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What changed in PROG Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PROG Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+409 added−398 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in PROG Holdings, Inc.'s 2025 10-K

409 paragraphs added · 398 removed · 282 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

53 edited+32 added−20 removed25 unchanged
Biggest changeAt every interaction with our POS partners and customers, we strive to combine our service and advanced technology-based solutions to deliver a best-in-class experience. We believe this strategy allows us to grow incremental sales for our POS partners, while realizing operating efficiencies at scale.
Biggest changeWe believe that the acquisition of Purchasing Power in January 2026 benefits our operating strategy, including expanding our offerings to our consumers, who now can align their needs with the right solutions as illustrated below: At every interaction with our POS partners, clients and customers, we strive to combine our service and advanced technology-based solutions to deliver a best-in-class experience.
However, these laws, agreements, and procedures provide only limited protection. We own, or are otherwise entitled to use, the various trademarks, trade names, and service marks used in our businesses, including those used with the operations of Progressive Leasing, Vive, and Four. We intend to file for additional trade name and trademark protection when appropriate.
However, these laws, agreements, and procedures provide only limited protection. We own, or are otherwise entitled to use, the various trademarks, trade names, and service marks used in our businesses, including those used with the operations of Progressive Leasing and Four. We intend to file for additional trade name and trademark protection when appropriate.
Our goal, therefore, is to develop a positive experience with our customers, and for our products, service and support in the minds of our customers from the moment they enter the stores, e-commerce websites or mobile apps of our POS partners, or access our website or mobile app.
Our goal, therefore, is to develop a positive experience with our customers, and for our products, service and support in the minds of our customers from the moment they enter the stores, e-commerce websites or mobile apps of our POS partners, or access our website or mobile apps.
Lease Agreement Customer Experience We offer simplified and transparent lease application and payment processes: Lease Agreement Decisioning Process Progressive Leasing uses proprietary decisioning algorithms to determine which applicants meet our leasing qualifications and the lease amount for which customers are approved.
Lease Agreement Customer Experience We offer simplified and transparent lease application and payment processes: 8 Lease Agreement Decisioning Process Progressive Leasing uses proprietary decisioning algorithms to determine which applicants meet our leasing qualifications and the lease amount for which customers are approved.
For example, in April 2020, Progressive Leasing entered into a settlement (the "FTC Settlement") with the Federal Trade Commission ("FTC") to resolve allegations by the FTC that certain of Progressive 11 Leasing's advertising and marketing practices violated the FTC Act.
For example, in April 2020, Progressive Leasing entered into a settlement (the "FTC Settlement") with the Federal Trade Commission ("FTC") to resolve allegations by the FTC that certain of Progressive Leasing's advertising and marketing practices violated the FTC Act.
These efforts drive new and returning customers online and into retail locations, generating incremental sales for our POS partners. 9 Competition Our Progressive Leasing segment competes with other lease-to-own companies (virtual and traditional store based), and to a lesser extent, consumer finance companies, and traditional and online sellers of merchandise that provide customers with various types of payment options.
These efforts drive new and returning customers online and into retail locations, generating incremental sales for our partners. Competition Our Progressive Leasing segment competes with other lease-to-own companies (virtual and traditional store-based), and to a lesser extent, consumer finance companies, and traditional and online sellers of merchandise that provide customers with various types of payment options.
We also make available on our website our Code of Ethics, our Corporate Governance Guidelines, and the charters for the Audit, Compensation and Nominating and Corporate Governance Committees of the Board of Directors. The SEC maintains an internet site, www.sec.gov, containing reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. 12
We also make available on our website our Code of Ethics, our Corporate Governance Guidelines, and the charters for the Audit, Compensation and Nominating and Corporate Governance Committees of the Board of Directors. The SEC maintains an internet site, www.sec.gov, containing reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. 14
We believe the strong focus on customer satisfaction generates repeat business from our customers and long-lasting relationships with our POS partners. Our customers are given access to products through multiple channels, including a network of POS partner store locations and e-commerce sites.
We believe the strong focus on customer satisfaction generates repeat business from our customers and long-lasting relationships with our POS partners and Purchasing Power's employer-clients. Our customers are given access to products through multiple channels, including a network of POS partner store locations and e-commerce sites.
Violations of these laws and regulations may subject them to government investigations and significant monetary penalties, remediation expenses and compliance-related burdens. Federal regulatory authorities have been focused on alternative consumer financial services and products that our Progressive Leasing, Vive and Four businesses provide.
Violations of these laws and regulations may subject them to government investigations and significant monetary penalties, remediation expenses and compliance-related burdens. Federal regulatory authorities have been focused on alternative consumer financial services and products that our businesses provide.
Purchasing and POS Partner Relationships The following table details the percentage of Progressive Leasing's revenues attributable to different categories of merchandise offered by its POS partners: Year Ended December 31, Progressive Leasing POS Partner Merchandise Category 1 2024 2023 2022 Furniture, Appliances and Electronics 2 58 % 58 % 57 % Mobile Phones and Accessories 16 % 15 % 14 % Jewelry 15 % 15 % 17 % Mattresses 5 % 6 % 6 % Automobile Electronics and Accessories 2 % 3 % 3 % Other 4 % 3 % 3 % 1 Revenues from a POS partner are attributed to a single category even if the POS partner may carry merchandise across multiple categories. 2 Progressive Leasing also classifies some electronics within mobile phones and accessories, automobile electronics and accessories, and other.
Purchasing and POS Partner Relationships The following table details the percentage of Progressive Leasing's revenues attributable to different categories of retail POS partners: Year Ended December 31, Progressive Leasing POS Partner Category 1 2025 2024 2023 Furniture, Appliances and Electronics 2 58 % 58 % 58 % Mobile Phones and Accessories 16 % 16 % 15 % Jewelry 15 % 15 % 15 % Mattresses 4 % 5 % 6 % Automobile Electronics and Accessories 3 % 2 % 3 % Other 4 % 4 % 3 % 1 Revenues from a POS partner are attributed to a single category even if the POS partner may carry merchandise across multiple categories. 2 Progressive Leasing also classifies some electronics within mobile phones and accessories, automobile electronics and accessories, and other.
The customer may cancel the agreement at any time without penalty by returning the merchandise to Progressive Leasing. If the customer leases the item through the completion of the full term, ownership of the item transfers to the customer. The customer may also purchase the item at any time by making the contractually specified payment.
The customer may cancel the agreement at any time without penalty by returning the merchandise to the lessor. If the customer leases the item through the completion of the full term, ownership of the item transfers to the customer. The customer may also purchase the item at any time by tendering the contractually specified payment.
During the third quarter of 2024, Progressive Leasing received a written request from the FTC to evidence Progressive Leasing's compliance with the FTC Settlement by providing the FTC with information and documents, including those related to customer complaints and advertising and marketing materials.
During the third quarter of 2024, Progressive Leasing received a written request from the FTC to evidence Progressive Leasing's compliance with the FTC Settlement by providing the FTC with information and documents, including those related to customer complaints and advertising and marketing materials. The Company fully cooperated with the FTC in responding to the FTC's request for information and documents.
Our other efforts to promote a sense of inclusiveness and belonging among all of our employees include: • Hosting internal and guest speakers to discuss topics related to fostering a welcoming and inclusive workplace; • Growing our mentorship programs that are offered to all employees • Partnering with the Company's ERGs to connect with diverse candidate pools and obtain internal referrals for sourcing job candidates; • Providing the ERGs with resources to support their missions in the community, such as volunteering and giving in areas we serve; and • Completing an ongoing talent review process that is designated to utilize a multi-factor approach to understanding the talents of our employees and the potential they have to be future leaders of the Company.
Our other efforts to promote a sense of inclusiveness and belonging among all of our employees include: • Hosting internal and guest speakers to discuss topics related to fostering a welcoming and inclusive workplace; • Providing the ERGs with resources to support their missions in the community, such as volunteering and giving in areas we serve; and • Completing an ongoing talent review process that is designated to utilize a multi-factor approach to understanding the talents of our employees and the potential they have to be future leaders of the Company.
We consistently monitor consumer preferences and trends to ensure that our business models are aligned with our customers' needs. We believe that building a relationship with the customer that ensures customer satisfaction is critical to our long-term success.
Customer Service A critical component of the success of our operations is the commitment to develop good relationships with our customers. We consistently monitor consumer preferences and trends to ensure that our business models are aligned with our customers' needs. We believe that building a relationship with the customer that ensures customer satisfaction is critical to our long-term success.
For the years ended December 31, 2024, 2023, and 2022, personnel costs, excluding stock-based compensation expense, were $172.5 million, $187.2 million, and $194.2 million, respectively. Seasonality Progressive Leasing's revenue mix is moderately seasonal. Adjusting for growth, the first quarter of each year generally has higher revenues than any other quarter.
For the years ended December 31, 2025, 2024, and 2023, personnel costs, excluding stock-based compensation expense, were $153.9 million, $157.4 million, and $170.8 million, respectively. Seasonality Progressive Leasing's revenue mix is moderately seasonal. Adjusting for growth, the first quarter of each year generally has higher revenues than any other quarter.
The information in the tables below summarizes our gender, ethnicity and race diversity metrics as of December 31, 2024: December 31, 2024 Male Female Vice Presidents and Above 82.9 % 17.1 % All Other Employees 43.6 % 56.4 % 10 December 31, 2024 Hispanic or Latino White Black or African American Native Hawaiian or Pacific Islander Asian American Indian or Alaskan Native Two or More Races Vice Presidents and Above 5.7 % 80.0 % 2.9 % —% 11.4 % —% —% All Other Employees 22.1 % 56.4 % 8.5 % 1.5 % 5.0 % 0.5 % 6.0 % We foster a culture of learning that provides employees with development opportunities to support their unique career paths.
None of our employees are covered by a collective bargaining agreement, and we believe that our relations with employees are good. 11 The information in the tables below summarizes our gender, ethnicity and race diversity metrics as of December 31, 2025: December 31, 2025 Male Female Vice Presidents and Above 81.8 % 18.2 % All Other Employees 45.4 % 54.6 % December 31, 2025 Hispanic or Latino White Black or African American Native Hawaiian or Pacific Islander Asian American Indian or Alaskan Native Two or More Races Vice Presidents and Above 6.1 % 78.8 % 3.0 % —% 12.1 % —% —% All Other Employees 30.4 % 53.0 % 7.2 % 1.2 % 5.2 % 0.3 % 2.7 % We foster a culture of learning that provides employees with development opportunities to support their unique career paths.
The Company is fully cooperating with the FTC in responding to the FTC's request for information and documents. In addition to federal regulatory oversight, currently, nearly every state specifically regulates lease-to-own transactions via state statutes, and are holding businesses like Progressive Leasing to higher standards of training, monitoring and compliance.
In addition to federal regulatory oversight, currently, nearly every state specifically regulates lease-to-own transactions via state statutes, and are holding businesses like Progressive Leasing to higher standards of training, monitoring and compliance.
PROG Holdings' operating segments include Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider, Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products, and Four Technologies, Inc. ("Four"), which offers Buy Now, Pay Later ("BNPL") payment options to consumers through the Four platform. PROG Holdings also owns Build, a credit building financial management tool.
PROG Holdings' operating segments include Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider, and Four Technologies, Inc. ("Four"), a modern, cloud-native mobile app which offers Buy Now, Pay Later ("BNPL") payment options to consumers through the Four platform. PROG Holdings also owns MoneyApp, a mobile application that offers customers interest-free cash advances.
Lease-to-own transactions facilitated through our Company also benefit our POS partners by generating incremental sales to credit-challenged consumers, who typically would not have qualified for financing offers traditionally provided by these retailers.
Lease-to-own transactions facilitated through our Company also benefit our POS partners by generating incremental sales to credit-challenged consumers, who typically would not have qualified for financing offers traditionally provided by these retailers. The Four segment enables consumers of all credit backgrounds to pay for purchases over time through short-term, interest-free installment BNPL plans.
Importantly, our ability to service our POS partners and our customers while effectively managing labor costs allows us to offer lease-purchase solutions that are generally lower cost and otherwise more attractive than many other options available in the market.
We believe this strategy allows us to grow incremental sales for our partners, while realizing operating efficiencies at scale. Importantly, our ability to service our partners and our customers while effectively managing labor costs allows us to offer alternative consumer payment solutions that are generally lower cost and otherwise more attractive than many other options available in the market.
We foster relationships with POS partners to better serve new and existing customers. Our Progressive Leasing segment offers centralized customer and retailer support through internal employee representatives located primarily in Utah, Arizona and Texas. Our Vive segment offers centralized customer and merchant support through internal employee representatives located primarily in Utah and Arkansas.
We foster relationships with POS partners and employer-clients to better serve new and existing customers. Our Progressive Leasing segment offers centralized customer and retailer support through internal employee representatives located primarily in Utah, Arizona and Texas. Additionally, we utilize third-party service providers in Cali, Colombia and Makati, Philippines to assist us with our customer support and collection efforts.
Strategy Our strategy to drive growth in our business, which we believe positions us for success over the long-term, includes the following: 5 • Grow our gross merchandise volume ("GMV") through existing merchant partners, new partners, and direct-to-consumer initiatives - We plan to grow GMV through strategic collaboration and marketing efforts with our existing POS partners.
Strategy We have a three pillared strategy, which we believe positions us for success over the long-term, as follows: • Grow our gross merchandise volume ("GMV") through existing merchant partners, new partners, and direct-to-consumer initiatives - We plan to grow GMV through strategic collaboration and marketing efforts with our existing POS partners and by focusing on converting our pipeline of retailers into new POS partners.
The provision for lease merchandise write-offs as a percentage of lease revenues was 7.5%, 6.7% and 7.7% for the years ended December 31, 2024, 2023, and 2022, respectively. The Company's targeted annual range for the provision for lease merchandise write-offs as a percentage of lease revenues is 6% to 8%.
For customer agreements that are past due, the Company's policy is to write off lease merchandise after 120 days. The provision for lease merchandise write-offs as a percentage of lease revenues was 7.5%, 7.5% and 6.7% for the years ended December 31, 2025, 2024, and 2023, respectively.
Our customers will more frequently exercise the early purchase option on their existing lease agreements during the first quarter of the year. We expect these trends to continue in future periods. Industry Overview The Lease-to-Own Industry The lease-to-own industry offers customers an alternative to traditional methods of obtaining home furnishings, electronics, appliances, computers, jewelry, and other consumer goods and services.
Our customers will more frequently exercise the early purchase option on their existing lease agreements during the first quarter of the year. We expect these trends to continue in future periods.
In a standard industry lease-to-own transaction, the customer has the option to acquire ownership of merchandise over a fixed term by making periodic lease payments. The customer may cancel the agreement at any time without penalty by returning the merchandise to the lessor.
Lease Agreement and Collection The Progressive Leasing customer has the option to acquire ownership of merchandise over a fixed term of up to 12 months, by making weekly, bi-weekly, semi-monthly, or monthly lease payments. The customer may cancel the agreement at any time without penalty by returning the merchandise to Progressive Leasing.
Progressive Leasing provides customers with transparent and competitive lease payment options along with flexible terms that are designed to help customers achieve merchandise ownership, including through low initial payments and early buyout options.
Progressive Leasing's technology-based, proprietary decisioning platform offers prompt lease decisioning at the point-of-sale and is integrated with both traditional and e-commerce POS partners' systems. Progressive Leasing provides customers with transparent and competitive lease payment options along with flexible terms that are designed to help customers achieve merchandise ownership, including through low initial payments and early buyout options.
Many of our customers fall within the near-prime or subprime Fair Isaac and Company ("FICO") score categories and may have difficulty purchasing big-ticket and other durable goods they desire. Progressive Leasing's technology-based, proprietary decisioning platform offers prompt lease decisioning at the point-of-sale and is integrated with both traditional and e-commerce POS partners' systems.
Many of our customers fall within the near-prime or subprime Fair Isaac and Company ("FICO") score categories and may have difficulty purchasing big-ticket and other durable goods they desire.
We are expanding and innovating our e-commerce capabilities to benefit existing and new POS partners and customers. • Expand our ecosystem to increase access and deliver more value to our customers - We expect to broaden our financial technology product ecosystem through research and development ("R&D") efforts and strategic acquisitions that will result in a more loyal and engaged customer base.
Through Four, we are also investing in digital payment technologies that provide customers with transparent and flexible installment options, integrated with an intuitive mobile app experience. • Expand our ecosystem to increase access and deliver more value to our customers - We expect to broaden our financial technology product ecosystem through research and development ("R&D") efforts and strategic acquisitions that will result in a larger, more loyal and engaged customer base.
The Company's two reportable segments are Progressive Leasing and Vive, which is consistent with the current organizational structure and how the chief operating decision maker regularly reviews results to analyze performance and allocate resources. The operating results of our two reportable segments may be found in (i) Item 7 .
Vive had been an operating segment prior to October 20, 2025, when the Company sold Vive's loans receivable portfolio. The Company's two reportable segments are Progressive Leasing and Four, which is consistent with the current organizational structure and how the chief operating decision maker regularly reviews results to analyze performance and allocate resources.
The Company leverages a large decisioning data set with mature lease performance data and other information provided from third party sources.
The Company leverages a large decisioning data set with mature lease performance data and other information provided from third party sources. Progressive Leasing's proprietary algorithms utilize the customer application, customer history, known fraud attributes, retailer/vertical performance and other information in the decision-making process.
Vive's Credit Decisioning and Collection Vive partners with merchants to provide a variety of revolving credit products originated through third-party federally insured banks to customers that may not qualify for traditional prime lending offers (referred to as "second-look" financing programs).
Purchasing Power's customers share many attributes with the Company's existing customers, providing opportunities for cross-product growth driving higher customer lifetime value. 9 Vive's Credit Decisioning and Collection Prior to the sale of its loan portfolio in October 2025 and the related wind-down of its operations, Vive partnered with merchants to provide a variety of revolving credit products originated through third-party federally insured banks to customers that may not qualify for traditional prime lending offers (referred to as "second-look" financing programs).
Through a variety of media testing methods, we can verify the impact of our paid digital media on in-store and online shopping trips and lease origination activity. In addition, targeted, personalized email and text marketing campaigns leverage our large customer database, educating customers about lease-to-own offerings, and driving lease conversion and sales for our POS partners.
In addition, targeted, personalized email and text marketing campaigns leverage our large customer database, educating customers about lease-to-own and BNPL offerings, and driving lease conversion and sales for our partners. In addition, in cooperation with our POS partners, Progressive Leasing leverages a variety of in-store marketing materials to drive awareness at the point of sale.
We are committed to providing our customers with transparency, flexibility, and greater choice on how and where they choose to shop.
We are committed to providing our customers with transparency, flexibility, and more choices on how and where they choose to shop. We 6 are expanding and innovating our e-commerce capabilities to benefit existing and new POS partners and customers.
We remain focused on converting our pipeline of retailers into new POS partners. Our ability to maintain and strengthen new and existing relationships, including addressing the changing needs of our POS partners, is critical to the long-term growth of our business.
Our ability to maintain and strengthen new and existing relationships, including addressing the changing needs of our POS partners, is critical to the long-term growth of our business. We will also continue to expand our direct-to-consumer marketing efforts to attract new customers and drive more GMV through in-store and online retailers.
If the customer chooses to return the merchandise, arrangements may be made to receive the merchandise from the customer by either scheduling a pick-up or shipping the merchandise to our warehouse in Draper, Utah. Merchandise pick-ups are handled by Progressive Leasing employees in a variety of locations throughout the United States.
We also send email and/or text reminders to customers and provide payment options and instructions. If the customer chooses to return the merchandise, arrangements may be made to receive the merchandise from the customer by either scheduling a pick-up or shipping the merchandise to our warehouse in Draper, Utah.
To accomplish these goals, we invest in digital, traditional, and in-store marketing, and our internal marketing and data science teams continually evaluate and optimize this investment to maximize the benefit for our POS partners. Our robust digital media program is comprised of paid search, digital display, mobile, video, and paid social advertising.
To accomplish these goals, we invest in digital, traditional, and in-store marketing, and our internal marketing and data science teams continually evaluate and optimize this 10 investment to maximize the benefit for our POS partners. We also have cross-marketing campaigns that seek to grow connectivity between Progressive Leasing and Four.
Human Capital We believe that a diverse workforce composed of individuals from various backgrounds, experiences, and perspectives fosters creativity and accelerates innovation. In fiscal 2024, we continued to focus on activities that promote an inclusive environment to reflect the consumers we serve and the communities in which we operate.
In fiscal 2025, we continued to focus on activities that promote an inclusive environment to reflect the consumers we serve and the communities in which we operate.
We also utilize a third-party service provider to assist in pick-ups when the merchandise is too large, or the return is outside our coverage areas. For customer agreements that are past due, the Company's policy is to write off lease merchandise after 120 days.
Merchandise pick-ups are handled by Progressive Leasing employees in a variety of locations throughout the United States. We also utilize a third-party service provider to assist in pick-ups when the merchandise is too large, or the return is outside our coverage areas.
There can be no assurances that other state attorneys general will not pursue similar legal actions against the Company in future periods. Intellectual Property Intellectual property and proprietary rights are important to the success of our business.
There can be no assurances that other state attorneys general will not pursue similar legal actions against the Company in future periods. In recent years, state regulatory authorities have also increasingly focused on the BNPL industry in which our Four business operates.
Competition is based primarily on product selection and availability, customer service, lease rates, interest rates, promotional rates, and other terms. Working Capital Progressive Leasing's most significant working capital asset is merchandise on lease. The need for additional lease merchandise is expected to remain a major working capital requirement. Vive's most significant working capital assets are loans receivable.
The need for additional lease merchandise is expected to remain a major working capital requirement. Four's most significant working capital assets are loans receivable, and Purchasing Power's most significant working capital assets are its accounts receivable.
As of December 31, 2024, our employee count was 1,261 for Progressive Leasing, 124 for Vive, and 18 for Four and Other, the majority of which were full time employees. None of our employees are covered by a collective bargaining agreement, and we believe that our relations with employees are good.
As of December 31, 2025, our employee count was 1,151 for Progressive Leasing, 15 for Four, and 69 for Other, the majority of which were full-time employees.
Progressive Leasing provides in-store, app-based, and e-commerce point-of-sale lease-to-own solutions through approximately 23,000 third-party POS partner locations and e-commerce websites in 45 states, the District of Columbia and Puerto Rico. It does so by purchasing the desired merchandise from POS partners and, in turn, leasing that merchandise to customers through a cancellable lease-to-own transaction.
Progressive Leasing Progressive Leasing is our largest operating segment, which empowers consumers and businesses with transparent and flexible lease-to-own options to help consumers achieve ownership of durable goods. Progressive Leasing provides in-store, app-based, and e-commerce point-of-sale lease-to-own solutions through approximately 24,000 third-party POS partner locations and e-commerce websites in 45 states, the District of Columbia and Puerto Rico.
During 2024, two POS partners each individually provided customer relationships that generated greater than 10% of our consolidated revenues. Marketing and Advertising Progressive Leasing actively markets its leasing services to help its customers achieve ownership of durable goods and drive new shoppers and incremental revenue for our POS partners.
Marketing and Advertising Progressive Leasing and Four actively market their leasing services and BNPL offerings to help customers achieve ownership of goods and drive new shoppers and incremental revenue for our partners.
Failure to maintain adequate sources of liquidity to purchase lease merchandise and originate loans may materially adversely affect our Progressive Leasing, Vive, and Four businesses. We believe our cash on hand, operating cash flows, and availability under our revolving credit facility are adequate to meet our normal liquidity requirements.
Consistent and dependable sources of liquidity are required for Progressive Leasing to purchase such merchandise, for Four to originate new loans, and for Purchasing Power to purchase goods sold to its customers. Failure to maintain adequate sources of liquidity to purchase lease merchandise and originate loans may materially adversely affect our Progressive Leasing and Four businesses.
If the customer leases the item through the completion of the full term, ownership of the item transfers to the customer. The customer may also purchase the item at any time by tendering the contractually specified payment.
If the customer leases the item through the completion of the full term, ownership of the item transfers to the customer. The customer may also purchase the item at any time by taking advantage of one of the early purchase options. Contractual payments are usually based on a customer's pay frequency and are typically processed through automated clearing house payments.
Other individuals who find the lease-to-own model attractive are customers who, despite access to credit, do not wish to incur additional debt or have only a temporary need for the merchandise. Government Regulation Our Progressive Leasing, Vive and Four businesses are extensively regulated by and subject to the requirements of various federal, state and local laws and regulations.
Other individuals who find the lease-to-own model attractive are customers who, despite access to credit, do not wish to incur additional debt or have only a temporary need for the merchandise. 12 The BNPL industry offers customers the opportunity to make a purchase now and defer payment or pay in installments, often on an interest-free basis.
We will leverage our extensive database of lease and loan agreements to offer current and previous customers products that meet their needs. Operating Segments As of December 31, 2024, the Company has three operating segments: Progressive Leasing, Vive and Four.
We will leverage our extensive database of lease and other agreements to offer current and previous customers products that meet their needs. Our ecosystem expansion includes scaling Four as a key digital payments offering that broadens PROG Holdings' reach across adjacent and overlapping consumer segments.
Progressive Leasing consequently has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers. The Progressive Leasing segment comprised approximately 96% of our consolidated revenues for the year ended December 31, 2024.
It does so by purchasing the desired merchandise from POS partners and, in turn, leasing that merchandise to customers through a cancellable lease-to-own transaction. Progressive Leasing consequently has no stores of its own, but rather, offers lease-purchase solutions to the customers of traditional and e-commerce retailers.
Contractual payments are usually based on a customer's pay frequency and are typically processed through automated clearing house payments. If a payment is not made in a timely manner, collections are managed in-house through our customer payment assistance team and proprietary lease management system.
If a payment is not made in a timely manner, collections are managed via third-party service providers in Cali, Colombia, and Makati, Philippines, and in-house through our customer payment assistance team and proprietary lease management system. The customer payment assistance team contacts customers within a few days after the due date to encourage them to keep their agreement current.
We will also continue to expand our direct-to-consumer marketing efforts to attract new customers and drive more GMV through in-store and online retailers. • Enhance our industry-leading consumer experience - We are investing in technology platforms that promote customer engagement and simplify the lease application, origination and servicing experience.
Four enables us to reach a broader customer base beyond traditional lease-to-own transactions and capture incremental GMV through short-term installment plans across a wide range of merchants and categories by engaging customers directly, as well as providing cross-promotion opportunities. • Enhance our industry-leading consumer experience - We are investing in technology platforms that promote customer engagement and simplify the application, origination and servicing experience.
Vive's current network of over 6,200 POS partner locations and e-commerce websites includes furniture, mattresses, fitness equipment, and home improvement retailers, as well as medical and dental service providers. The Vive segment comprised approximately 3% of our consolidated revenues for the year ended December 31, 2024.
Vive offered customized programs with services that included revolving loans through private label and Vive-branded credit cards. Vive's network of POS partner locations and e-commerce websites included furniture, mattresses, fitness equipment, and home improvement retailers, as well as medical and dental service providers. On October 20, 2025, the Company sold substantially all of Vive's loan receivables portfolio.
Four's financial results are reported within "Other" for segment reporting purposes. 6 Operations Operating Strategy Our operating strategy is based on distinguishing our Progressive Leasing, Vive, and Four brands from those of our competitors, along with maximizing our operational efficiencies.
Vive is presented as discontinued operations and is no longer an operating segment. 7 Operations Operating Strategy Our operating strategy is based on developing and deploying an integrated ecosystem of alternative payment solutions to underserved individuals and families, distinguishing our brands from those of our competitors and maximizing our operational efficiencies.
Management's Discussion and Analysis of Financial Condition and Results of Operations and (ii) Item 8 . Financial Statements and Supplementary Data. Progressive Leasing Progressive Leasing is our largest operating segment, which empowers consumers and businesses with transparent and flexible lease-to-own options to help consumers achieve ownership of durable goods.
The operating results of our two reportable segments may be found in (i) Item 7 . Management's Discussion and Analysis of Financial Condition and Results of Operations and (ii) Item 8 . Financial Statements and Supplementary Data.
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The Progressive Leasing segment comprised approximately 96% of our consolidated revenues for the year ended December 31, 2024.
Added
The unified financial technologies ecosystem we continue to build, which we have expanded through our recent acquisition of Purchasing Power (as described below) provides these underserved customers with alternatives to traditional financing options. The Progressive Leasing segment comprised approximately 96% of our consolidated revenues for the year ended December 31, 2025.
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Vive Vive primarily serves customers who may not qualify for traditional prime lending offers and desire to purchase goods and services from participating merchants. Vive offers customized programs with services that include revolving loans through private label and Vive-branded credit cards.
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Four offers transparent, fixed-term payment options, powered by its proprietary risk-decisioning engine and its direct-to-consumer mobile app. Sale of Vive Financial On October 20, 2025, PROG Holdings sold substantially all of the loans receivable portfolio of Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products, which had been an operating segment prior to the sale.
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Four Four provides consumers of all credit backgrounds with BNPL options through four interest-free installments. Four's proprietary platform capabilities provide our base of customers and POS partners with another payment solution as part of the PROG Holdings financial technology offerings.
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Following the sale, the Company began the wind-down of Vive's operations. See Note 2 in our consolidated financial statements included in this Form 10-K for additional information.
Removed
Shoppers use Four's platform to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States. Four was not a reportable segment for the year ended December 31, 2024 as its financial results were not material to the Company's results of operations or financial condition.
Added
Acquisition of Purchasing Power On January 2, 2026, PROG Holdings acquired Purchasing Power, a company that provides the employees of Purchasing Power's employer-clients with a voluntary employee benefit program that allows employees to purchase brand-name products and services from Purchasing Power and pay for those purchases through either automatic payroll deductions or allotments.
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Legacy Finance Solution Shortfall Progressive Leasing's Answer Approximately 40% of United States population has a near or below prime FICO score and may not have a convenient solution to finance the purchase of big-ticket items. Progressive Leasing offers a technology-based, proprietary decisioning platform with transparent and competitive lease payment options.
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Millions of employees nationwide have access to Purchasing Power's innovative purchasing options and financial wellness offerings. See Note 16 in our consolidated financial statements included in this Form 10-K for additional information. 5 By expanding the products offered by the Company, we are building a unified financial ecosystem, as illustrated below.
Removed
Consumers may not be able to qualify for traditional products due to low credit score or no traditional credit file/score. Approvals are determined by various credit underwriting factors beyond traditional credit scores. Traditional products have high denial rates for non-prime customers and retailer staff have minimal training or program support to enable the purchase.
Added
In addition, we plan to grow GMV through Four, which, as a cloud-enabled mobile app is capable of scaling rapidly and efficiently.
Removed
Progressive Leasing brand loyalty, marketing and POS partner support efforts help drive incremental business to our POS partners and facilitate sales to customers that are otherwise unable to purchase.
Added
Our acquisition of Purchasing Power in January 2026 adds a highly complementary and important new platform to our growing ecosystem of payment solutions and provides us with an opportunity to cross-market our other offerings to Purchasing Power's customers. Operating Segments As of December 31, 2025, the Company has two operating segments: Progressive Leasing and Four.
Removed
Progressive Leasing's proprietary algorithms utilize the customer application, customer history, known fraud attributes, retailer/vertical performance and other information in the decision-making process. 7 Lease Agreement and Collection The Progressive Leasing customer has the option to acquire ownership of merchandise over a fixed term of up to 12 months, by making weekly, bi-weekly, semi-monthly, or monthly lease payments.
Added
The Progressive Leasing segment comprised approximately 96% of our consolidated revenues for the year ended December 31, 2025. Four Four enables consumers of various credit backgrounds to pay for purchases over time through short-term, interest-free installment BNPL plans. Four offers transparent, fixed-term payment options, powered by its proprietary risk-decisioning engine and direct-to-consumer mobile app.
Removed
The customer payment assistance team contacts customers within a few days after the due date to encourage them to keep their agreement current. We also send email and/or text reminders to customers and provide payment options and instructions.
Added
Leveraging data science, automation, and machine learning, Four delivers efficient underwriting and consistent credit outcomes while supporting purchases across a diverse range of merchants and product categories. Customers use Four's mobile app to shop for apparel, electronics, furniture, footwear, health and beauty products, travel, and other goods across the United States.
Removed
We believe Vive provides the following strategic benefits: • Enhanced product for POS partners - Vive is able to drive more sales for its POS partners through its revolving credit products.
Added
As part of PROG Holdings' financial technology ecosystem, Four complements Progressive Leasing's larger-ticket, longer-duration lease-to-own model and broadens the Company's reach into adjacent consumer segments while helping merchants increase conversion and order values. Vive Vive primarily served customers who may not have qualified for traditional prime lending offers who desired to purchase goods and services from participating merchants.
Removed
Vive has a centralized, scalable underwriting model with a long operating history, deployed through its third-party bank partners, and a proprietary receivable management system. • Expanded customer base - PROG Holdings is able to serve a broader base of consumers through Vive.
Added
Following the closing and completion of a transition services period with the purchaser, Vive will cease substantially all loan servicing activities.
Removed
Vive primarily serves customers with FICO scores between 580 and 700, which make up approximately a quarter of the United States population. These customers generally have credit profiles that are typically stronger than Progressive Leasing's current customers.
Added
The Company's targeted annual range for the provision for lease merchandise write-offs as a percentage of lease revenues is 6% to 8%. Four's Credit Decisioning and Collection Four partners with retailers across the United States to provide consumers with the ability to pay for merchandise in four interest-free installments through BNPL transactions.
Removed
Additionally, Vive's revolving credit products can be used for the purchase of services in addition to merchandise. • Proprietary decision algorithm and collection - Vive uses an underwriting model that provides standardized credit decisions, including borrowing limit amounts. Credit decisions are primarily based on a proprietary underwriting algorithm.
Added
Four's operations are built around a proprietary decisioning and payment platform designed to deliver responsible access to an interest-free, short-term payment offering while managing risk effectively.
Removed
Loans receivable are unsecured, and collections on loans receivable are managed in-house through Vive's employees and proprietary loans receivable management system. Customer Service A critical component of the success of our operations is the commitment to develop good relationships with our customers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

131 edited+36 added−27 removed175 unchanged
Biggest changeThese competitors may have significantly greater financial and operating resources, greater name recognition in certain markets and more developed products and services, which may allow them to grow faster, including through acquisitions, and to offer more aggressive exclusivity, rebate and/or other incentive payments to 18 existing and potential POS partners, some of whom may be our POS partners.
Biggest changeCompetitors may also seek to develop or acquire companies offering voluntary employee benefit programs via direct payroll deductions or allotments similar to Purchasing Power's voluntary employee benefit program. These competitors may have significantly greater financial and operating resources, greater name recognition in certain markets and more developed products and services, which may allow them to grow faster, including through acquisitions.
If we are unable to continue to attract experienced data scientists and information technology engineers, or unable to maintain and build our highly experienced sales force and finance team, several aspects of our performance may be materially and adversely affected. We do not carry key man life insurance on any of our personnel.
If we are unable to continue to attract experienced data scientists and information technology engineers, or are unable to maintain and build our highly experienced sales force and finance team, several aspects of our performance may be materially and adversely affected. We do not carry key man life insurance on any of our personnel.
Employee or third-party misconduct may prompt regulators to allege or to determine based upon such misconduct that we have not established adequate supervisory systems and procedures to inform employees of applicable rules or to detect violations of such rules. The precautions that we take to detect and prevent misconduct may not be effective in all cases.
Employee or third-party misconduct may prompt regulators to allege or to determine based upon such misconduct that we have not established adequate supervisory systems and procedures to inform employees of applicable rules or to detect violations of such rules. The precautions that we take to prevent and detect misconduct may not be effective in all cases.
In such an event, either or both of them may be required to re-engineer all or a portion of their technologies, seek licenses from third parties in order to continue offering their products and services, discontinue the use of their platforms in the event re-engineering cannot be accomplished, or otherwise be limited in the licensing of their technologies, each of which may reduce or eliminate the value of their technologies and products and services.
In such an event, either or both of them may be 28 required to re-engineer all or a portion of their technologies, seek licenses from third parties in order to continue offering their products and services, discontinue the use of their platforms in the event re-engineering cannot be accomplished, or otherwise be limited in the licensing of their technologies, each of which may reduce or eliminate the value of their technologies and products and services.
In addition to compliance costs, we may continue to incur substantial expenses to respond to regulatory and other third-party investigations and enforcement actions, proposed fines and 13 penalties, criminal or civil sanctions, and private litigation, as well as potential "headline risks" that may negatively impact our business and may adversely affect our share price.
In addition to compliance costs, we may continue to incur substantial expenses to respond to regulatory and other third-party investigations and enforcement actions, proposed fines and penalties, criminal or civil sanctions, and private litigation, as well as potential "headline risks" that may negatively impact our business and may adversely affect our share price.
With respect to these transactions, consumer advocacy groups and media reports generally focus on the total cost to a consumer to acquire merchandise, which is often alleged to be higher than the interest typically charged by banks or similar lending institutions to consumers with better credit histories.
With 21 respect to these transactions, consumer advocacy groups and media reports generally focus on the total cost to a consumer to acquire merchandise, which is often alleged to be higher than the interest typically charged by banks or similar lending institutions to consumers with better credit histories.
As previously disclosed, during the third quarter of 2024, Progressive Leasing received a written request from the FTC to evidence Progressive Leasing's compliance with the FTC Settlement by providing the FTC with information and documents, including those related to customer complaints and 21 advertising and marketing materials.
As previously disclosed, during the third quarter of 2024, Progressive Leasing received a written request from the FTC to evidence Progressive Leasing's compliance with the FTC Settlement by providing the FTC with information and documents, including those related to customer complaints and advertising and marketing materials.
Additionally, a divestiture may result in continued financial obligations, such as through transition service agreements, guarantees, indemnities or other current or contingent financial obligations and liabilities, following the transaction. The satisfaction of these continued financial obligations may also have an adverse effect on our financial condition.
A divestiture may also result in continued financial obligations, such as through transition service agreements, guarantees, indemnities or other current or contingent financial obligations and liabilities, following the transaction. The satisfaction of these continued financial obligations may also have an adverse effect on our financial condition.
Our reputation is critical to maintaining and developing relationships with our existing and potential customers and third parties with whom we do business. There is a risk that our employees or the employees of a POS partner with which we do business, may engage in misconduct that adversely affects our reputation and business.
Our reputation is critical to maintaining and developing relationships with our existing and potential customers and third parties with whom we do business. There is a risk that our employees, or the employees of a POS or employer partner with which we do business, may engage in misconduct that adversely affects our reputation and business.
Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from our guidance, and the variations may be material. We are a holding company and are dependent on the operations and funds of our subsidiaries.
Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from our guidance, and the variations may be material. 33 We are a holding company and are dependent on the operations and funds of our subsidiaries.
While the indenture that governs the senior notes and the Revolving Facility limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other 27 intercompany payments to us, these limitations are subject to qualifications and exceptions.
While the indenture that governs the senior notes and the Revolving Facility limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions.
We believe our proprietary lease and loan decisioning processes to be a key to the success of our businesses. These decisioning processes assume behavior and attributes observed for prior customers, among other factors, are indicative of performance by our future customers.
We believe our proprietary lease and loan decisioning processes to be a key to the success of our businesses. These decisioning processes assume behavior and attributes observed for prior customers, among other factors, are indicative of performance by 16 our future customers.
We may also be required to undertake additional cost reduction steps, including a further reduction of our workforce, which could also be 23 disruptive to our businesses and potentially lower the anticipated benefits with respect to our future performance, including with respect to GMV and revenue.
We may also be required to undertake additional cost reduction steps, including a further reduction of our workforce, which could also be disruptive to our businesses and potentially lower the anticipated benefits with respect to our future performance, including with respect to GMV and revenue.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, may adversely affect our businesses.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance 20 requirements, may adversely affect our businesses.
For example, the decisioning engine utilized by Progressive Leasing and Vive is based on algorithms that evaluate a number of factors and currently depend on sourcing certain information from third parties, including consumer reporting agencies.
For example, the decisioning engine utilized by Progressive Leasing is based on algorithms that evaluate a number of factors and currently depend on sourcing certain information from third parties, including consumer reporting agencies.
We may pursue acquisitions, strategic investments or divestitures, and the failure of an acquisition, investment or divestiture to produce the anticipated results may have a material adverse impact on several aspects of our performance.
We have, and may continue to, pursue acquisitions, strategic investments or divestitures, and the failure of an acquisition, investment or divestiture to produce the anticipated results may have a material adverse impact on several aspects of our performance.
In addition, competition for smaller POS partners has intensified significantly in recent years, with many such POS partners simultaneously offering several products and services that compete directly with the products and services offered by Progressive Leasing.
Competition for smaller POS partners has intensified significantly in recent years, with many such POS partners simultaneously offering several products and services that compete directly with the products and services offered by Progressive Leasing.
The value of our intellectual property and other proprietary rights may diminish if others assert rights in or ownership of our intellectual property or other proprietary rights, or in trademarks or service marks that are similar to our trademarks or service marks.
The value of our 27 intellectual property and other proprietary rights may diminish if others assert rights in or ownership of our intellectual property or other proprietary rights, or in trademarks or service marks that are similar to our trademarks or service marks.
Additionally, if the negative characterization of these types of transactions is accepted by government officials, Progressive Leasing may become subject to more restrictive laws and regulations and more stringent enforcement of existing laws and regulations, any of which may have a material adverse effect on several aspects of our performance.
Additionally, if the negative characterization of these types of transactions is accepted by government officials, Progressive Leasing and/or Four may become subject to more restrictive laws and regulations and more stringent enforcement of existing laws and regulations, any of which may have a material adverse effect on several aspects of our performance.
As a result, open source software may have security vulnerabilities, defects, or 26 errors of which we are not aware.
As a result, open source software may have security vulnerabilities, defects, or errors of which we are not aware.
For example, Progressive Leasing and Vive face competition from national, regional and local operators of lease-to-own stores, virtual lease-to-own companies, traditional and e-commerce retailers (including many that offer layaway programs and title or installment lending), traditional and online sellers of used merchandise, and various types of consumer finance companies that may enable our customers to shop at traditional or online retailers, as well as with rental stores that do not offer their customers a purchase option.
For example, Progressive Leasing faces competition from national, regional and local operators of lease-to-own stores, virtual lease-to-own companies, traditional and e-commerce retailers (including many that offer layaway programs and title or installment lending), traditional and online sellers of used merchandise, and various types of consumer finance companies that may enable our customers to shop at traditional or online retailers, as well as with rental stores that do not offer their customers a purchase option.
In addition, some of Progressive Leasing's competitors may be willing to lease certain types of products that we will not agree to lease, enter into customer leases that have services, as opposed to goods, as a significant portion of the lease value, or engage in other practices related to pricing, aggressive rebates and other incentive payments to POS partners, compliance, and other areas that we will not, in an effort to gain market share at our expense.
In addition, some of Progressive Leasing's competitors may be willing to lease certain types of products that we will not agree to lease, enter into customer leases that have services, as opposed to goods, as a portion of the lease value, or engage in other practices related to pricing, aggressive rebates and other incentive payments to POS partners that we will not, in an effort to gain market share at our expense.
We depend on our POS partners' abilities to deliver products to customers at the right time, in the right quantities and at the right price. Accordingly, it is important for our POS partners to obtain products at reasonable prices, maintain optimal levels of inventory and respond rapidly to shifting demands.
We depend on the abilities of our POS partners and vendors to deliver products to customers at the right time, in the right quantities and at the right price. Accordingly, it is important for our POS partners and vendors to obtain products at reasonable prices, maintain optimal levels of inventory and respond rapidly to shifting demands.
Changes in economic conditions affecting our customers, new information regarding our loans and other factors, both within and outside of our control, may require an increase in the allowance for credit losses. We may underestimate our expected losses and fail to maintain an allowance for credit losses sufficient to account for these losses.
Changes in economic conditions affecting our customers, new information regarding our receivables and other factors, both within and outside of our control, may require an increase in the allowance for credit losses. We may underestimate our expected losses and fail to maintain an allowance for credit losses sufficient to account for these losses.
Additionally, any failure by Progressive Leasing or by its competitors, including smaller, regional competitors, for example, to comply with the laws and regulations applicable to the traditional and/or virtual lease-to-own business models, or any actions by those competitors that are challenged by consumers, advocacy groups, the media or governmental agencies or entities as being abusive or predatory may result in our business being mischaracterized, by implication, as engaging in similar unlawful or inappropriate activities or business practices, even if our only association with such conduct is that we operate in the same general industries as one or more offenders.
Additionally, any failure by Progressive Leasing or Four or by their competitors, including smaller, regional competitors, for example, to comply with the laws and regulations applicable to the traditional and/or virtual lease-to-own or BNPL business models, or any actions by those competitors that are challenged by consumers, advocacy groups, the media or governmental agencies or entities as being abusive or predatory may result in our business being mischaracterized, by implication, as engaging in similar unlawful or inappropriate activities or business practices, even if our only association with such conduct is that we operate in the same general industries as one or more offenders.
In addition, in the event that Progressive Leasing enters into new or amended business or contractual terms or conditions with any of its largest POS partners that are less favorable than its current arrangements with those POS partners, including with respect to the prices it pays those POS partners for merchandise that it leases to consumers and/or exclusivity, rebate or other incentive payments it may make to those POS partners, our business and prospects may be materially and adversely effected.
In the event that Progressive Leasing enters into new or amended business or contractual terms or conditions with any of its largest POS partners that are less favorable than its current arrangements with those POS partners, including with respect to the prices it pays those POS partners for merchandise that it leases to consumers and/or exclusivity, rebate or other incentive payments it may make to those POS partners, our business and prospects may be materially and adversely affected.
Our businesses collect, store, use, disclose, process and transfer (collectively, "process") a wide variety of information, including personally identifiable information, for various purposes, including to help ensure the integrity of their services and to provide features and functionality to their customers and POS partners.
Our businesses collect, store, use, disclose, process and transfer (collectively, "process") a wide variety of information, including personally identifiable information, for various purposes, including to help ensure the integrity of their services and to provide features and functionality to their customers, POS partners and employer-clients.
High profile fraudulent activity or significant increases in fraudulent activity may also lead to regulatory intervention, negative publicity, and the erosion of trust from our businesses' POS partners and, therefore, may materially and adversely affect several aspects of our performance.
High profile fraudulent activity or significant increases in fraudulent activity may also lead to regulatory intervention, negative publicity, and the erosion of trust from our businesses' POS partners and/or employer-clients and, therefore, may materially and adversely affect several aspects of our performance.
To the extent we pay the purchase price of any strategic acquisition or investment in cash, it may have an adverse effect on our financial condition; similarly, if the purchase price is paid with our stock, it may be dilutive to our shareholders.
Additionally, if we pay the purchase price of any strategic acquisition or investment in cash, it may have an adverse effect on our financial condition; similarly, if the purchase price is paid with our stock, it may be dilutive to our shareholders.
We believe these claims will likely continue, in part because of the provisions enacted by the Dodd-Frank Act that provide for cash awards to persons who report alleged wrongdoing to the U.S.
We believe these claims will likely continue to occur, in part because of the provisions enacted by the Dodd-Frank 15 Act that provide for cash awards to persons who report alleged wrongdoing to the U.S.
Any extended supply chain interruptions, inventory shortages, material increases to the prices of imported goods or other operational factors affecting the performance of any of our POS partners may have a material adverse impact on our business.
Any extended supply chain interruptions, inventory shortages, material increases to the prices of imported goods or other operational factors affecting the performance of any of these POS partners or vendors may have a material adverse impact on our business.
Any interruptions or delays in a vendor's platform availability, any damage to a vendor's systems or facilities, any software failures or other disruption in our vendors' information technology systems may harm the relationship our businesses have with their POS partners and customers and also harm their reputation. In addition, both Progressive Leasing and Vive source certain information from third parties.
Any interruptions or delays in a vendor's platform availability, any damage to a vendor's systems or facilities, any software failures or other disruption in our vendors' information technology systems may harm the relationship our businesses have with their POS partners and customers and also harm their reputation. In addition, Progressive Leasing and Four source certain information from third parties.
These decisioning tools may be unable to accurately predict and respond to the impact of an uncertain macroeconomic environment or changes to customer behaviors in connection therewith, which in turn may limit the ability of our businesses to manage risk, avoid lease and loan charge-offs and may result in insufficient reserves to cover actual losses (which Progressive Leasing records as accounts receivable allowance and allowance for lease merchandise write-offs and Vive and Four record as provision for loan losses).
These decisioning tools may be unable to accurately predict and respond to the impact of an uncertain macroeconomic environment or changes to customer behaviors in connection therewith, which in turn may limit the ability of our businesses to manage risk, avoid lease and loan charge-offs and may result in insufficient reserves to cover actual losses (which Progressive Leasing records as accounts receivable allowance and allowance for lease merchandise write-offs and Purchasing Power, Four, and MoneyApp record as provision for loan losses).
Additionally, in February 2024, our Board of Directors authorized the initiation of a quarterly cash dividend, and the Company has since paid a quarterly cash dividend to its shareholders for each fiscal quarter since the first quarter of the 2024 fiscal year.
In February 2024, our Board of Directors also authorized the initiation of a quarterly cash dividend, and the Company has since paid a quarterly cash dividend to its shareholders for each fiscal quarter since the first quarter of the 2024 fiscal year.
The processing of the information they acquire in connection with their customers' and POS partners' use of their services is subject to numerous privacy, data protection, cybersecurity, and other laws and regulations.
The processing of the information they acquire in connection with their customers', POS partners' and employer-clients' use of their services is subject to numerous privacy, data protection, cybersecurity, and other laws and regulations.
As a result, our decisioning process has required, and may in the future require, frequent adjustments (including tightening) and the application of greater management judgment in the interpretation of the results produced by our decisioning tools, which could have an unfavorable impact on our GMV, margins and earnings.
As a result, our decisioning process has required, and may continue to require, frequent adjustments (including tightening) and the application of greater management judgment in the interpretation of the results produced by our decisioning tools, which could have an unfavorable impact on our GMV, margins and earnings.
Among the factors that may affect our stock price are: • how our actual financial performance compares to the financial performance outlook we provide; • quarterly variations in our key operating metrics, such as revenue, active customer count, GMV and profitability that are not necessarily indicative of longer-term operating performance and valuation; • the stock price performance of comparable companies and quarterly variations in their results of operations; • changes in earnings estimates or buy/sell recommendations by securities or industry analysts; • investor perceptions of us and our industry; • federal, state or local regulatory proposals, initiatives, actions or changes that are, or are perceived to be, adverse to our operations, including any continuing impacts of the FTC Settlement as discussed above; • actions by institutional and "activist" shareholders, including future purchases and sales of our stock; • our capital allocation strategy and financial policies, including continued share repurchases under our current share repurchase program as discussed above; • additions or departures of key personnel; and • continuing uncertain macroeconomic conditions, in particular those relating to persistent inflationary pressures and elevated interest rates for prolonged periods.
Among the factors that may affect our stock price are: • how our actual financial performance compares to the financial performance outlook we provide; • quarterly variations in our key operating metrics, such as revenue, active customer count, GMV and profitability that are not necessarily indicative of longer-term operating performance and valuation; • the stock price performance of comparable companies and quarterly variations in their results of operations; • changes in earnings estimates or buy/sell recommendations by securities or industry analysts; • investor perceptions of us and our industry; • federal, state or local regulatory proposals, initiatives, actions or changes that are, or are perceived to be, adverse to our operations, including any continuing impacts of the FTC Settlement as discussed above; • actions by institutional and "activist" shareholders, including future purchases and sales of our stock; • our capital allocation strategy and financial policies, including continued share repurchases under our current share repurchase program as discussed above; • additions or departures of key personnel; and • continuing uncertain macroeconomic conditions, in particular those relating to persistent inflationary pressures, a higher cost of living, changes in international trade policies or the tariff environment and elevated interest rates for extended periods.
The automated nature of their businesses and their reliance on digital technologies may make them an attractive target for, and potentially vulnerable to, cyber-attacks, computer malware, computer viruses, social engineering (including phishing and ransomware attacks), general hacking, physical or electronic break-ins, or similar disruptions.
The automated nature of their businesses and their reliance on digital technologies, such as AI tools, may make them an attractive target for, and potentially vulnerable to, cyber-attacks, computer malware, computer viruses, social engineering (including phishing and ransomware attacks), general hacking, physical or electronic break-ins, or similar disruptions.
Furthermore, there are other financial and operational risks associated with our capital allocation strategy and financial policies, including in the event that we implement a debt repurchase or dividend program, which are detailed more fully below.
Furthermore, there are other financial and operational risks associated with our capital allocation strategy and financial policies, including in the event that we implement a debt repurchase, which are detailed more fully below.
Our ability to utilize certain types of contractual provisions designed to limit costly litigation, including class actions, may not be enforceable. To attempt to limit costly and lengthy consumer, employee and other litigation, including class actions, Progressive Leasing and Vive require their customers and employees to sign arbitration agreements and class action waivers, many of which offer opt-out provisions.
Our ability to utilize certain types of contractual provisions designed to limit costly litigation, including class actions, may not be enforceable. To attempt to limit costly and lengthy consumer, employee and other litigation, including class actions, our businesses require their customers and employees to sign arbitration agreements and class action waivers, many of which offer opt-out provisions.
For example, each of the Progressive Leasing and Vive platforms and internal systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data. As a result, undetected errors, failures, bugs, or defects may be present in such software or occur in the future in such software.
For example, each of the Progressive Leasing, Purchasing Power and Four platforms and internal systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data. As a result, undetected errors, failures, bugs, or defects may be present in such software or occur in the future in such software.
As discussed above, BNPL offerings have become subject to enhanced regulatory scrutiny by federal and state regulatory authorities which allege several areas of perceived risks to consumers, including the risks that borrowers will become overextended.
As discussed above, BNPL offerings have become subject to enhanced regulatory scrutiny by state regulatory authorities which allege several areas of perceived risks to consumers, including the risk that borrowers will become overextended.
In particular, and among other perceived concerns, advocacy groups have asserted (and are likely to continue asserting) that laws and regulations should be broader and more restrictive regarding lease-to-own transactions, such as those engaged in by Progressive Leasing.
In particular, and among other perceived concerns, advocacy groups have asserted (and are likely to continue asserting) that laws and regulations should be broader and more restrictive regarding lease-to-own transactions, such as those engaged in by Progressive Leasing, as well as with respect to BNPL transactions.
In addition, if our senior management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if our independent registered public accounting firm cannot render an unqualified opinion on the effectiveness of our internal control over financial reporting, when required, or if material weaknesses in our internal controls are identified, we may be subject to increased regulatory scrutiny and a loss of public and investor confidence, which may also have a material adverse effect on our business and our stock price. 29 Our risk management processes and procedures may not be effective in mitigating our risks.
In addition, if our senior management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if our independent registered public accounting firm cannot render an unqualified opinion on the effectiveness of our internal control over financial reporting, when required, or if material weaknesses in our internal controls are identified, we may be subject to increased regulatory scrutiny and a loss of public and investor confidence, which may also have a material adverse effect on our business and our stock price.
These efforts may take longer and may require greater financial and other resources than anticipated, may cause distraction of key personnel, may cause disruptions to our existing systems and our business, may adversely impact our ability to externally report timely and accurate consolidated financial information, may expose us to heightened cybersecurity risks and may not otherwise provide the anticipated benefits.
These efforts are expected to continue into 2026 and may take longer and may require greater financial and other resources than anticipated, may cause distraction of key personnel, may cause disruptions to our existing systems and our business, may adversely impact our ability to externally report timely and accurate consolidated financial information, may expose us to heightened cybersecurity risks and may not otherwise provide the anticipated benefits.
Our businesses ultimately bear the risk of consumer fraud in transactions and generally have no recourse to their respective POS partner (as the case may be) to collect the amount owed by the customer. Significant amounts of fraudulent transactions may adversely affect our respective businesses.
Our businesses ultimately bear the risk of consumer fraud in transactions and generally have no recourse to their respective POS or affiliate partners (as the case may be) to collect the amount owed by the customer. Significant amounts of fraudulent transactions may adversely affect our respective businesses.
We also expect to migrate a large portion of our enterprise-wide applications to a third-party cloud provider in order to further enhance our business continuity and disaster recovery plans.
We also migrated a large portion of our enterprise-wide applications to a third-party cloud provider in order to further enhance our business continuity and disaster recovery plans.
In the event that any third-party from which they source information experiences a service disruption, whether as a result of maintenance, natural disasters, terrorism, or security breaches, whether accidental or willful, or other factors, the ability of the decisioning engine utilized by Progressive Leasing and Vive to make accurate lease and loan decisions and to process them correctly may be adversely impacted.
In the event that any third-party from which either Progressive Leasing or Four sources information experiences a service disruption, whether as a result of maintenance, natural disasters, terrorism, or security breaches, whether accidental or willful, or other factors, the ability of the decisioning engine utilized by Progressive Leasing and Four to make accurate lease and loan decisions and to process them correctly may be adversely impacted.
Additionally, adverse macroeconomic conditions or other factors outside of our control may unfavorably impact our customers' ability to make the payments they owe the Company which, in turn, could result in increased customer payment delinquencies, as well as increases in lease merchandise write-offs, loan loss provisioning and loan write-offs.
Additionally, those and other adverse macroeconomic conditions or other factors outside of our control may unfavorably impact our customers' ability to make the payments they owe the Company which, in turn, could result in increased customer payment delinquencies, as well as increases in accounts receivable, lease merchandise and loan write-offs.
Our businesses maintain business continuity and disaster recovery plans that, as discussed above, are expected to be enhanced in 2025 by migrating a large portion of our enterprise-wide applications to a third-party cloud provider.
Our businesses maintain business continuity and disaster recovery plans that, as discussed above, were enhanced in 2025 by migrating a large portion of our enterprise-wide applications to a third-party cloud provider.
The risks that are specific to Vive may also have a material and adverse effect on several aspects of our performance in the future.
The risks that are specific to Purchasing Power may also have a material and adverse effect on several aspects of our performance in the future.
Intellectual property and other proprietary rights are important to the success of our business. Our ability to compete effectively is dependent in part upon our ability to obtain, maintain, protect, and enforce our intellectual property and other proprietary rights, including with respect to our proprietary technology, and to obtain licenses to use the intellectual property and proprietary rights of others.
Our ability to compete effectively is dependent in part upon our ability to obtain, maintain, protect, and enforce our intellectual property and other proprietary rights, including with respect to our proprietary technology, and to obtain licenses to use the intellectual property and proprietary rights of others.
The timing and actual number of further share repurchases and/or the continuation of our dividend program following the date of this Annual Report on Form 10-K, if any, will depend on a variety of factors, including the price and availability of our shares, trading volume, our earnings and financial condition, general market conditions, and projected cash positions in light of other capital allocation opportunities such as organic growth and strategic acquisitions.
The timing and actual number of further share repurchases and/or the continuation of our dividend program following the date of this Annual Report on Form 10-K, if any, will depend on a variety of factors, including the price and availability of our shares, trading volume, our earnings and financial condition, general market conditions, and projected cash positions in light of other capital allocation opportunities such as organic growth, repayment of the indebtedness incurred in connection with the Purchasing Power acquisition and strategic acquisitions.
The process for establishing the allowance for loan losses is critical to our results of operations and financial condition, and requires complex models and judgments, including forecasts of economic conditions and other qualitative factors.
The process for establishing allowances is critical to our results of operations and financial condition, and requires complex models and judgments, including forecasts of economic conditions and other qualitative factors.
We derive our revenue from the products and services offered by our businesses. Adverse macroeconomic conditions, such as persistent inflationary pressures, the cost of living and elevated interest rates for extended periods, may lead to declines in disposable income and/or discretionary spending levels which, in turn, could reduce demand for our products and services.
We derive our revenue from the products and services offered by our businesses. Adverse macroeconomic conditions, such as persistent inflationary pressures, a higher cost of living and elevated interest rates for extended periods, may continue to lead to declines in disposable income and/or discretionary spending levels and therefore reduce demand for our products and services.
For example, in fiscal 2025, we expect to begin implementing a new enterprise resource planning system that is intended to streamline and optimize the Company's financial and accounting processes, as well as begin implementing operational and technological enhancements to our lease decisioning and management systems that are intended to optimize performance, improve efficiency and enhance scalability.
For example, in fiscal 2025, we began implementing a new enterprise resource planning system that is intended to streamline and optimize the Company's financial and accounting processes, and we are in the process of implementing operational and technological enhancements to our lease decisioning and management systems that are intended to optimize performance, improve efficiency and enhance scalability.
Additionally, as we execute on our strategic plans, we may continue to expand into complementary businesses that engage in financial, consumer credit transactions or lending services, or lease-to-own or rent-to-rent transactions involving products that we do not currently offer our customers, or implement the use of new technologies in our existing businesses and products, such as machine learning and artificial intelligence-based technologies, all of which may be subject to a variety of statutes, laws and regulatory requirements in addition to those regulations currently applicable to our operations, which may impose significant costs, limitations or prohibitions on the manner in which we currently conduct our businesses as well as those we may acquire in the future.
Additionally, as we execute on our strategic plans, we may continue to expand into complementary businesses, such as the voluntary employee benefit program business pursuant to our acquisition of Purchasing Power in January 2026, that engage in financial, consumer credit transactions or lending services, or lease-to-own or rent-to-rent transactions involving products that we do not currently offer our customers, or implement the use of new technologies in our existing businesses and products, such as artificial intelligence-based technologies, all of which may be subject to a variety of statutes, laws and regulatory requirements in addition to those regulations currently applicable to our operations, which may impose significant costs, limitations or prohibitions on the manner in which we currently conduct our businesses as well as those we may acquire in the future.
Although we strongly disagree with these characterizations, if the negative characterization of these types of lease-to-own transactions becomes increasingly accepted by consumers or Progressive Leasing's POS partners and others with whom it does business, demand for its products and services may significantly decrease, which may have a material adverse effect on several aspects of our performance.
Although we strongly disagree with these characterizations, if the negative characterization of these types of lease-to-own and BNPL transactions becomes increasingly accepted by consumers or POS partners (in the case of Progressive Leasing) and others with whom we do business, demand for Progressive Leasing's or Four's products and services may significantly decrease, which may have a material adverse effect on several aspects of our performance.
As a result of these restrictions, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns, or at other times; or • unable to compete effectively or to take advantage of new business opportunities. 28 These restrictions may affect our ability to grow in accordance with our strategy.
As a result of these restrictions, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns, or at other times; or • unable to compete effectively or to take advantage of new business opportunities.
If federal regulatory authorities continue to focus on alternative consumer financial services products, including within the industries in which our businesses operate, this may result in increased compliance costs and the possibility of significant monetary penalties, remediation expenses and costly changes to the manner in which we conduct our businesses.
If federal regulatory authorities propose or adopt new regulations or increase their focus on alternative consumer financial services products, including within the industries in which our businesses operate, this may result in increased compliance costs and the possibility of significant monetary penalties, remediation expenses and costly changes to the manner in which we conduct our businesses.
The Company is fully cooperating with the FTC in responding to the FTC's request for information and documents.
The Company fully cooperated with the FTC in responding to the FTC's request for information and documents.
These e-commerce-based processes entail additional risks relative to in-store-based underwriting processes and procedures, including risks regarding the sufficiency of notice for compliance with consumer protection laws, increased risks and occurrences of fraud, risks that customers may challenge the authenticity of their lease or loan documents, or the validity of electronic signatures and records, and risks that, despite internal controls, unauthorized changes are made to their electronic documents.
These e-commerce-based processes entail additional risks relative to in-store-based underwriting processes and procedures, including risks regarding occurrences of fraud, risks that customers may challenge the authenticity of their lease or loan documents, or the validity of electronic signatures and records, and risks that, despite internal controls, unauthorized changes are made to their electronic documents.
Our capital allocation strategy and financial policies, including our current stock repurchase and dividend programs, as well as any potential debt repurchase program may not be effective at enhancing shareholder value, or providing other benefits we expect.
Our capital allocation strategy and financial policies, including our current stock repurchase and dividend programs, may not be effective at enhancing shareholder value, or providing other benefits we expect.
If Progressive Leasing is unable to quickly and effectively respond to such characterizations, it may experience declines in customer loyalty and traffic and its relationships with its POS partners may suffer, which may have a material adverse effect on several aspects of our performance.
If Progressive Leasing or Four is unable to quickly and effectively respond to such characterizations, they may experience declines in customer loyalty and traffic and harm their relationships with their POS partners, which may have a material adverse effect on several aspects of our performance.
Lease revenue and interest income is the highest in the first quarter of each year due to the typical increased payment activity associated with tax refund proceeds often received by customers in the first quarter. This seasonality requires the Company to manage its cash flows over the course of the year.
Revenue from each of our businesses is generally the highest in the first quarter of each year due to the typical increased payment activity associated with tax refund proceeds often received by customers in the first quarter. This seasonality requires the Company to manage its cash flows over the course of the year.
For example, certain states, such as New York, have introduced legislation to enhance regulations applicable to BNPL offerings, including regulations that limit the amount of fees BNPL businesses are permitted to charge consumers, require BNPL businesses to obtain licenses to conduct business in such states, and require BNPL businesses to perform "ability-to-repay" analyses on their applicants.
For example, in May 2025, New York enacted legislation to enhance regulations applicable to BNPL offerings, including regulations that limit the amount of fees BNPL businesses are permitted to charge consumers, require BNPL businesses to obtain licenses to conduct business in New York, and require BNPL businesses to perform "ability-to-repay" analyses on their applicants.
Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This may further exacerbate the risks to our financial condition described above. We and our subsidiaries may be able to incur significant additional indebtedness in the future.
Despite our current level of indebtedness, we and our subsidiaries have recently incurred, and may continue to incur, substantially more debt. This may further exacerbate the risks to our financial condition described above. We and our subsidiaries have recently incurred, and may continue to incur in the future, significant additional indebtedness.
Our intellectual property and other proprietary rights may not be sufficient to provide us with a competitive advantage and the value of our intellectual property and other proprietary rights may also diminish if others assert rights therein or ownership thereof, and we may be unable to successfully resolve any such conflicts in our favor or to our satisfaction. 25 We may be sued by third parties for alleged infringement, misappropriation, or other violation of their intellectual property or other proprietary rights.
Our intellectual property and other proprietary rights may not be sufficient to provide us with a competitive advantage and the value of our intellectual property and other proprietary rights may also diminish if others assert rights therein or ownership thereof, and we may be unable to successfully resolve any such conflicts in our favor or to our satisfaction.
If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
Borrowings under our Revolving Facility are at variable rates of interest and expose us to interest rate risk. If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
Consumer complaints with respect to our industry have resulted in, and may in the future result in, state, federal and local regulatory and other investigations. In addition, while we are not aware of any whistleblower claims regarding the specific practices of our businesses, such claims are on the rise generally.
Consumer complaints with respect to our industry have resulted in, and may in the future result in, state, federal and local regulatory and other investigations. In addition, while we are not aware of any whistleblower claims regarding the specific practices of our businesses, the number of these types of claims has increased in recent years.
The loss of any key POS partners would have a material adverse effect on our business. For example, during 2024, we derived 52.6% of our consolidated revenues from customers of Progressive Leasing's top three POS partners, and 78.2% of our consolidated revenues from customers of Progressive Leasing's top ten POS partners.
The loss of any key POS partners would have a material adverse effect on our business. For example, during 2025, we derived 54.8% of our consolidated revenues from customers of Progressive Leasing's top three POS partners, and 77.0% of our consolidated revenues from customers of Progressive Leasing's top ten POS partners.
The attractiveness of Progressive Leasing's platform to POS partners depends upon, among other things: its brand and reputation; its ability to sustain its value proposition to POS partners for consumer acquisition; the attractiveness to POS partners of its virtual and data-driven platform; the services, products and customer decisioning standards offered by Progressive Leasing's competitors; the amount of rebates or 15 other incentive payments offered to those POS partners by Progressive Leasing, and its ability to perform under, and maintain, its POS partner agreements, most of which have terms that do not exceed three years.
Additionally, the attractiveness of Progressive Leasing's platform to POS partners depends upon, among other things: its brand and reputation; its ability to sustain its value proposition to POS partners for consumer acquisition; the attractiveness to POS partners of its virtual and data-driven platform; the services, products and customer decisioning standards offered by Progressive Leasing's competitors, as compared to Progressive Leasing's; the amount of rebates or other incentive payments offered to those POS partners by Progressive Leasing, and its ability to perform under, and maintain, its POS partner agreements, which give our 17 POS partners the right to terminate for cause in certain situations, and some of which have terms that do not exceed three years, especially with respect to our agreements with our regional POS partners.
In cases where we modify a loan, if the modified loans do not perform as anticipated, we may be required to establish additional allowances on these loans. Given the significant judgment used in estimating the allowance for loan losses, Vive's and Four's loan loss reserves may not be sufficient to cover actual losses.
In cases where we modify a loan or account receivable, if the modified receivables do not perform as anticipated, we may be required to establish additional allowances. Given the significant judgment used in estimating the allowances for credit losses, Purchasing Power's and Four's loss reserves may not be sufficient to cover actual losses.
Any actual or perceived failure to comply with legal and regulatory requirements applicable to our businesses, including those relating to information security, or any failure to protect the information that our businesses collect from their customers and POS partners, including personally identifiable information, may result in, among other things, regulatory or governmental investigations, administrative enforcement actions, sanctions, criminal liability, private litigation, civil liability and constraints on our ability to continue to operate. 17 Furthermore, federal and state regulators and many federal and state laws and regulations require notice of any data security breaches that involve personal information.
Any actual or perceived failure to comply with legal and regulatory requirements applicable to our businesses, including those relating to information security, or any failure to protect the information that our businesses collect from their customers and POS partners and from Purchasing Power's employer clients, including personally identifiable information, may result in, among other things, regulatory or governmental investigations, administrative enforcement actions, sanctions, criminal liability, private litigation, civil liability and constraints on our ability to continue to operate.
Similarly, either Vive or Four's inability to timely and effectively respond to such 19 characterizations may harm its relationships with its merchant partners and customers, and result in declines in transactions and revenue.
Similarly, Progressive Leasing's or Four's inability to timely and effectively respond to such characterizations may harm their relationships with their partners and customers, and result in declines in transactions and revenue.
In addition, through its BNPL offerings, Four's business model allows shoppers to pay for merchandise through four interest-free installments, which enables its customers to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States.
In addition, through its BNPL offerings, Four's business model allows shoppers to pay for merchandise through four interest-free installments, with the first installment collected at the time of purchase and the remaining three installments scheduled over a defined repayment period, which enables its customers to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States.
Our success depends, in part, on our ability to develop and commercialize our products and services without infringing, misappropriating, or otherwise violating the intellectual property or other proprietary rights of third parties.
We may be sued by third parties for alleged infringement, misappropriation, or other violation of their intellectual property or other proprietary rights. Our success depends, in part, on our ability to develop and commercialize our products and services without infringing, misappropriating, or otherwise violating the intellectual property or other proprietary rights of third parties.
For example, in 2024, Progressive Leasing's GMV generated from e-commerce platforms represented 17.0% of its total GMV.
For example, in 2025, Progressive Leasing's GMV generated from e-commerce platforms represented 23.3% of its total GMV.
Misconduct by our employees or third-party contractors or other third parties who are directly or indirectly associated with our business, or even unsubstantiated allegations of misconduct, may result in a material adverse effect on our reputation and our business. We may be unable to sufficiently obtain, maintain, protect, or enforce our intellectual property and other proprietary rights.
Misconduct by our employees or third-party contractors or other third parties who are directly or indirectly associated with our business, or even unsubstantiated allegations of misconduct, may result in a material adverse effect on our reputation and our business.
The impact of any of these events may have a material and adverse effect on several aspects of our performance. 20 Our businesses rely extensively on models in managing many aspects of their businesses, and if those models are not accurate or are misinterpreted, such errors may have a material adverse effect on several aspects of our performance.
Our businesses rely extensively on models in managing many aspects of their businesses, and if those models are not accurate or are misinterpreted, such errors may have a material adverse effect on several aspects of our performance. Our businesses rely extensively on models in managing many aspects of their businesses, including loan and lease decisioning, pricing, and collections management.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−1 removed8 unchanged
Biggest changeIn addition, the Company's Enterprise Risk Management Committee, which is comprised of members of the Company's executive leadership team, is informed on a regular basis about, and monitors, the Company's efforts and initiatives to prevent, detect, mitigate and remediate cybersecurity-related risks, and to further improve the Company's cybersecurity maturity, including through presentations it receives from the Company's Chief Information Security Officer.
Biggest changeIn addition, the Company's Enterprise Risk Management Committee, which is comprised of members of the Company's executive leadership team, is informed on a regular basis about, and monitors, the Company's efforts and initiatives to prevent, detect, mitigate and remediate cybersecurity-related risks, and to further improve the Company's cybersecurity maturity, including through presentations it receives from the Company's Chief Information Security Officer. 34 Conducting the Company's businesses involves the collection, storage, use, disclosure, processing, transfer, and other handling of a wide variety of information, including personally identifiable information, for various purposes in the Company's businesses, including to help ensure the integrity of the Company's services and to provide features and functionality to the Company’s customers and POS partners.
For more information about these and other cybersecurity risks faced by the Company, see Part 1. Item 1A. "Risk Factors." 31
For more information about these and other cybersecurity risks faced by the Company, see Part 1. Item 1A. "Risk Factors."
While there was no major operational impact to any of Progressive Leasing’s services as a result of the incident, and the Company’s other subsidiaries were not impacted, this incident, as well as any other breach of the Company’s systems or facilities, or those of Progressive Leasing, Vive, Four, or the Company's other strategic operations may continue to result in cybersecurity-related risks.
While there was no major operational impact to any of Progressive Leasing’s services as a result of the incident, and the Company’s other subsidiaries were not impacted, this incident, as well as any other breach of the Company’s systems or facilities, or those of Progressive Leasing, Purchasing Power, Four, or the Company's other strategic operations may continue to result in cybersecurity-related risks.
Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework. 30 In furtherance of detecting, identifying, classifying and mitigating cybersecurity and other data security threats, the Company also: • adopted and maintains information security and privacy policies; • conducts targeted audits and penetration tests throughout the year, using both internal and external resources; • engages nationally-known third party cybersecurity consultants to independently evaluate the Company's information security maturity on a regular basis; • maintains a vendor risk management program, which includes receiving the results of cybersecurity audits conducted on vendors, for a portion of our vendors, and conducting cyber related risk assessments on other vendors; • provides mandatory security and privacy training and awareness to all of its employees so that employees understand the behaviors and requirements necessary to safeguard information resources at the Company; • maintains cyber liability insurance; and • complies with the Payment Card Industry Data Security Standard.
In furtherance of detecting, identifying, classifying and mitigating cybersecurity and other data security threats, the Company also: • adopted and maintains information security and privacy policies; • conducts targeted audits and penetration tests throughout the year, using both internal and external resources; • engages nationally-known third party cybersecurity consultants to independently evaluate the Company's information security maturity on a regular basis; • maintains a vendor risk management program, which includes receiving the results of cybersecurity audits conducted on vendors, for a portion of our vendors, and conducting cyber related risk assessments on other vendors; • provides mandatory security and privacy training and awareness to all of its employees so that employees understand the behaviors and requirements necessary to safeguard information resources at the Company; • maintains cyber liability insurance; and • complies with the Payment Card Industry Data Security Standard for its larger business segments and is in the process of obtaining that certification for its other segments.
This cybersecurity program is based in-part on, and its maturity is measured using, the U.S.
This cybersecurity program is based in-part on, and its maturity is measured using, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework.
Removed
Conducting the Company's businesses involves the collection, storage, use, disclosure, processing, transfer, and other handling of a wide variety of information, including personally identifiable information, for various purposes in the Company's businesses, including to help ensure the integrity of the Company's services and to provide features and functionality to the Company’s customers and POS partners.

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−1 removed1 unchanged
Biggest changeOn January 25, 2024, the Company announced that it had taken several restructuring actions, including the reduction and consolidation of its office space in Utah and Arizona. During the first quarter of 2024, the Company reduced its office space in Utah by 50% and completely vacated the office space in Arizona.
Biggest changeDuring the first quarter of 2024, the Company reduced its office space in Utah by 50% and completely vacated the office space in Arizona.
The closure of the office space in Arizona was not due to a reduction in the workforce there, but rather, was due to the employees who had worked in that space being allowed to permanently work from home. A corresponding impairment was recognized for the abandoned right-of-use lease assets. The existing lease agreement for Utah expires in August 2027.
The closure of the office space in Arizona was not due to a reduction in the workforce there, but rather, was due to the employees who had worked in that space being allowed to permanently work from home. A corresponding impairment was recognized for the abandoned right-of-use lease assets. The existing lease agreement for Utah expires in May 2027.
ITEM 2. PROPERTIES The Company leases management and information technology space for corporate functions under operating leases expiring at various times through 2028. Most of the leases contain renewal options for additional periods ranging from three to five years.
ITEM 2. PROPERTIES The Company leases management and information technology space for corporate functions under operating leases expiring at various times through 2028. Most of the leases contain renewal options for additional periods ranging from two to three years.
The following table sets forth certain information regarding our corporate and segment management facilities as of December 31, 2024: LOCATION 1 SEGMENT, PRIMARY USE AND HOW HELD SQ. FT.
The following table sets forth certain information regarding our corporate and segment management facilities as of December 31, 2025: LOCATION 1 SEGMENT, PRIMARY USE AND HOW HELD SQ. FT.
Draper, Utah Progressive Leasing and Vive — Corporate Management – Leased 74,000 Aventura, Florida Four — Corporate Management – Leased 6,769 1 The Company previously leased offices for corporate management of its Progressive Leasing segment in Glendale, Arizona.
Draper, Utah Progressive Leasing — Corporate Management – Leased 74,000 Aventura, Florida Four — Corporate Management – Leased 6,769 1 On January 25, 2024, the Company announced that it had taken several restructuring actions, including the reduction and consolidation of its office space in Utah and Arizona.
Removed
During 2022, the office space in Arizona was consolidated to a single floor as part of the Company's restructuring initiatives and partial impairment was recognized for the abandoned portion of the right-of-use lease asset.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed2 unchanged
Biggest changeHowever, an adverse resolution of a number of these items may have a material adverse impact on our business, financial position or results of operations. For further information, see Note 9 in the accompanying consolidated financial statements under the heading "Legal Proceedings," which discussion is incorporated by reference in response to this Item 3. ITEM 4.
Biggest changeHowever, an adverse resolution of a number of these items may have a material adverse impact on our business, financial position or results of operations. For further information, see Note 10 in the accompanying consolidated financial statements under the heading "Legal Proceedings," which discussion is incorporated by reference in response to this Item 3. ITEM 4.
MINE SAFETY DISCLOSURES Not applicable. 32 PART II
MINE SAFETY DISCLOSURES Not applicable. 35 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−4 removed2 unchanged
Biggest changeThe number of shareholders of record of the Company's common stock at February 14, 2025 was 165. The closing price for the common stock at February 14, 2025 was $42.82.
Biggest changeThe number of shareholders of record of the Company's common stock at February 12, 2026 was 158. The closing price for the common stock at February 12, 2026 was $33.34. Issuer Purchases of Equity Securities There were no share repurchases or other unregistered sales of equity securities for the three months ended December 31, 2025.
Securities Authorized for Issuance Under Equity Compensation Plans Information concerning the Company's equity compensation plans is set forth in Item 12 of Part III of this Annual Report on Form 10-K. 33 Performance Graph Comparison of 5 Year Cumulative Total Return* Among PROG Holdings, Inc., the S&P MidCap 400 Index, the S&P SmallCap 600 Index, and the S&P North American Technology Sector Index *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
Securities Authorized for Issuance Under Equity Compensation Plans Information concerning the Company's equity compensation plans is set forth in Item 12 of Part III of this Annual Report on Form 10-K. 36 Performance Graph Comparison of 5 Year Cumulative Total Return* Among PROG Holdings, Inc., the S&P MidCap 400 Index, the S&P SmallCap 600 Index, and the S&P North American Technology Sector Index *$100 invested on 12/31/20 in stock or index, including reinvestment of dividends.
The Company was previously included in the S&P MidCap 400 Index, but moved to the S&P SmallCap 600 Index in April 2022. The spin-off of The Aaron's Company on November 30, 2020 was reflected as a $9.60 per share special dividend in calculating the PROG Holdings cumulative total shareholder return.
The Company was previously included in the S&P MidCap 400 Index, but moved to the S&P SmallCap 600 Index in April 2022.
December 31, 2019 2020 2021 2022 2023 2024 PROG Holdings, Inc. $ 100.00 $ 109.20 $ 91.45 $ 34.24 $ 62.66 $ 86.73 S&P MidCap 400 100.00 113.66 141.80 123.28 143.54 163.54 S&P SmallCap 600 100.00 111.29 141.13 118.41 137.42 149.37 S&P North American Technology Sector 100.00 145.15 183.47 118.60 191.10 260.04 34 ITEM 6. [RESERVED] Not applicable.
December 31, 2020 2021 2022 2023 2024 2025 PROG Holdings, Inc. $ 100.00 $ 83.75 $ 31.36 $ 57.38 $ 79.42 $ 56.44 S&P MidCap 400 100.00 124.76 108.47 126.29 143.88 154.68 S&P SmallCap 600 100.00 126.82 106.40 123.48 134.22 142.30 S&P North American Technology Sector 100.00 126.40 81.71 131.65 179.15 228.99 37 ITEM 6. [RESERVED] Not applicable.
Removed
Issuer Purchases of Equity Securities The following table presents our share repurchase activity for the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 1 October 1, 2024 through October 31, 2024 75,000 $ 43.95 75,000 $ 398,516,145 November 1, 2024 through November 30, 2024 485,309 47.55 485,309 375,437,702 December 1, 2024 through December 31, 2024 300,000 46.96 300,000 361,349,309 Total 860,309 860,309 1 Share repurchases are conducted under authorizations made from time to time by the Company's Board of Directors.
Removed
The authorization, effective February 21, 2024, provided the Company with the ability to repurchase shares up to a maximum amount of $500 million. Subject to the terms of the Board's authorization and applicable law, repurchases may be made at such times and in such amounts as the Company deems appropriate. Repurchases may be discontinued at any time.
Removed
Shareholders of PROG Holdings received one share of The Aaron's Company for every two shares of PROG Holdings common stock in the distribution related to the separation and spin-off.
Removed
The $9.60 per share special dividend was based on the November 30, 2020 closing price of one share of The Aaron's Company common stock, on a "when issued" basis, which was $19.19, adjusted for the distribution ratio.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

80 edited+59 added−61 removed29 unchanged
Biggest changeInterest expense is presented net of interest income earned on the Company's deposits in cash and cash equivalents. 38 Results of Operations Results of Operations – Years Ended December 31, 2024 and 2023 Change Year Ended December 31, 2024 vs. 2023 (In Thousands) 2024 2023 $ % REVENUES: Lease Revenues and Fees $ 2,366,489 $ 2,333,588 $ 32,901 1.4 % Interest and Fees on Loans Receivable 97,007 74,676 22,331 29.9 2,463,496 2,408,264 55,232 2.3 COSTS AND EXPENSES: Depreciation of Lease Merchandise 1,621,101 1,576,303 44,798 2.8 Provision for Lease Merchandise Write-offs 178,338 155,250 23,088 14.9 Operating Expenses 469,160 451,084 18,076 4.0 2,268,599 2,182,637 85,962 3.9 OPERATING PROFIT 194,897 225,627 (30,730) (13.6) Interest Expense, Net (31,289) (29,406) (1,883) (6.4) EARNINGS BEFORE INCOME TAX (BENEFIT) EXPENSE 163,608 196,221 (32,613) (16.6) INCOME TAX (BENEFIT) EXPENSE (33,641) 57,383 (91,024) nmf NET EARNINGS $ 197,249 $ 138,838 $ 58,411 42.1 % nmf—Calculation is not meaningful Revenues Information about our revenues by source and reportable segment is as follows: Year Ended December 31, 2024 Year Ended December 31, 2023 (In Thousands) Progressive Leasing Vive Other Total Progressive Leasing Vive Other Total Lease Revenues and Fees $ 2,366,489 $ — $ — $ 2,366,489 $ 2,333,588 $ — $ — $ 2,333,588 Interest and Fees on Loans Receivable — 64,415 32,592 97,007 — 68,912 5,764 74,676 Total Revenues $ 2,366,489 $ 64,415 $ 32,592 $ 2,463,496 $ 2,333,588 $ 68,912 $ 5,764 $ 2,408,264 The increase in Progressive Leasing revenues was primarily the result of the 7.3% increase in GMV for 2024 as compared to the prior year, due to an increase in demand for our lease-to-own offerings and more customers choosing to exercise early buyout options.
Biggest changeThe tax benefit in 2024 was due to a $51.4 million non-cash reversal of the uncertain tax position related to Progressive Leasing and a $27.8 million deferred tax benefit related to an election which resulted in the deemed liquidation of a wholly-owned partnership for tax purposes. 44 Results of Operations – Years Ended December 31, 2024 and 2023 Change Year Ended December 31, 2024 vs. 2023 (In Thousands) 2024 2023 $ % REVENUES: Lease Revenues and Fees $ 2,366,489 $ 2,333,588 $ 32,901 1.4 % Other Revenues 32,592 5,764 26,828 nmf 2,399,081 2,339,352 59,729 2.6 COSTS AND EXPENSES: Depreciation of Lease Merchandise 1,621,101 1,576,303 44,798 2.8 Provision for Lease Merchandise Write-offs 178,338 155,250 23,088 14.9 Operating Expenses 404,917 389,091 15,826 4.1 2,204,356 2,120,644 83,712 3.9 OPERATING PROFIT 194,725 218,708 (23,983) (11.0) Interest Expense, Net (31,289) (29,406) (1,883) (6.4) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE 163,436 189,302 (25,866) (13.7) INCOME TAX EXPENSE (BENEFIT) (33,875) 55,412 (89,287) nmf NET EARNINGS FROM CONTINUING OPERATIONS 197,311 133,890 63,421 47.4 EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX (62) 4,948 (5,010) nmf NET EARNINGS $ 197,249 $ 138,838 $ 58,411 42.1 % nmf—Calculation is not meaningful Revenues Information about our revenues by source and reportable segment is as follows: Year Ended December 31, 2024 Year Ended December 31, 2023 (In Thousands) Progressive Leasing Four Other Total Progressive Leasing Four Other Total Lease Revenues and Fees $ 2,366,489 $ — $ — $ 2,366,489 $ 2,333,588 $ — $ — $ 2,333,588 Other Revenues — 27,351 5,241 32,592 — 5,694 70 5,764 Total Revenues $ 2,366,489 $ 27,351 $ 5,241 $ 2,399,081 $ 2,333,588 $ 5,694 $ 70 $ 2,339,352 The increase in Progressive Leasing revenues was primarily the result of the 7.3% increase in GMV for 2024 as compared to the prior year, due to an increase in demand for our lease-to-own offerings and more customers choosing to exercise early buyout options.
Cash Provided by Operating Activities Cash provided by operating activities was $138.5 million and $204.2 million during the years ended December 31, 2024 and 2023, respectively.
Cash provided by operating activities was $138.5 million and $204.2 million during the years ended December 31, 2024 and 2023, respectively.
The $65.7 million decrease in operating cash flows was primarily driven by a $129.3 million increase in cash used for purchases of lease merchandise as a result of higher GMV at Progressive Leasing, an increase in the balance of accounts receivable due to timing of payments received from customers, and an increase in payments made on accounts payable and accrued expenses compared to December 31, 2023.
The $65.7 million decrease in operating cash flows was primarily driven by a $129.3 million increase in cash used for purchases of lease merchandise as a result of higher GMV at Progressive Leasing, an increase in the balance of accounts receivable due to the timing of payments received from customers, and an increase in payments made on accounts payable and accrued expenses compared to December 31, 2023.
The Revolving Facility includes an uncommitted incremental facility increase option ("Incremental Facilities") which, subject to certain terms and conditions, permits the Company at any time prior to the maturity date to request an increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $300 million.
The Revolving Facility includes an uncommitted incremental facility increase option ("Incremental Facilities") which, subject to certain terms and conditions, permits the Company at any time prior to the maturity date to request an increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $300.0 million.
The provision for lease merchandise write-offs increased by $23.1 million during the year ended December 31, 2024, as compared to 2023. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.5% for the year ended December 31, 2024 from 6.7% for the prior year.
The provision for lease merchandise write-offs increased by $23.1 million during the year ended December 31, 2024, as compared to 2023. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.5% for the year ended December 31, 2024 from 6.7% in the prior year.
Debt Financing On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350 million senior revolving credit facility (the "Revolving Facility").
Debt Financing On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350.0 million senior revolving credit facility (the "Revolving Facility").
We believe GMV is a key performance indicator of our Progressive Leasing and Vive segments, as it provides the total value of new leases and loans written into our portfolio over a specified time period. GMV does not represent revenues earned by the Company, but rather is a leading indicator we use in forecasting revenues the Company may earn.
We believe GMV is a key performance indicator of our Progressive Leasing and Four segments, as it provides the total value of new leases and loans written into our portfolio over a specified time period. GMV does not represent revenues earned by the Company, but rather is a leading indicator we use in forecasting revenues the Company may earn.
The Company will be in default under the Revolving Facility if it fails to comply with these covenants, and all borrowings outstanding may become due immediately. As of December 31, 2024, the Company was in compliance with the financial covenants set forth in the Revolving Facility and believes it will continue to be in compliance in the future.
The Company will be in default under the Revolving Facility if it fails to comply with these covenants, and all borrowings outstanding may become due immediately. As of December 31, 2025, the Company was in compliance with the financial covenants set forth in the Revolving Facility and believes it will continue to be in compliance in the future.
Advertising expense increased $2.9 million compared to 2023, primarily due to increased advertising in the Progressive Leasing segment associated with the expansion of our direct-to-consumer marketing efforts. Professional services increased $5.4 million compared to 2023, primarily due to higher technology-related costs.
Advertising expense increased $2.8 million compared to 2023, primarily due to increased advertising in the Progressive Leasing segment associated with the expansion of our direct-to-consumer marketing efforts. Professional services increased $4.9 million compared to 2023, primarily due to higher technology-related costs.
In 2024, restructuring expense included $7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing, $2.0 million associated with the early termination of a third party vendor agreement within other strategic operations, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to 40 the reduction of Progressive Leasing office space, and $6.8 million of employee severance for Progressive Leasing, Vive, and Other operations.
In 2024, restructuring expense included $7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing, $2.0 million associated with the early termination of a third party vendor agreement within other strategic operations, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, and $4.9 million of employee severance for Progressive Leasing and Other operations.
Our active customer count represents the total number of customers that have an active lease agreement with Progressive Leasing, or an active loan with Vive or our other operations. Active customer counts include customers that may have an active lease or loan agreement with more than one segment.
Our active customer count represents the total number of customers that have an active lease agreement with Progressive Leasing, or an active loan with Four or our other strategic operations. Active customer counts include customers that may have an active lease or loan agreement with more than one segment.
Future interest payments on the Company's variable-rate debt are based on a rate per annum equal to, at our option, (i) the Secured Overnight Financing Rate ("SOFR") plus a margin within the range of 1.5% to 2.5% for revolving loans, based on total leverage, or (ii) the administrative agent's base rate plus a margin ranging from 0.5% to 1.5%, as specified in the agreement.
At December 31, 2025, future interest payments on the Company's variable-rate debt were based on a rate per annum equal to, at our option, (i) the Secured Overnight Financing Rate ("SOFR") plus a margin within the range of 1.5% to 2.5% for revolving loans, based on total leverage, or (ii) the administrative agent's base rate plus a margin ranging from 0.5% to 1.5%, as specified in the agreement.
The indenture also contains customary events of default for transactions of this type and amount. The Company was in compliance with these covenants at December 31, 2024 and believes that it will continue to be in compliance in the future. 46 Commitments Income Taxes. During the year ended December 31, 2024, we made net income tax payments of $49.8 million.
The indenture also contains customary events of default for transactions of this type and amount. The Company was in compliance with these covenants at December 31, 2025 and believes that it will continue to be in compliance in the future. Commitments Income Taxes. During the year ended December 31, 2025, we made net income tax payments of $45.8 million.
Because we believe Progressive Leasing will continue to grow over the long-term, we expect that the need for additional lease merchandise will remain a major capital requirement; • Making merger and acquisition investment(s) to further broaden our product offerings; and • Returning excess cash to shareholders through periodically repurchasing stock and/or paying dividends.
Because we believe these businesses will continue to grow over the long-term, we expect that the need for additional merchandise will remain a major capital requirement; • Making merger and acquisition investment(s) to further broaden our product offerings; and • Returning excess cash to shareholders through periodically repurchasing stock and/or paying dividends.
Stock-based compensation increased $4.3 million compared to 2023, consisting of increases of $5.3 million at Progressive Leasing and $0.2 million at Vive, partially offset by a decrease of $1.2 million at Four.
Stock-based compensation increased $4.1 million compared to 2023, consisting of increases of $5.3 million at Progressive Leasing, partially offset by a decrease of $1.2 million at Four.
Our corporate and segment management office leases contain renewal options for additional periods ranging from three to five years. Approximate future minimum payments for operating leases that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2024 are disclosed in Note 6 in the accompanying consolidated financial statements. Contractual Obligations and Commitments .
Our corporate and segment management office leases contain renewal options for additional periods ranging from two to three years. Approximate future minimum payments for operating leases that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2025 are disclosed in Note 7 in the accompanying consolidated financial statements. Contractual Obligations and Commitments .
The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. As a result, scheduling deferred income tax liabilities as payments due by period may be misleading, because this scheduling would not necessarily relate to liquidity needs. Unfunded Lending Commitments.
The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. As a result, scheduling deferred income tax liabilities as payments due by period may be misleading, because this scheduling would not necessarily relate to liquidity needs. Purchasing Power Acquisition.
Dividends We declared and paid a dividend of $0.12 per share in each quarter of 2024, which resulted in aggregate dividend payments of $20.4 million. We paid no dividends during 2023 and 2022.
Dividends We declared and paid a dividend of $0.13 per share in each quarter of 2025, which resulted in aggregate dividend payments of $20.8 million. We declared and paid a dividend of $0.12 per share in each quarter of 2024, which resulted in aggregate dividend payments of $20.4 million. We paid no dividends during 2023.
The increase in the provision was a result of higher delinquencies and write-offs in 2024 compared to 2023.
The increase in the provision was a result of higher delinquencies and write-offs in 2024 compared to 2023. Interest expense, net.
The Company purchased 3,480,871 shares of its common stock for $138.7 million during the year ended December 31, 2024, 4,691,274 shares for $139.6 million during the year ended December 31, 2023, and 8,720,223 shares for $223.6 million during the year ended December 31, 2022. These amounts do not include any excise tax that may be assessed on those repurchases.
The Company purchased 1,835,792 shares of its common stock for $51.8 million during the year ended December 31, 2025, 3,480,871 shares for $138.7 million during the year ended December 31, 2024, and 4,691,274 shares for $139.6 million during the year ended December 31, 2023. These amounts do not include any excise tax that may be assessed on those repurchases.
For the year ended December 31, 2024 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows: Revenues . We separate our total revenues into two components: (i) lease revenues and fees and (ii) interest and fees on loans receivable.
For the year ended December 31, 2025 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows: Revenues . We separate our total revenues into two components: (i) lease revenues and fees and (ii) other revenues.
For customer agreements that are past due, the Company's policy is to write off lease merchandise after 120 days. As of December 31, 2024 and 2023, the allowance for lease merchandise write-offs was $51.9 million and $44.2 million, respectively.
For customer agreements that are past due, the Company's policy is to write off lease merchandise after 120 days. As of December 31, 2025 and 2024, the allowance for lease merchandise write-offs was $47.0 million and $51.9 million, respectively.
Depreciation and amortization decreased $5.1 million compared to 2023, primarily due to a decrease of $5.7 million at Progressive Leasing and $0.1 million at Vive, partially offset by an increase of $0.7 million at Four and other strategic businesses.
Depreciation and amortization decreased $5.0 million compared to 2023, primarily due to a decrease of $5.7 million at Progressive Leasing, partially offset by an increase of $0.7 million at Four.
At December 31, 2024 and 2023, we had deferred revenue representing cash collected in advance of being due or earned totaling $40.9 million and $35.7 million, respectively, and accounts receivable, net of an allowance for doubtful accounts based on historical collection rates, of $80.2 million and $67.9 million, respectively.
At December 31, 2025 and 2024, we had deferred revenue representing cash collected in advance of being due or earned totaling $37.4 million and $40.9 million, respectively, and accounts receivable, net of an allowance for doubtful accounts based on historical collection rates, of $74.2 million and $80.2 million, respectively.
Factors impacting the change in earnings before income tax (benefit) expense for each reporting segment are discussed above. Income Tax (Benefit) Expense Income tax (benefit) expense was a benefit of $33.6 million for the year ended December 31, 2024 compared to an expense of $57.4 million in 2023.
Factors impacting the change in earnings from continuing operations before income tax expense (benefit) for each reporting segment are discussed above. Income Tax Expense (Benefit) Income tax expense (benefit) was a benefit of $33.9 million for the year ended December 31, 2024 compared to an expense of $55.4 million in 2023.
The effective tax rate was (20.6)% for the year ended December 31, 2024 compared to 29.2% in 2023.
The effective tax rate was (20.7)% for the year ended December 31, 2024 compared to 29.3% in 2023.
Progressive Leasing's GMV is defined as the retail price of merchandise acquired by Progressive Leasing, which it then expects to lease to its customers. GMV for Vive and Other are defined as gross loan originations.
Progressive Leasing's GMV is defined as the retail price of merchandise acquired by Progressive Leasing, which it then expects to lease to its customers. GMV for Four is defined as gross originations.
Operating expenses include personnel costs, stock-based compensation expense, occupancy costs, advertising, decisioning expense, professional services expense, sales acquisition expense, computer software expense, bank service charges, the provision for loan losses, fixed asset depreciation expense, intangible asset amortization, and restructuring expense, among other expenses. Impairment of Goodwill.
Operating expenses include personnel costs, stock-based compensation expense, occupancy costs, advertising, decisioning expense, professional services expense, sales acquisition expense, computer software expense, bank charges and processing fees, the provision for loan losses, fixed asset depreciation expense, intangible asset amortization, and restructuring expense, among other expenses. Gain on Sale of Receivables.
During the year ended December 31, 2025 we anticipate making estimated cash payments of $67.0 million for United States federal and state income taxes. Leases . We lease management and information technology space for corporate functions under operating leases expiring at various times through 2028.
During the year ended December 31, 2026, we anticipate receiving estimated cash refunds (net of payments) of $9.6 million for United States federal and state income taxes. Leases . We lease management and information technology space for corporate functions under operating leases expiring at various times through 2028.
As of December 31, 2024, we had the authority to purchase additional shares up to our remaining authorization limit of $361.3 million.
As of December 31, 2025, we had the authority to purchase additional shares up to our remaining authorization limit of $309.6 million.
As discussed above, on November 26, 2021, the Company issued $600 million aggregate principal amount of Senior Notes that bear a fixed annual interest rate of 6.00%. Interest will accrue on the outstanding balance and will be payable semi-annually. The Senior Notes will mature on November 15, 2029.
The Company had no outstanding borrowings under the Revolving Facility as of December 31, 2025. As discussed above, on November 26, 2021, the Company issued $600 million aggregate principal amount of Senior Notes that bear a fixed annual interest rate of 6.00%. Interest will accrue on the outstanding balance and will be payable semi-annually.
The Company has no long-term commitments to purchase merchandise nor does it have significant purchase agreements that specify minimum quantities or set prices that exceed our expected requirements for three months. Deferred income tax liabilities as of December 31, 2024 were approximately $74.3 million.
The Senior Notes will mature on November 15, 2029. The Company has no long-term commitments to purchase merchandise nor does it have significant purchase agreements that specify minimum quantities or set prices that exceed our expected requirements for three months. Deferred income tax liabilities as of December 31, 2025 were approximately $121.2 million.
For additional information, refer to the "Liquidity and Capital Resources" section below. • Lease merchandise, net, increased $46.8 million due primarily to a 7.3% increase in Progressive Leasing's GMV in 2024 as compared to 2023. • Loans receivable, net of allowances and unamortized fees, increased $20.2 million due primarily to growth in the loan portfolio of Four compared to December 31, 2023.
For additional information, refer to the "Liquidity and Capital Resources" section below. • Lease merchandise, net, decreased $71.2 million due primarily to an 8.6% decrease in Progressive Leasing's GMV in 2025 as compared to 2024. • Loans receivable, net of allowances and unamortized fees, increased $51.5 million due primarily to growth in the loan portfolio of Four compared to December 31, 2024.
The Revolving Facility is fully secured and contains certain financial covenants, which include requirements that the Company maintain ratios of (i) total net debt to EBITDA of no more than 2.50:1.00 and (ii) consolidated interest coverage of no less than 3.00:1.00.
Refer to Note 16 for further information on this transaction. The Revolving Facility is fully secured and contains certain financial covenants, which, prior to January 2, 2026, included requirements that the Company maintain ratios of (i) total net debt to EBITDA of no more than 2.50:1.00 and (ii) consolidated interest coverage of no less than 3.00:1.00.
We believe the persistent inflationary pressures, the cost of living and elevated interest rates for extended periods have also unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners.
We believe these economic pressures have unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners.
The allowance for loan losses is maintained at a level considered appropriate to cover expected lifetime losses of principal, interest and fees on active loans in the loans receivable portfolio, and the appropriateness of the allowance is evaluated at each period end.
The allowance for loan losses is maintained at a level considered appropriate to cover expected lifetime losses of principal and fees on active loans in the loans receivable portfolio, and the appropriateness of the allowance is evaluated at each period end. Four's delinquent loans receivable are those that are past due based on their contractual billing dates.
In light of these macroeconomic challenges and to align the cost structure of our business with our near-term revenue outlook, the Company executed on a number of cost reduction initiatives beginning in 2022 and continuing into 2024, to drive efficiencies and right-size variable costs, while attempting to minimize the negative impact on growth-related initiatives.
In anticipation of these challenges, we have continued to align the cost structure of our business with our near-term revenue outlook by executing on a number of cost reduction initiatives to drive efficiencies and right-size variable costs, while attempting to minimize the negative impact on growth-related initiatives.
The $14.7 million decrease in personnel costs was due to a decrease of $13.3 million at Progressive Leasing attributable to its reduction in the number of employees during the second half of 2023 and first quarter of 2024 as part of its restructuring and cost cutting initiatives. Personnel costs at Vive also decreased by $1.4 million compared to 2023.
The $13.3 million decrease in personnel costs was attributable to Progressive Leasing's reduction in the number of employees during the second half of 2023 and first quarter of 2024 as part of its restructuring and cost cutting initiatives.
Provision for Lease Merchandise Write-offs . The provision for lease merchandise write-offs represents the estimated merchandise losses incurred but not yet identified by management and adjustments for changes in estimates for the allowance for lease merchandise write-offs. Operating Expenses .
Depreciation of lease merchandise reflects the expense associated with depreciating merchandise leased to customers by Progressive Leasing. Provision for Lease Merchandise Write-offs . The provision for lease merchandise write-offs represents the estimated merchandise losses incurred but not yet identified by management and adjustments for changes in estimates for the allowance for lease merchandise write-offs. Operating Expenses .
The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under the lease ownership agreements. Progressive Leasing recognizes lease revenue on a straight-line basis over the estimated lease term.
Revenue Recognition All of Progressive Leasing's customer agreements are considered operating leases and are recognized in accordance with ASC 842, " Leases ." The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under the lease ownership agreements. Progressive Leasing recognizes lease revenue on a straight-line basis over the estimated lease term.
As of December 31, 2024, the Company had $50.0 million outstanding and $300 million remaining available for borrowings on the Revolving Facility. The Company repaid the $50.0 million Revolving Facility borrowing in January 2025.
As of December 31, 2025, the Company had no outstanding balance and $350.0 million remaining available for borrowings on the Revolving Facility.
These decreases in cash provided by operating activities were offset primarily by a decrease in cash paid for taxes of $50.6 million when compared to the prior year. Cash provided by operating activities was $204.2 million and $242.5 million during the years ended December 31, 2023 and 2022, respectively.
These decreases in cash provided by operating activities were offset primarily by a decrease in cash paid for taxes of $50.6 million when compared to the prior year.
Promptly after detecting the incident, the Company engaged third-party cybersecurity experts and took immediate steps to respond to, remediate and investigate the incident. Law enforcement was also notified.
Cybersecurity Incident During the third quarter of 2023, Progressive Leasing experienced a cybersecurity incident affecting certain data and IT systems of Progressive Leasing. Promptly after detecting the incident, the Company engaged third-party cybersecurity experts and took immediate steps to respond to, remediate and investigate the incident. Law enforcement was also notified.
As a result of this cybersecurity incident, Progressive Leasing has become subject to multiple lawsuits which allege, among other things, the incurrence of various types of damages arising out of the incident. All of these lawsuits have been consolidated into a single action in the United States District Court for the District of Utah (the "District Court").
As a result of the cybersecurity incident, Progressive Leasing was named a defendant in multiple lawsuits which alleged, among other things, various damages arising out of the incident. All of those lawsuits were consolidated into a single action in the United States District Court for the District of Utah (the "District Court").
The number of customers for Vive has remained essentially flat. The increase in the number of customers for Other was the result of continued growth in our other strategic businesses. 37 Key Components of Earnings Before Income Tax (Benefit) Expense In this MD&A section, we review our consolidated results.
The increase in the number of customers for Four was the result of continued growth in originations in that segment. Key Components of Earnings from Continuing Operations Before Income Tax Expense (Benefit) In this MD&A section, we review our consolidated results.
Provision for Loan Losses and Loan Loss Allowance Expected lifetime losses on loans receivable are recognized upon loan acquisition, which results in earlier recognition of credit losses and requires the Company to make its best estimate of probable lifetime losses at the time of acquisition.
The provision for lease merchandise write-offs was $173.1 million and $178.3 million for the years ended December 31, 2025 and 2024, respectively. 50 Provision for Loan Losses and Loan Loss Allowance Expected lifetime losses on loans receivable are recognized upon loan acquisition, which results in earlier recognition of credit losses and requires the Company to make its best estimate of lifetime losses at the time of acquisition.
The increase was primarily the result of a $14.0 million increase in the provision for loan losses for our Other operations, due to the continued growth of our Four business and our other strategic operations. The provision for loan losses at Vive also increased $1.2 million due to higher delinquencies compared to 2023.
The increase was primarily the result of a $19.4 million increase in the provision for loan losses for our Four operations, due to the continued growth of that business. The provision for loan losses at our other strategic initiatives also increased $2.3 million due primarily to the continued growth of the MoneyApp business in 2025 when compared to 2024.
It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers.
Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and e-commerce website partners (collectively, "POS partners"). It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction.
Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments.
Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Other revenues represents transaction income, subscription revenues, and annual and other fees earned relating to loans in our Four segment and our other strategic businesses. Depreciation of Lease Merchandise .
Other capital requirements include (i) expenditures related to software development; (ii) expenditures related to our corporate operating activities; (iii) personnel expenditures; (iv) income tax payments; (v) funding of loans receivable for Vive and Four; and (vi) servicing our outstanding debt obligations.
Other capital requirements include (i) expenditures related to software development; (ii) expenditures related to our corporate operating activities; (iii) personnel expenditures; (iv) income tax payments; and (v) servicing our outstanding debt obligations. Our capital requirements have been financed through: • cash flows from operations; • private debt offerings; • bank debt; and • stock offerings.
Future interest payments related to our Revolving Facility are based on the borrowings outstanding at that time. Future interest payments may be different depending on future borrowing activity and interest rates. The Company had $50.0 million of outstanding borrowings under the Revolving Facility as of December 31, 2024.
The Fourth Amendment also updates the commitment fees payable on unused revolving commitments to a range of 0.25% to 0.50%, as determined based on total net leverage. Future interest payments related to our Revolving Facility are based on the borrowings outstanding at that time. Future interest payments may be different depending on future borrowing activity and interest rates.
This decrease in cash used was partially offset by a $20.4 million increase in cash paid for dividends, as the Company began paying dividends during 2024. Cash used in financing activities was $141.9 million during the year ended December 31, 2023 compared to $227.2 million during the year ended December 31, 2022, a decrease of $85.3 million.
This increase in cash outflows was offset by a decrease of $86.9 million in cash paid for share repurchases during 2025 when compared to 2024. Cash used in financing activities was $119.1 million during the year ended December 31, 2024 compared to $141.9 million during the year ended December 31, 2023, a decrease of $22.8 million.
The effective tax rate was 29.2% for the year ended December 31, 2023 compared to 33.4% in 2022.
The effective tax rate was 28.7% for the year ended December 31, 2025 compared to (20.7)% in 2024.
For a discussion of all of the Company's significant accounting policies, see Note 1 in the accompanying consolidated financial statements. Revenue Recognition All of Progressive Leasing's customer agreements are considered operating leases and are recognized in accordance with ASC 842, Leases .
For a discussion of all of the Company's significant accounting policies, see Note 1 in the accompanying consolidated financial statements.
The allowance for loan losses was $47.8 million and $40.6 million as of December 31, 2024 and 2023, respectively. Recent Accounting Pronouncements Refer to Note 1 to the Company's consolidated financial statements for a discussion of recently issued accounting pronouncements.
Recent Accounting Pronouncements Refer to Note 1 to the Company's consolidated financial statements for a discussion of recently issued accounting pronouncements.
Earnings Before Income Tax (Benefit) Expense Information about our earnings before income tax (benefit) expense by reportable segment is as follows: Change Year Ended December 31, 2024 vs. 2023 (In Thousands) 2024 2023 $ % EARNINGS BEFORE INCOME TAX (BENEFIT) EXPENSE: Progressive Leasing $ 184,782 $ 216,271 $ (31,489) (14.6) % Vive (848) 4,545 (5,393) nmf Other (20,326) (24,595) 4,269 17.4 Earnings Before Income Tax (Benefit) Expense $ 163,608 $ 196,221 $ (32,613) (16.6) % nmf—Calculation is not meaningful The loss before income tax (benefit) expense within Other primarily relates to losses from our other strategic operations.
Earnings from Continuing Operations Before Income Tax Expense (Benefit) Information about our earnings from continuing operations before income tax expense (benefit) by reportable segment is as follows: Change Year Ended December 31, 2024 vs. 2023 (In Thousands) 2024 2023 $ % EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE (BENEFIT): Progressive Leasing $ 184,782 $ 216,271 $ (31,489) (14.6) % Four (6,485) (14,437) 7,952 55.1 Other (14,861) (12,532) (2,329) (18.6) Earnings from Continuing Operations Before Income Tax Expense (Benefit) $ 163,436 $ 189,302 $ (25,866) (13.7) % The loss from continuing operations before income tax expense (benefit) within Other relates primarily to losses from our other strategic operations.
Other changes in cash provided by operating activities are discussed above in our discussion of results for the year ended December 31, 2023. Cash Used in Investing Activities Cash used in investing activities was $79.2 million and $38.8 million during the years ended December 31, 2024 and 2023, respectively.
These increases are primarily the result of growth of loan activity at Four and MoneyApp. Cash used in investing activities was $79.2 million and $38.8 million during the years ended December 31, 2024 and 2023, respectively.
Professional services in the prior year were also impacted by the benefit of $0.5 million of regulatory insurance recoveries that were received during the first quarter of 2023. The provision for loan losses increased $15.2 million compared to 2023.
Professional services in the prior year were also impacted by the benefit of $0.5 million of regulatory insurance recoveries that were received during the first quarter of 2023. Bank charges and processing fees increased $4.8 million compared to 2023 primarily relating to additional processing fees at Four due to its continued growth and the resulting increase in transaction volumes.
("Four"), is a Buy Now, Pay Later ("BNPL") company that allows shoppers to pay for merchandise through four interest-free installments. Four's proprietary platform capabilities and its base of customers and retailers expand PROG Holdings' ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer financial technology offerings.
Four's proprietary platform capabilities and its base of customers and retailers expand PROG Holdings' ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer financial technology offerings. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States.
Factors impacting the change in earnings before income tax expense for each reporting segment are discussed above. Income Tax Expense Income tax expense increased to $57.4 million for the year ended December 31, 2023 compared to $49.5 million in 2022 primarily due to higher earnings before income tax expense in 2023 as compared to prior year.
Factors impacting the change in earnings from continuing operations before income tax expense (benefit) for each reporting segment are discussed above. Income Tax Expense (Benefit) Income tax expense (benefit) for the year ended December 31, 2025 was an expense of $50.2 million compared to a benefit of $33.9 million in 2024.
Cash Used In Financing Activities Cash used in financing activities was $119.1 million during the year ended December 31, 2024 compared to $141.9 million during the year ended December 31, 2023, a decrease of $22.8 million. The decrease in cash used in financing activities was primarily the result of a $50.0 million draw on our revolving credit facility.
Cash Used in Financing Activities Cash used in financing activities was $128.5 million during the year ended December 31, 2025 compared to $119.1 million during the year ended December 31, 2024, an increase of $9.4 million.
As a percentage of total lease revenues and fees, depreciation of lease merchandise decreased to 67.5% from 69.6% in the prior year period, primarily due to improved customer payment activity and lower early buyouts for the year ended December 31, 2023, as compared to the same period in 2022. Provision for lease merchandise write-offs .
As a percentage of 43 lease revenues and fees, depreciation of lease merchandise in 2025 was 68.5%, which remained flat compared to the prior year period. Provision for lease merchandise write-offs . The provision for lease merchandise write-offs decreased by $5.2 million during the year ended December 31, 2025, as compared to 2024.
For example, Big Lots, Inc., one of Progressive Leasing's ten largest POS partners filed for Chapter 11 bankruptcy in September 2024, resulting in the permanent closure of many of its stores.
American Signature, Inc., one of Progressive Leasing's larger POS partners, filed for bankruptcy in November 2025, which will result in the permanent closure of many of its stores in 2026.
The increase in Other revenue was primarily driven by a 67.2% increase in Four's GMV as compared to the same period in 2022. 42 Operating Expenses Information about certain significant components of operating expenses is as follows: Change Year Ended December 31, 2023 vs. 2022 (In Thousands) 2023 2022 $ % Personnel Costs 1 $ 187,199 $ 194,195 $ (6,996) (3.6) % Stock-Based Compensation 24,920 17,521 7,399 42.2 Occupancy Costs 5,429 6,466 (1,037) (16.0) Advertising 17,203 15,762 1,441 9.1 Professional Services 26,882 22,824 4,058 17.8 Sales Acquisition Expense 2 28,205 28,828 (623) (2.2) Computer Software Expense 3 26,673 27,629 (956) (3.5) Bank Service Charges 11,246 12,491 (1,245) (10.0) Other Sales, General and Administrative Expense 38,005 40,574 (2,569) (6.3) Sales, General and Administrative Expense 365,762 366,290 (528) (0.1) Provision for Loan Losses 40,757 41,232 (475) (1.2) Depreciation and Amortization 32,032 33,851 (1,819) (5.4) Restructuring Expense 12,533 9,001 3,532 39.2 Operating Expenses $ 451,084 $ 450,374 $ 710 0.2 % 1 Personnel costs excludes stock-based compensation expense, which is reported separately in the operating expense table. 2 Sales acquisition expense includes vendor incentives and rebates to POS partners, external sales commissions, amortization of initial direct costs and amounts paid to various POS partners to be their exclusive provider of lease-to-own solutions. 3 Computer software expense consists primarily of software subscription fees, licensing fees and non-capitalizable software implementation costs.
The increase in Other revenue was primarily driven by growth in the Company's other strategic operations. 45 Operating Expenses Information about certain significant components of operating expenses is as follows: Change Year Ended December 31, 2024 vs. 2023 (In Thousands) 2024 2023 $ % Personnel Costs 1 $ 157,432 $ 170,770 $ (13,338) (7.8) % Stock-Based Compensation 27,845 23,730 4,115 17.3 Occupancy Costs 4,021 5,247 (1,226) (23.4) Advertising 19,919 17,122 2,797 16.3 Professional Services 31,171 26,274 4,897 18.6 Sales Acquisition Expense 2 28,322 27,397 925 3.4 Computer Software Expense 3 20,895 19,886 1,009 5.1 Bank Charges and Processing Fees 16,059 11,288 4,771 42.3 Other Sales, General and Administrative Expense 33,442 38,897 (5,455) (14.0) Sales, General and Administrative Expense 339,106 340,611 (1,505) (0.4) Provision for Loan Losses 18,639 4,660 13,979 nmf Depreciation and Amortization 26,334 31,287 (4,953) (15.8) Restructuring Expense 20,838 12,533 8,305 66.3 Operating Expenses $ 404,917 $ 389,091 $ 15,826 4.1 % nmf—Calculation is not meaningful 1 Personnel costs excludes stock-based compensation expense, which is reported separately in the operating expense table. 2 Sales acquisition expense includes vendor incentives and rebates to POS partners, external sales commissions, amortization and write-offs of initial direct costs and amounts paid to various POS partners to be their exclusive provider of lease-to-own solutions. 3 Computer software expense consists primarily of software subscription fees, licensing fees and non-capitalizable software implementation costs.
The increase to Other revenue was primarily driven by a 198.3% increase in Four's GMV as compared to the same period in 2023, due to increased loan originations. 39 Operating Expenses Information about certain significant components of operating expenses is as follows: Change Year Ended December 31, 2024 vs. 2023 (In Thousands) 2024 2023 $ % Personnel Costs 1 $ 172,542 $ 187,199 $ (14,657) (7.8) % Stock-Based Compensation 29,179 24,920 4,259 17.1 Occupancy Costs 4,199 5,429 (1,230) (22.7) Advertising 20,102 17,203 2,899 16.9 Professional Services 32,277 26,882 5,395 20.1 Sales Acquisition Expense 2 29,175 28,205 970 3.4 Computer Software Expense 3 28,057 26,673 1,384 5.2 Bank Service Charges 11,042 11,246 (204) (1.8) Other Sales, General and Administrative Expense 36,969 38,005 (1,036) (2.7) Sales, General and Administrative Expense 363,542 365,762 (2,220) (0.6) Provision for Loan Losses 55,950 40,757 15,193 37.3 Depreciation and Amortization 26,977 32,032 (5,055) (15.8) Restructuring Expense 22,691 12,533 10,158 81.1 Operating Expenses $ 469,160 $ 451,084 $ 18,076 4.0 % 1 Personnel costs excludes stock-based compensation expense, which is reported separately in the operating expense table. 2 Sales acquisition expense includes vendor incentives and rebates to POS partners, external sales commissions, amortization of initial direct costs and amounts paid to various POS partners to be their exclusive provider of lease-to-own solutions. 3 Computer software expense consists primarily of software subscription fees, licensing fees and non-capitalizable software implementation costs.
The increase to Other operations revenue was primarily driven by growth in our MoneyApp business. 42 Operating Expenses Information about certain significant components of operating expenses is as follows: Change Year Ended December 31, 2025 vs. 2024 (In Thousands) 2025 2024 $ % Personnel Costs 1 $ 153,925 $ 157,432 $ (3,507) (2.2) % Stock-Based Compensation 28,477 27,845 632 2.3 Occupancy Costs 3,339 4,021 (682) (17.0) Advertising 23,016 19,919 3,097 15.5 Professional Services 44,372 31,171 13,201 42.4 Sales Acquisition Expense 2 35,430 28,322 7,108 25.1 Computer Software Expense 3 27,207 20,895 6,312 30.2 Bank Charges and Processing Fees 27,862 16,059 11,803 73.5 Other Sales, General and Administrative Expense 34,950 33,442 1,508 4.5 Sales, General and Administrative Expense 378,578 339,106 39,472 11.6 Provision for Loan Losses 40,339 18,639 21,700 116.4 Depreciation and Amortization 24,032 26,334 (2,302) (8.7) Restructuring Expense 2,798 20,838 (18,040) (86.6) Operating Expenses $ 445,747 $ 404,917 $ 40,830 10.1 % 1 Personnel costs excludes stock-based compensation expense, which is reported separately in the operating expense table. 2 Sales acquisition expense includes vendor incentives and rebates to POS partners, external sales commissions, amortization and write-offs of initial direct costs and amounts paid to various POS partners to be their exclusive provider of lease-to-own solutions. 3 Computer software expense consists primarily of software subscription fees, licensing fees and non-capitalizable software implementation costs.
The $50.0 million draw was subsequently repaid in January 2025. • Deferred tax assets increased $23.5 million and deferred tax liabilities decreased $30.5 million, due primarily to an election which resulted in the deemed liquidation of a wholly-owned partnership for tax purposes. 45 Liquidity and Capital Resources General We expect that our primary capital requirements will consist of: • Reinvesting in our business, including buying merchandise for the operations of Progressive Leasing.
We expect the wind-down of Vive's operations to be complete in 2026. • Debt, net decreased by $48.7 million due to the repayment of a $50.0 million draw on our Revolving Facility in early January 2025. • Deferred tax liabilities increased $46.8 million, primarily due to the enactment of the One Big Beautiful Bill Act ("OBBBA"), which permanently extends 100% federal bonus depreciation. 48 Liquidity and Capital Resources General We expect that our primary capital requirements will consist of: • Reinvesting in our business, including buying merchandise for the operations of Progressive Leasing, Purchasing Power and Four.
This increase was partially offset by having a smaller lease portfolio at the beginning of 2024 as compared to the beginning of 2023. Vive revenues declined primarily due to a smaller loan portfolio throughout 2024 as compared to 2023, as a result of lower demand for products offered by certain Vive POS partners.
This increase was partially offset by having a smaller lease portfolio throughout 2024 as compared to 2023. The increase in Four revenue was primarily driven by a 198.3% increase in Four's GMV as compared to 2023.
PROG Holdings has two reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products. Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and e-commerce website partners (collectively, "POS partners").
As of December 31, 2025, PROG Holdings has two reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Four Technologies, Inc. ("Four"), which offers Buy Now, Pay Later ("BNPL") payment options to consumers through the Four platform.
The increase in revenues was primarily due to an increase in GMV at Four and Progressive Leasing in 2024 compared to the prior year. • GMV from our other operations increased by $200.5 million, or 198.3%, primarily due to an increase in loan originations for our Four business in 2024 compared to 2023.
The increase was primarily the result of a $9.5 million increase in the provision for loan losses from our Four segment and an increase of $4.5 million from our Other operations, due to the continued growth of our Four business and our other strategic operations.
Depreciation of lease merchandise decreased by 10.3% during the year ended December 31, 2023 compared to 2022. The decrease was primarily due to a reduction in the size of Progressive Leasing's lease portfolio, resulting from tightening of its decisioning in mid-2022 and decreased consumer demand for many of the leasable products offered by Progressive Leasing's retail partners.
Other Items Depreciation of lease merchandise . Depreciation of lease merchandise decreased by 1.9% during the year ended December 31, 2025 compared to 2024. The decrease was primarily due to the decrease in Progressive Leasing's GMV.
The provision for uncollectible renewal payments is recorded as a reduction of lease revenues and fees in accordance with ASC 842. Vive recognizes interest income based upon the amount of the loans outstanding, which is recognized as interest and fees on loans receivable in the billing period in which they are assessed if collectability is reasonably assured.
The provision for uncollectible renewal payments is recorded as a reduction of lease revenues and fees in accordance with ASC 842. Other Revenues are primarily generated from our Four segment, and to a lesser extent, our other strategic operations.
The provision for lease merchandise write-offs as a percentage of lease revenues decreased to 6.7% for the year ended December 31, 2023 from 7.7% in the same period in 2022.
The decrease in the provision was a result of the lower gross leased asset balance during most of the year ended December 31, 2025 compared to 2024. The provision for lease merchandise write-offs as a percentage of lease revenues remained flat at 7.5% for the year ended December 31, 2025 compared to the prior year. Gain on sale of receivables.
The following table presents our active customer count for each segment and Other: As of December 31 (Unaudited and In Thousands) 2024 2023 2022 Active Customer Count: Progressive Leasing 934 893 943 Vive 90 86 92 Other 252 113 39 The number of customers for Progressive Leasing was higher in 2024, compared to the prior year, due to favorable customer responses to our strategic initiatives, including enhanced marketing, e-commerce integrations with POS partners, customer experience technology improvements with certain POS partners, and to a lesser extent, a tightening of the credit supply above Progressive Leasing.
The following table presents our active customer count from continuing operations for each segment and Other: 40 As of December 31 (Unaudited and In Thousands) 2025 2024 2023 Active Customer Count from Continuing Operations: Progressive Leasing 838 934 893 Four 486 157 80 Other 52 51 21 The number of customers for Progressive Leasing was lower in 2025, compared to the prior year, due to lower lease approvals primarily as a result of the bankruptcy of Big Lots and the tightening of our decisioning posture.
E-commerce channels generated 17.0% of Progressive Leasing's GMV in 2024 compared to 16.9% in 2023. The increase in GMV from our other operations was primarily due to an increase in loan originations by our Four business. GMV for Vive remained consistent year over year. Active Customer Count.
These decreases were offset by an increase in GMV from our e-commerce channels, including Progressive Leasing's direct to consumer offerings. E-commerce channels generated 23.3% of Progressive Leasing's GMV in 2025 compared to 17.0% in 2024. We expect to see further growth in GMV from Progressive Leasing's e-commerce channels in 2026. Active Customer Count.
The decrease in the effective tax rate was primarily driven by the non-deductible goodwill impairment loss for Four of $10.2 million that occurred in 2022, and the increase in the valuation allowance related to certain deferred tax assets that occurred in 2022. 44 Overview of Financial Position The major changes in the consolidated balance sheet from December 31, 2023 to December 31, 2024 include: • Cash and cash equivalents decreased $59.7 million to $95.7 million for the year ended December 31, 2024.
The income tax benefit and negative effective tax rate in 2024 was primarily due to a $51.4 million non-cash reversal of the uncertain tax position related to Progressive Leasing and a $27.8 million deferred tax benefit related to an election which resulted in the deemed liquidation of a wholly-owned partnership for tax purposes. 47 Overview of Financial Position The major changes in the consolidated balance sheet from December 31, 2024 to December 31, 2025 include: • Cash and cash equivalents increased $217.9 million to $308.8 million for the year ended December 31, 2025.
In 2022, restructuring costs included $5.6 million of employee severance within Progressive Leasing, $3.3 million of operating lease right-of-use asset and other fixed asset impairment charges related to the relocation of the Vive corporate headquarters and a reduction of Progressive Leasing management and information technology office space, and $0.1 million of other restructuring expenses. 43 Other Costs and Expenses Depreciation of lease merchandise .
The increase at Four was due to an increase in depreciable assets as compared to 2023. 46 In 2024, restructuring expense included $7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing, $2.0 million associated with the early termination of a third party vendor agreement within other strategic operations, $6.0 million of operating lease right-of-use assets and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, and $4.9 million of employee severance for Progressive Leasing, Four, and Other operations.
We believe the increased cost of living has had a disproportionate negative effect on the customers we serve and an unfavorable impact on our GMV and financial performance in 2024, and will continue to do so in 2025.
We believe the increased cost of living has continued to have a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many leasable products, and customer payment performance.
The Company segments its Vive loans receivable portfolio into homogenous pools by FICO score and by delinquency status and evaluates loans receivable collectively for impairment when similar risk characteristics exist.
Four segments its loans receivable by delinquency status and evaluates loans receivable collectively for impairment when similar risk characteristics exist. The Company calculates the Four allowance for loan losses based on internal historical loss information. ASC 326, " Credit Losses, " requires the consideration of reasonable and supportable forecasts of future economic conditions in determining allowances for loan losses.
GMV increased by $130.5 million for Progressive Leasing in 2024, compared to 2023.
Other sales, general and administrative expenses decreased by $5.5 million compared to 2023, primarily due to reductions in administrative costs within Progressive Leasing during 2024. The provision for loan losses increased $14.0 million compared to 2023.
Four's financial results are reported within "Other" for segment reporting purposes. PROG Holdings also owns Build, a credit building financial management tool. Build is not a reportable segment in 2024 as its financial results are not significant to the Company's consolidated financial results. Build's financial results are reported within "Other" for segment reporting purposes.
The average ticket size of a Four transaction is significantly smaller than a transaction with Progressive Leasing. PROG Holdings also owns MoneyApp, a mobile application that offers customers interest-free cash advances. MoneyApp is not a reportable segment in 2025 as its financial results are not significant to the Company's consolidated financial results.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−2 removed0 unchanged
Biggest changeHowever, due to the uncertainty of the specific actions that would be taken and their possible effects, the analysis assumes no changes in our financial structure. We do not use any significant market risk sensitive instruments to hedge commodity, foreign currency or other risks, and hold no market risk sensitive instruments for trading or speculative purposes. 49
Biggest changeBased on the Company's variable-rate debt outstanding as of December 31, 2025, a hypothetical 1.0% increase or decrease in interest rates would not affect interest expense. We do not use any significant market risk sensitive instruments to hedge commodity, foreign currency or other risks, and hold no market risk sensitive instruments for trading or speculative purposes. 51
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2024, we had $50.0 million of outstanding borrowings under our senior secured Revolving Facility. Borrowings under the Revolving Facility are indexed to SOFR or the prime rate, which exposes us to the risk of increased interest costs if interest rates rise.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2025, we had no outstanding borrowings under our senior secured Revolving Facility. Borrowings under the Revolving Facility are indexed to SOFR or the prime rate, which exposes us to the risk of increased interest costs if interest rates rise.
Removed
Based on the Company's variable-rate debt outstanding as of December 31, 2024, a hypothetical 1.0% increase or decrease in interest rates would increase or decrease interest expense and cash flows by approximately $0.5 million annually. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our Revolving Facility.
Removed
These analyses do not consider the effect of any change in overall economic activity that could occur. Further, in the event of a change of that magnitude, we may take action to further mitigate our exposure to the change.

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