Earnings call transcript Q4 2022

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Operator

Good day, and thank you for standing by. Welcome to the PROG Holdings Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today, John Baugh, Vice President, Investor Relations. ahead. go Please

John Baugh

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

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

expect including from certain including statements and three performance the we comments forward-looking, regarding the XXXX, for call, be to portfolio our our our this write-offs, our During benefits with of outlook XXXX will we the pillars lease quarter. delinquencies strategy, for related expectations and make full-year GMV and respect our to XXXX, in first

our to to actual Safe found Harbor that That discussed in attention your provision Harbor our can for we morning. risks statements earnings call cause from to the issued that want statements. at results press forward-looking the be Safe forward-looking expectations differ identifies of materially that end the release this provision earlier I may

our There in can statements. not make to XX, emphasis forward-looking later which expect such risks report on the and that ended today, be undertake statements XXXX, we found XX-K to December to are we any Listeners update place are cautioned today. file year obligation Form undue additional we for on annual no

release. adjusted EBITDA, are comparability reconciliation other which EPS, with call, be items, in of non-GAAP non-GAAP non-GAAP will measures, referring our and included we These with measures performance today's including have certain companies. our On the earnings tables for the been to which affect may certain detailed adjusted financial

operational of understanding operational into cash financial meaningful results insight in performance and comparisons with performance. these facilitate periods investors to the these measures The provide assist operating company's company to them the that to non-GAAP measures and prior and believes help flows provide company's ongoing

Holdings’ PROG the Executive Steve? call President to Officer. Michaels, over With to Steve would turn like and that, I Chief

Steve Michaels

we additional you, QX on you everyone. full-year take results, good as XXXX our I our report thoughts John, morning to as this and and appreciate provide opportunity well Thank morning, this joining us as the merchant weaker was retail inflation year of year than customers and traffic Last business. partners financial a pressures for both combination and and expected our our XXXX outlook. impacted rising challenging

our response, adapted cost In while expectations quickly key we rightsizing near-term advancing long-term portfolio, our managing strategy, against growth still and and balancing investments structure, initiatives.

the enacted performance of end the first portfolio our year, continue to decisioning today. Towards the changes that our of we to bolster half

the that within is marking write-offs I'm year We of in half reduced point our range our proud our X% for annual targeted QX's the to resulted in second X%. with of of X.X% of X.X%, annual And write-offs substantially our efforts low extremely XXXX. which

environments managing history have established range our in long not our have of in We various since we annual exceeded targeted a and that macro portfolio write-off XXXX. range

year, a areas. we have delinquency health decisioning other our about that last key time. improve last leadership beginning the seen XXXX, additions the our on number Since the since and based has portfolio Entering finance, and to year good made of performance of in feel of team continued technology, critical changes with we the

they the provide multi-year renewed These environment. Again, the executives renewals macro XXXX, department dynamic stability our partners value successfully partners. experience top and and heads necessary executed agreements exclusivity progressive recognition in extended by of will that believe our number of and with partner I with to this a our offer see to leasing. leadership continuing retail navigate in are the we

We growth. and top one our to mix success integrations, categories history grew improvements, for future towards of campaigns. balance Thanks shift of retail deeper new and will believe nearly with a share [ph] partners our of benefit [start] marketing within technological declines continue our delivering our across accounts. the e-commerce, Despite every landscape, to with value existing leasable co-branded our

percentage In a progressive GMV QX, high of e-commerce XX.X%. as leasing all-time of reached an

year, more pandemic. the experience forced following or shopping a shift online During the the transition saw towards omnichannel continued we a by

by our largest remain value e-commerce to on the in is behavior range our a e-commerce offerings providing As leased partners. integration customizable with home our clear. GMV, options provider the customers' We aligning focused of for retail

operate the for us growth and both accomplishments continuing to These efficiently, support exited a initiatives long-term. financial macroeconomic And headwinds. position, strong the despite year while allowed short to in more the we

pillars centered for strategy around growth value will grow, shareholders. remains Our pillars: and three-key these We our deliver believe expand. and enhance,

grow partners] [existing marketing First, collaboration GMV to we strategic and [ph]. our through plan efforts with

In our of ability converting critical and needs the new relationships, new into strengthen remain partners our on including pipeline focused our to POS growth our retailers addressing POS changing is existing addition, long-term we to and of and partners the maintain of business.

drive We GMV retailers. more our will and in-store continue marketing also to efforts new direct-to-consumer through and attract to customers online expand

in investing platforms that are servicing we origination, lease and customer Second, simplify enhance engagement the and application, technology experiences.

choice we We and innovating where with enhancing transparency, on are are greater our customers they and and customers. our capabilities POS e-commerce choose and and to benefit committed to how existing partners flexibility, to providing new shop. And

product customer that and technology we in a acquisitions engaged Third, expand and believe base. to through expect result efforts we our research ecosystem strategic development will loyal more financial and

will to that of leverage database current needs. lease customers their agreements meet offer and previous our extensive products We

pressures the we summarize on we delay be XXXX to related items. could our or intentions I'd While Due how a going trade like more XXXX. there detail to into positioning lower by our ticket purchase Brian our continued in get a thinking outlook, will believe about down are into macro consumer, backdrop to economic held to

pre-pandemic while tighter credit is liquidity has challenging par the utilization macro years. customer environment, three leases rates reserves results, Despite originated with data a the is margin lower year-over-year. charge-offs, on are portfolio volume gross half posture in with our cash and improve second declining entering which of should that delinquency level highest strong Consumer's with show increasing, look performing recover decisioning at performance the in helped metrics XXXX, stress the with the year

pressured average XXXX, deferred QX last mentioned, to against tightening the that our comp are purchases early X% year. the in results GMV to GMV on-track achieve decisioning in revenue year, and target seen addition results a we we annual write-off in still are declines X% stress, half we date. ticket potential of late our the From of on we as of I because in of rates XXXX be just first have standpoint, While from of based to yet lease year to potential in we again approval higher of consumer to expect the

our the we more convert are during environments discussed we retailers we in forward past, As tough look retail believe a traffic. to to helping have valuable we more partners and partner

see our addition we also outlook. in normal morning's annual view to you'll to this shared of up a in expect providing As how release, we shape QX

we XXXX, to unfold. throughout key current move we quarter visibility we the greater As year plan providing will metrics for how continue believe into

talk factors first ended As quarterly period the revenue, XXXX our assets momentarily, our such top our Brian growth decline result these And revenue in on around with headwinds, weigh with operating year-over-year. that coupled initiatives, addition in expectations when balance, lease gross line will driver investment and we to negative will down continued GMV This leverage. as expect wage inflation comparisons. in half we will about X.X% of future

represents of XXX shareholders. the outstanding operations we and shares, year million we flow million during financial purchased from illustrating in Finally, XX.X% our returning stock our which commitment to and X.X to cash generated strength value

we still and which end ratio Our us maintain QX the at We capital is sheet, shareholders. in generated continue range. comfortable to a X.Xx, business, the will balance of to excess net capital to in a that was the return strong XXXX in opinion within leverage our reinvest allow believe

our control I an continue eye future closing, year the [ph] [all strategy. into being a want thank portfolio, to our a the navigating and XXXX towards head for as moment team execute through to to We controlled the healthy business aspects] growth. we In and with take of by of adaptable a challenging on

XXXX CFO, outlook I'll now over financial our in turn will detail. XXXX the and greater results discuss to Brian Brian? who our Garner, call

Brian Garner

Steve. Thanks,

environment Our fourth ability demonstrate nimble challenging within to results addressing our quarter macroeconomic by a in drivers control. our remain financial

in materially the quarter, when non-GAAP revenues, a cost adjusted fourth diluted with despite the X.X% in XXXX. EPS and management resulted for lower which share in increase year-over-year to a compared in resulted a count of portfolio Our EBITDA combined growth decline XX.X% quarter, actions in QX

consolidated EBITDA margin than Our a Progressive compared primarily expected to XX.X%, results quarter the in XX.X% of better year. same Leasing adjusted improvement in by which margin segment, our last QX were had driven

merchandise lease cash of of the started we performance calls, prior on trends the to from payment indicated customer As in throughout reserves navigated in half quickly in X.X% first as [indiscernible] stimulus year, decided and delinquency changing climb QX. XXXX, write-offs

duration in the coupled reverse year. in science half. saw short investment data our as increased the the we quickly continued portfolio to allowed team Our profitability our higher we write-off us write-offs, exited trajectory with margins, lower and Driving first

headwinds to softness results. from as a categories consumer with X.X% GMV combined Moving in faced year-over-year in Consolidated on posture consolidated the company conservative QX trends revenues the stemming serve. XXXX more declined we decision for a

of and was comparison to drove million decreased The SG&A factors of as levels. a relatively reduction cost asset the leased XX.X% in pre-pandemic percentage of gross X.X mentioned, actions elevated Steve unchanged in QX our QX receivable As revenue provision from result XXXX. balance declining in year-over-year QX a these QX. in XXXX expense remained XX.X% a in to overall Consolidated as accounts SG&A taken by

of and X.X% a buyouts, progressive Consolidated XXXX XX.X receivable provision million QX QX accounts gross lower primarily in as leasing driven adjusted well in year-over-year. EBITDA XX-day increased declining improvement and from by million from expense margin SG&A as in to lower XX.X XXXX,

XX.X% segment, retail to impact QX as of period Revenue volume million gross progressive weaker result and in declined of QX merchandise X.X%. our QX XXXX of XXXX, For the compared primarily tighter of decisioning decreased executed the in in leasing traffic. XXX.X

the However, gross year-over-year, returning for margin the to QX improved historical period. levels segment's

from Progressive Leasing’s rest decreased a in of period. QX our of primarily declined down in And X.X% result XXXX. to the year-over-year, X.X% of million SG&A in expense year-over-year of expense QX from in SG&A of XX.X previous actions. XXXX leases or XX.X% The QX, million year's a also write-off of as revenues revenue cost XX.X% was X.X percent

of from X.X% X.X% XXXX. QX X.X% from Additionally, in peak QX our and that of in a of decline represents XXXX the

price with debt our ended is quarter repurchase our which XX billion adjusted program. million of previously trailing our of and $X X.X a authorized our average months Looking stock common In have in under we a XXX.X the weighted cash $XX.XX remaining and function XXX of share $XXX.X EBITDA. sheet. at million balance of XXX.X million X.XXx net XXXX, at our repurchased debt million, shares of We million, gross

was which outlook, like I'd earnings in touch provided key aspects to of XXXX now two this on morning's our release.

As of compare face felt Steve the will economic our by the our year. which on an QX pressures a liquidity believe our customers the in have in first including tougher half XXXX mentioned, results, last and will we the decisioning of year, timing of impact GMV,

to percentage GMV basis QX for lower entered X.X% Additionally, year-over-year, a with of quarter which of we future period asset with be leased first expect year-over-year revenue. roughly XXXX in-line the balance, decline We the our decline. our gross rate is

We expect first particularly headwind to the decline this the as serve year. of half to a in revenue,

negative Our our us base providers benefit in any nor stack. case consumers impact assume material the credit assume or further downturn by of it unemployment above on not timing the from does does economic

size, a include year, a account versus into decline government in take did lower support ticket programs. average reduced amount average last tax we and factors refund Some

of decisioning outlook outlook assumes EBITDA in to to a adjusted billion, durable our million demand and non-GAAP impact changes range EPS XXX $X.XX. rate of and to goods. expect we consumer environment in $X.XX for million, from operating XXX continued company's effective No with tax to no XX%, non-GAAP $X.XX be posture to range This additional in for for share be to approximately billion material soft difficult Turning EPS in consolidated the of range revenues the $X.XX the of XXXX, and the repurchases.

earnings we portfolio will challenging, drive that revenues. performance leasing the from rates year-over-year Steve XXXX to lower picture gross was our of much from anticipate while lower offset helping buyout mentioned, our for progressive As pressured XX-day margins higher the revenue lease XXXX

was backdrop In also over business. react proud years XX this from of macroeconomic company's to in experienced different XXXX. our a extremely we closing, anything It ability have to in I'm

pressures external of confident remarkable team approach. showed dedicated and to to continue Our ability team's a [that [ph] ability employees to focused] respond and in remain I adaptable quickly our

I will back portion now call. turn to the operator Operator? the the call of over Q&A the for

Operator

KeyBanc. from question first Our comes the of Instructions] Brad [Operator Thomas line from

Your open. line is

Brad Thomas

good Hi, Steve had questions morning. could. if and Brian, a couple of I and I

how today. kind that you're one, one operating in business and on First the the you're environment on of

was any first, tightening credit in think seeing Brian, it that just and starting you're prepared I'd subprime curious, from think world? remarks, hearing the outlook I you so the you benefit of in there not part any the And And be out benefit from if the your out tightening in part what that factor stack. you're to and does mentioned there of get within credit

Brian Garner

Yes. your team. Steve I weigh been the as now with the appreciate let I'll close that in question. to on sales he's following

Steve Michaels

– customer reserve say expectation data good the kind impacted quickly that several as And more Brad, we're savings of one in funnel. our is that already, this we've than Yes, been for it's while talked up cash this just a our about for the prime on mind application a Yes, happened me you morning. certainly, I you're – that waiting would has see and should an show as calls, as customer confusing have rates, prime looking to customer. at in was the but because

to results, their on higher delinquencies, seeing and tightening provisions. calls starting certainly using higher their hear the and some the You're product word of providers you're

Although from have expectation but our say, lead material we on us I reduced seen it impact it's stack, we to material that to not have any above will the yet it – seen to yet. actions. has effect It would a not supply credit well, those

happen, terrible we predicting outlook into far. not the of it while in baked our been timing will And I've thus so, because it think it is

we more [indiscernible] specifically, do So, operate business. in

there although little tightened more not and above are several seen are both a and environment tightening watching them. bit seen we last and [ph] where over a And has just [second the the But it. of XX tertiary yet, [indiscernible] for provider times hawk – and few so we prime are a and have instances a broadly, we months book] the the for retail has like provider it looking within

Brad Thomas

growth. help there That's wondering little years where expense just us how think And have was base business? of I many experienced helpful then the were Steve. could been think you – about a more about the if you Progressive significant bit Obviously,

in do I think the amount growth of some ahead tougher could tremendous of feel have the environment you GMV, terms about there's operating still cost opportunity opportunities little the nonetheless, all, bit level but the that structure you of you how a the of a business, in you near-term, of spending talk savings specific here a and about more maybe might this year? here

Steve Michaels

can the there on and navigate I'll couple through about market and environment, of has changed. said though then has been We're in. this you your crazy years side, in but view expense nothing very the Yes, nothing as our managing this changed the Even we're the has size out to capture. start Brian chime that focused price question, of and on a trying

near-term on the future. we're be to also trying we're prudent while results, for So, investing

year, remember, out of will That took the We our did in most was base. XX% a reduction last with definitely earlier right about actions cost anything. you we that. expense [indiscernible] took did We than sized some headcount. As

XXXX, As to we to revenue how picture plan started was about started we think shaping our up. for

We plan. focused very there's hiring in not really the and base are cost the any on

headcount we in some recruiting how attrition retention In be are reductions and environment, area, wage could a there there's an talent GMV fact, environment out, on and based leases in shakes active our inflation. of ops but operating through just tough also

teams talented back the have it's to those in and win think we folks. best field the that we on investment appropriate the so, have And to we with

and invest e-com offering to products in investments, to our order on in the technology both improve As continue we to and experience. specific customer relates it

environment, we [indiscernible] So, of growth when better boarding we come think foundation believe the mentioned, they that do the a we that as that is because believe spring will normal to it's does. just it you revenue new off that been feel right things don't forward that tough and a this look we but

Brian Garner

Yes, Brad just I would add.

going a about from you a an well thought] be term structure think of near XXXX obviously it’s set-up remains kind will, balancing we the opportunity to cost and operating as prepared the There's going revenue. the headwinds near-term [ph] need said, Steve [left national standpoint. the the, remarks to on As a leverage as deleveraging, and act, in I if

margins we're – be With do have our in that's expectation. but costs highly variable we cost weigh does structure, is and on to fixed that something going XXXX

do We a to levers the exist. them large degree. So, control

going this We're I think being ROI from and would the right too expected be it as in those it's be evaluate I investments careful in structure. getting think judgment – we decision. these thoughtful to and our about – that investments reactive the environment,

Brad Thomas

Really Thanks helpful. Brian. Thanks Steve.

Brian Garner

thank you. Brad,

Operator

One moment next for our question.

Capital. Our next of the comes line from Loop question Anthony Chukumba from

Your line is open.

Anthony Chukumba

taking Good my you. morning. Thank question. Thanks for

quarter So, on just a question had first guidance. guidance, specifically

So, you're particularly as year full-year simplistically, significantly at EBITDA account the I EBITDA. earnings full-year I pretty XX% guidance back then and about call look up that last pretty of will for, at of implying and about year-over-year was earnings EBITDA will your And first be that the your it, from for quarter quarter an first EBITDA. look XX%-ish perspective,

numbers I trying leading to – to, like, guess seem the that would I misinterpreting? worse of on that I'm all. performance year it you of square that goes I'm what's you're think trying to get as sort just to or just am to So, expecting imply sort

Brian Garner

well. start can it's as Anthony. believe I weigh Steve I'll and a good in question,

in reflected XXXX nuances we're and that's given a there's in where out [indiscernible] a uncertainty the that think guidance. and from some perspective enter I the the headwind what's environment throwing think as we about I we're thinking

with asset balances roughly down set up entering to we’re I this a start, leased year X.X%. [indiscernible] think gross we

period revenue. our so, that's future the And driver of

continued extent, expect impacting revenue amortizes to And that some – QX pressures dynamic. that it's so, in from we the while

Steve also first of near-term the start year. GMV indicated some the half challenges to

starting GLA. in are in of And There's they were got than better also XXXX, so, models we an an expectation are, much accounts payment half while integral from our to to your be receivable first still that our to trends on that's provision. referring performance the point going addition haven't back within we

our we working challenged that's yet going back of level there's a from performance] to what not our model. a degree standpoint. to performance still expectation We're pre-pandemic to some through. be within [ph] And [paying It's customer its way saw

last would weight] be of that provision seasonality say AR in since receivable period. debt or the see typically normal performance kind lowest just the that it front expense about [ph] we've thing and any was, So, a will like had to talk the typically kind of QX, you the in but that I'd forever of accounts feels seasonality, bad cycle provision

So, are deleveraging results and when to point as be going throughout the expect to that well. bit pressure the a helping those look kind year. as QX mentioned would that's I [ph] aspects we builds] I [revenue that things three as the But of to we soften the

Anthony Chukumba

That's helpful. it. And question. one follow-up then Got just

gave your of the you partner these in just Would in pipeline? existing the fact multi-year love execute terms terms that update retail – partners any and is So, some lease penetration you and helpful stats very penetration of growing the renewals. retail

Steve Michaels

conversations momentum hard working MSA, and environments are we're – of every timing expect difficult frustrating Anthony. nothing have feel processes named with seen. my up difficult in will sign We do has by, has to positive these it's which economy dealing some Thanks, in dealers] in normal whether and they – are release Steve. various enterprise changed the answer, we the changed be other when [ph] be I'll predict. is that's to day. talk to is stalled. Yes. they that remain convert conversion tough, or in on the about but assigned will as But fact we on to with we're press where But have the regard otherwise may [three – experiencing obviously that our to obviously of it's in in actually so pipeline. retail to pipeline, XXXX and goal comps and It’s that pipeline we're be retailers, say positive that that when large nothing just come This

focus massive broaden ours certainly, it's to base. So, our a of

grow we the more when retail that to So environment positive bigger a is from. have that platform

Anthony Chukumba

Got it. luck answer Good Yes, your consistent. but with frustrating, was that.

Operator

One next moment for question.

from line the Jason Our of of America. next from question Haas Bank comes

is open. Your line

Jason Haas

Hey, for thanks questions. my good taking morning and

I'm the for know was traffic, So, that up I curious it’s that's holiday are weak for you how And has curious been the retail case you how been the generally. first then I issue could about your if one, a for as performance partners an while. this talk performing year, been? started we customer them? out how just called shaped

a I'm So, pretty signs still or curious is weak any been if there's improvement of it backdrop? been

Brian Garner

retailer – slightly do different price deep they categories Jason. also stores. have an read points, going may their are or their Obviously, high-end be of it within to not would their before mattress specific super a high-end to jewelry item. don't we be – whether piece point that call Yes, within results. potentially they we that [indiscernible], know in you than participate release comps the price But it than opening of the differently like And perform super the report through. any the leasable QX I but definitely and the headline you're little bit

in the went as of were QX [XX/XX] down in really GMV on. XXXX. a than we holiday seeing but generally commenting strong expect other it [ph] in, on So, kind we into to of since of than what down weaker same were were not, We're not not was we we one, were October, we're outlook to anticipated – to we not going when it provide season expecting the that neighborhood our – that as was because seems be it in weaker kind we quarter massively weaken the

Jason Haas

differently. I'm I a Got earlier, going ask then a follow-up, think to it. And Thanks. as That's this but asked bit question little you fair. maybe was

year, I about to I like was question, through. guidance earlier closer then of the are there the AR for the like it's the years through XQ on driver for an XX.X% getting X%. would the cadence biggest of based sounds So, that response think think many it coming your be, Brian, reserve of the and to to margin I

– XQ it, like gross margins – of outsized that then in So, in like remainder the that and of is that the is sort should like we normalizes effective see the maybe year?

And guess of saw along this where are that, more think be if we're in for the for is like what's sort to want think P&L XXXX still, pre-pandemic margins I of my lines just your for below I expected I for year compare target. broadly question XXXX, still that them XX% XXXX, we or like XX% versus XXXX to I you what

of like what's curious the it compare Thank coming helpful wage if you just of AR in help that'd So, Is is I'm inflation So, the too. could Are provision? you. write-offs kind the of driver higher? over two, that years? those be

Brian Garner

XX% X%, if component as we – pretty is below above and gets quickly XX% not XX%. terms the margins meaningfully models, your that is of, I margin correct math roughly growing of improve terms deleveraging From and my bringing that this probably pieces. take to you're is year In your the think and in of profile this I'd – is on a rest me response. can order this sensitivity certainly aspect earlier to in and that I referenced of internal magnitude, the meaningful of pretty the it's real in Let say the slightly out back run it AR it

the investments So, they investments time. I getting on critical on accountable obviously, sure think those are it. making that through margin going and hold seen are the and focus ourselves growth And typically growth where and over we're have that we to bleeding margins to

keep to just [more of to out, XXXX historically, in mind, obviously, XXXX [ph] the time. reported on progressive public is think I and half spend]

it So, are you're had certainly of about I think that's margin, a talking public if north and is it attainable. something And Steve as of costs [ph] where I but margin be. want the there, talked to about cost] XX% EBITDA certainly the the of that's – being the business, internally lot when we it's you there that think about think – of contribution [variable generates,

get some got need to So, to where be to there. we've execution happen see us that we to want we

Steve Michaels

just the the we where actions provision get can do are higher than proud the we portfolio to on it would XXXX] write-offs with I bad took point last we're to by the [indiscernible], expense, and happy me the your they than keep mean, better AR – year and is while be and but and XXXX [BDE] I [ph] add measure. Brian also is, of about some the net still [ph] none comparable, where higher to portfolio expect levels than pre-pandemic is but and [when – where

Jason Haas

That's all it. you. Got helpful color. Thank

Operator

next our for moment One question.

comes Raymond line Our Griffin next from from the of James. Bobby question

Your line is open.

Alessandra Jimenez

Jimenez morning. Thank This Good questions. is Alessandra on for Griffin. Bobby you for our taking

to listening terms. of touch wanted on, I just kind First,

the payment to GMV again and in would start performance growth? you to go after or what to see loosen economy need more So terms

Brian Garner

Yes.

we decisioning since from standpoint, that we're same So, of in when we've the ballpark been a kind posture timing the talked in our from actions. a about decisioning the, summertime

XXXX, also or but the leading doesn't improvement. any tailwinds base We all in and recession assume watching – We're our assume any really indicator the not are data a economic does all data. case BLS

prepared the utilization As credit we stresses mentioned for on the high up. our is remarks, liquidity is consumer

some vintage pockets meet for And a levers weeks defensive review this to uncertain committee we risk for we're posture retail tightened have environment our we in portfolio is but by knowingly opportunities our in appropriate. We that disposal, and are us rates. increase also to an some we which of don't are we look pool and bit that partners, we or little review to leave also to want how on the feel table approval two profitable and inventory of playing it's on GMV at every operating like the our So, out. in,

before my move we're and being ready, it's deploy we those year, but approval to at baseline we expectation, – as opportunities through prudent have we rates we not initiatives I for I just increase certainly look in hope that the hope, but them. this can

Alessandra Jimenez

that. pressure? That's just terms very kind a stabilized see you seen continuing of have of to you Are on then in sequential And follow-up volumes? application maybe that modestly? helpful. What Has

Brian Garner

channel, have Yes, we've at by it seen to right. look and we

So, e-com sales store material through talking in-store kind of from kind a are sense. but difference higher in-store There's little, and up volumes flat that of what in the a E-com there's an when makes the a slightly pretty app to to someone's an versus volumes purchase funded in down. GMV intent go you, funnel app are associates.

conversion approval in So, rates store. are higher in higher rates store,

have numbers online. you least to flow through app It smaller kicks does app the at in, big when per GMV. increases so, it a has while And have –

So, we're watching that profile the what opening of credit but above we're of app for [public the far. evidence specifically we're more but the app we're observing the [ph] watching, look of so funnel] also that that's to something from the us watching side that's providers from tightening,

Alessandra Jimenez

much. you Thank so in best luck XXXX. And of

Brian Garner

Thank you.

Operator

question. next moment One for

comes Our next Goestch line from from the question Hal Capital. of Loop

Your line is open.

Hal Goestch

books [three your same components merchants year [ph] on merchants thoughts through forecast? from? off you assumption originated us then think you in buckets] much Give guys. And XXXX like that good to book, being [ph] now and is where kind Hey, coming from those in add XXXX. on in XXXX might on had your thoughts your about and back the of of GMV the like for that from come of it are is GMV this like are store those you morning XXXX] sales like ask basically and merchants your added for GMV then might [XXXX you how I'd of that you their

Brian Garner

Yes.

plan And we We GMV have So, team. I'll in that start for sure, the with have pipeline. a on also to number bizdev the make want pressure always our keep we one. – last

the really So, if announcement accounts named but there, an XXXX pipeline ones. be material impact we year, to GMV. is not in Even would a the are have exciting it this

So, pipeline our outlook in in there's number or standpoint. a from smaller a our view

have of not out productive. rest or and existing And ability really XXXX then We just calling initiatives kind the more do with the the baseline specificity to is, become retailers of vintage. vintage and the the XXXX the

on said, as ability prepared is but have you like which ultimately – kind play mentioned these that the a we will of deeper store And our focusing we're what in same so in we sales remarks. out integrations metric,

last for nature card waterfalls, waterfalls, talked order grow which e-com prominent that on top credit partners GMV sale that the we that years, continue side. down couple same about to in integrations, in XX become In-store and of some pages More retailer. opportunities even within retail of and landing environment and PDPs – area. with those comp on POP, still displays so, over we've have grow to that e-com more – And of in the things things nature environment a potentially balance of increase the

the thing One half rates comping obviously in – first want we're I XXXX. the that approval the mentioned against still XXXX higher is, just to first of we here half reiterate and from in

collaborate and because So, those might have we will And even – our more tech retail initiatives overcome those even that well whatever merchant are to will teams throughout timing difficult be the be. productivity to to teams, partner partners, those year or the initiatives. difficult project the predict with with of productivity

all to that. roadmaps with partner using hard become opportunity more have to and retailers the this We're some partner our working level of achieve well-developed we meaningful on at

Hal Goestch

risk follow-up than for your And Could strong you less lease than we've the range, your the get hey, have market model? like very just statement point but bonus at these this seems time. saying companies loan a on on toward on are] of your the know, about the from how wanted on thoughts the like other what focus You're to caution, where prime customers the the stand job I that own in job they'd – all some lower-end because a your your companies very, and heard now your pretty good, probably color in space, leave to doing decisioning factored job you could be lenders which volume all table, is probably market, of several table [ph] write-off is maybe on some [what we into trending market thoughts ask lease we're that? they're less relative to leading on or a volume the said, to on

Brian - Garner A

to all pandemic I all on out my figure exception to in couple what's trying Listen, figure and virologists years, to mean, of happen trying economist hear all out are I we for armchair about I'm armchair on we're the frustrate that we're out I side. think going – a [ph] the talking have things now these working to [back always when no team road] because that all I macro [ph] morning. [CNBC] I the

actually was alluded know be in that in the That sustainable that's could but would don't not. if I that is our jobs that So, so, of doors be for welcome number [indiscernible]. not off. customer a right? for the some January to one we thing us increase move And might unemployment tailwind you tailwind see listen, kind rate, to base, or a

it a way, there I'm But things in question, them. leaving original macro the I'm to some long that's could But the not I last I break position economic stable] out be that I than mean, used big would [on of give until way commentary don't And years, likely cautions. are I elements more possible us we say to I'm so not to to over want give. back we qualified that that counting not of it's our think actually breaking to are of volume of our more not for and that some some appropriate the clarity. get the bunch the on [ph] probably couple

Hal Goestch

Thank you.

Operator

comes line from next with question. the Stephens. question next Caintic One Our Instructions] moment our Vincent [Operator of for

is line open. Your

Vincent Caintic

in XXXX. repurchases, have asked. in the no my taking share active Hey, wanted to I expectations on was good your for my I been morning. know question. generation but XXXX. of XXXX guidance, there Most Thanks were touch for you questions and cash

about thoughts on return get XXXX? So, just you. how for your to you're Thank want thinking capital

Steve Michaels

mean That's with I duration quick one the will conversion our Yes. XXXX. portfolio. cash the short cash we model in a and generate of really cycle cash from standpoint, elements nice the business of

will cash of production timing So, levels. actual obviously, the the impact GMV the

the right years. in many a cash many, would year and more generate course we cash when positive year, was our the normal he had said, haven't the than in user. over we of will flow. GMV a of we depending production the XXX% Brian as we generate first And cash half year, calendar But in in But normal half actually of a on then be the might year back

to lend shareholder repurchases return. here. view Obviously, As show two We'll a a value have balance to history about our the we I it next look the will strong shares sheet share optimism it I relates think a the to and of with would kind that or are always our future prospects years-ish ratio want like. of over what allocation at leverage and keeping, capital prudent keep look good

our first, And the the don't business repurchases. definition think we to [indiscernible], capital, shareholders. we'll I And program. I favor repurchase then authorized exact then is And million original but in it's prioritize generally remember always our by to number, excess neighborhood in we'll look forward of our return under the share remaining $XXX but the share of investment

Vincent Caintic

then Okay, perfect. earlier. That's questions question, from merchant the on very a helpful. quick last And just follow-up

detail? you existing more campaigns maybe there? with there you understanding cold more, that the engagement in there. I you about seeing talk the was as discussion Are So, comments about that engagement talk and wondering about partners increasing but like anything your say, or if could merchant when marketing the was pipeline, you. Thank on some

Brian Garner

Yes, definitely than engagement. Vincent. our is don't And and counterparts partners at we with we've out [indiscernible] comps. there partnering I'm had with pleased that trying we our level sense makes for are. to every the of Thanks, now. collaboration because I have think Yes. retailer better merchant

someone of a but test. having out deciding, give idea the our about the okay, view first that storage, and it a negative on let's try then That's So, material always in development.

got wanting really coming in more more been product partner participate [indiscernible] partner partners up successful at our which league, The to – pronged which and week, really has with that. We've previous a which two merchants there our on well, but markets on customers would well. co-branded out co-branded, will as send progressive not be, of something co-branded, well, to progressive as with

Best that. or [Kay example, like something Buy Jewelers] like [ph] For and

velocity that on then unused holiday partner, are and like [ph] generally, good up to across [for and always potential talked So, not that some backing everybody now seeing now, years] and we're like before something a our that's belt, good allocation, in good has returns those that positive might able and like the most a data important we tool have pretty increasing conversations just this and that. which about they that there's specific the track and and there's frequency are part have the there. left limitations tool and execute in tool statement things, record is and resource tools about of be year merchant resource to if intentions or And

make can't retailer us it of a focused work burden, those the and partner. us extent can. can but putting taking makes the deployment of benefits XXX%, do the and that side and a easier easier ledger burden of the we much the off We the to can retailer and preferred we're as continued to on extent on But we integrations taking that it we as the tools our

hope we to and things actual number those XXXX. a by those things of encouraged we're So, in have execution evidence and of

Vincent Caintic

much. very Thanks Perfect.

Operator

queue. Steve questions to closing And further turn in over any remarks. I'll showing back you. any Thank for the the I'm call not

Steve Michaels

you Thank today. us joining you, all privilege Victor. It's a

reiterate optimistic very and just we work those Really what XXXX we're As team had that's my XXXX, accomplish, to challenges, the mean future the multi-year, the for for about we us. also what want need get near-term wrapped a to the – I up thanks for well future holds appreciation where but challenging to can be. and us we and to going to to executing doing medium-term

to days all about April end shortly so in So, XXor the at we here updating of you results. our QX look forward

Operator

you for This concludes today's participating. Thank conference call.

great now day. disconnect. Everyone have a You may

PROG (PRG) 22 Feb 232022 Q4 Earnings call transcript