for ended in that material There drive quarter to of we our to grow the owning transaction to digital do in not million our but will position million. loyal consolidated Even we business. of Four to cash with $XX incremental

Our capital unchanged. priorities remain

fund First, growth. we will organic

around return Next, delivered of QX, strategic priorities. look all lastly, will these In M&A focused cash for across largely And shareholders. allocation that we will opportunities we are X technical we products to capabilities. capital or excess new

and our to solutions over Finally, they wherever, I who want to enable to CFO, customers more our partners, we strive to shop however, whenever in will thank I'll for to our Brian? turn their results consumers and the will commitment tailor financial want. and detail. as employees Garner, discuss that our innovate Brian call

Brian Garner

Thanks, Steve.

at The performance second elevated remain consolidated as segment. of our delinquencies begin continuation driving yield customer comments financial historic quarter's I'll higher reflect and period with strong results payment margins. Leasing and portfolio Progressive a lows, growth GMV in near on the expanded

quarter quarter, a the the observed the of grew stimulus-related size, measured from and second XX-day buyout the throughout sheet, from QX trend growth pandemic. levels, remaining on As the in leased year-over-year. periods the GMV moderating we as while the assets dropped activity, of result balance gross prior buyouts reversing our for declining XX-day lease portfolio consistent

as to still pre-pandemic are elevated However, compared XX-day buyouts levels.

year-on-year a seeing portfolio is of growth respect GMV and future in and higher although within to of than by the portfolio levels, we quarter's higher $X encouraged assets size, entered revenues, and the key in XX% act we the base million, resulting billion, the down positive to the finished GMV are quarter size balance at trends which our for with a performance, for up may portfolio In liquidity gross as With our a X.X%. growth leased We customer headwind in offset quarter. QX continue at short, are levels quarter GMV. more buyout driver X.X% second $XXX

year this Progressive continue compared portfolio trend quarter the the the million X.X% pre-pandemic the throughout Progressive increase remainder of XX.X% in to of Revenues Progressive expect in were of present Leasing, Revenue $XX incur and year were X% and the quarter as size million, or and performance. for Leasing's XXXX. X.X% public benefited to QX payment the segment increased XX.X% from of an year. was an invest strong SG&A $XXX Leasing the second We a ranged product Leasing's drove defined enhancements percentage company of compared the to strong operating to gross XXXX of the technology point which we higher X.X% in performance as for write-offs the as of as amortization in year year, annually the year-over-year XXX increase as levels excluding period. revenues versus XX.X% X% same year increase in to period second period. the prior for compared last expect SG&A, return additional to for expenses million $XX or gross of reflects customer remainder costs for payment revenues, between quarter and historically Progressive a and impact ago also not the margin margins. write-offs, was we in period. prior a This XX.X% basis

This in performance previously period delinquencies quarter's the mentioned. results the benefited from low and portfolio strong

COVID an our increase XXXX, below recorded note, and we of million due arising in XXXX. range, incremental pandemic. expect of back into from this to anticipate the challenges reserves year the and write-offs we we XXXX in the annualized first historical uncertainties the $XX.X quarter While in be Of to economic half

in evaluate COVID-related low levels year-over-year performance XX.X% we improved Progressive we upon the to quarter We quarter, by $XX.X continue we our from period based anticipated levels XX.X% XXXX or second the for XX.X%. second EBITDA, was Leasing million and million quarter financial of $XXX.X the in $X.X $XX.X appropriate $XXX the payment consolidated the for million recent EBITDA mentioned. same and basis adjusted lower of the our released revenue in year, performance a reserves, year, EBITDA XX.X% and performance by Adjusted results primarily quarter results. an I margin portfolio to a Adjusted The performance. reserves write-offs. margin. encouraged driven previously are million portfolio by XXX was to of up of associated In points delinquency second are and increase the the segment, Pivoting compared including second was the seeing. second last the for quarter, Vive was driven Consolidated prior of the XX.X% million, increase of

margins year We over EBITDA was XX% same macroeconomic and GAAP in non-GAAP expect the time, EPS the period to our range compared annual as typical conditions more was $X.XX $X.XX compared return to $X.XX $X.XX period, historic for to XXXX. to diluted that in ago of XX%. will normalize EPS

from position cash million. of million a quarter to $XXX and We operations turning with and in sheet QX, of in cash $XX.X profile. liquidity million our $XX Now generated ending the debt balance

have We under available credit $XXX our revolving million facility.

million of remaining of $XX purchased share million we $XXX shares with repurchase quarter, authorization. $XXX the During million our

no payments, from variants. of to credit to to tax additional in With slight million portion million This a the range noted potential the morning's performance the our question-and-answer the negative deterioration tax $XXX share press I'll portfolio chain for rate outlook this those child to adjusted XXXX supply outlook call. of over financial impacts previous to of call XX% consolidated no relating we the responses customer increasing operator release, to turn repurchases. a including as also million million, governmental additional the COVID $XXX global It and dislocations emergence up assumes Finally, assumes the variants, of for year of or are $XXX that, our payment to a subsequent better-than-expected full Operator? the range in $XXX to due performance. activity, EBITDA

Operator

first [Operator Our question Instructions] with Jason America. of Haas Bank comes from

Jason Haas

X-year being quarter stronger you on be prepared fourth call, we growth last So the fourth in tougher the think I your in to expecting correctly. said than to remarks basis talked GMV on heard I compares a thought that that start, about I XQ, Steve, And quarter. if the you're stack

outlook. So driving color I'm you could more what's if curious on provide just some that

Steve Michaels

Jason. Sure,

back XXXX, and think the half I think just the along in-store was some just had we of were time that because were said remain we half year, of fourth the stack, than and just of -- we is this will lack we of be GMV the that -- initiatives Friday we'll last some growth last by the tougher waited the weighted season that the the half Black holiday have of year, the I case. said period during how quarter because for counteracting more holiday, and in still certainly generally the and that X-year the that. does that front the launches back in that traffic we a to reason impacted early e-comm all-important with on

bit from we're will but the to overall half, be So guide a growth we track XXXX, weighted that for a back on little still think percentage for rate GMV QX. more

Jason Haas

it not So that, a GMV and between just growth you to comparing QX. a to QX like right? year-over-year clarify that the were Is on referring sounds percentage dollar basis,

Steve Michaels

QX, Well, be no, really higher be certainly growth than higher in but both. QX also The percentage in rates dollars will QX. will

Jason Haas

then a as And follow-up question.

-- it guidance, -- million it about million. the so, EBITDA by like lower like it only beat but higher you $XX $X consensus raised million looks depending or So or will like, on you whether $XX get to looks you in about then looks

plan. I'm the curious, match So the Street know internal estimates I don't always

new And investments. like some think anything's there's your So company some just maybe pressures incremental did changed curious if you I'm I It outlook. mention public half say sounds cost or costs. in I should back

with what's outlook? just really changed back So half the curious

Brian Garner

that. Yes. I could Jason, take It's Brian.

I helpful back take dynamics. comparing half in moving half about be is first talk of step -- kind a versus me might what the second think and Let to

So with if we what's on going think about there. revenue and starting

we dynamic certainly that revenue the throughout half first first than half. expect to second to degree higher in a So from typical not buyout half. is we fueled the going the which be rates, our That same in the benefited

subside. on momentum that's that So will revenue

that that being talked the our prepared our by However, fact replaced X%. was remarks up has We entirely it's grown. portfolio about almost to portfolio our

minus. revenue roughly equate half half, X the second or to those roughly the swaps So plus same same going are versus to -- first

going on that what's -- on front. that that's So

being you roll pulling reins XXXX were second that half, back that bit to XX% continue been the over really a a COVID. at to there. half remnant we is year we've So throughout the XXXX percentage Leasing for spending. back SG&A half. as front for on of move expectation SG&A, And in I mean dropped in segment. And a it we front That going as SG&A we're XXXX, my invest. constrained just through to versus had half of to The the COVID -- the That's and and down we saw look during you if revenue of QX. a more little Progressive XX% we've

that opportunities going so really think it's have as a hit positive that back to we pursue. And pre-COVID and to I spend on just levels reemergence stride ROI see our we're

half. of think is, see guidance second in level second half we're the ramp is portfolio And first in half so spending I think you're write-offs the implied in X% then the did the going just to about we third We about to what's talked contributing I element performance back of of in to that expecting the as X%. And decline our half. some the not same in margin

it's for second X% to -- step-up, going the as we effects saw in those we that, from reasonable expectation And What quarter, I something a the the the on, the certainly expect, but kind -- of very at think half less we in more delinquency will year. the move half. first for a mentioned delinquencies as point, X%, what than were and below of slight saw we we started just record total that for on a QX certainly, really we the is just the quarter in off. that be the to profile stimulus was the went that there uptick to our delinquencies, very, half, call. will second low the And months as throughout that be

be out data the liquidity is we're some lot early a there. still anticipating of And level there's and so increase there'll really there, while just of

for a versus lower half half, margin first think So second the dynamics really in that of all that's and the at play results are the that our in I guide.

Jason Haas

I provide out, And then color large about last very saw color your curious both release to could the with any remember partnerships just Or launching in you a talked some those up? encouraging. the any is on add more performance press could called and And I'm if squeeze the then -- how marketing I question the that partners? some which if on here. national you else, more driver. on another other large could I on call, the pipeline partners. are partners, in anything was ramping call, that if those you you strong potentially of

Steve Michaels

Yes, Jason. definitely The for marketing -- is I of mean, us, a an but opportunity also area spot. bright

partnering more we that have of into our like that to, reaching of I the think have year toolkit us partners. we've we the certainly a for continue with that seen more and And QX. call the said last teams, calendar teams that our GMV drive nice partnering and our our well we continued on marketing with and half for to back marketing for hopefully, partners in

productivity relationship generally, still see So early of what But in driver. continue we it's gains relationships, of that to we're matures, the just there. certainly gains we're but few be the with seeing a is normal innings our that we as these a pleased the very from and

Jason Haas

That's does how great. on And that pipeline, look? the

Steve Michaels

good. our made mean we our what out I But that Yes, advancements don't call that the with for conversion know you future growth conversations some mean pipeline through we're encouraged sales for and the frustratingly, I could really pleased are the by of and rates. cycle ultimate is and we've names for periods guys.

Operator

Kyle Our with next question Joseph Jefferies. comes from

Kyle Joseph

and activity the credit demand? then talk obviously, some for less terms the really credit sense normalization impacting child business offsets remainder forward, for and you as in over increased You just guys potential outlook credit how the a going that. And the changes year? about buyout credit Can the the for you touched of the of on tax us of normalizes, see give business in the for

Steve Michaels

But and specifically weeks, pretty contact tax relates do we we I'll changes it in have early chime good a have don't I'll a Brian in. centers. the it's as of because and Kyle, thank ability said ton of But our data. to behavior that, a observe it's customers' start, quickly been This you. couple credit, obviously, our let through is Steve. child having to only

over in in and contact during in the are we accounts, bank normal that received season, can centers dispersed. of funds As instance, contact any in the in were of phones we've payments stimulus up light a see onetime tax our years, in day the in activity seen really X not said executions, similar our terms previous this customers' particular on saw those calls and increased measurable large weeks, have our that uptick contact we a payments previous In the buyout anything. we rates or last the XX-day refund center

will over and that we'll X behavioral look time. out and for nothing to how it's the reiterate, I Now weeks, only continue plays consumer been see that so changes. we'll feedback far. But And

a we've some would as seen headwind from -- buyout quarters. our we as for if remains increased we've don't to lack enjoyed monthly we XX-day GMV that are should think performance that of expect from seen And a will that that positive our it exceeds that expectations credit, need it the with XX of extent can't and executions any it to impact the the So the But could liquidity has customers, POS to in our in we for that I don't couple of may stimulus. drive months, for in which performance We it stimulus that expectation payment, do. the large refundable customers negative. stimulus prolong participate large -- that mean the be expect We have portfolio view they the many up this a they to over credit, exceeded that have period them that will large payments. portfolio financing as onetime seen of be opposed the of and last last show our continued XX that onetime

puts tax mean, let I'll stay and I the and -- to the the tuned. child there it on and relates as credit, write-offs we'll say in lot just XX-day Brian buyouts? a So on chime takes to

Brian Garner

a Steve to credit going than keep tax to that's mean, level It's I historical would to normal to that write-offs what a we -- And we've early -- impact, return activity, still our from in we is normalization remarks, buyouts, we've my in guide. down watch level, so the as if child more stage. elevated we would continue of but the know to And XXXX at that. certainly, come we the a on certainly stage referenced No, be normal Yes. said, as are still the just perspective levels. we year-over-year well to because prepared buyout the be like lower got we continue expected so below we're and a expectation credit from saw normalizes, buyouts

So your hopefully, that question. answers

Kyle Joseph

Progressive here, environment, private of a other the so consumer more we demand inflationary on then And the an mean, the was us company. I in last is the kind about impacted probably talked you inflation. there But kind were But really on and of business is inflation as -- time of side liquidity remind can by coin the we frankly, consumer there. how credit

can you sense how business is us impacted give If there. for the a

Steve Michaels

which well a the Kyle, the years, lease. you're And an the time The has inflationary company. XX business we years, for let's Yes, the environment, over for at forces. was is the kind generally, in cycles. deflationary the categories there business just certain recent extreme, has done industry, all private and that items PROG pressures the of the PROG even economic And last fortunately, from the But call was in opposite, it, most faced of commoditization right.

for their by be reverse pay the caused end, at which being the to inflation, versus ticket prices higher customers the large needing purchases able would payment of in could result cash. So or that, option more point-of-sale a other

intimated it demand a headwind for as be prices the increase. as of could on you your in So removal product question, a

Kyle Joseph

or and there that Progressive sounds of How one of for underwriting any last It just integration capabilities potential? and synergies about then the independent on product? as acquisition. with morphing kind kind of company And you're operate the buy-now-pay-later database going Four is this thinking -- I'm me sort like initially. to

Steve Michaels

in our well that because you we our will silo. glad dollar that transactions, could a while we not retail add operate question, will separate small be by I'm them merchandise offer both capability was a that as reason lease. to payment they Yes. we wanted that is asked a and so The business, retail as currently we better can not partners for our offer for serve partners customers a that option this eligible

So existing product as lease we product, believe, TAM. has complement specifically the BNPL the a to and the a expand Four pay our and to potential

So the the whether lease-to-own the core Four to mean, you opportunities, be for a the database, we're decisioning help that excited it I yes, us ability be the things capabilities grow for growth. our capabilities, lever hit, and cross-marketing about

cooperation collaboration there So can add PROG increased sure value value to be they of be separately, that would and Holdings. and will maintained businesses create and but and make we both ultimately,

Operator

comes question Loop Chukumba Anthony with next Capital. The from

Anthony Chukumba

with start the again. see growth to GMV X nice It's

with the your online it's probably being But considering? point-of-sale be first and know question, this even other of as XXX% plug-ins, the factors of was I to of online might and retail that systems I growth, better to X that kind opposed integrated maybe partners any Magento these WooCommerce the like hard kind large of not directionally just -- much GMV So parse out. how

Steve Michaels

wild. So quarters. to other the but GMV from right? were plug-ins coming larger some in those game, players Thanks, early plug-ins are bright out I'm expect we be e-comm have retail we that the tremendous larger in that in growth there Anthony. in supporting is go-to-market you potential, e-comm the have sorry, But the strategy. and of are -- WooCommerce The and a recent. integrations was to it certainly the omnichannel spot, will majority -- that had that We've very the Yes, are we've and that and referred X the Magento that their seen continue e-comm partners the

us large we've and smaller upside of I But these continuing retailers So of the to our for some for that's a kind platforms. is enterprise growth with that because off-the-shelf we're currently, the big e-comm how think got large and while, e-commerce in accounts. skewed share use balance grow e-tailers by

Anthony Chukumba

mentioned year? year-over-year so e-commerce was that first comparison. the quarter the sort XX% Progressive GMV quarter, And I your second you last If then -- the -- guess, that in I gave GMV. you What Leasing sort you number, of recall of was in of of

number I what XXXX? that was the comparable just quarter for So second be would curious of

Steve Michaels

like X.X% Yes, X.X%. Xs, low it was or

Anthony Chukumba

not got $XXX how from kid $XXX XX, to of mean, Like, a for a right? I from Okay. sense perspective, not X. just well, from And heard it's think age in going to Makes every X you to how think got they've can a the mean in -- my every kid final expanded or a lump of XX-day then just particularly X. trying buyouts this you've people, early I year, if lot a below I'm this question, not payment didn't to these your credit help because help terms the all this me. back to that in And of so tax one write-down comments about to child going bit. lead month But to perspective? a sum. half of month is probably get I

Steve Michaels

is nature, I mean vacuum, helping it's and reopening, valid what it, going of other that point. And all schools there. like back are could variant be to things pressures. with and potentially we're that Delta a in there related I it closely having to are a against could of there I the pressures out and they're variable and say hard other just right? reopening And the things argue on But when to reopening, watching this they going obviously, unknown the office think you the would the -- be

The other pressures nature. of things mortgage moratoriums their it's that income, or rent and on whether

disposable yes, the play prolong factors In mixing of period our there other demands a say bowl. lower average But it that variables than that at there's customers' having will portfolio us continue better-than-average to income. isolation, that be the should in it So of are go should I way. lot performance, or on

Operator

next Our Young Truist. with from question comes Michael

Michael Young

wanted talk taken we've you have that maybe up sort seen. about expect has that to of now forward? are a of Can the you sort already guys credit kind strong of following to or place? you see I trends the little underwriting box just going bit kind Or on we should start What that? of loosening

Steve Michaels

the bit Thank pandemic. decisioning posture we learned tightened standpoint, and the fall, And just from talked it the right? portfolio little in we're Michael. and So on we -- a obviously, previous quarters, continues over we a to the we this summer of and you, be onset at Yes, surprised us, that from but then the dynamic for the the performance. a of of data course upside the about

XXXX, or those tightenings. in, learned rollback, a wasn't a it call starting rolling or data. adjustment of we dials some back But more we So was informed the just calibrating it -- from it, dial November because started of the

is way so of And the into there early XXXX. made series all adjustments from November a of QX

actually a So other profitable and to they run they pre-pandemic. as were approval R&D are Approval looking through always pre-pandemic. -- yes, are today, to for or than we even the ways than higher pipes rates are amounts very are higher measured we in sit here way. our say were And ways we

we're opportunities. a headwind data headwind a But But removal those great in a -- a science for right XXXX, I of of will looking admit. a team good now, certainly, been has and self-inflicted, a spot from the So of job right now. does decisioning removal

we early react refer to here the side to as do in opposed the as of -- we having controlled portfolio are because portfolio being, the duration indicators too that so short what on will changing And would time. metrics but loose. things I can that and good real is have to We always

Michael Young

to just And Obviously, on you've the million $XXX buyback. share then approved. touch wanted got

You a this there? About it aggressive looks stock are lately. imagine, were would of somewhat today, $XX pursuing active How be other good to on at M&A, I been somewhat are you And like kind outside quarter. stock higher willing any maybe where than million thoughts we as weaker that? the price repurchased of it a guys has value.

Steve Michaels

we'll cash and pretty generate a at very to aggressive have even rate. We're model, business growth fortunate capital-efficient

capital. these levels, -- decision going But So work do the that the to at your leaves we're we'll us return best that attractive would the of signal we comments available very not to going as do. exactly put that we is excess with echo to what prices we're with to cash and are to I what And to see define us. the

Michael Young

Vive kind or And done segment has just continue other The just quite specifically? to we that any last one. here segment of comments maybe recently. one Should expect that on well quick

Steve Michaels

also of and is to expansion growth of logos. bright only logos, not doors Vive new due base, a has Yes. amount partner new certainly tremendous a its seen but spot existing within

so the up Vive And materially. GMV was for

accounting, the there past, all As the from the benefit the -- unknown be XXXX to the reduction CECL rates can over loan loan we're drag provision earnings we when a the a have has you in to have in upfront life booked. seeing of said is uncertainties estimated provide due losses for so Vive of provisions when In on the of pandemic. XXXX, the from because high

we'll assuming case. to and of But back years, are so it we will asset we those has that and think It's now little will maintain as to profitability, do provision will Vive -- in that, that that see strategic flipped for profitability. bought certainly of be normal XXXX. a we and Progressive. trend rates by of it after half strong, a a proven use we -- influenced rates, the And but And bit growth reversal several the XXXX see probably Vive back into

Operator

Bradley next B. Markets. from [Operator with Instructions] KeyBanc Capital question Thomas Our comes

Bradley Thomas

just questions, I way quarters a you missed how detail how I we revisit apologize And you could bit talk could already. this was ahead? particularly in But hoping about to upside if I second potential number trends addressed GMV And of just these maybe I the call, so And strong you're given beginning if flow the if little through? could. was? the what to the that quarter could of into for in mean the revenues flows couple that A expecting GMV revenue,

Brian Garner

take Yes. Probably pieces. X that. I'll

or QX that question, ballpark. XX.X% There's -- the half. going the in this that GMV like leading the half number the a saw revenue But revenue first total buyout and for on activity, et we of including revenue to cetera, revenue, saw certainly So we indicator commentary components in is revenue. an impact just versus in in same start in second will reiterate, QX, to the front will The quarter, to earlier certainly. I terms half made of be

kind that we that portfolio this the And out and to top of adding expect, on growing, the given stimulus we're that. the of is buyout because hit of GMV buyouts trillion that's late -- QX which is losing in function fell revenue, but that the a saw the the funnel. I tailwind $X Just of

right moving of those versus to it But is So are about probably the kind XX-XX, thinking half I second way it. front about think the half pieces. think

Bradley Thomas

I the about then some takes? about been we addressed XQ versus imagine margin But to you share want our earnings perspective, more color models an may given fine-tune earlier. XQ And this as from how any and think of to have puts

Brian Garner

going I back it's a margins I No, half going a off. -- Yes. perspective, fall see think to from -- to be mean, we're

spend, going think margins I versus to in X quarter quarters. of ramp wouldn't similar other. between up we to pretty you're Obviously, continue level one mentioned. big as a expect I the the swing see I

that's that a so a baseline spend that one probably we And our of at pre-pandemic. the level than just saw it level try to QX be we QX, back get in to as higher variable is might in function

Operator

Our next Griffin from with question Raymond Bobby James. comes

Bobby Griffin

the thought it. on their about actually want with out the of ago to comments just struggling I buy portfolio. kind tailwind. clarify buyout But And decreases your I of contracts maybe Brian, stimulus, would consumers I'm second the a early, to which yield conceptualize just

kind more buyouts on and and So the half, growth normal in the if portfolio we of have stronger. the the portfolio less behavior second be from to yield shouldn't the generated revenue

Brian Garner

Yes.

buyouts period got come X up. which there's the buyouts, our effectively we'll happen in I us. guess level early whether that after is, the business. expectation is strength that I in saw will margin that that the for we same that Buyouts, think front us And portfolio there's are question events There's XX-day that the and to profitable at be the X are answer half? you've buyouts for So see kind write-offs of XX-day

where, along subsiding with those you're SG&A So write-offs where contraction. kind seeing margin and that's with increase, the presume continuing of to increase, to that's

Steve Michaels

is days Steve. the this $X,XXX add will and GMV pays from if to just customer would term, will higher. it's a be period. out, out in portfolio a the kind of customer I time, revenue Bobby, do it of a period just yield whereas that, now like, right buys you're worth today if like longer It to over be full that XX you shot of in that

But So particular to have over generate it revenue quarters that when grow elevated revenue more just as GMV buyouts, of if time. near-term amount quickly. the you fairly dollar subside, influence will isn't It can going buyout much.

Bobby Griffin

write higher and implied maybe the guess, pretty there pulled that XQ. -- bringing XQ a second out temporarily think, for like $XX back what $XX I outs, investments? you And XQ in still colors in up. were I in COVID? out million, costs just that secondly, coming other were modestly it even or and unpack, I Steve, so a up Brian growth because just referenced, fairly is that But stable Just Or to you think the notable numbers quarter. the once XQ you back here OpEx and step little is million XQ OpEx for and XQ Is looks

Brian Garner

it it's Yes, think I both is. And those of Yes. components.

in is range continuing we of saw percentage be a we as what grow the for we're the think overall, business and going opportunities GMV and -- as expectation to XXXX to in working are of pre-pandemic. to investments year we we're going grow the my see to pursue those. to see that make I But SG&A revenue, somewhere

of an for range annualized just the we're last that back been to XX months. has So kind -- getting suppressed that's really

that where as And the and Steve to steady move expect. to so you're that step-up margins The XX%, in that's going reference the for QX that's we what heard and were we're And state I seeing. XX% XX% aiming the margins you we're think QX we and XXXX. that just we saw live beyond not

is keeping continued spend give there. color It it rates I'd pre-pandemic. So investment, within we're what but have you our the historical confines the that's of been

Steve Michaels

The -- of plans split as Bobby, we that other on that thing, layer that million little a is hiring about would of worth said the $XX pre-split. costs things company those around time expected we didn't to exist take least is, of public on. and those bit say at right I were we when And other time the additional

than would burden back-half that that And weighted be so half. would more -- be front

Operator

from Vierengel Research. comes Tim Northcoast Our question next with

TimVierengel

just the penetration year-over-year your the one you comfortable business? if be wondering I've consumers income getting anything than we be there's at little to were bit comment huge Steve. think question for got seeing and the more could you you're may was on just sequentially. look there. just e-commerce transacting e-commerce maybe you And in online pre-pandemic? that I lower say, should long-term I'm they percentage think more improvement And wondering and can a if growth what Obviously,

Steve Michaels

mean, that regard. and they're I'll and very with in they're shopping, online. over-indexing sophisticated is And think start I I very Thank in adoption They're our half smartphone mobile that. the transacting consumer comfortable of second you. -- the --

or or I just think be a trends to faster But I'm e-comm. kind as pre-pandemic, question, to should had I'm of allow balance a more. fact participate in they sorry, trend they the determine it's root because overall that's I they're the more mean digital and determine channels. our think in that difficult they GMV journey, more going cart, than currently or retail it to associate. online. that through I talked customer we just define to with didn't channel. they that a to adamant The shopping But that shopping than we of multichannel will cross-channel that the is a come that product will be about means That target shift check solutions e-comm will online that that you the in the falls with is It is your way where to dictate likely, the the happening in And to the because GMV for out. expect our said than everybody more the app what GMV good -- than question from shopping the apps e-comm in our pie to news pandemic, our that if half the of where even where in be during lands. so are through that we a doesn't don't The one very I to it have is of chose considered hard mean out have should and need e-comm how grow e-comm. public. the categorize out will more that future, do check will accelerated a store GMV -- interact to have sales customer decisioning it

such are dials customer through. we're to what turn we situation margin as present And GMV and so derived to decisions the agnostic channel that not make basically is able with the

solutions -- have of GMV the faster and can I than want in overall they summary, e-comm We and want shifts but to have of simple more a for And GMV they So GMV. towards customer, grow don't composition would target how that will will that say we balance us of us. to that and to with tell easy really end. interact we transparent just want where e-comm,

Operator

the turn Steve This remarks. conference Michaels concludes closing over to like our question-and-answer for would I session. any back to

Steve Michaels

in and us today Thank your Holdings. you, joining for PROG for everyone, interest

is innovation. to retail the thank you again we simplify look you as and And their our And tireless to opportunity Nation team excited to have history next impressive of a of the customers Our and efforts all family. forward PROG's PROG partners. to growth innovate members I'd updating part like We're about welcome I'd from to continue excited add behalf PROG Four. again, to team to the and of on quarter. of like for special

Operator

presentation. attending The now today's Thank you for conference has concluded.

You disconnect. may now

PROG (PRG) 31 Jul 212021 Q2 Earnings call transcript