Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Standing by, and welcome to the PROG Holdings Second Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Mr. Investor President, Vice Baugh, Relations. John sir. Please go ahead,

John Baugh

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

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

of year to that additional safe from risks risks ended to to Listeners and regarding the lease statements are third make we statements. write-offs for our you harbor will that forward be we undue earnings discussed our statements GMV shareholder earlier provision to certain that we There the forward-looking comments performance annual attention December year outlook provision identifies press periods, actual this our quarter your call, can issued may for Form morning. found differ which this our statements. of the end XXXX. statements XX-K future not for and that to on no forward-looking expectations and found in During cautioned we update materially the time, in XX, forward-looking report our emphasis updated on today, we any call merchandise full looking, in such safe be harbor be encourage place over want outlook release our including can make That return are undertake XXXX read. I to XXXX, results obligation the at cause

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

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

Steve Michaels

John, an you, quarter XXXX being second results, I morning, and us financial as QX good on important update Thank we thoughts full our a everyone. our with on year our and outlook. appreciate provide few share metrics today discuss you

level our net We proud high I'm had team's the another beating expectations, excellent the end the and EBITDA performance revenues our of adjusted end provided slightly of above our range quarter April. GMV expectations of what above with QX buyout to customers we at they well performance quarter. and strong remains XX-day in at portfolio of into second as the executed utilize a retail the trend choosing in a fewer we The that discussed environment. high continued challenging options QX

behavior we margin As a these payment in write-offs have you as year-over-year XX.X% year-to-date increased XXXX. release, our improved and or in gross $XX.X are seen reflecting our in in outperformance and outlook we The strong for our morning's earnings favorable this incorporating trends may customer of QX experienced basis XX.X% margin. evidenced growth point EBITDA by XXX resulting adjusted X.X% million of expansion,

we year, our for decline X%. to targeted track XXXX of our GMV write-offs to was decisioning tighter another last due approximately X/X to for The range us of accounted deliver decline. Our QX which first on X% of the implementation keeping in X.X%, in of were our believe half largely annual within GMV year

fully ease tighter difficult year-over-year last expectations, the QX year's GMV comparisons July decision. we as we to look of we As trends lap the to our introduction and anticipate

the credit through assume from providers believe that to that the indicators assumed we we materially any above balance of morning, have any this STACK. environment tightening see benefit the we yet to macro lending outlook the us leading in provided us sales Though revised practices have in XXXX. current We rebound will retail of not in will result

experience from sustained our periods demonstrates flexible benefit of past consumers payment Additionally, during that pressures. options liquidity

are teams with flows improve retail counterparts tech their at GMV find Our our well conversion growth and integrations promotions, point-of-sale that rates. partners opportunities, including working application to materials and

through retail track on integrations. several with in balance of large to this our are second partners of share year We new half the grow e-commerce

significant strategy short-term development retail enhance business efforts. is rather sluggish and sustainable than grow, climate, broaden expand retail growth existing growth remain and to a e-commerce, focused along innovations, our remains goal conversion. through new focused sustainable retailer In We technology and improve. including dedication PROG growth partnerships, X-pillared strategies, regaining our to Our new for conditions positioning gains. marketing to on once with emphasizes pipeline ourselves on

with first e-commerce are increase Xx partners Our GMV last same the our consistently year, added contributes upcoming GMV. showing solid retailers the XX% the along half growth. our These than e-commerce business and of existing in with should did than total XXXX several period efforts integrations of partners, new to to we contribute in progress. more number of We nearly new channel the our long-term

example of our provide specific where We PROG customers. week's GMV. in retailers this of and select also previous second to we large current retail last with planning from half key are cross-marketing offers promotions of and database of is partners Week, our support daily Perks One many

of several the have of with promotion partners this much just last example and Network. business the Preferred being drives. the success, over Partner run the X retail times part is the years incremental program This PROG enjoyed of have benefit We one

of lifetime customer Our to affinity customers' contributes to by our products XX% leasing average ratio. rates acquisition and to retention, is our for over higher consistent repeat a our than illustrated customer high cost testament value

avenues component for seek of revenue to retail retail in long-term environment new enhancement. strategy motivate more pursuit current our the remains our especially key opportunities Lastly, may growth, for a of retailers challenging that

with our discussions regional and accounts recognizable added ability in We confident number national and in of ongoing the to a virtual about $XX balance build will to many bring to proven industry's brands converting can that we'll and technologies increase continue customers. remain payment lease-to-own existing share enable and Progressive more Leasing in option, have and a regional to us the value of billion with business We're addressable retailers retailers quarter our relationships their $XX to billion while capture without the market.

omnichannel at bolster And periods. Under retailer technology initiatives progressing ENHANCE customers our aimed and in experience nicely. the [ph], initiatives frictionless we are future more believe a will our those performance offering GMV journey improving

platform, tools to focused experience shopping areas: self-service helping enable decisioning core map informed best is X flexible superior the for offering retailer improving streamlined and most a tech road and Our on greater lease a make while personalization choices experience. the our customer customer-centric providing and

to also LTO and addressing believe will aim developing rapidly customers. that We direct-to-consumer common convert are easier technical operating an products boost today's efficiency business to our identify retail while potential We debt, evolving and technology we give landscape. path enhance partners in issue

R&D Labs innovating generative AI. personalization is customer group PROG ways service, enhance to and our Lastly, decisioning through

a announced management As designed a for expand, their consumers QX, scores. tool enhancing aid in to new credit product called credit in we Bill,

our a is which loan express issued frequently WebBank both can profile. to secured and inclusive [ph] by Vivad history natural Our addition improve transparent credit blend while savings savings need consumers. for suite, in Bild, a leasing a is an financial of as accumulation. X product account, desire a and help Bill credit their to customers installment Progressive this address to joining Leasing, products and aiding

loans. marked and going we leasing of build volumes we Vive addition us forward. by strong to potential net financial to will pillars This health, to These to by boost their continue in promoting substantial growth. free and progressive cash not leases healthy journey, financial underpinned In financial or empowering strength our a anticipate through position, profitability, invest expect areas customers are currently leverage our all future which for flow customers enables catering robust qualifying

to spin an of capital approximately allocation; our our have account from the in of closing our quarter count $XXX with Since years year million. generated $XXX transaction Turning balance price stock have the cash purchases X.X at These a shares. $XX.XX months of per we of roughly average by ago, X% operations, shares we acquired company have of outstanding the over X.X million million first flow we for outstanding the X share. cash common X/X. Year-to-date, share reduced of

not XXXX. a generate if the flow As operating first half all, majority, our expect a of the again we calendar the seasonal pattern year, reminder, in cash typically of we in

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

will more to like While the thoughts. outlook to our provide high-level some division the I'd upward for provide on Brian year, detail

with year tailwinds to forward earnings of first carry that the the remainder may half due into not same Our the outperformed magnitude. expectations

consumer updated ongoing macro resulting reflects from the Our outlook demand to challenges environment.

percentage in revenues as compared will first second lease of due the portfolio show resulting to of high a that the primarily year, the balance. half a mid- half single-digit in XXXX decline expect year, same last performance smaller We in the period GMV to to

a last year's is comparison lap there in decisioning an easing we However, GMV year-over-year difficult changes. as

last consistent is quarter. summary My with

strong work Our of our and and the customer teams expectations payment strong first result hard behavior. half far of as earnings a exceeded

investments through We overtime. will have we We will strong return financial challenging believe as record evolve. a shareholder dynamic compelling track our macro navigating and ongoing conditions and of proven and adjust environments, drive health

for Garner, XXXX details now over our call and more results Brian? second our Brian on CFO, outlook. I'll the quarter turn to

Brian Garner

Thanks, Steve.

Let highlights. me our by summarizing start QX

we quarter for For opportunities. in portfolio thank SG&A and highly challenged earnings pursuit health uncertain P&L we in want sustainable in for a environment environment. as in perseverance effectively managing exceeded I growth their row, expectations of to a our a the retail long-term teams the second managed the and expenditures

as customer our elevated fewer the margins we targeted remained remains yields During payment yet QX, options, XX-day annual period. to behavior range. the purchase gross customers Similar quarter, our in to choosing increased to strong utilize saw contributed within our write-offs portfolio

outcomes As the balance actively performance as lease X.X% managing always, consumer portfolio are portfolio lower a behavior change. year-over-year and consolidated QX revenue to entering declined period. due we

expectations, exceeded performance. portfolio revenue by driven However, strong

million increased last million year. Consolidated adjusted from EBITDA by to $XX $XX.X QX XX.X% in

consolidated on QX adjusted driven SG&A, EPS Progressive Our driven margins efficiencies. EBITDA to and gross operational favorable were SG&A was lower from our our diluted in per stronger primarily write-offs by share and per by $X.XX Non-GAAP XXXX. Leasing XX.X% of better-than-expected focus lower growing $X.XX segments, increased share, results the

of flow, of to to efforts demonstrate to revenue proud our and to preserving results. our headwinds these model margins and adapt I'm our and while business deliver resiliency continue the capacity We extremely team's cash

Progressive For internal our year-over-year, Leasing decreased XX.X% which our than expectations. was slightly better segment, GMV

improved a QX. for decline QX have decline to we XX% the from year-over-year XX.X% believe a We in QX and decline mid-single-digit to in are GMV a comparison trending

we steps took of mentioned, first tighten which in the Steve roughly XXXX, the half we our our in profitability. believe decisioning is to comp of improved proactive As has GMV write-offs by driven QX and X/X negative the

QX period revenue a quarter, period, a impacted as the balance improved the was partially as during year-over-year leased declined lower yield. XX.X% down X.X% gross well by the by portfolio in and decline buyouts offset XX-day asset throughout ending

similar improved the acceptable QX QX points by outcomes last year-over-year at of in XXX strong buyouts year payment remained utilize higher in in primarily fewer to behavior XX%, These first the margin into the have and XX-day write-offs margin option. driven translated as levels gross half as basis buyouts customer to However, early levels. of buyout lower quarter, customers to elected lower

margins a outlook slight seasonal trends the remainder buyout and activity the decrease to write-offs follow pre-pandemic of gross in XXXX, Our of XX-day for first in half XXXX. revised resulting versus anticipates

in million, slightly SG&A decrease last to half Lease's of percentage XXXX. higher in SG&A to as XX.X% quarter the remainder the rest XX% XXXX. first for $XX.X SG&A X.X% to in of a $X.X QX -- percentage as $XX.X revenues compared that million compared compared increased will QX expect year. to a year, or of same a the we the I of of revenue be was of For expense million

year first sequential write-offs write-offs targeted X.X% half development. increase within to in of of was key efficiently $XX platforms, through XXXX X.X%, write-offs continue our We period. X.X%. Progressive X%. of or in while range seasonal quarterly consumer remain marketing the resulting X% were the and challenging will in the on write-off We a business down previous balancing to by trends, The end technology year's in million annual leases track in year-to-date operate demand from investment driven environment to

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

manage To summarize gross options return while expectations customers we the portfolio our and fewer XX-day margin. in half XXXX, the first shift buyout of outperformance actively cost of in efficiencies the we to choosing utilize resulted our structure driving in higher to observed

I'd and press few outlook, now on morning's of this a release. like touch in which aspects were QX key earnings to year full revised our provided

The a the period guidance comparison to As of our QX revenue assumed late GMV reminder, which in asset easing leased key QX. starting the was on the end balance, of a gross provided headwinds in earnings further in we on future year-over-year July. call April, at is with decline driver expected

margin XX-day we would leases year, we low lease anticipated improve pressures year-over-year. buyout as and assumed portfolio our rates Although margin performance Progressive move our to drive throughout the we

activity of compared course XXXX, We the was the projected narrow for to the XX-day year-over-year variance remainder year. lower to QX of buyout over the to although expected be

the Our compared believe we in to in quarter what slightly April. expected gives performance trending us GMV second better is reason that to

performance, a degree performance feel in higher forward. we of to our our favorable addition portfolio In confidence going year-to-date

percentage as timing of we align revenue the growth opportunities. of revenue a increase as Lastly, we evaluate remainder with move will to future return the investments although our will of SG&A and trends and through XX.X%,

revenue As full our result, we earnings raising a outlook. are year and

year's we We GMV to to ease year-over-year lap QX anticipate the last mid-single-digit a decline comparison as tightening.

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

case the the current assume employment on base stack. our providers by not quarter, a outlook our for credit but of the us consumer last the material a remainder benefit tightening does downturn, impact economic with Consistent trends above year of material considers further in or customers from negative

back the operator turn questions. I the to will now call for Operator?

Operator

question comes of Joseph [Operator Instructions] And first from Jefferies. line the our from Kyle

Kyle Joseph

for taking questions. me Thanks having on my

shoots in very performance, consumer. but ongoing your Just curious on moving less some kind terms is buyout of environment of underlying thoughts Obviously, of employment early health the the activity, parts credit obviously, your stable But just consumer sense still. a overall or kind the of underlying there of if for the are strong of any get confidence demand improving health green consumer and there? potentially, of sort

Steve Michaels

the -- to perform. Thanks, regular lot that X buyout mature? XX-day have fewer have would Kyle. that we quarter, how during But last and they are choosing season trying pools continue of otherwise When we those their the to a customers option that margin would the at on a option, assess its how talked utilize guess impacts to I'll we those And point spoke tax will about I was overall Yes. margin would utilized consumers a -- gross start. what buyout business.

making So well. QX, performing today, There far still payments. the they're through fairly their active that verdicts leases. are They're

so that's And of the sign good health our for a consumer.

signs business of in seeing and that's factor also the your weakness I mentioned and or of over, is good of fairly there, I pressures inflation business, always as we're relates data strong our employment You cost any should to employment, say kind and big side probably think in rolling of a not points that in news. it -- the one economy,

then. we payment remarks The fluid in behavior. our repayment and and there now in impacted there's very puts out card prepared the is and to I in only related is between that's will of developing what us and that around lot wild And performance loan situation happen it say, on takes would and fall. customer facing what and portfolio see about to can student that may strong a this -- the talked strong a what who be portfolio You

wildcard bit generally, of a may the the So not I shape or may with future consumer a for would it's little in say, materialize. good pretty that

Kyle Joseph

one helpful. then follow-up Very me. just it. Got for And

you credit availability of And words. some last you any tightening call, on I other think think guys in And above the initial signs mentioned I quarter's saw kind down broadly. of you or addressed update there? from trade

Steve Michaels

the of Yes. What in risk last only And said the saw and quintile quarter. that the you see will. internal we see begun -- funnel. throughout we own best top we quarter that very just we did And had or we way is of applicants our in basically the was app if the late that top to had have the scores change our FICO recently in to monitor applicant continue scores our April begun, some funnel, our recently of even in to what

seen a drift widely but the has the in inflation. there at throughout scores has been -- top been FICO -- our So reported, some we quintile. as have app up There certainly our funnel, in FICO

perform might couple of XXX not years did XXX a ago. So a like a

attention So that as paying well. to we're

believe tailwind it is in not least from into it's and believed it's material large, to, year, at for is how so any, mentioned prepared will a benefit and difficult our us. have But our baked But the in remarks, the business. our be time the -- outlook. this for determine we As us big a point benefit long outlook, we for for not that the in if at potential do that

Kyle Joseph

a on good congrats That Great. quarter.

Steve Michaels

Thanks, Kyle.

Operator

Thank And comes of the next next you. from Bank One from line our Haas Jason America. of question our for question. moment

Jason Haas

second versus a the year-over-year of in worsening and implies also half seems both it So basis. first half year, margins Loon the like guidance the for a of the

remarks, would margins the in gross just also then half? but it SG&A step walk you as why up a well? second little through soften driving And talked You bit can about in the prepared that what's in spending

Brian Garner

Yes, Kyle. This is Brian.

The out that's half. entering we're lower back GLA is effectively playing -- is the This Jason. balance asset Brian. Sorry, with balance a dynamic our gross starting lease

foremost. first going on put that's dollars revenue, to and pressure so of And total

So you've back a you've structure, stream in got got fix revenue fixed the you coming some lower SG&A half. got the a -- within costs

some put to margins. going that's So on pressure

and sales And dynamic that expected some do also step happening with back-end up. on other office some are the technology to has to initiatives SG&A that front. The is pursuing is that initiatives, and marketing we

as we year want of to or the forward higher balances grow exit next, to think lease a the and balance we on the I we towards as year. into put end look a gross asset trajectory the

So footing entering into we at can be year. a next good

year. for previous So margin -- anticipated And this outlook. pressures revenue our SG&A reason QX declining the some pressures of and this from QX. the not communicated and in we unexpected ramp the that's in the in GLA from primary what it's point at a We'd

Jason Haas

That's like then good margins for a XXXX? great. that to use that in follow-up, my And XXXX the Is beyond. you're and framework are expecting for

for I to EBITDA segment. goal margins. is that be the range XX% XX% to for The think about you've Progressive historically, in talked

within is any I there do range this to should from here? have Or be to based grow that goals able then be that there to expectation any margin think from margins year -- rate? you grow and you is well just maintain guidance? the on the And revenue

Brian Garner

where within own. managed a at from and on us. happened SG&A and been top a where line this long-term do actively we've And for think, and portfolio it's our I'm expectation, watching but SG&A comfortable not aligning is range with get I margin year its we're I through been Yes. think management to XXXX, It's on not performance. trending, going specific

Leasing that remains XX% I highlighted think to that so XX% Progressive you unchanged. And for

a was obviously on a result. quarter. XX.X% think long the leasing it about think term. I I basis. -- we great for I that's quarterly that and strong in quarter, progressive a remain for good very don't guideline expect to XX%, that here But QX, it's quarter-to-quarter XX% had is a And high

Jason Haas

strong the on Congratulations results.

Operator

of Instructions] [Operator Thomas Brad the line next comes from Capital Markets. And question from our KeyBanc

Bradley Thomas

less does you you're year, we're of follow GMV what in a wanted second talk the thinking I kind a about market, in some was bad like territory little could cadence even more more wondering I bit if getting to on about the in up half cases, of retailers the and is how out retailers to the recently. seem end bit. moving GMV positive of hearing of the

a thinking organic been? a So you're what headwind if more again, we GMV has second trends underwriting maybe more in as think And the about remind curious growth rate run half. bit you also just then how us how little the of could been have the about much

Steve Michaels

GMV little give you bit, the range, bad as did QX. as about We guess QX bad April I you from kind digits less of June the rolling that and Brad. season heard -- in to that not from it for would back was things retail I negative Yes, same yet a of speak did May think as of say, and QX, a We mid-single was earnings bad. the we was less standpoint,

would or that we've expect you year-over-year carry approval the quarter, of scenario I top those will. negative the if of the participate changes tightening times the X/X pressures in year. rates, of that were into lapping decisioning our we've bad well. less from that of you that, number On So if last we believe said got decisioning would third a about from GMV we And as things

rare to it it days. leases somebody trailing XXth take approved a it's for are lease, to rates, average As and does through the doesn't the because relates the comes we look in those at that approvals It a XX -- flow about X-week on GMV. generally funded approval funds but for bit day good

we're today, year. we're several decision from not late X-week look And to parity last we happened of with weeks still year And changes QX at those getting back -- last away as here as trailing so in we still a average. sit

certainly So headwind, of but the less still bit quarter a a of a little progresses. headwind as

partnerships several encouraged and integrations that environment. year. looking that ways get deepen holiday the cores for before retail of by our and quarters, talked to for the like approaching I retailers. would the of On and decisioning our of the deploy about we've fast of done we sense say the even we're tools that's I'm urgency so most some top Obviously, stuff retailers And receptivity have for to of this that,

some is the those And of forward to look extent as XXXX, have benefit so done, balance essence. of get the that to the can roll we also But time in we into we but the can of 'XX.

Bradley Thomas

getting you great. those Steve, now. talked stack, standpoint? curious in write what And aggressive you're just like if then, playing That's Do the you Are in of above a kind seeing all competitive you're what you're all seeing out you seeing could what about you trying seeing comment the loosening? bit from lease-to-own about but right group more competitors feel Are I here? was they curious more? little I'm away you to from business win are to you? seeing tightening defense Are anyone you there more a

Steve Michaels

talk where business usually approved our always an I of have as it the not competition multiple say competitors the evidence with exclusivities as accounts be their with about And we from we is. standpoint. strong may and regionals tightening the that the I've would seen Yes. rate bifurcated enterprise that there I is mean business, along book are players that there. the

way. little the might In be fact, bit other on the it a margin,

the so fighting strong day. remains there And out day we're to and competition

Bradley Thomas

Thank you.

Operator

Markets. Capital Our Instructions] from question next Chukumba line comes of [Operator the Loop from Anthony

Anthony Chukumba

nice a on quarter. Congrats

was just you exactly confused guess What when So provide a is build on some out? that color that. on more I product? little can would getting I rolling that? you be the And

Steve Michaels

builder Yes. Anthony. Build a Thanks, -- it's a loan. Yes. credit is

vehicle, to with looking to we it our there So it's their of or true our of were is customers -- and tried they're a properly. what of and said builder done serve a a credit or for be to want we lot is loan you we is them It's new to that. that have savings builder frequently, partnering offer way loan And can proud credit improve build combination a credit it's WebBank a a however do And that saw that and not accumulation to characterize and many profile, score product. do ways if that. quite

products, add to excited it the the lots we're improving of our mission to acquire of ecosystem helps so of using build. through for suite empowerment. our us lives There's And new ecosystem and financial it to customers of the PROG further customers to opportunities into

our every lease the approval rates, customers to effectively over there's number imagine, a hopefully, product to have we And we product. into or year. and of maybe build or grow we over declined extent a as -- grow and We you time a -- could that then can believe near-prime approval them with them a [indiscernible] offer into back time, more

by And we've of not plans of a to it's for just this lot states is year. states build got so there's launched, end -- clear, yet, in all expect the all well, be -- but we to in be

customers. active We have

to going out activity And help access would marketing, helped be but be the also grow business. to between allow leasing launching across loans have secured able built there. the doing a will the customers card We're we build, active access the be to savings. to promotional have to We customers that our products accumulated

Anthony Chukumba

just follow-up. it. a Got And

-- being So or WebBank? progressive being is that under market how is that under market

Steve Michaels

under marketed the is other Bill in being It's it and Bill. name. through database, Progressive also is product's forms. but being Gitbuild.com, to marketed the

Anthony Chukumba

Thank you.

Operator

Raymond Griffin And from [Operator the question next Bobby line our comes of James. from Instructions]

Bobby Griffin

that or I'm guess relatively hanging to can of just number asking question think customers historical is, in estimate on the or the that unique. provide guys numbers us could type sense And us just that as any you standards. understand size the behavior the of of leases just are trying we to Because help kind maybe get year, type roll it. of my a into about this be longer on next to gauge any help first I maybe I'm Steve of than context on,

Brian Garner

I revenue Yes. got driver are haven't of I paint the there's mean guess is margin of gross mean, of you component you've say -- customer strong seen influencing the disclosed Bob, year-to-date. margins. primary improvement the the have or the number the performance That XX-day that overall then it's I component and buyout would we along that gross I that customers. what

And so XX-day rate expected as I year. subside narrow think year-over-year is pre-pandemic of we to variance as remarks, lower that our of expectations the And versus course over time. it will the this take around throughout is in kind the mentioned move my prepared I

as a edge made year, into But next what Magna. so that take at revenue customer is that behavior we we we'll And coming public the tranche have from is. obviously, not look

way we we -- the pre-pandemic. to a think would not this longer that model. counting experienced in the I term are So dynamic expect margins really about and think normalized on being gross probably it permanent is necessarily what

Bobby Griffin

Okay, And then comfortable to of just necessarily more follow the on that that that the that, betting customers lease the that staying about XX-day guide on longer. more about It's like then way flow-through continues. not I behavior to you're makes sense. up you those buy didn't out right think guess is the feel

So that Is actually and you're of in correct? XQ. implying place been some XQ upside continues that's that taking

Brian Garner

standpoint now, seen customers do like performance of is we've the QX QX the There's from do you're the I elect -- they think go buyout. on from performance right There the XX-day previous do and those primary what current that at outlook the components in a they to would where Steve certainly and top the list and to XX-day do the our mentioned, X that. after Yes. outlook highlight not

the model of And elevated we've days. are the some then where that's degradation been from at and have of to they the portfolio laid that now. half, on performance right we've if an level way XX level counting customer some continue is of performance upside this allowance incorporated of decline what level kind in it's been we base think in or got not low the for But the the I first case payments out.

So year has XX still days will a tick from move overall, will the slight the of payment incorporated EBITDA have in half. and lines maybe first a been strong where we along year, start performance to performance would margins show the expected. we've as with what bit But the we down normalize EBITDA throughout in

I the give. that's think I So commentary

Bobby Griffin

I we these overearned interesting last performance GMV. -- about pandemic. talked for more changes we in quarter little ticket know lastly during Any some within then categories just some the the durable that? bit And any Okay. of just home a larger product me, of like category

standpoint just played quarter? and product So, it during from anything out the call within to GMV the how a interesting category out

Steve Michaels

No, can or note. we're in also I Bobby, that we that that -- but new categories of doing that some just are nothing generally, obviously, have the we within we mean, would and how we deviate door. doing a integration new from they're might because participate initiative results

and and stronger categories And so on specific to weaker, are out. are some but the call some all obviously, nothing we're focused

Bobby Griffin

details the quarter. Okay. I here best luck appreciate in third the

Steve Michaels

Thanks, Bob.

Bobby Griffin

Thank you.

Operator

does to further hand conclude today's back session Michaels This any to Steve program. for the program the of I'd question-and-answer like remarks.

Steve Michaels

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

our X-pillar and teams to technology We investments delivered feel next portfolio, positioning a have forward job Our a the our on and great enhance, our did progress you the day. you people quarter, to right and about strong strategy. good further we're look grow, hope in great updating another of We expand quarter. and making

Operator

and ladies the program. for participation does your This you, in gentlemen, conference. Thank today's conclude

You may now disconnect.

PROG (PRG) 26 Jul 232023 Q2 Earnings call transcript