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    PRG
    Earnings call· Jun 2026(Q2 FY26)

    PROG Holdings Q2 FY26 earnings call PRG

    Jul 29, 2026 Source

    Executive summary

    PROG Holdings Q2 FY26 — Strong Earnings Beat Driven by Ecosystem Growth and Disciplined Portfolio Management

    PROG Holdings delivered a strong quarter, exceeding earnings expectations across its diversified ecosystem. Growth was driven by Progressive Leasing's return to positive GMV, Four's continued triple-digit expansion, and Purchasing Power's profitable double-digit growth. The company maintained disciplined portfolio management and a healthy balance sheet despite a stressed consumer environment, raising its full-year outlook.

    Highlights

    5

    • Consolidated GMV grew 60% year-over-year to $902 million, improving from 54% in Q1.

    • Consolidated adjusted EBITDA of $88.4 million and non-GAAP EPS of $1.19 both exceeded the high end of outlook.

    • Progressive Leasing returned to year-over-year GMV growth of 3.4% and achieved a 12.7% adjusted EBITDA margin, its highest Q2 margin since exiting COVID.

    • Four's GMV more than doubled year-over-year (111% growth), extending its triple-digit growth streak to 11 quarters with profitable economics ($8.7 million adjusted EBITDA).

    • Purchasing Power delivered double-digit GMV growth and improved adjusted EBITDA to $10.6 million (8.1% margin) from $0.8 million in Q1.

    Concerns

    2

    • Lease merchandise write-offs at Progressive Leasing came in at 8.4% of total revenue, slightly above the normal seasonal step-up from Q1, attributed to cost pressures on consumers.

    • The consumer is stressed by prolonged inflation and higher gas prices, creating a headwind for discretionary budgets.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $3.025 billion to $3.1 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $355 million to $375 million
    high materiality
    High
    Full-year 2026 Non-GAAP EPS
    $4.75 to $5.00
    high materiality
    High
    Full-year 2026 Progressive Leasing Write-offs
    6% to 8% (near the high end)
    medium materiality
    High
    Effective Tax Rate for Non-GAAP EPS
    approximately 26%
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Progressive Leasing
    GMV improved from Q1's decline, reflecting lapping of prior headwinds and growth initiatives. Revenue decline eased as portfolio rebuilds. Gross margin improved due to higher portfolio yield. Write-offs were managed to optimize absolute earnings.
    GMV: $428.1 millionGMV growth YoY: 3.4%Gross margin: 33.8%Lease merchandise write-offs: 8.4% of total revenueSG&A: $82.8 millionSG&A as % of revenue: 15%
    		$550.3 million-3.4%—12.7% adjusted EBITDA margin
    Four Technologies
    Continued impressive growth and profitability, driven by customer engagement, repeat purchasing, and efficient marketing. AI-driven enhancements simplify shopping. MoneyApp revenue up 34% YoY.
    GMV: $315 millionGMV growth YoY: 111%Take rate (trailing 12-month): approximately 10%Average purchase frequency: roughly 5 transactions per quarterActive shoppers growth YoY: nearly 80%Quarterly average monthly active users: nearly doubled YoY4-plus subscribers contribution to total GMV: approximately 80%
    		$35.1 million118%—$8.7 million adjusted EBITDA (24.8% margin)
    Purchasing Power
    Delivered double-digit GMV growth, primarily from employer relationships. Adjusted EBITDA rose sequentially due to operating leverage, favorable product mix, improved pricing, and lower interest expense on securitized debt. Integration is on track.
    GMV: $158.8 millionAdjusted EBITDA Q1: $0.8 million
    		$130.4 milliondouble-digit—$10.6 million adjusted EBITDA (8.1% margin)

    Operational metrics

    18
    Consolidated GMV
    $902 million60% YoY growth
    Q2 FY26

    Improved from 54% growth in Q1 FY26.

    Consolidated Revenue
    $720 millionup 22% YoY
    Q2 FY26

    Transcript also states revenue from continued operations grew 22.3% year-over-year to $79.7 million, which is likely an ASR error for $797 million, but $720 million is used as the authoritative figure.

    Consolidated Adjusted EBITDA
    $88.4 million
    Q2 FY26

    Exceeded the high end of outlook.

    Non-GAAP Diluted EPS
    $1.19
    Q2 FY26

    Exceeded the high end of outlook.

    Gross Leased Asset Balance
    roughly flatYoY
    Q2 FY26

    Down 9.4% YoY at the start of FY26. Expected to inflect positive in H2 FY26.

    Applications Growth
    double digitsYoY
    Q2 FY26

    Fueled by stronger top-of-funnel marketing and improved user experience.

    PROG Marketplace GMV CAGR
    nearly 200%
    2022-2025

    Annual basis.

    PROG Marketplace GMV Expansion
    roughly 13-foldover past 3 years
    Q2 FY26

    Q2 basis.

    E-commerce channel % of GMV
    25.6%up from 20.9% a year ago
    Q2 FY26

    Highest second quarter mix to date, helped by improved digital checkout experience.

    MoneyApp Revenue Growth
    34%YoY
    Q2 FY26

    Driven by new revenue streams. Important engagement and cross-sell driver.

    Net Leverage Ratio
    1.7xdown from 2.5x post-acquisition and 2x at Q1 end
    as of June 30

    Comfortably within long-term target range of 1.5 to 2 turns. Excludes nonrecourse ABS debt.

    Recourse Debt
    $600 milliondown $50 million from Q1 end
    as of June 30

    Paid down $260 million of recourse debt since closing Purchasing Power acquisition.

    Unrestricted Cash
    $85.2 million
    as of June 30

    Part of total available liquidity.

    Total Available Liquidity
    $435.2 million
    as of June 30

    Includes revolving credit facility.

    Share Repurchases
    280,000 shares
    Q2 FY26

    Resumed repurchases due to improved leverage profile and confidence in business future.

    Progressive Leasing Q1 Write-offs
    7.3%-7.4%
    Q1 FY26

    Normal sequential increase from Q1 to Q2 is typically 60-70 basis points.

    Average Ticket Size
    ~$150
    Q2 FY26

    Smaller ticket size compared to Leasing and Purchasing Power.

    Four Provision as % of GMV
    effectively flatYoY
    Q2 FY26

    Benefiting from improved decisioning model and operational enhancements on collections.

    Industry KPIs

    11
    MetricValueDetails
    Funding mix—
    Payment ratelower
    Delinquenciesslightly higher
    Capital returns$0.14USD
    Credit quality mix—
    Net charge off rate8.4%%
    Loans card receivablesroughly flat
    Provision reserve rate8.4%%
    New accounts card acquisitionsdouble digits%
    Billed business purchase volume$902 millionUSD
    Net interest margin yield on receivables—

    Product announcements

    3
    ProductTypeDetails
    Vita (Purchasing Power's AI shopping assistant)launch
    New bundling feature (Purchasing Power)launch
    New automotive services (Purchasing Power)expansion

    Deals & partnerships

    1
    Large new client (unnamed employer)Added a large new employer client to Purchasing Power platform.

    Client added just after Q2 end. Expected to drive future growth, with a 2-3 year ramp for full penetration.

    Risks & headwinds

    2
    Consumer cost pressures (inflation, gas prices)Current, ongoing

    Lease merchandise write-offs at Progressive Leasing at 8.4% of total revenue (Q2 FY26), slightly above normal seasonal step-up.

    Mitigation: Dynamic decisioning posture, managing portfolio to annual write-off target (6-8%), optimizing for absolute earnings. Made some cuts to decisioning in pockets.

    Soft demand environment for large ticket consumer durablesCurrent, ongoing

    Not quantified directly, but noted as a factor.

    Mitigation: Strength in product marketplace, direct-to-consumer, e-commerce platforms, and initiatives with retailers to grow GMV.

    What to watch in Q3 FY26

    5

    Progressive Leasing revenue comps

    H2 FY26
    CurrentDown 3.4% YoY in Q2 FY26
    TargetInflect positive in H2 FY26

    Why it matters

    Indicates portfolio rebuild and return to growth for the largest segment.

    With GMV growth continuing and portfolio growth resuming, we expect Leasing to return to positive year-over-year revenue comps in the second half of the year.

    Q&A highlights

    6

    Balancing lower early buyout activity with strong demand recovery post-COVID pull-forward.

    The consumer is stressed but resilient. Lower buyout activity signals liquidity concerns, with some leading to delinquencies. The company is managing write-offs to an annual range (6-8%) and has made minor decisioning adjustments. Demand for large-ticket durables is still soft, but growth comes from product marketplace, direct-to-consumer, e-commerce, and lapping prior headwinds.

    “The consumer is stressed, but resilient. And so that's the environment that we're operating in across the products. And we've seen certainly, the lower buyout activity is, I think, a signal on how the consumer is feeling about their liquidity position and whether they want to use some of that liquidity to pay off early.”

    asked by Kyle Joseph · answered by Steven Michaels

    2 min read6 chapters

    Detailed Narrative

    01

    Ecosystem Strength and Diversification

    PROG Holdings' diversified ecosystem, comprising Progressive Leasing, Four, and Purchasing Power, demonstrated resilience and growth despite consumer pressures🌐. The platform generates volume across all products, with consolidated GMV growing 60% YoY, highlighting the benefits of multiple offerings for a similar customer base. This ecosystem approach is gaining traction, with increasing customer overlap and cross-product marketing driving momentum.

    02

    Progressive Leasing's Turnaround

    Progressive Leasing returned to positive year-over-year GMV growth of 3.4%, a significant improvement from the 2.2% decline in Q1. This recovery was driven by lapping prior headwinds (tightening actions, Big Lots bankruptcy) and successful growth initiatives, including double-digit application growth and improved e-commerce penetration, which reached 25.6% of total GMV in the quarter. The PROG Marketplace also showed exceptional trajectory, achieving a GMV CAGR of nearly 200% from 2022 to 2025.

    03

    Four's Sustained Hyper-Growth

    Four Technologies continued its impressive performance with 111% GMV growth and 118% revenue growth year-over-year, marking its eleventh consecutive quarter of triple-digit expansion. The business maintains strong customer engagement, repeat purchasing, and profitability, with AI-driven product enhancements simplifying the shopping experience. Four's lean, AI-native team enables efficient growth without significant increases in resources, contributing to its path toward higher margins.

    04

    Purchasing Power Integration and Growth

    Purchasing Power delivered double-digit GMV growth, primarily from established employer relationships, and saw its adjusted EBITDA improve significantly to $10.6 million (8.1% margin) from $0.8 million in Q1. The integration is advancing well, with new employer clients added, including one with over 80,000 eligible employees. AI-powered tools like Vita, an AI shopping assistant, and a new bundling feature are enhancing the customer experience and driving engagement.

    05

    Strategic Priorities and AI Adoption

    The company's strategy focuses on 'Grow, Enhance, and Expand,' with AI serving as a critical enabler. AI is embedded in numerous improvements across the ecosystem, from Four's shopping experience to Purchasing Power's Vita assistant, driving better search results, higher checkout conversion, faster decisioning, and lower costs to serve. These AI-powered initiatives collectively contribute to improved unit economics and operational efficiency.

    06

    Capital Allocation and Deleveraging

    PROG Holdings prioritizes reinvestment, strategic M&A, and returning capital to shareholders. Rapid deleveraging post-acquisition brought the net leverage ratio to 1.7x as of June 30, down from 2.5x immediately after the acquisition. This progress, fueled by strong cash flow generation, allowed the company to resume share repurchases, buying back 280,000 shares in Q2.

    AI-generated summary of the company’s earnings call. Not investment advice.