UPBD 10-K & 10-Q changes, risk factors and insider trading

•The success of our business overall and each of our segments is dependent on macroeconomic and other factors affecting consumer demand, spending and payment behaviors that are notoutside underof our control.

Risks Relating to Our Vendors, SuppliersSuppliers, Products and ProductsServices

•Disruptions in our lease-to-own supply chain and other factors affecting the distribution of our merchandise could materially and adversely affect our business.

•We rely on the receipt of information from third-party data vendors,vendors across our business segments, and inaccuracies in or delays in receiving such information, or the termination of our relationships with such vendors, could have a material adverse effect on our business, operating results and financial condition.

•We must successfully manage our Rent-A-Center inventory to reflect customer demand and anticipate changing consumer preferences and leasing trends or our revenue and profitability could be materially and adversely affected.

•Allegations of or actual product safety and quality control issues,issues for our leased products, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs.

•If we are unable to successfully appeal to and engage with our target consumers,consumers and third-party retailers, our business and financial performance may be materially and adversely affected.

•We must maintain corporate brands that are recognized and trusted by consumers and third-party retailers.

•We face risks in our Acima third-party retailer business and virtual locations that differ in some potentially significant respects from the risks of the traditional lease-to-own business conducted in Rent-A-Center store locations. These risks could have a material adverse effect on Acima, which could negatively impact our ability to growmeet our growth objectives for the Acima segment and result in a material adverse effect on our results of operations.

•Our operations are dependentdepend on effective information management systems. Failure of our systems or those of our hostthird-party retailersretailers, bank partners or other commercial counterparties could negatively impact our business, financial condition and results of operations.

•If we fail to protect the integrity and security of customer, employee, suppliersupplier, andthird-party hostretailer, retailerbank partner or other third partythird-party information, or if our hostthird-party retailersretailers, bank partners, outsourced technology providers or other third parties fail to protect the integrity and security of customercustomer, employee or other sensitive information, we could incur significant liability and damage our reputation, and our business could be materially and adversely affected.

•If we are unable to attract, train and retain managerial personnel and hourly associates in our Rent-A-Center stores and staffed Acima locations, our reputation, sales and operating results may be materially and adversely affected.

•The risks associated with climate change and other environmentalEnvironmental impacts and increased focus by stakeholders on environmental issues, including those associated with climate change,issues could adversely affect our business, financial condition and operating results.

•WeOur maybusinesses beand industries are heavily regulated and subject to active enforcement including legal orand regulatory proceedings fromthat timehave toin timethe thatpast and may in the future result in damages, penalties or other materialsignificant monetary obligations or materialand restrictions on our business operations, and our use of arbitration agreements may not allow us to avoid costly litigation.operations.

•Our products and services may be negatively characterized by consumer advocacy groups, the media and certain federal, state and local government officials, and if those negative characterizations become increasingly accepted by consumers and/or our third-party retailers, bank partners or other commercial counterparties, demand for our goods and the transactions we offer could decrease and our business could be materially and adversely affected.

•Our Brigit businesssegment is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws.

•If our Brigit businesssegment wereis unable to obtain, or was determined to be operating without having obtainedobtained, necessary state or local licenses, registrations, or similar regulatory filings or approvals,approvals that are required or deemed required by regulatory authorities for certain of its products and services, it could adversely affect Brigit’s business, results of operations, financial condition, and future prospects.

•Federal and state regulatory authorities are increasingly focused on the earned wage accessEWA industry, and any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced or interpreted could expose Brigit to significant additional costs or compliance-related burdens and could require Brigit to alter its business practices in a manner that may be materially adverse to Brigit.

•The amount of borrowings permitted under the Asset Based Loan Credit Facility (the “ABL Credit Facility”) is limited to the value of certain of our assets, and Upboundwe Group, Inc. reliesrely in part on available borrowings under the ABL Credit Facility for cash to operate itsour business, which subjects itus to market and counterparty risk, some of which is beyond Upbound Group, Inc.’sour control.

•If our goodwill or other intangible assets become impaired, we may be required to record a significant charge to earnings.

•We may be unable to realize the anticipated benefits of the Brigit acquisition, including synergies, and expecthave to incurincurred substantial expenses related to the acquisition, which could have a material adverse effect on our business, financial condition and results of operations.

The success of our business overall and each of our segments is dependent on macroeconomic and other factors affecting consumer demand, spending and payment behaviors that are notoutside underof our control.

Consumer demand, spending and payment behaviors are affected by general economic conditions and other factors outside our control, including levels of employment, disposable consumer income, prevailing interest rates, consumer debt and availability of credit, tariff policies, cost of fuel, food and housing, inflation, recession and fears of recession, war (including the current conflicts in Ukraine and the Middle East) and fears of war, terrorist activities, pandemics, inclement weather, tariff policies, tax rates and rate increases, timing of receipt of tax refunds, consumer confidence in future economic conditions and political conditions and consumer perceptions of personal well-being and security. Unfavorable general economic changes, due to any one or more of these or other factors, could reduce demand for our lease-to-own, EWA and other products and services resulting in lower revenue or negatively impact consumer payment behavior resulting in higher than expected losses and negatively impacting our business and financial results. For example, sincestarting in the latter part of 2021, weour havelease-to-own businesses experienced negative trends in customer behavior following the expiration of government stimulus and relief programs combined with a significant rise in the U.S. consumer price index, resulting in significant pressure on the discretionary income levels of our consumers. This led us to tighten our underwriting policies in an effort to improve risk management related to the execution of new leases. The continuation of the trends described above combined with the tightening of our underwriting policies has reduced the number of active leases with corresponding decreases in lease revenue and operating cash flows compared to having less restrictive underwriting policies.

While the lease-to-own industry has historically remained a resilient business model throughout various economic cycles, theThe full extent to which our risk management strategy and these macroeconomic trends (including consumer demand, spending and payment behavior) and our risk management strategies across our business segments may impact our business in future periods is uncertain. The continuation of volatile macroeconomic trends may have a material adverse impact on our financial statements, including our results of operations, operating cash flows, liquidity and capital resources. These general economic conditions and other factors described above may similarly adversely impact our Brigit business, including through changes in customer payment behaviors and losses at Brigit.

Risks Relating to Our Vendors, SuppliersSuppliers, Products and ProductsServices

Disruptions in our lease-to-own supply chain and other factors affecting the distribution of our merchandise could materially and adversely affect our business.

Our arrangements with our lease-to-own merchandise suppliers and other vendors may be materially and adversely affected by changes in our financial results or financial position or changes in consumer demand, which could materially and adversely affect our business.

We rely on the receipt of information from third-party data vendors,vendors across our business segments, and inaccuracies in or delays in receiving such information, or the termination of our relationships with such vendors, could have a material adverse effect on our business, operating results and financial condition.

We are heavily dependent on data provided by third-party providers.providers across our business segments, including our lease-to-own, EWA and other offerings. We employ proprietary decisioning algorithms that determine whether or not an application for a leaseapplications submitted by a customer for our products and services will be approved for a lease and the potential amount of the lease.transaction. These algorithms depend extensively upon continued access to, and timely receipt of, reliable data from external sources, such as third-party data vendors. Our data providers could stop providing data, provide untimely, incorrect or incomplete data, or increase the costs for their data for a variety of reasons, including a perception that our systems are insecureunsecure as a result of a data-security breach, regulatory concerns or for competitive reasons. We could also become subject to increased legislative, regulatory or judicial restrictions or mandates on the collection, disclosure or use of such data, in particular if such data is not collected by our providers in a way that allows us to legally use the data. If we were to lose access to this external data or if our access or use were restricted or were to become less economical or desirable, our business would be negatively impacted, which would materially and adversely affect our operating results and financial condition. We cannot provide assurance that we will be successful in maintaining our relationships with these external data-source providers or that we will be able to continue to obtain data from them on acceptable terms or at all. Furthermore, we cannot provide assurance that we will be able to obtain data from alternative sources if our current sources become unavailable. Risks similar to those described in this paragraph may also adversely impact our Brigit business, which also depends on data provided by third-party providers.

We must successfully manage our Rent-A-Center inventory to reflect customer demand and anticipate changing consumer preferences and leasing trends or our revenue and profitability could be materially and adversely affected.

The success of our Rent-A-Center segment depends upon our ability to successfully manage our inventory and to anticipate and respond to merchandise trends and customer demands in a timely manner. We cannot always accurately predict consumer preferences, and they may change over time. We must order certain types of merchandise, such as consumer electronics, well in advance of seasonal increases in customer demand for those products. The extended lead times for many of our purchases may make it difficult for us to respond rapidly to new or changing consumer trends and price shifting and to maintain an optimal selection of merchandise available for lease at all times. If we misjudge any of the marketmarkets for our merchandise, our customers’ product preferences or our customers’ leasing behaviors, our revenue may decline significantly, and we may not have sufficient quantities of merchandise to satisfy customer demand, or we may be required to mark down excess inventory, either of which would result in lower revenue and profit. In addition, our level of profitability and success in our Rent-A-Center segment depends on our ability to successfully re-lease our inventory of merchandise that is returned by customers of our Rent-A-Center or Acima segments, due to their lease agreements expiring,being terminated, or otherwise.

Allegations of or actual product safety and quality control issues,issues for our leased products, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs.

The products we lease and sell in our Rent-A-Center segmentAcima and AcimaRent-A-Center segmentsegments are subject to regulation by the U.S. Consumer Product Safety Commission and similar state regulatory authorities and expose us to potential product liability claims, recalls or other regulatory or enforcement actions initiated by regulatory authorities or through private causes of action. Such claims, recalls or actions could be based on allegations that, among other things, the products leased or sold by us contain contaminants or impermissible materials, provide inadequate instructions regarding their use or misuse or include inadequate warnings, such as those concerning the materials or their flammability. We do not control the production process of the products we sell and lease and may be unable to identify a defect or deficiency in a product purchased from a manufacturer before offering it for sale or lease to our customers. Product safety or quality concerns may require us to voluntarily remove selected products from our physical locations or from our customers’ homes or cease offering those products online. Such recalls and voluntary removal of products can result in, among other things, lost sales, diverted resources, potential harm to our reputation and increased customer service costs, each of which could have a material adverse effect on our results of operations or financial condition. In addition, in the event of such a product quality or safety issue, our customers who have leased the defective merchandise from us could terminate their lease agreements for that merchandise and/or not renew those lease arrangements,agreements, which could have a material adverse effect on our results of operations or financial condition if we are unable to recover those losses from the vendor who supplied us with the relevant merchandise. In addition, new federal or state legislation, including new product safety and hazardous material laws and regulations, may negatively impact our operations, increase our cost of doing business and adversely affect our operating performance.

Our success depends on the effective implementation and continued execution of our strategies.strategies to continue to grow and transform our business.

We are focused on our mission to elevate financial opportunity for cash- and credit-constrained consumers including through affordableaffordable, flexible and flexibleconvenient access across digital and physical channels to durable goods that promote a higher quality of living.living and additional complementary and scalable products and services such as financial health technology solutions. In recent years, we accelerated our virtual lease-to-own growth strategy through the acquisition of Merchants Preferred, launch of our Preferred Lease offering andand, in 2021, acquisition of Acima Holdings, with a focus towards executing on large market opportunities through national and regional third-party retailers.retailers and offering consumers greater choice in where they shop and the durable goods they can select to lease under our flexible transactions. Most recently, in 2025, we acquired Brigit, which expands our strategic focus for our target customers into technology-driven financial health solutions, such as earned wage access (“EWA”) and credit building products for consumers who are underserved by traditional financial institutions. We seek to capitalize on key differentiators in our expanding virtualdigital, and technology-driventechnology and data-driven consumer offerings, as well as grow our business through expansion in our lease-to-own product verticals, e‑commerce platformplatforms and other digital enhancements, improving the customer and third-party retailer experience and providing consumers with greater opportunities to shop how, when and where they want with the flexibility of our lease-to-own solutions and to meet their liquidity, cash flow and other financial health needs through Brigit’s leading technology solutions. OurIn our more mature Rent-A-Center segmentsegment, employswe itsalso own growth strategies and seeksseek to adapt to changing consumer preferences and the increasing shift to online shopping behaviors while managing itsour cost structure. Brigit also has its own growth strategies as it seeks to achieve significant growth in providing financial health solutions to consumers.

GrowthThe continued growth and transformation of our business, including through the launch of new digital product offeringsofferings, requires us to effectively manage, integrate and continue to enhance our growing products and services and achieve intended synergies, invest in orand expand our informationdata and technology capabilities, engage and retain additional personnel who are experienced management,in investtechnology and data driven consumer offerings, manage our investments in our stores to align to changing consumer trends, and otherwise make additional investments and incur additional costs. Our inability to addressimplement these concernsstrategies or otherwise to achieve targeted results associated with our initiatives could materially and adversely affect our prospects, or results of operations, or negatively impact our ability to successfully execute future strategies, which may result in a material adverse effect on our business and financial results.

WeOur lease-to-own segments operate indigitally the consumer retail industryand through brick-and-mortar stores including direct-to-consumer and digitally including through third-party retailer channels. Through our Brigit business,segment, we now also provide financial health technology solutions direct to consumers. As such, our success depends, among other things, on our ability to identify and successfully market products and services through various channels that appeal to our current and future target customer segments and third-party retailers, to align our offerings with consumer and third-party retailer preferences and to maintain favorable perceptions of our brands by our target consumers and third-party retailers. If we are unable to successfully appeal to and engage with our target consumers and third-party retailers, our business and financial performance may be materially and adversely affected.

Our Acima®, Brigit™, Rent-A-Center® and other brands could be adversely affected by situations that reflect negatively on us, whether due to ouractual or perceived business practices, adverse financial developments, a data breach, perceptions of our corporate governance or how we address environmental or socialcorporate responsibility initiatives, the conduct of our officers, directors, or employees, the actions of a significant partner or other businesses with which we do business, or other causes. The negative impacts of these or other events may be amplified as consumers and other stakeholders increase or change their expectations regarding the conduct of public companies, sustainability efforts,companies and corporate responsibility. These impacts may be further complicated suchby the fact that perceptions are formed through rapid and broad interactions using modern communication and social media tools over which we have no control. Any such event could decrease demand for our products,products and services, reduce our ability to recruit and retain employees, and lead to greater regulatory scrutiny of our businesses.

We believe our proprietary customer lease decisioning process to be a key to the success of our business for both Acima and Rent-A-Center. Brigit also employs a proprietary decisioning process to approveassess consumerseligibility for its products and services. We assume behavior and attributes observed from prior customers, among other factors, are indicative of performance by future customers. Unexpected changes in behavior caused by macroeconomic conditions, including, for example, impacts to the U.S. economy related to the COVID-19tariffs pandemicproposed or imposed by the current U.S. Presidential Administration and changes in consumer behavior relating thereto as well as the current challenging macroeconomic conditions, could lead to increased incidence and costs related to lease merchandise write-offs or customer losses at Brigit. For example, we experienced higher losses in the fourth quarter of 2021 and during 2022 due to the impacts of changing consumer payment behaviors following the expiration of governmental stimulus programs and high inflation. Unexpected changes in behavior caused by macroeconomic conditions will impact our decisioning process and likely require frequent adjustments and the application of greater management judgment in the interpretation and adjustment of the results produced by our decisioning toolstools. and weWe may be unable to accurately predict and respond to the impact of a prolonged economic downturn or changes to consumer behaviors, which in turn may limit our ability to manage risk and avoid lease merchandise write-offs or other losses and could result in our accounts receivable allowance being insufficient. Even after the effect of the current macroeconomic conditions subside, unexpected changes in behavior caused by macroeconomic conditions such as the U.S. economy experiencing a recession or slowdown in economic growth and job losses related thereto, a continued high interest rate environment, inflationary pressures, reduced availability or elimination of government subsidies,subsidies relied on by our target customers, changes in consumer preferences, availability of alternative products or other factors, could lead to increased incidence and costs related to lease merchandise write-offs or other customer losses.

We may take advantage of additional merger and acquisition opportunities from time to time with the intent of advancing our key initiatives, but such activities may not prove successful and may subject us to additional risks.

From time to time, we may take advantage of additional merger and acquisition opportunities intended to advance our key strategic initiatives.initiatives, such as our Acima acquisition to accelerate our growth in the virtual lease-to-own channel and our Brigit acquisition to add complementary data-driven financial health technology solutions to our portfolio of consumer offerings for our target customers. Such merger and acquisition opportunities, such as our recent Brigit acquisition,opportunities may involve numerous risks, including the following:

•diversion of management’s attention from normal daily operations of the business and the challenges of managing largerlarger, more complex and more widespread operations;

Mergers and acquisitions are inherently risky and subject to many factors outside of our control. We cannot assure you that our previous or future acquisitions will be successful in achieving our growth and value creation objectives and will not materially and adversely affect our business, operating results or financial condition. Failure to manage and successfully integrate acquisitions could materially harm our business and operating results.

Consumer spending remains uncertain and our continued profitability is largely dependent on our ability to effectively manage our cost structure, certain elements of which are largely fixed in nature. We have experienced, and may experience in the future, increases in the costs of purchasing certain merchandise from suppliers or third-party retailers as a result of various factors, including supply/demand trends, tariffs and other government regulations, increases in the prices of certain commodities, increases in shipping costs and general economic conditions. We have experienced and may experience in the future increases in labor costs as a result of wage inflation for employees in many regions or increased competition for employees as unemployment rates decline. We have limited or no control over many of these inflationary forces. We also incur many other costs across our business segments based on our projections about future consumer demand for our products and services, including with respect to our data and technology systems, marketing and advertising and other items. In addition, due to the competitive environment in our industries and increasing price transparency,comparison tools, we may not be able to recover all or even a portion of such cost increases by increasing our merchandise or other prices, fees, or otherwise. Even if we are able to increase merchandise or other prices or fees, those cost increases to our customers could result in reduced demand for our products and services. As a result, the failure to manage our overall cost of operations, labor and benefit rates, advertising and marketing expenses, operating leases, charge-offs due to customer-stolen merchandise, other operating expenses or indirect spending could materially and adversely affect our profitability.

We face risks in our Acima third-party retailer business and virtual locations that differ in some potentially significant respects from the risks of the traditional lease-to-own business conducted in Rent-A-Center store locations. These risks could have a material adverse effect on Acima, which could negatively impact our ability to growmeet our growth objectives for the Acima segment and result in a material adverse effect on our results of operations.

We report financial operating performanceoperations under four operating segments, including our Acima segment, which includes our virtual and staffed business models; our Rent-A-Center segment, which representsincludes our company-owned storesstores, franchise stores, and e-commerce platform through rentacenter.com; and our MexicoBrigit and FranchisingMexico segments.

Brigit Acquisition. On January 31, 2025, we completed the acquisition of Brigit for total consideration of up to $460 million, consisting of approximately $278.7 million in cash consideration and approximately 2.7 million shares of Upbound Group, Inc. common stock at closing, $75 million in deferred consideration, payable in multiple installments, and an earnout of up to $60 million based on the achievement of certain financial performance metrics for the Brigit business in 2026. Brigit is a holistic financial health technology company that has helped millions of Americans budgetimprove better,their financial health and literacy, find ways to earn and save money, access their earned wages before their regularly scheduled payday, build their credit through savings, and protect themselves from identity theft, and find ways to earn and save money.theft. Its mission is to help everyday Americans build a better financial future.

•On FebruaryJune 20,1, 2025, we announced that Mitchell E. Fadel will retireretired from his position as Chief Executive Officer and as a member of the Board of Directors, effective June 1, 2025.Directors. Fahmi KaramKaram, willour succeedformer Chief Financial Officer, succeeded Mr. Fadel as Chief Executive Officer and a member of the Board of Directors at that time. Mr. Karam has served as Chief Financial Officer since October 2022.Directors.

Macroeconomic Conditions. In recent years, we have experienced significant change in business and operational trends driven by macroeconomic conditions, which have directly impacted our customers as well as our operations, including significant changes in the U.S. consumer price index, changes in demand for certain consumer retail categories, changes in consumer payment behaviors, a condensed labor market, which has also contributed to wage inflation, rapid increases in interest rates, changes in tariff and trade policies, and global supply chain disruptions resulting in reduced product availability and rising product costs.

While theour lease-to-ownbusinesses industry hashave historically remained a resilient business model throughoutthrough various economic cycles, the full extent to which our risk management strategy and these macroeconomic trends (including consumer spending and payment behavior) may impact ourthe businessCompany in future periods is uncertain. The continuation of volatile macroeconomic trends may have a material adverse impact on our financial statements, including our results of operations, operating cash flows, liquidity and capital resources.

Rent-A-Center e-commerce revenue. In recent years, e-commerce revenues increasedhave continued to increase as a percentage of total rentals and fees revenue in our Rent-A-Center segment. For the years ended December 31, 20242025 and 2023,2024, e-commerce revenues represented approximately 27% and 26% of total lease-to-own revenues.revenues, respectively. Due to recent trends in consumer shopping behaviors and expectations, we believe e-commerce solutions are an important part of our lease-to-own offering. However, we are unable to quantify the extent to which e-commerce revenues are incremental compared to what our overall revenues would have been in the absence of those e-commerce transactions. In addition, the profitability of e-commerce transactions can be impacted by different merchandise loss factors compared to traditional store-based transactions in the Rent-A-Center segment. Therefore, we are unable to determine with certainty whether the continuation of this trend toward increased e-commerce transactions will have a significant impact toon our financial statements in future periods or be ultimately favorable or unfavorable to our financial results.

Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Company-owned Rent-A-Center lease-to-own stores and e-commerce platform at the end of any given period.

Same Store Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Company-owned Rent-A-Center lease-to-own stores that were operated by us for 13 months or more at the end of any given period. The Company excludes from the same store base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store base in the 30th full month following account transfer.

Same Store Sales: Same store sales generally represents revenue earned in Company-owned Rent-A-Center stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period. The Company excludes from the same store sales base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store sales base in the 30th full month following account transfer.

Lease Charge-Offs (“LCOs”) (previously referred to as “skip/stolen losses”): Represents charge-offs of the net book value of unrecoverable on-rent merchandise with lease-to-own customers who are past due. This is typically expressed as a percentage of revenues for the applicable period. For the Rent-A-Center segment, LCOs exclude Get It Now andNow, Home Choice and franchise-owned Rent-A-Center locations.

During the year ended December 31, 2024,2025, consolidated revenues and gross profit increased by approximately $328.2$374.5 million and $58.1$191.3 million, respectively, primarily due to the addition of Brigit segment revenues and an increase in the Acima segment revenues, partially offset by a decrease in Rent-A-Center segment revenues described below. Operating profit increaseddecreased by approximately $128.7$68.3 million, primarily due to decreasesincreases in non-labor operating expenses, other gains and charges and general and administrative expenses of $112.3$138.3 million, $107.6 million and operating$19.5 labormillion, expensesrespectively, ofpartially $4.3offset million in addition toby the increase in gross profit noted above,above partiallyand offseta by increasesdecrease in non-laboroperating operatinglabor expenses of $35.7 million and general and administrative expense of $10.8$6.9 million.

The Acima segment revenues increased approximately by $330.1$251.0 million for the year ended December 31, 2024,2025, due to increases in rentals and fees revenues and merchandise sales of $244.9$192.5 million and $84.1$59.0 million, respectively, primarily resulting from an increase inhigher GMV of 17.1%.8.6%. Growth in GMV was primarily due to an increase in third-party retailer locations and productivity, which resulted in more leases per retailer, and expanded direct-to-consumer offerings. Operating profit increased approximately $20.1$39.4 million for the year ended December 31, 2024,2025, primarily due to an increase in gross profit of $58.2$60.3 million and a decreasedecreases in operating labor costs and other gains and charges of $11.6$4.4 million and $1.7 million, respectively, partially offset by an increase in non-labor operating expenses of approximately $49.2$26.4 million. See “Segment Performance” below for further discussion of Acima segment operating results for the year ended December 31, 2024.2025.

Revenues in our Rent-A-Center segment decreased approximately $0.7$83.2 million for the year ended December 31, 2024, primarily2025, due to decreases in merchandise sales and installment sales of $1.0 million and $2.7 million, partially offset by an increase in rentals and fees revenue of $3.1 million, resulting from an increase in same store sales of 1.5%.2.2% and lower corporate-owned store count as a result of prior year store closures, resulting in decreases in rentals and fees revenues and merchandise sales of $79.9 million and $3.5 million, respectively. Operating profit increaseddecreased approximately $6.9$47.6 million for the year ended December 31, 2024,2025, primarily due to a decrease in gross profit of approximately $51.1 million driven by lower revenues, in addition to higher general and administrative expenses and other gains and charges of approximately $9.1 million and $6.2 million, respectively, partially offset by decreases in non-labor operating expenses and operating labor expensesexpense of $13.4approximately $13.2 million and $5.7$6.4 million, respectively partially offset by an increase in other gains and charges of $7.3 million and a decrease in gross profit of $5.2 million.respectively. See “Segment Performance” below for further discussion of Rent-A-Center segment operating results for the year ended December 31, 2024.2025.

The MexicoBrigit segment had revenues increasedand byoperating 5.5%profit forof $206.0 million and $30.7 million, respectively, during the yearperiod endedbeginning on the Closing Date and ending on December 31, 2024, contributing to an increase in gross profit of 6.7%, or $3.6 million.2025. See “Segment Performance” below for further discussion of MexicoBrigit segment operating results for the year ended December 31, 2024.2025.

RevenuesThe for the FranchisingMexico segment decreasedrevenues $5.4and milliongross profit increased by 0.8% and 0.2% for the year ended December 31, 2024,2025, respectively, primarily due to increases in rentals and fees revenue, partially offset by negative impacts of exchange rate fluctuations. Operating profit increased 13.4%, primarily due to an increase in gross profit and a decrease in merchandisegeneral salesand administrative expenses, partially offset by negative impacts of $6.9exchange million.rate fluctuations. See “Segment Performance” below for further discussion of FranchisingMexico segment operating results for the year ended December 31, 2024.2025.

Revenue. Total revenue increased by $328.2$374.5 million, or 8.2%,8.7%, to $4,320.6$4,695.1 million for the year ended December 31, 2024,2025, from $3,992.4$4,320.6 million for 2023. The increase was2024, primarily due to an increase of approximately $330.1$251.0 million in the Acima segment and the addition of the Brigit segment with $206.0 million in revenue, partially offset by a decrease of approximately $83.2 million in the Rent-A-Center segment, as discussed further in the section “Segment Performance” section below.

Cost of Rentals and Fees. Cost of rentals and fees consists primarily of depreciation of rental merchandise. Cost of rentals and fees for the year ended December 31, 20242025 increased by $156.3$86.3 million, or 13.0%,6.4%, to $1,355.5$1,441.8 million, as compared to $1,199.2$1,355.5 million in 2023.2024. ThisThe increase in cost of rentals and fees was primarily attributable to an increase of $156.7approximately $116.5 million in the Acima segment,segment driven by an increase in rentals and fees revenues, partially offset by a decrease of approximately $30.8 million in the Rent-A-Center segment resulting from a decrease in rentals and fees revenue. Cost of rentals and fees expressed as a percentage of rentals and fees revenue increased to 38.6%39.8% for the year ended December 31, 20242025, as compared to 36.8%38.6% in 2023.2024, primarily due to the continued growth of the Acima segment as a percent of total rentals and fees revenue.

Cost of Merchandise Sold. Cost of merchandise sold represents the net book value of rental merchandise at time of sale. Cost of merchandise sold increased by $121.0$72.9 million, or 18.5%,8.2%, to $773.9$957.6 million for the year ended December 31, 2024,2025, from $652.9$884.7 million in 2023,2024, primarily attributable to an increase of $115.3$74.3 million in the Acima segment,segment primarily driven by an increase inhigher merchandise sales. The gross margin percent of merchandise sales decreased to (23.915.5)% for the year ended December 31, 2024,2025, from (20.514.3)% in 2023.2024 primarily due to the conversion of Acceptance Now locations to the Acima Holdings Lease Management platform.

Gross Profit. Gross profit increased by $58.1$191.3 million, or 2.9%,9.2%, to $2,080.4$2,271.7 million for the year ended December 31, 2024,2025, from $2,022.3$2,080.4 million in 2023,2024, primarily due to the addition of the Brigit segment with $182.1 million in gross profit and an increase of $58.2$60.3 million in the Acima segment, partially offset by a decrease of approximately $51.1 million in the Rent-A-Center segment, as discussed further in the section “Segment Performance” section below. Gross profit as a percentage of total revenue decreasedincreased to 48.4% in 2025, as compared to 48.1% in 2024, as compared to 50.7% in 2023.2024.

Operating Labor. Operating labor includes all salaries and wages paid to store operational employees and district managers, together with payroll taxes and benefits. Operating labor decreased by $4.3$6.9 million, or 0.7%,1.1%, to $609.2$602.3 million for the year ended December 31, 2024,2025, as compared to $613.5$609.2 million in 2023,2024, primarily due to decreases of $6.4 million and $4.4 million in the Rent-A-Center and Acima segments, respectively, partially offset by the addition of the Brigit segment with $4.0 million in operating labor. The decrease in Rent-A-Center operating labor was primarily attributable to a decrease of $5.7 million in thecorporate-owned Rent-A-Centerstore segment,count, partiallyresulting offsetfrom byprior anyear increasestore ofclosures $1.2and million in the Mexico segment.refranchising. Operating labor expressed as a percentage of total revenue excluding franchise merchandise sales and royalty income and fees was 14.5%12.8% for the year ended December 31, 2024,2025, as compared to 15.8%14.1% in 2023.2024.

Non-Labor Operating Expenses. Non-labor operating expenses include LCOs, occupancy, delivery, advertising, selling, insurance, travel and other operating expenses. Non-labor operating expenses increased by $35.7$138.3 million, or 4.6%,17.0%, to $811.6$949.9 million for the year ended December 31, 2024,2025, as compared to $775.9$811.6 million in 2023,2024, primarily due to the addition of the Brigit segment with $124.5 million in non-labor operating expenses and an increase of approximately $26.4 million in the Acima segment primarily related to an increase of $49.2$27.2 million in lease charge-off expense, partially offset by a decrease of approximately $13.2 million in the AcimaRent-A-Center segment, primarily attributable to an increasedecreases of $35.8$11.3 million in LCOslease-to-own and otherstore merchandise losses. Non-labor operating expenses expressed as a percentage of total revenue excludingwas franchise merchandise sales and royalty income and fees were 19.3%20.2% for the year ended December 31, 2024,2025, as compared to 20.0%18.8% in 2023.2024.

General and Administrative Expenses. General and administrative expenses include all corporate overhead expenses related to our headquarters such as salaries, payroll taxes and benefits, stock-based compensation, occupancy, administrative and other expenses, as well as salaries and labor costs for our regional directors, divisional vice presidents and executive vice presidents. General and administrative expenses increased by $10.8$19.5 million, or 5.3%,9.2%, to $212.5$232.0 million for the year ended December 31, 2024,2025, as compared to $201.7$212.5 million in 2023,2024, primarily due to higheran compensation.increase in the allowance for doubtful accounts of $9.5 million related to franchising trade receivables, and the addition of the Brigit segment with $7.3 million in general and administrative expenses. General and administrative expenses expressed as a percentage of total revenue were 4.9% for both the yearyears ended December 31, 2024,2025 comparedand to 5.1% in 2023.2024.

Operating Profit. Operating profit increaseddecreased $128.7by $68.3 million, or 79.1%,23.4%, to $291.6$223.3 million for the year ended December 31, 2024,2025, as compared to $162.9$291.6 million in 2023,2024, primarily due to the increases in non-labor operating expenses, other gains and charges and general and administrative expenses, partially offset by an increase in gross profit and decreases in other gains and charges and labor operating expenses, partially offset by increases in non-labor operating and general and administrative expenseslabor, as described above. Operating profit expressed as a percentage of total revenue was 6.7%4.8% for the year ended December 31, 2024,2025, compared to 4.1%6.7% in 2023.2024.

Income Tax Expense. Income tax expense decreased by $3.9$19.3 million to $54.1$34.8 million for the year ended December 31, 2024,2025, as compared to $58.0$54.1 million in 2023.2024, Theprimarily effectivedue taxto ratethe ofdecrease 30.5%in earnings before income taxes for the year ended December 31, 2024,2025 compared to 109.8%2024, inpartially 2023,offset decreasedby primarilya duehigher effective tax rate for the year ended December 31, 2025 attributable to a lowerthe tax impact ofon stocknon-deductible compensation expenseexpenses related to stock consideration issued to the formerBrigit owners of Acima Holdings in the form of restricted stock awards, compared to the prior year period.acquisition. See Note J of our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our effective tax rate.

(1) See Key Metrics described above for additional information Revenues. The increase in revenues for the year ended December 31, 20242025, as compared to 20232024, was primarily due to increases in rentals and fees revenuerevenues and merchandise sales revenue of $244.9$192.5 million and $84.1$59.0 million, respectively, primarily resulting from higher GMV. Growth in GMV was primarily due to an increase in new third-party retailer locations and productivity, which resulted in more leases per retailer, in addition to expanded direct-to-consumer offerings.

Gross Profit. Gross profit increased for the year ended December 31, 20242025, as compared to 2023,2024, driven primarily by the increase in revenues described above. Gross profit as a percentage of segment revenues decreased to 31.1%30.4% for the year ended December 31, 2024,2025, compared to 33.4%31.1% in 2023,2024, primarily due to an increase in merchandise sales as a percent of total revenue, and the conversion of Acceptance Now locations to the Acima Holdings Lease Management platform.

Operating Profit. Operating profit as a percentage of segment revenues decreasedincreased to 11.3%11.7% for the year ended December 31, 2024,2025, compared to 12.2%11.3% in 2023.2024. The decreaseincrease in operating profit margin wasis primarily due to increaseshigher revenues described above, resulting in non-labora decrease of 1.2% in operating expenseexpenses as a percentage of approximatelytotal $49.2revenue, millionpartially foroffset by the year ended December 31, 2024 compared to 2023 and decreasesincrease in gross profit margin described above. The increase in non-labor operating expense is primarily attributable to an increase of $35.8 million in LCOs and other merchandise losses for the year ended December 31, 2024 compared to 2023. Merchandise losses in our Acima locations due to LCOs, expressed as a percentage of revenues, were approximately 9.4%9.5% in 2024,2025, compared to 9.3%9.4% in 2023.2024. Merchandise losses in our Acima locations due to other merchandise losses, expressed as a percentage of revenues, were 0.2%0.4% in 2024,2025, as compared to 0.1%0.2% in 2023.2024. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims.

(1) See Key Metrics described above for additional information Revenues. The decrease in revenue for the year ended December 31, 20242025, as compared to 2024, was primarily due to decreases in merchandisesame sales and installmentstore sales of $1.02.2% milliongenerally andresulting $2.7from million,certain respectively,underwriting partiallyadjustments offset by an increaseimplemented in rentalsprior andperiods. feesIn revenues of $3.1 million, primarily attributable to a smaller portfolio, as a result ofaddition, the saledecrease ofin 55revenue stores to a Rent-A-Center franchisee and store consolidated. Forfor the yearsyear ended December 31, 20242025 andwas 2023,also e-commercedriven revenuesby representedlower approximatelycorporate-owned 26%store ofcount totaldue Rent-A-Centerto segmentprior lease-to-ownyear revenues.store closures.

Gross Profit. Gross profit decreased in 2025, as compared to 2024, driven primarily by the decrease in revenues described above. Gross profit as a percentage of segment revenues decreasedincreased to 69.4%67.0% in 20242025 from 69.6%66.7% in 2023,2024, primarily due to mix-shift changes between lease merchandise product categories.

Operating Profit. Operating profit as a percentage of segment revenues was 15.0%13.2% for 20242025, as compared to 14.7%15.0% for 2023.2024. The increasedecrease in operating profit margin for the year ended December 31, 20242025 was primarily due to a decrease in non-labor operating expenses of $13.4 million, which includes the net gain on refranchise sale of approximately $3.1 million, and decrease in operating labor expenses of approximately $5.7 million, partially offset byan increase in other gains and charges of $7.3$6.2 million.million, primarily due to impairment charges and shutdown costs related to closure of refranchised locations. The decrease in operating profit margin for the year ended December 31, 2025 was also attributable to an increase in general and administrative expenses of $9.1 million, primarily driven by increase in the allowance for doubtful accounts related to franchising trade receivables. Merchandise losses in our Rent-A-Center lease-to-own stores due to LCOs, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 4.7% for theboth yearyears ended December 31, 2024,2025 comparedand to 4.5% in 2023.2024. Merchandise losses in our Rent-A-Center lease-to-own stores due to other merchandise losses, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 1.3%1.0% for the year ended December 31, 2024,2025, compared to 1.4%1.3% in 2023.2024. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims.

(1) See Key Metrics described above for additional information Revenues. RevenuesExchange forrate 2024 werefluctuations negatively impacted revenues by exchange rate fluctuations of approximately $2.2$4.2 million,million for the year ended December 31, 2025, as compared to 2023.2024. On a constant currency basis, revenues for the year ended December 31, 20242025 increased approximately $6.3$4.9 million, as compared to 2023.2024.

Gross Profit. GrossExchange rate fluctuations negatively impacted gross profit by approximately $3.1 million for the year ended December 31, 2024 was negatively impacted by exchange rate fluctuations of approximately $1.6 million,2025, as compared to 2023.2024. On a constant currency basis, gross profit for the year ended December 31, 20242025 increased by approximately $5.2$3.2 million, as compared to 2023.2024. Gross profit as a percentage of segment revenues increasedwas 71.2% for the year ended December 31, 2025, as compared to 71.7% infor 2024, compared to 70.8% in 2023.2024.

Overview. For the year ended December 31, 2024,2025, we generated $104.7$305.6 million in operating cash flow andflow, used cash in the amount of $323.8$516.6 million for debt repayments, $82.3$278.9 million for dividendsacquisitions, and$87.9 $56.3million for dividends, $66.9 million for capital expenditures, and $58.2 million for customer cash advance originations net of collections, and had cash proceeds from indebtedness of $320.0 million and proceeds from sale of property assets of $18.7$776.0 million. We ended the year with $60.9$120.5 million of cash and cash equivalents and outstanding indebtedness of $1.3$1.6 billion. In connection with the Merger, we incurred additional indebtedness in January 2025, as discussed in the “Senior Debt” section below.

•difficulties encountered in managing the financial and operational performance of our multiple business segments;

•risks associated with pricing, value proposition and other changes to our consumer offerings and strategies being deployed in our businesses;

•our ability to continue to effectively execute our strategic initiatives, including mitigating risks associated with any potential additional mergers and acquisitions, or lease-to-own refranchising opportunities;

•our ability to effectively provide consumers with additional products and services beyond lease-to-own and products and services currently offered by our Brigit segment, including through third-party partnerships;

•the possibility that costs, difficulties or disruptions related to the integration of Brigit operations into our other operations will be greater than expected;

•the possibility that the anticipated benefits from the Brigit acquisition may not be fully realized or may take longer to realize than expected;

•the general strength of the economy and other economic conditions affecting consumer preferences, spending and payment behaviors, including the availability of credit to our target consumers and to other consumers, impacts from continued or renewed inflation, central bank monetary policy initiatives to address inflation concerns, and a possible recession or slowdown in economic growth;

•failure to effectively manage our operating labor and non-labor operating expenses, including failure to effectively optimize our proprietary algorithms and customer decisioning tools to limit merchandise losses for our lease-to-own offerings;

•our ability to retain the revenue associated with acquired lease-to-own customer accounts and enhance the performance of acquired stores;

•factors affecting the disposable income available to our current and potential customers;

•changes in the unemployment rate;

•capital market conditions, including changes in interest rates and availability of funding sources for us;

•changes in our credit ratings;

•our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies;

•disruptions caused by the operation of our information management systems or disruptions in the systems of our third-party retailers or other third parties with whom we do business;

•risks related to our virtual lease-to-own business, including our ability to continue to develop and successfully implement the necessary technologies;

•our ability to achieve the benefits expected from our integrated virtual and staffed third-party retailer offering and to successfully grow this business segment;

•exposure to potential operating margin degradation due to the higher cost of merchandise and higher merchandise losses in our Acima segment compared to our Rent-A-Center segment;

•additional risks associated with our Brigit segment and its consumer products and services, including managing losses, regulatory, licensing and other compliance risks, and risks associated with our Brigit segment’s reliance on regulated banks and on providers of third-party data and technology and other third-party service providers; and other new risks for our Company;

•our ability to (i) effectively adjust to changes in the composition of our offerings and product mix as a result of acquiring Brigit and continue to maintain the quality of existing offerings and (ii) successfully introduce other new product or service offerings on a timely and cost-effective basis;

•changes in our future cash requirements as a result of the Brigit acquisition, whether caused by unanticipated increases in capital expenditures or working capital needs, unanticipated liabilities or otherwise;

•litigation or administrative proceedings to which we are or may be a party to from time to time and changes in estimates relating to litigation reserves, including in each case in connection with the regulatory and litigation matters described in Note 11 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q;

•our compliance with applicable statutes and regulations governing our businesses, impacts from the enforcement of existing laws and regulations and the enactment of new laws and regulations adversely affecting our business and any legislative or other regulatory enforcement efforts or private party litigation or arbitration that seeks to re-characterize store-based or virtual lease-to-own transactions as credit sales and to apply consumer credit laws and regulations to our lease-to-own business or to apply consumer credit laws to our Brigit segment’s non-credit consumer offerings, in each case including in connection with, but not limited to, the regulatory matters described in Note 11 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q;

•our transition to more-readily scalable “cloud-based” solutions;

•our ability to continue to enhance digital or e-commerce capabilities, including mobile applications;

•our ability to protect our proprietary intellectual property and to defend against allegations by third parties that any of our products, services or business activities may infringe against their intellectual property rights;

•risks from development, deployment and governance of artificial intelligence (“AI”) and adjacent technologies, including technical failures or inaccuracies, rapid adoption by our competitors, and evolving regulatory requirements that may restrict certain AI uses or increase compliance costs;

•our ability or that of our third-party retailers or other third parties with whom we do business to protect the integrity and security of customer, employee, supplier and third-party retailer or other third-party information, whichfrom mayadverse beeffects adversely affected byof hacking, computer viruses, cybersecurity attacks or similar disruptions;

•impairment of our goodwill or other intangible assets;

•disruptions in our supply chain;

•limitations of, or disruptions in, our distribution network;

•rapid inflation or deflation in the prices of our lease-to-own products and other related costs;

•allegations of product safety and quality control issues, including recalls of goods we lease to customers;

•our ability to execute, as well as the effectiveness of, lease-to-own store consolidations, including our ability to retain the revenue from customer accounts merged into another store location as a result of a store consolidation;

•our available cash flow and our ability to generate sufficient cash flow to continue payingto dividendsfund the operations of our business;

•increased competition from traditional competitors, virtual lease-to-own competitors, online retailers, Buy-Now-Pay-Later, earned wage access and financial health technology competitors and other fintech companies and other competitors, including subprime lenders;

•our ability to identify and successfully market products and services that appeal to our current and future targeted customer segments and to accurately estimate the size of the total addressable market;

•consumer preferences and perceptions of our brands;

•our ability to enter into new rental or lease purchase agreements and collect on our existing rental or lease purchase agreements;

•ongoing changes in tariff policies, including impacts from tariffs proposed or imposed by the current U.S. Presidential Administration on the price of imported goods, or consumer prices overall or other financial impacts of such tariffs or proposed or imposed retaliatory tariffs enacted by U.S. trading partners on our costs or target consumers;

•adverse changes in the economic conditions of the industries, countries or markets that we serve;

•information technology and data security costs;

•the impact of breaches in data security or other disturbances to our information technology and other networks;

•changes in estimates relating to self-insurance liabilities and income tax reserves;

•changes in our effective tax rate;

•fluctuations in foreign currency exchange rates;

•our ability to maintain an effective system of internal controls; and the other risks detailed from time to time in our reports furnished or filed with the United States Securities and Exchange Commission (the “SEC”).

On January 31, 2025, we completed the acquisition of Brigit, a holistic financial health technology company that has helped millions of customers improve their financial health and literacy, find ways to earn and save money, obtain early access to their earned wages before("cash their regularly scheduled payday,advances"), build their credit through savings and protect themselves from identity theft. Its mission is to help customers build a better financial future. See Note 2 in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

•At Acima, grow penetration with current Acima third-party retailers and build on our strength with small to medium size businesses while also adding new national and regional third-party retailers to our platform and expanding our direct-to-consumer channels;

•At Brigit, continue to grow Brigit’s EWA,earned wages access, credit builder and other existing products and increase Brigit’s portfolio of products;

•At Rent-A-Center, accelerate the shift to e-commerce, improve the fully integrated omni-channel customer experience and expand product categories, which we expect will increase brand awareness and customer loyalty;

•Leverage data analytics capabilities to attract new customers, approve more customers and mitigate risk across business segments;

•Execute on market opportunities and enhance our competitive position across both traditional and virtual lease-to-own solutions, and implement complementary products and services that supplement our current offerings and provide our customers more financial alternatives; and Upgrade and integrate technology platforms to allow for an enhanced consumer experience, third-party retailer and waterfall integration, consumer transaction process and coworker efficiency.

Dividend. On MarchJune 25,2, 2026, we announced that our board of directors approved a quarterly cash dividend of $0.39 per share for the first quarter of 2026.share. The dividend was paid on AprilJuly 28,7, 2026 to our common stockholders of record as of the close of business on AprilJune 7,16, 2026.