Earnings call transcript Q1 2023

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Operator

Good day ladies and gentlemen and thank you for standing by. Welcome to the PROG Holdings First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation there will be a question-and-answer session. [Operator Instructions]. would turn I to conference time, Mr. this like the to over At President, Relations. Baugh, Investor John Vice Mr. Baugh, begin. you may

John Baugh

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

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

be call, forward-looking, and revised of GMV, comments write lease certain expectations statements well of to this offs XXXX. assets our of for levels strength XX-day allocation will our related make During our quarter including The outlook we from balance, gross buyouts as leased the our regarding XXXX the XXXX second balance decision our range of for faster, starting year full our future our the sheet outlook as in periods. and and capital priorities

to any we additional you obligation to There statements. which year-ended are undue are to undertake today, such no annual provision our the issued Form earlier on differ I want of in our XX, read. cause risks we may press that statements. and emphasis to we our That December make Harbor the release at be from report in not encourage be the on cautioned XXXX, to found place call risks statements to actual that earnings end this update forward-looking materially your Safe can that found results we can the XX-K expectations that Harbor for discussed identifies provision Safe attention statements Listeners forward-looking morning. forward-looking for

to which financial financial adjusted non-GAAP in them of into non-GAAP will results other the that affect with performance company's facilitate understanding believes are EPS, operational our flows company's to may company tables operational cash The companies. with the measures to assist these and certain with and and measures, items, the These the measures insight comparisons adjusted provide been On today's release. non-GAAP be performance. to for of in earnings comparability investors these reconciliation performance referring certain help included meaningful call, our periods provide including prior we which have measures ongoing EBITDA, operating non-GAAP detailed and

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

Steven A. Michaels

our an XXXX you, good Thank John everyone. few first had results, full us our expectations I and our on net and first important share update financial you report on as year outlook. revenues. GMV excellent provide for appreciate and metrics, morning, meeting joining a We thoughts we quarter QX our quarter an

We earnings than expectations also better continued materially customer portfolio our and buyouts, to behavior, lower payment management. expected due exceeded XX-day

team's but unprecedented results. I obstacles in challenges have overcoming The last proud months of XX deliver to these efforts presented our am such strong

to our our start great we XX% XXXX. XX improve the year and by XX.X% to a non-GAAP performance X%, actions Despite of X%, offs to outlook. by has margin to earnings compared adjusted year XX.X% by of This first full EBITDA and led as quarter for raise the million or us our year EPS write significantly still revenues consolidated costs year-over-year benefit right and our size QX gross expansion, grew portfolio of leverage. as evidenced continue improved SG&A Our margin to declining us, in last

macroeconomic we our While decisioning and backdrop economic demonstrates to believe pressures, ability optimistic margin, is first forward, outperformance that our contributing there while to targeted economic carry inflationary environment, key and gross our were we decisioning within we X% a year first to range, not optimize quarter and manage returns in a our discuss cautiously write that our to are of remain in prepared X% more to current about quarter annual deliver detail. We factors pleased results, business off our health Still, which positions our our us liquidity. with the strained instability, Brian customer may will strong despite to were another portfolio shifts with which our healthy persistent goalpost.

to past double-digit quarters for two past we of pressure believe decision we have GMV, in byproduct declines over last in tighter largely are experienced Turning a our the that decisioning those the have the of thirds three changes over approximately quarters. of GMV We the implemented QX three accounted year.

to though, outlook, back at difficult similar fully posture, to year half our expect second GMV decisioning the QX lap last the these to year-over-year comparisons GMV introduction rate we a changes. of ease our due quarter of terms of year's we as decline decisioning expect In current the a basis we to on in

Soft to response continues to pressures. this big durables liquidity demand of categories, leasable in the many to redirecting that demand for consumer primarily due our our in ticket with is showing income more of product retail their essentials consumer slowing data base

us materially indicators sales seen through We XXXX. leading rebound of assume no balance to the retail have will that

starting banking that us recently late consumer underwriting. very Delinquencies that have many to providers sector that evidence see for albeit past are We The lenders providers the developed look begun in further track credit restrict QX recent likelihood will their pre-pandemic are to of decade. tighten in challenges levels. prime to fueled below credit the most funding the speaks to level above still increasingly that we in for higher, borrowing cases moving that the of

timing to business, be credit becoming it supply potential is predict any benefit this the balance have not is we believe our some it impact we will as While may more of XXXX. assumed delay the for to too consumers. Because for when GMV to our there of restricted, the tailwind still early

overall in closely the started to very the only track pools improvements we and have We quintile. of our continue quality to top see applicant recently

in our The of posture last the took to we Moving strong to short leases of recover portfolio portfolio, duration business the decisioning leases. second maintain with for performing revenues XXXX active half in helped in expect performance near of immaterial now leasing levels. profitability, our QX of portfolio in outlook ability term. leases margins year, remaining year deliver on the the our an core we portion represent and first with half the to our to our Because of decline on healthy originated our despite par pre-pandemic tighter originated

position more our In make the elaborated on and to expand. in addressable pillars allow February, to we on market growth us strong key sheet our the to share investments market three grow, and gains profitability enhance will of near while capturing term. capitalize strategic our believe continue We long term that in us selective balance

us continue consumer and build technologies our better more to to we a than know years those after for evolving enhance XX an LTO example, allow than leader. For will [ph] as that investments anyone

are purchases. our of have a millennial groups more or Gen thirds researching shown two and Z, approach, vacillating omnichannel making when that in-store roughly Today, and key between customers online

personal know with our differently generations emerging also interact these previous demographics personal We adopting financial technologies of and solutions. finances products than part their as

today's come their options, and more items. result, control especially flexibility have a for expect payment over to As consumers ticket larger

enhancing consumers need omnichannel and while best price transparency the We a and continue tools, and to the to by providing with informed most they address more this frictionless developing disclosure discovery, products educational simultaneously choices. customer them journey offer help that make demand

that lease invest actions even stakeholders we converting with will revenue believe to innovate own to also XXXX. continue partners and to in term technologies and as opportunities, checkouts. accelerated key new E-commerce with customizable, integrations existing enhance with long secure this these to We continue and focus, efforts online challenging existing remain pipeline their integration retail in of our LTOs all a benefit and further in as ways flexible, offer add partners we pace backdrop the has new to area the while retailers

was than in in-store the down results Progressive last same continued what grow, we in year-over-year, e-commerce that XXX basis GMV While QX higher saw a and comparable less percentage points to e-commerce period leasing coming of decline GMV year. was as than total for

initiatives and experience, key enhancements lease to takes the to to it were complete retailer the an customer Additional include time completed and transaction, and technology decrease updates LTO systems. the customers optimizations to payment that within quarter

Brian the to the more earnings for like a to detail our summarize upward on While year, I'd few themes. provide will revision outlook key

expected stronger [indiscernible]. with average buyouts a Revenue driven and we XX% by historical customer than Our decrease buyouts XX-day believe from which low the materially from tax QX approximately expected driven emerged low of perspective, better margin XX-day was by was a performance refund than we year-over-year.

we financial positive for lease the portfolio in lower this of impact we experienced normal remainder Should options. our buyouts the and margin, monitor While gross it a customers performance how a with tailwind lower continues performs buyout XXXX, QX delinquency the will was percentage trends results. to the for should be the a low see important XX-day executing be buyout whether to of pools

on However, indicator our could to should our to be XX-day performance, decline prompt decision. in which tighten a stress delinquencies, customers portfolio prove and may we leading the us buyouts experience higher of

Onto capital representing shares we the first outstanding in of million topic quarter, purchased during X% of the $XX.X stock. allocation, our

further XXX.X an economic ability to operations, We also from strength in illustrating unstable cash financial our flow in generated show million environment.

priorities we shareholders, and cash strategic fund M&A for excess share growth, Our return unchanged, to opportunities, look capital and primarily to remain allocation through expect repurchases. to continue

quarters. the emphasize result in the have our our direct that strategic To strong efforts work that close, QX to over a I hard want teams and was of put several past

empowerment details remains today and of and at possibilities and core we of unlock Our financial mission operate, to expand better the to create will through customers. XXXX the the we our and tomorrow improve a grow, enhance, for more CFO, I'll quarter continue how now over on Brian outlook. Brian? of call the our our first Garner help to results to financial lives turn

Brian Garner

to quarter Steve the our I'd partners, start helping like and deliver thanking retail and us morning, a for good customers you, strong by everyone. Thank year. teams, to start

strains our to in QX million revenues expectations. from resilience consolidated XXXX results model XXXX our inflationary pressures macroeconomic adjusted in consolidated by QX million, Our outperforming XX% EBITDA quarter million and XX.X of approximately XXXX teams of highlight headwinds, and QX XXX XX.X in declined the X% the experienced overcoming increased business of to liquidity our including first consumer.

improvement write driven lower results our Our better by than leasing consolidated at segment. and offs were expected Progressive primarily margin

driven to benefit low resulted Non-GAAP that to headwind lower in EPS for current QX QX, were on growing margins. approximately $X.XX revenue, checks gross compared XX-day QX XXXX refund XX% partially a record pressure to Liquidity in XX.X% activity diluted customer, period in $X.XX, a tax which average is by from to year, our last but buyout on XXXX. of of increased

quarter lower than the experienced higher profitability. due expected year, driving last performance, in which margins, we in increased payment to better in Additionally, and tightening efforts our charge-offs of resulted QX

percentage double-digit million XXXX, continued of largely million QX in For declined XXXX driven as compared asset retail tax refunds. XX% our period our traffic, balance and in weak lower into segment, revenue by quarter, in from the decisioning XXX.X QX and of XXX.X decreased QX, by decline GMV heading posture, material in buyouts, leasing to behavior. Progressive current softer customer Revenue in offset gross the the lease year-over-year, X% partially XX-day by payment decline improved a in driven to GMV

to QX year-over-year improved XX-day reached that to portfolio and activity However, yield. points improved margins decision lows year's XX.X%, basis gross primarily record the actions due that segment's XXX QX the last buy

than While margin gross average gross a XX-day charge-offs. beneficial buyout to more it than results lease, margin remains a lower most significantly an

course expect although expense a QX year. XX-day QX to over of year. SG&A in XXXX year-over-year XX.X% lower remainder as leasing Progressive due is the of to narrow in XX of the million buyout expected cost last be variance decreased revenue declined of to still year-over-year the actions the percentage for SG&A in QX We XX.X% XXXX, primarily while activity of expense the to XXXX, of from

track the revenues to QX, recently also trends XX.X off in in of in and targeted I year our the thus the annual within far range. period. seen continue announced XXXX, end X.X% remain encouraged from we on previous We or by a down year's X% we've write million be to

million million of the we at ratio X.XX XX of in with on the cash X.XX net million EBITDA. $XXX.X under Looking million, have in balance at shares months times average billion $XX the our adjusted sheet, and quarter XXX resulting ended repurchase trailing leverage our and debt XXX.X a common first stock gross price share program. of In previously authorized of purchased we quarter, weighted $X our remaining

to outlook, to on now year due EBITDA, earnings aspects Despite revised release. to and on in XXXX like continue economic expected results our morning's experience provided key I'd first quarter were for strong and touch full our few QX our pressures this headwinds of adjusted we by felt liquidity which consumers. a GMV

decline in we second As Steve XXXX the year-over-year rate. compare be mentioned, implemented last due decline should half year. GMV our of the as percentage to This lower roughly GMV QX to expect tightening against of decisions in we lessen we line second year-over-year our with quarter the

which quarter period lower GMV gross revenues leased gross periods. second year-over-year. Our quarter asset ended X.X% is and asset X.X% headwind XXXX as the entered future a future driver of the year-over-year decline This lower likely balance XXXX will of balance, in revenue serving key leased a further decline the first to due to through

buyout providers leases in revenue low and for portfolio the considers current a performance improvement downturn, Despite anticipate assume stack. headwinds, consumer to consumers case the us above Progressive trends, employment does the on margin but economic base Our our year negative remainder further a of will that or credit drive materially from our the tightening impact of by XX-day material year-over-year. we lease benefit rates not continue

our our earnings raising year are revenues. full we slightly result, expected a outlook decreasing and As

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

year. would earnings remainder thinking strength we they the to the the like to first about Finally, as how I address the and are our of pertain quarter increased outlook of

strong headwinds are the continuing that move encouraged pressures financial margin throughout we year. by cautious as GMV QX, are and we about on we in results the expect the achieved While we

consumer adjust to April Soft GMV observe demand trends caused expectations have into our us for and and downward we QX exiting revenue.

costs range. assumes initiatives XX-day that than margins QX, inflation platforms, outlook wage are the the buyout revised margins offs dissipation for in to lower an dynamic X% and due that of of targeted of increase EBITDA specific X% the in due remainder to the run Our write year adjusted rate annual full some QX technology for key year and our SG&A within to targeting benefited

remain Q&A and In optimistic results and following efforts of the about now the operator the from the our strong year short, as momentum the committed prospects start call QX to we over portion look helped capitalize decisioning performance. of achieve positive call. the strategic I will those back on the our gained are to turn that Operator. we other for to us XXXX have disciplined the

Operator

[Operator Instructions].

Joseph, from Our first Jeffries. line the line Kyle your question of Mr. or from open. comment comes is Joseph

Kyle Joseph

parts. Hey, Thanks good on my and the taking of Obviously questions things, moving side morning a a credit of difficult environment. guys. navigating lot job for good

tax You a employed they lower underwriting health guys adapted facing Have the get just that elevated get parts? last your some but to trying a kind obviously the in refunds have expenses. for year kind just the underlying they're this of year, of changes this but dynamics now, for sense some consumer, to played going of the year, implemented environment want given quarter we've out of moving sense in for of as the a been on inflationary to but

Steven A. Michaels

those per the and our performance we know, that our pool ranges. track the the morning. as consumers Good and a those This within GMV have Kyle. because customers Underlying of nicely of were did, has mentioned, expectations our changes. delivered that thanks, performance you is we decisioning the there. that kind our There's changes having we is you were lot Steve. Yeah, We expected responded portfolio pools year approving make throughout as last funded QX pre-pandemic as performing to portfolio which certainly and history targeted against

back that the performance to half and provide saw the that turned we throughout It XXXX, our short of portfolio duration we leases. due metrics the that was over in So externally. reflected

the The story, by interesting performance portfolio slightly than right. behavior from trends QX we expected, payment a from wildcard was saw as driven standpoint. although the standpoint, refund customer was a what believe an tax better was We refund, expected season. tax similar

lower. of that frequently, pressure built to as our be come to fairly lower it it related We original in on it into as expected We did GMV. report you some and many will outlook

a kind of experience gross our driver Brian higher primary we a the it's margin history dictates lowered but driver than tax where prepared saw, through, have resulted side. activity in consumer. materially read What not our XX-day leaves or of believe our refund in both said and that our by in we that, perfect origination this on buyout our that -- seasons. is as I Just we and us just it's this were those refunds lower to seen the previous and anticipating and And remarks

customer's going the just stress to persist other cycles and -- wasn't some will to life XX-day. dispositions convince think naive come or margin need that a because be is why to caused a to this do do of The shape. yet XX-day not cycle, the few data now was out due picture XX-day that react was lease. There's us did someone and on able be we a that believe lower good stress had delinquency did tailwind where that situation them set the in new is XX-day margin, lower, we're that which is Will -- so we while on our consumer remains to still to a to question we magically who liquidity some a the that full full of materially buyouts to, play a march to would've didn't to XX-day it's buyout. to XX-day it's it done to interesting persist kind right and buyouts, is And more have through of going that in term, throughout

to remains that So out. play

If in to We little a margin year. persists, we're mixed a going bag. throughout some tailwinds the have of the So had strong bit QX. balance of it's to that still performance

We payment are to anticipating dissipate. that customer performance out performance,

Kyle Joseph

guys me. a guess in helpful add have potential and clarification. their from any lot new it take of this kind want to for the do environment, for back That's to and have of just I you look to you from XXs see to first the follow-up durables we kind to how more the challenging a of And then recover talked precedence, get have of greater and retail do sense know really just desire in long the recovery and terms I go for, to one we product partners demand and then at retailers? consumer seen took

Steven A. Michaels

the an Brian they're weakness of from And we by correlation Yeah, time I'm said remarks, long QX I've spirit business and definitely into been we March between SVB some but of we talk in slash a it's not that, sophisticated frequently but They coming enterprise, out a out not the because impacted weeks to the animal a what large retail say really our the imagine. we're have retailers to and And to But, saw it's having in and I you going obviously sure as And not benefits of us saw and XXs. banking direct tell they one his happened as some partners. what few can something since very and out consumer, first and on our prepared exiting April. not would us, consumer challenging of confidence they shops crisis into there. them April. the make environment and weakness

of the here got our decisioning we've changes to lapping towards alluded QX. end we of the as So

then headwinds. for retailers removal environment ultimately continues that'll challenged a the be it So be to demand us. and for of our a But

Kyle Joseph

Got for questions. answering very my Thanks much it.

Operator

Thank you.

Thomas from Brad open. KeyBanc. Mr. question or comes from Our is your next line Thomas, of comment line the

Bradley Thomas

here. Thanks, good nice and morning execution a

outlook. the early were gross Wanted ask quarter I me usually my for funds Let about year-over-year they know the from buyouts. is that. to reduced account refund first that lower Even add based that. year-over-year, and tax though margin that XQ big

about maybe like the it pretty how margin, good you about a bit you're the that? just look there's So, could does look year, of a outlook for thinking out as I little Thanks. talk here at gross more balance

Brian Garner

customers by, Brad, not I these expect behave. how Yeah, I in and mix. towards is take go where that we are to customers that the assumptions around XX-day work and our Based who seeing that they driven margins. primarily that. into here more dispositions an the a outcome far to by not think to XX-day can ultimately be did sitting, we're around elected our more upon do favorable is favorable a delinquency we take Those to what thus that's profile QX gross optimistic those

So think you're the terms our that that's incorporated that in favorable are margin going reflected into and trends the the trends seeing of guide, we've I forward. what and gross

we're the say behavior right holding happens. what Obviously model do to seeing I consumer they sensitive balance. is this see now, is on -- elect would we'll comfortable our what very So, to within and based delinquencies are everything

Bradley Thomas

little as they helpful, off declines really talking need guess, you're with what color, which how maybe company do about comparisons. of That's get I'd be I more of share just Steve, wallet customers, then are here right Progressive a dealing more in now And opportunity Brian. you sales and them? the curious, now, many who coming think right to with from pandemic your retail most do tough to

Steven A. Michaels

network, in and them well more year partnering in XXXX I are mean, continues reaching partner into we've it for that Tool existed Brad. currently our -- with this discussed thanks, preferred continues it Yeah, in tools before, as Yeah, retailers Belt. and the

the drive from or and in-store the obviously, easier so for consumer on sales types by more to more convert their is And spend. business way sales to and traffic return increase with they retailers we And whether retail the need sales Progressive. and for store increased making the in site efforts on to what do traffic the in Also the their save for more these ad visible training more can payment us that associates environment, and also within ultimately is environment. it's Progressive in do us, them

material should for direct other then part are the those end be awareness, deals us lot the of daily or and a of the and it whether And and lot spectrum, partner not marketing purchase better lift. pages do that various week we're of e-com other with a save call Those product waterfalls appetite all have co-branded whether week things say be them. point transactional partners. things we tech online. for can whether are where retailer, I by be carts like of on we a it, that also more as from things take of So to a may Progressive we retailers partner things with it to it help or our the scale placement sliding display And on seeing and pull those levers sales sponsored

had, So us believe we've deeper we're returns. and existing be environment the that set for this out that by environment of these to -- allow partners much demand growth will come springboard of this encouraged with integrations -- we with underlying this when our that partnership kind and a

Bradley Thomas

much. so Thanks great. That's

Operator

you. Thank

your the is of Our Chukumba, comes next from line Chukumba from or Capital. comment Anthony question open. Loop line Mr.

Anthony Chukumba

and job name. last great of my Hi, on the pronunciation

So, I of pretty of my those when point. leases, are so the given about your this of the pre-tightening in talked you by half of the that tightening year fact short first sort much duration started gone you question, guess most last and leases back

towards X% but being range, range, to merchandise of that lease else would guess, know write-off saying imply imply that should about that X% then your to am equal be everything it I that the this low I I you're for the I year, it thinking right way? remainder mean that right, mean the could So rates that of end me that would

Brian Garner

decisioning Anthony I'd point been you get what is we is towards, is of saw guess as towards of our performance And we've to trying you I that to really the those in of in normal. kind of midpoint targeting back pre-pandemic our were mean, I XX% in of periods, during range. level what Brian, point this efforts terms last

the don't on so, don't that's really overpromise end. low our And want to, target. want to I I

as QX, perhaps here is sequential the X% would in experience which season. the tax base strain seasonally saw more expect away QX, QX we and great tends write on off be the lowest seasonally. to in you further but is get Here you from consumer, you rate step and from QX you get just what tax season up a away further just

we're really So back just as the QX range sure we're and saw incorporating within that the trying that seasonality reasonableness about me cost there. pre-pandemic. would that of to Again, get run to taking stating a rate making and we

Anthony Chukumba

Got and it. pressured just that reason earnings obviously And quick guidance remain your enough. follow-up, mentioned. a for you then will Fair GMV the you increased

you and leverage free that, guidance, cash would imply free didn't So strong that and that that I times. give you'll know X.X is flow flow year cash but incredibly have imply would at this your

know you're cash building guidance, I a of So you'll allocation given I think that it share not up your repurchases should at free mean, is reasonable how sort of it step you'll -- least reasonable assumption that that guess, we capital about -- potentially a but could for assumption the remainder is dynamics? this year, you I flow those

Brian Garner

we're you about capital variables. cash. to able internally allocation, kind Yeah, I of generated mean, growth with the our We talk fund nailed

favor our has capital way return the to that history of to we Our repurchases shown as shareholders. stock

leverage GMV been We bit probably will GMV dollars pick cash cash we our this ranges flow spot than but for our preferred be would higher have more in of where of all free a reminder, declining in generation will a also in that net six as ratio equity remain we're environment, the be. bit just seasonality free back the some that to the annual look over of and going the QX. should to months as of the a at in we continue at generate, these on up I EBITDA. year. good generate But of seasonality X.XX just, comfortable first a at well, course because cash flow of little lens Even has GMV. of use because in having of look likely period. year we said as, it's XX-month seasonality a of the that GMV XXX% will the deem we A will well on the there's of a our And And, that of it as through the times the we and X/XX, in that expect price that, vehicle to funding attractive, half little

Anthony Chukumba

rest it. of Thank you. the Good year. Got luck with the

Brian Garner

you Thank Anthony.

Operator

you. Thank

Our comment Bobby of next line open. Mr. comes your Raymond question James. a Griffin Griffin, is line or from from

Bobby Griffin

taking first on want back for Good morning, Bobby. I circle GMV. Yep. I my I to Thanks am questions. guess, Steve,

I of stronger your think than decisions. you see we're if that a mean app that to basis how little, leasing prepared that that decline driven mentioned GMV maybe figure? that unpack of use by in flow you're I or on reported exactly quote the could kind to are seeing the you and two-thirds what does internal remarks, wanted you your seeing the are trends demand at a kind unquote of product getting was

Steven A. Michaels

We we those in Yeah, the and be source, parse metrics, store. store. bob phone And from online, out mean, I try while all funnel it's it we outflows. funnel, channel analyze in someone's of do even mid-funnel, analyze top all whether whether they're our

and ticket X, then we this kind the is done apps So and it changed look period year well that. or rate say, funnel was that, by it down has your follow our same average this has Y. or of approval can and okay, Conversion at channel just whereas last

lot to approval in was the in of from just factor. lower driving analysis rates. of get is effectively was implied the a kind that of moving parts as So that's two question, rough pressure, simplistic your terms, GMV we how thirds the but There's

on to as will back being relates half footing, of into so it all turn neutral year, we And a and decisioning. be page this things equal, the as we the

more underlying an But in about And of the be additional if talked it'll or the so as potentially seek rates approval demand we if data. data to then story. warrant than we loosen ready app I've stress retail stand before,

away additionally, the adjustments if being but had We the that have will we a all of go ready equal, also of tighten series at headwind things in half. back the to

Bobby Griffin

during flow guess that guess I of But and some want at, of the X%, is between your it to loss trends would bottom of or and payment some that, that at maybe range hang at here performance to GMVs what the is with tiny a be ratios the or maybe that type loosen it Yeah. economically you of that we start approve loosen part out continue there for economic view type my to I of you Okay. product. get environment like a demand be bit I we was a performance, would it of greater to like category see when what the app I go delta, and where guess maybe to current a to And kind I what to can guess can chance that question. second that going would potentially imply GMV? gap see could guess, the the there to is after change the

Brian Garner

how against reserve say There's Yeah, first release tracking think I And should indicator, over based are balances of pre-pandemic are performance. good mean, going buckets pools. delinquencies to loss -- leases versus of perform. ultimately lease reserve or there's in a shorter would But things. payment the that or term ACH buildup the all and are kinds rates all on we're that. built expectations to tracking, our reserves we're We're indicators lease defaults time the and tracking, underlying you obviously the are components but the

going that time we as than March because there's would as isolation just about were looking you If nuance XXth we question, in out weren't buyouts to But executing they create -- and Kyle's situations those the forever. Goldilocks pig you at to don't loosen. in why consumer, naively last something don't liquidity the more for I of stress there's pools our to say, okay, because talked another XX-day python it there lease on if through it's happened want

prove So to I've that's we sounds data the and appropriate. us as appropriate it But to the us we're, ready postured, we're and want opportunities that's we're if decision, like it. I do warrant be to we doing, to and for said, defensively that then looking stand think -- you loosen

have few the more door doing to to just we're feels cycles data so team get that. And of before going a comfortable in the

Bobby Griffin

is perfect for. of cash And I and -- OPEX I little just it Okay. pressure I the step despite bit, margin of answer was going levels coming guess lastly, down cash Brian revenue probably comments kind up some OPEX just, the Yeah, Yeah, -- the the that's the sense. XQ just from guess was on looking makes to sequentially that's a sequentially?

Brian Garner

From a from are cash -- a speaking we flow operations, from perspective?

Brian Garner

look at Speakers], Yeah, ex-write-offs, OPEX [Multiple I I cash the… yeah. look at I -- look just so OPEX, just

Steven A. Michaels

while be also There's that. the a you moved a fixed dealing reflect happens and we're wage that are Sorry, a structure, our aspect we top start fill inflation of variable revenue are there's element throughout -- reasons line going that cost in think that up SG&A think as I to there's with do will we those step costs, that to ratio. couple a de-leveraging as There's we that's some obviously in respect as highly -- to And percentage with in metric. year. pressures, have and that I there's an for

a answer So there's a going your QX -- I levels. would yeah, think be increase from I to to runway moderate question, say

Bobby Griffin

all I of and best upside luck on this the Congrats appreciate the forward. going Okay. quarter details. of

Steven A. Michaels

Thanks, Bobby.

Operator

you. [Operator Instructions]. Thank

or from is from Our your comes Mr. Haas, line open. America. line of Bank the question Haas comment Jason of next

Jason Haas

not morning, good a thanks the you seeing what current taking though guidance? benefit benefiting even in questions. are to really do and curious, not tightening come know the my yet it's any are to down, extent great, for included I think potentially trade or results from I'm credit of Hey, so that's you sort and

Steven A. Michaels

it what above started the and it is by whether have news, Yeah, primary see Jason, look stack. or were actual we kind developing said, prepared us credit of in the by this beginnings certainly we is In tightening. be I of by or the very but lender. precisely, believe don't really tightening really think the results or to region, retailer, we recently at remarks QX We benefited by by that vertical

there's know GMV now. time for you very us. trends or in weeks that some it tightening prime happening have been the prime for for lenders the even be lenders, couple might near But in a lenders certainly means only in evidence the we that As app the what of delay trends secondary have it happening. seen We had last seen not

as calls, So, quarters was it's we it. I it's encouraging and to of it saw or our expectations evidence kind built really to into ago, because some we The year GMV the the said, a back evidence, of comment. stay happen no a as not from And on and that. from we expecting fact I've said previous admitted tailwind have prepared remarks, half full anything that we're tuned, see you in starting

could way, for the so And tailwind extent be us. to it out it a play continues to that

Jason Haas

start if Got the impacts then curious, year. next here, don't of it. months over was I a from the prices to is I gas should rates, And we highest some payment last factor that few correlation that maybe lap be see business? know just something in I'm for that that it's you're your sure like to something data, a a is your but able so how could benefit, potentially there not impactful

Steven A. Michaels

we Like, employment gains. good there still a driver inflationary thing know for good wage be the and parse that a pandemic. It's That difficult thing and a especially will negative. for would be that's have has there, us. definitely the not been strong easing of could energy, since -- is us, benefit. be some tell impacted difficult to But, all parts it eggs and margin. much hopefully portfolio a it what gross It's I of Certainly, moving show how something that prices in shelter and that. the Well, than gas extent it's continues the out by It say strong that. versus to customer take food, more customer or our performance across and like we'll by is would the driven during or was that been happened an there's to mean, to pressures I the the this prime with is

Jason Haas

Got it. you. Thank

Operator

you. Thank

Our comes line Caintic or of open. next your is Stephens. Vincent from question the from Caintic, comment line Mr.

Vincent Caintic

Okay. just asked, parse Thanks question is there's Most weaker for of on maybe to trying but taking your out questions my GMV of how from picking for to maybe through the guidance posture one kind out demand, more tight of consumer understanding been that have that up, much my question. underwriting but maybe year, need the separate product. I'm versus consumer demand comes trying

don't metric see know volume we I can so time? how moving like you. Thank or something over application kind demand So be there's that if might like of much a

Steven A. Michaels

adjustments. seen of driven that our in our believe back necessary last two-thirds mid-teens, three-ish the Yeah, comments Vincent, about the by over you quarters is I would just, kind I decisioning guess, of to own we've point that decline about decisioning GMV -- we

break be things that moving or that by the kind that and driven product. to be lower of It forward to replaced further So of the obsolete. there's believe from you could the mid-single-digits would offset third the could another for offset That as away lead need pandemic. purchases by during become demand by large laptops cycles fix demand pull be

do those of some our decisioning continued consumer look but, soft would trends, demand to So see we adjustments. outside we forward

Vincent Caintic

perfect. had. Okay, helpful. all you. Thank That's That's I

Operator

additional remarks. back in management any conference to the questions no queue over Thank you. showing closing I'm to the time. like turn at this I'd for

Steven A. Michaels

and interest to morning like again in you this you. I'd us Thank thank joining your Holdings. for for PROG

the great a We did for the positioning people good job start right us in making we're of about the year. strong getting a and team portfolio off investments our and Our to technology. feel

So grow, it will look our further you expand. updating progress to forward day. our have great next and of we enhance, you We and a three pillar hope quarter, strategy on

Operator

gentlemen, in thank today's Ladies you the conference. and concludes for This program. participating

wonderful now may disconnect. You Everyone, have day. a

PROG (PRG) 26 Apr 232023 Q1 Earnings call transcript