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What changed in UPBOUND GROUP, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of UPBOUND GROUP, 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.

+489 added−476 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-25)

Top changes in UPBOUND GROUP, INC.'s 2025 10-K

489 paragraphs added · 476 removed · 381 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

49 edited+24 added−14 removed56 unchanged
Biggest changeOur Strategy Our strategy is focused on achieving our mission to elevate financial opportunity for all and growing our business through emphasis on the following key initiatives: • Leverage data analytics capabilities to attract new customers, approve more customers and mitigate risk across business segments; • Upgrade and integrate technology platforms to allow for a more simplified and seamless consumer experience, third-party retailer and waterfall integration and consumer transaction process and coworker efficiency; • Execute on market opportunities and enhance our competitive position across both traditional and virtual lease-to-own solutions, and implement complementary products and services that supplement our current offerings and provide our customers more financial alternatives; • Develop centers of excellence that will be leveraged across the organization to support our various business segments, utilizing best practices to drive efficiency and growth; • Grow penetration with current Acima third-party retailers and build on our strength with small to medium size businesses while also adding new national and regional third-party retailers to our platform and expanding our direct-to-consumer channels; and • At Rent-A-Center, accelerate the shift to e-commerce, improve the fully integrated omni-channel customer experience and expand product categories, which we expect will increase brand awareness and customer loyalty.
Biggest changeFurthermore, Credit Builder promotes savings as the customer’s payments accumulate in a deposit account and may be withdrawn by the customer at any time during the term of the loan. 5 Our Strategy Our strategy is focused on achieving our mission to elevate financial opportunity for all and growing our business through emphasis on the following key initiatives: • Grow penetration with current Acima third-party retailers and build on our strength with small to medium size businesses while also adding new national and regional third-party retailers to our platform and expanding our direct-to-consumer channels; • At Brigit, continue to grow Brigit’s EWA, credit builder and other existing products and increase Brigit’s portfolio of products; • At Rent-A-Center, accelerate the shift to e-commerce, improve the fully integrated omni-channel customer experience and expand product categories, which we expect will increase brand awareness and customer loyalty; • Leverage data analytics capabilities to attract new customers, approve more customers and mitigate risk across business segments; • Execute on market opportunities and enhance our competitive position across both traditional and virtual lease-to-own solutions, and implement complementary products and services that supplement our current offerings and provide our customers more financial alternatives; and • Upgrade and integrate technology platforms to allow for a more simplified and seamless consumer experience, third-party retailer and waterfall integration, consumer transaction process and coworker efficiency.
There are differences in the unit economics between our Rent-A-Center and Acima segments, as we generally purchase our merchandise at wholesale prices for our Rent-A-Center segment and at retail prices for our Acima segment. Historically, operating margin for our Acima segment has benefited from the lower overhead cost associated with the virtual options employed at many third-party locations.
There are differences in the unit economics between our Acima and Rent-A-Center segments, as we generally purchase our merchandise at wholesale prices for our Rent-A-Center segment and at retail prices for our Acima segment. Historically, operating margin for our Acima segment has benefited from the lower overhead cost associated with the virtual options employed at many third-party locations.
There can be no assurance as to whether the enforcement of existing state laws or regulations, including in connection with the regulatory matters described in Note M to our consolidated financial statements included in this Annual Report on Form 10-K, or the enactment of new laws or regulations that may unfavorably impact the lease-to-own industry would have a material and adverse effect on us.
There can be no assurance as to whether the enforcement of existing state laws or regulations, including in connection with the regulatory matters described in Note M to our consolidated financial statements included in this Annual Report on Form 10-K, 10 or the enactment of new laws or regulations that may unfavorably impact the lease-to-own industry would have a material and adverse effect on us.
Previously leased merchandise is generally offered at a similar weekly, bi-weekly, semi-monthly, or monthly lease rate as is offered for new merchandise, but with an opportunity to obtain ownership of the merchandise after fewer lease payments. Our furniture products include dining room, living room and bedroom furniture featuring a number of styles, materials and colors.
Previously leased merchandise is generally offered at a 7 similar weekly, bi-weekly, semi-monthly, or monthly lease rate as is offered for new merchandise, but with an opportunity to obtain ownership of the merchandise after fewer lease payments. Our furniture products include dining room, living room and bedroom furniture featuring a number of styles, materials and colors.
Other lease-to-own transactions involve the customer leasing our merchandise through all lease renewal terms required to obtain ownership of the merchandise at the conclusion of the final lease renewal term. A customer may also elect to obtain ownership any time after the initial lease period, but prior to the completion of all lease renewals otherwise required to obtain ownership.
Other lease-to-own transactions involve the customer leasing our merchandise through all optional lease renewal terms required to obtain ownership of the merchandise at the conclusion of the final lease renewal term. A customer may also elect to obtain ownership any time after the initial lease period, but prior to the completion of all lease renewals otherwise required to obtain ownership.
We believe consumers also benefit from our Acima model because they are able to obtain the products they want and need under flexible terms and without the necessity of relying on credit to finance a purchase or need to pay the full cost upfront.
We believe consumers also benefit from our Acima model because they are able to obtain the products they want and need under flexible terms and without the necessity of relying on credit to finance a purchase or need to 6 pay the full cost upfront.
A copy of the Code of Business Conduct and Ethics is published on our website at https://investor.upbound.com/corporate-governance/governance-documents. We intend to make all required disclosures concerning any amendments to, or waivers from, this Code of Business Conduct and Ethics on our website. 11
A copy of the Code of Business Conduct and Ethics 11 is published on our website at https://investor.upbound.com/corporate-governance/governance-documents. We intend to make all required disclosures concerning any amendments to, or waivers from, this Code of Business Conduct and Ethics on our website. 12
Product Selection The stores in our Rent-A-Center, Mexico, and Franchising segments generally offer merchandise from certain basic product categories: such as furniture, including mattresses; tires; consumer electronics; appliances; tools; handbags; computers; and accessories.
Product Selection The stores in our Rent-A-Center and Mexico segments generally offer merchandise from certain basic product categories such as furniture, including mattresses; tires; consumer electronics; appliances; tools; handbags; computers; and accessories.
We were incorporated in the State of Delaware in 1986, and our common stock is traded on The Nasdaq Global Select Market under the ticker symbol “ UPBD. ” Our principal executive offices are located at 5501 Headquarters Drive, Plano, Texas 75024. Our telephone number is (972) 801-1100 and our company website is www.upbound.com.
We were incorporated in the State of Delaware in 1986, and our common stock is traded on The Nasdaq Stock Market under the ticker symbol “ UPBD. ” Our principal executive offices are located at 5501 Headquarters Drive, Plano, Texas 75024. Our telephone number is (972) 801-1100 and our company website is www.upbound.com.
Approximately 31% of U.S. consumers have incomes below $50,000 and may lack access to traditional credit. The lease-to-own industry provides customers the opportunity to obtain merchandise they might otherwise be unable to obtain due to insufficient cash resources or a lack of access to credit to finance a purchase.
Approximately 30% of U.S. consumers have incomes below $50,000 and may lack access to traditional credit. The lease-to-own industry provides customers the opportunity to obtain merchandise they might otherwise be unable to obtain due to insufficient cash resources or a lack of access to credit to finance a purchase.
We also provide electronic or paper copies of our filings free of charge upon request. In addition, our Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all members of our Board of Directors, as well as all of our coworkers, including our Chief Executive Officer, Chief Financial Officer, principal accounting officer and controller.
We also provide electronic or paper copies of our filings free of charge upon request. In addition, our Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all members of our Board of Directors, as well as all of our coworkers, including our Chief Executive Officer, Chief Financial Officer and controller.
Acima Our Acima segment, which primarily operates in the United States and Puerto Rico, includes the operations of Acima Holdings, LLC (“Acima Holdings”), which we acquired in February 2021, and locations previously operating under our Acceptance Now brand, which completed the transition to the Acima platform in 2024.
Acima Our Acima segment, which primarily operates in the United States and Puerto Rico, includes the operations of Acima Holdings, LLC (“Acima Holdings”), which we acquired in February 2021, and locations formerly operating under our Acceptance Now brand, which completed the transition to the Acima platform in 2024.
Operations, including Puerto Rico, 1,300 coworkers in our Mexico operations and 560 coworkers at our corporate facilities. We continually monitor our demand for labor and provide training and competitive compensation packages in an effort to attract and retain skilled coworkers. We believe our coworkers are one of the primary keys to successfully operating our business and achieving our strategic objectives.
Operations, including Puerto Rico, 1,050 coworkers in our Mexico operations and 710 coworkers at our corporate facilities. We continually monitor our demand for labor and provide training and competitive compensation packages in an effort to attract and retain skilled coworkers. We believe our coworkers are one of the primary keys to successfully operating our business and achieving our strategic objectives.
Its mission is to help everyday Americans build a better financial future. See Note B in our consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Its mission is to help customers build a better financial future. See Note B in our consolidated financial statements included in this Annual Report on Form 10-K for additional information.
To better reflect our current strategic focus, our third-party retailer business operations are reported as the Acima segment, which includes our virtual and staffed business models; and our company-owned stores and e-commerce platform through rentacenter.com are reported as the Rent-A-Center segment. In addition, we report operating results for our Mexico and Franchising segments.
To better reflect our current strategic focus, our third-party retailer business operations are reported as the Acima segment, which includes our virtual and staffed business models; and our company-owned and franchise stores and e-commerce platform through rentacenter.com, getitnowstores.com and homechoicestores.com are reported as the Rent-A-Center segment. In addition, we report operating results for our Brigit and Mexico segments.
In our virtual locations, transactions are initiated through an electronic portal accessible by third-party retailers on their store computers, on our third-party retailers' e-commerce sites or through our Acima direct to consumer offerings including the Acima mobile application. Accordingly, capital expenditures with respect to new Acima locations are minimal.
In our virtual locations, transactions are initiated through an electronic portal accessible by third-party retailers on their store computers, on our third-party retailers' e-commerce sites or through our Acima direct-to-consumer offerings including the Acima mobile application. Accordingly, capital expenditures with respect to new Acima locations are minimal. Acima relies on our third-party retailers to deliver merchandise leased by the customer.
On January 31, 2025, we completed the acquisition of Brigit, a holistic financial health technology company that has helped millions of Americans budget better, access their earned wages before their regularly scheduled payday, build their credit through savings, protect themselves from identity theft, and find ways to earn and save money.
On January 31, 2025, we completed the acquisition of Brigit, a holistic financial health technology company that has helped millions of customers improve their financial health and literacy, find ways to earn and save money, access their earned wages before their regularly scheduled payday, build their credit through savings and protect themselves from identity theft.
Franchising has established national advertising funds for the franchised stores, whereby Franchising has the right to collect up to 4.5% of the monthly gross revenue from each franchisee as contributions to the fund. Franchising directs the advertising programs of the fund, generally consisting of television and radio commercials and print and digital display advertisements.
Franchising has established national advertising funds for the franchised stores, whereby franchising has the right to collect a percent of the monthly gross revenue from each franchisee as contributions to the fund. Franchising directs the advertising programs of the fund, generally consisting of television and radio commercials and print and digital display advertisements.
Mexico No comprehensive legislation regulating the lease-to-own transaction has been enacted in Mexico. We use substantially the same rental purchase transaction in Mexico as in the U.S. stores, but with such additional provisions as we believe may be necessary to comply with Mexico’s specific laws and customs.
Mexico No comprehensive legislation regulating the lease-to-own transaction has been enacted in Mexico. We use substantially the same rental purchase transaction in Mexico as in the U.S. stores, but with such additional provisions as we believe may be necessary to comply with Mexico’s specific laws and customs. Government Regulation of EWA Products State Regulation.
Acima relies on our third-party retailers to deliver merchandise leased by the customer. Such third-party retailers typically charge us a fee for delivery, which we pass on to the customer. In the event the customer wishes to return rented merchandise and terminate their lease, we provide various return options.
Such third-party retailers typically charge us a fee for delivery, which we pass on to the customer. In the event the customer wishes to return rented merchandise and terminate their lease, we provide various return options.
Product turnover is the number of times a product is rented to a different customer. On average, a product is leased (turned over) to multiple customers before a customer acquires ownership. Merchandise returned in the Acima segment is often moved to a Rent-A-Center store where it is offered for lease.
On average, a product is leased (turned over) to multiple customers before a customer acquires ownership. Merchandise returned in the Acima segment is often moved to a Rent-A-Center store where it is offered for lease.
As we pursue our strategy, we have taken, and may in the future take, advantage of joint venture, partnership, or merger and acquisition opportunities from time to time that advance our key initiatives and elevate the financial mobility of underserved consumers. 5 Our Operating Segments We report financial operating performance under four operating segments.
As we pursue our strategy, we have taken, and may in the future take, advantage of joint venture, partnership, or merger and acquisition opportunities from time to time that advance our key initiatives and elevate the financial mobility of underserved consumers.
Federal Regulation . To date, no comprehensive federal legislation has been enacted regulating the rental purchase transaction. However, other consumer protection laws and regulations adopted at the federal level and enforcement activities by the CFPB and the Federal Trade Commission may impact our business.
Federal Regulation . To date, no comprehensive federal legislation has been enacted regulating the rental purchase transaction. However, other consumer protection laws and regulations adopted at the federal level and enforcement activities by the Consumer Financial Protection Bureau (“CFPB”) and the United States Federal Trade Commission (the “FTC”) may impact our business.
In our Rent-A-Center and Mexico segments, we purchase our rental merchandise from a variety of suppliers. In 2024, approximately 39% and 16% of our merchandise purchases were attributable to Ashley Furniture Industries and Whirlpool, respectively. No other brand accounted for more than 10% of merchandise purchased during these periods.
In our Rent-A-Center and Mexico segments, we purchase our rental merchandise from a variety of suppliers. In 2025, approximately 37%, 11% and 10% of our merchandise purchases were attributable to Ashley Furniture Industries, LG Electronics and Whirlpool, respectively. No other brand accounted for more than 10% of merchandise purchased during these periods.
The duration of these marks is unlimited, subject to periodic renewal and continued use. 9 Human Capital Resources As of December 31, 2024, we employed a total of 11,970 coworkers, the vast majority of which are full time employees. Our employee base is made up of 10,110 coworkers in our U.S.
The duration of these marks is unlimited, subject to periodic renewal and continued use. Human Capital Resources As of December 31, 2025, we employed a total of 12,050 coworkers, the vast majority of which are full time employees. Our employee base is made up of 10,290 coworkers in our U.S.
If a customer does not return the merchandise or make a payment sufficient to reinstate an agreement, the remaining book value of the leased merchandise associated with delinquent accounts is generally charged off on or before the 90 th day following the time the account became past due in the Rent-A-Center and Mexico segments, on or before the 120 th day in our Acima segment or during the month following the 150 th day in certain Acima locations formerly operating under the Acceptance Now brand.
If a customer does not return the merchandise or make a payment sufficient to reinstate an agreement, the remaining book value of the leased merchandise associated with delinquent accounts is generally charged off on or before the 90 th day following the time the account became past due in the Rent-A-Center and Mexico segments, on or before the 120 th day in our Acima segment.
See “The industries in which we operate are highly competitive, which could impede our ability to maintain lease volumes and pricing and have a material adverse effect on our operating results” contained in Item 1A of this Annual Report on Form 10-K.
See “The industries in which we operate are highly competitive, which could impede our ability to maintain and grow consumer transaction volumes and pricing and have a material adverse effect on our prospects and operating results.” contained in Item 1A of this Annual Report on Form 10-K.
In our store locations and through our third-party retailers, we offer merchandise from a large number of well-known brands such as Ashley home furnishings; LG, Samsung, and Sony home electronics; LG, Samsung, General Electric, Whirlpool, Amana, and Maytag appliances; and HP, Acer, Asus, and Samsung computers and/or tablets. Delivery and set-up.
In our store locations and through our third-party retailers, we offer merchandise from a large number of well-known brands such as Ashley home furnishings; LG and Samsung electronics, Sony Playstation and Nintendo game consoles; LG, Samsung, General Electric, and Whirlpool appliances; and HP, Acer, Asus, and Lenovo computers. Delivery and set-up.
Franchising also has the right to require franchisees to expend up to 3% of their monthly gross revenue on local advertising. Industry & Competition According to data released by the Fair Isaac Corporation on October 29, 2024, consumers in the “subprime” category (those with credit scores below 650) made up approximately 25% of the United States population.
Franchising also has the right to require franchisees to expend a percent of their monthly gross revenue on local advertising. Industry & Competition According to data released by the Fair Isaac Corporation in September 2025, consumers in the “subprime” category (those with credit scores below 650) made up approximately 26% of the United States population.
Seasonality Our revenue mix is moderately seasonal, with the first quarter of each fiscal year generally providing higher merchandise sales than any other quarter during a fiscal year.
Seasonality Our revenue mix in our lease-to-own businesses is moderately seasonal, with the first quarter of each fiscal year generally providing higher sales than any other quarter during a fiscal year.
We believe we hold the necessary rights for protection of the trademarks and service marks essential to our business. The products held for rent in our lease-to-own stores or through our third-party retailers also bear trademarks and service marks held by their respective manufacturers.
The duration of our registered trademarks is unlimited, subject to periodic renewal and continued use. We believe we hold the necessary rights for protection of the trademarks and service marks essential to our business. The products held for rent in our lease-to-own stores or through our third-party retailers also bear trademarks and service marks held by their respective manufacturers.
Operations Operating Expenses Our operating segment expenses primarily relate to merchandise costs and labor and non-labor operating expenses, including salaries and benefits for our employees, lease charge-offs, occupancy, delivery, advertising, selling, insurance, travel, fixed asset depreciation, and other expenses.
The following discussion applies generally to all of our operating segments, unless otherwise noted. Operations Operating Expenses Our operating segment expenses primarily relate to merchandise costs and labor and non-labor operating expenses, including salaries and benefits for our employees, lease charge-offs, occupancy, delivery, advertising, selling, insurance, travel, fixed asset depreciation, and other expenses.
In addition, in the Rent-A-Center segment, we promote the “RAC Worry-Free Guarantee ® ” to further highlight these aspects of the lease purchase transaction.
In addition, in the Rent-A-Center segment, we promote the “RAC Worry-Free Guarantee ® ” to further highlight these aspects of the lease purchase transaction. We also promote the Acima segment’s lease-to-own solution and the Brigit segment’s financial wellness products.
As of December 31, 2024, we operated 21 Home Choice stores in Minnesota. North Carolina has no rental purchase legislation. However, the retail installment sales statute in North Carolina expressly provides that lease transactions which provide for more than a nominal purchase price at the end of the agreed rental period are not credit sales under the statute.
However, the retail installment sales statute in North Carolina expressly provides that lease transactions which provide for more than a nominal purchase price at the end of the agreed rental period are not credit sales under the statute. As of December 31, 2025, we operated 84 lease-to-own stores and 22 Acima staffed locations in North Carolina.
The Acima segment generally offers consumers who do not qualify for traditional financing the lease-to-own transaction through staffed or unstaffed kiosks located within third-party retailer locations, or other virtual options. In virtual locations, customers, either directly or with the assistance of a representative of the third-party retailer, initiate the lease-to-own transaction online in the retailers' locations using our virtual solutions.
The Acima segment generally offers the lease-to-own transaction to consumers who do not qualify for traditional financing through staffed or unstaffed kiosks located within third-party retailer locations, or other virtual options.
In contrast, our cash expenditures for our merchandise purchases for the fiscal year are generally the highest beginning in the latter part of the third quarter through the fourth quarter, primarily as a result of holiday promotions that lead to increased demand for our lease-to-own offerings.
In contrast, our cash expenditures for our merchandise purchases for the fiscal year are generally the highest beginning in the latter part of the third quarter through the fourth quarter, primarily as a result of holiday promotions that lead to increased demand for our lease-to-own offerings. 9 Trademarks We own various trademarks and service marks that are used in connection with our operations, including certain trademarks that have been registered with the United States Patent and Trademark Office.
As of December 31, 2024, we operated 30 Get It Now stores in Wisconsin and 18 Rent-A-Center stores in New Jersey. In addition to state lease-to-own laws as described above, general consumer protection laws and regulations adopted by states and enforcement activities by state attorneys general and other consumer regulatory authorities may also impact our business.
In addition to state lease-to-own laws as described above, general consumer protection laws and regulations adopted by states and enforcement activities by state attorneys general and other consumer regulatory authorities may also impact our business.
Accordingly, in Wisconsin, we offer our customers an opportunity to purchase our merchandise through an installment sale transaction in our Get It Now stores. In New Jersey, we have modified our typical rental purchase agreements to provide disclosures, grace periods, and pricing that we believe comply with the retail installment sales act.
In New Jersey, we have modified our typical rental purchase agreements to provide disclosures, grace periods, and pricing that we believe comply with the retail installment sales act. As of December 31, 2025, we operated 30 Get It Now stores in Wisconsin and 18 Rent-A-Center stores in New Jersey.
Trademarks We own various trademarks and service marks that are used in connection with our operations, including certain trademarks that have been registered with the United States Patent and Trademark Office. The duration of our registered trademarks is unlimited, subject to periodic renewal and continued use.
We license the use of the Rent-A-Center ® trademarks and service marks to our franchisees under our franchise agreements with such franchisees. We also own various trademarks and service marks, including RimTyme ® , that are used in connection with our franchisees’ operations and have been registered with the United States Patent and Trademark office.
We believe our executive management team's extensive industry and company experience will allow us to effectively execute our strategies. 8 Marketing We promote our products and services through direct marketing, paid and organic search optimization, digital advertisements, paid social media, radio and television commercials, and store signage.
Marketing We promote our products and services through direct marketing, paid and organic search optimization, digital advertisements, paid social media, radio and television commercials, and store signage.
For example, in Mexico, the appliances we offer are sourced locally, providing our customers in Mexico the look and feel to which they are accustomed in that product category.
For example, in Mexico, the appliances we offer are sourced locally, providing our customers in Mexico the look and feel to which they are accustomed in that product category. Acima locations offer merchandise available for sale in-store and online through third-party retailers, including furniture and accessories, consumer electronics and appliances, wheels and tires, and jewelry.
Our Franchising segment's primary source of revenue is the sale of rental merchandise to its franchisees, who in turn, offer the merchandise to the general public for rent or purchase under a lease-to-own transaction. The balance of our Franchising segment's revenue is generated primarily from royalties based on franchisees' monthly gross revenues.
The Rent-A-Center segment also includes franchising operations that offer the sale of rental merchandise to our franchisees, who in turn offer the merchandise to the general public for rent or purchase under lease-to-own agreements consistent with our company-owned lease-to-own stores. We also receive royalties based on a percent of the franchisees' monthly gross revenues.
Eleven states limit the total rental payments that can be charged to amounts ranging from 2.0 times to 2.4 times the lessor's disclosed cash price or the retail value of the rental product. Six of those eleven states also limit the lessor's cash price of merchandise to amounts ranging from 1.56 to 2.5 times our cost for each item.
Eleven states limit the total rental payments that can be charged over the maximum potential life of a rental purchase agreement if the customer elects to renew the lease for the maximum number of optional renewal periods to amounts ranging from 2.0 times to 2.4 times the lessor's disclosed cash price or the retail value of the rental product.
Rent-A-Center Our Rent-A-Center segment consists of company-owned lease-to-own stores in the United States and Puerto Rico that lease durable goods to customers on a lease-to-own basis. Our Rent-A-Center segment operates through our company-owned stores and e-commerce platform through rentacenter.com.
Rent-A-Center Our Rent-A-Center segment primarily consists of company-owned lease-to-own stores in the United States and Puerto Rico that lease durable goods to customers on a lease-to-own basis. In addition, we offer merchandise on an installment sales basis in certain of our stores operating under the names “Get It Now” and “Home Choice” in the states of Minnesota and Wisconsin.
As of December 31, 2024, we operated 84 lease-to-own stores and 13 Acima staffed locations in North Carolina. Courts in Wisconsin and New Jersey, which do not have rental purchase statutes, have rendered decisions which classify rental purchase transactions as credit sales subject to consumer lending restrictions.
Courts in Wisconsin and New Jersey, which do not have rental purchase statutes, have rendered decisions which classify rental purchase transactions as credit sales subject to consumer lending restrictions. Accordingly, in Wisconsin, we offer our customers an opportunity to purchase our merchandise through an installment sale transaction in our Get It Now stores.
The Consumer Financial Protection Bureau (“CFPB”) may adopt a different interpretation of the Dodd-Frank Act or other federal consumer financial protection laws and is currently engaged in investigations and enforcement activities with respect to the lease-to-own industry, including pending litigation against our Acima subsidiary as discussed in this Annual Report on Form 10-K. 10 From time to time, we have supported legislation introduced in Congress that would regulate the rental purchase transaction.
The CFPB has in past adopted, and may in the future adopt, a different interpretation of the Dodd-Frank Act and other federal consumer financial protection laws. From time to time, we have supported legislation introduced in Congress that would regulate the rental purchase transaction.
Management Our executive management team has extensive experience in the lease-to-own industry, as well as financial services and technology and has demonstrated the ability to grow and manage our business through their operational leadership and strategic vision. Our regional and district managers generally have long tenures with us, and we have a history of promoting management personnel from within.
However, any termination or disruption to our relationship with Ashley Furniture Industries, Whirlpool or other significant suppliers could materially adversely impact our results. 8 Management Our executive management team has extensive experience in the lease-to-own industry, as well as financial services and technology and has demonstrated the ability to grow and manage our business through their operational leadership and strategic vision.
Although Minnesota has a rental purchase statute, the rental purchase transaction is also treated as a credit sale subject to consumer lending restrictions pursuant to judicial decision. Therefore, we offer our customers in Minnesota an opportunity to purchase our merchandise through an installment sale transaction in our Home Choice stores.
Therefore, we offer our customers in Minnesota an opportunity to purchase our merchandise through an installment sale transaction in our Home Choice stores. As of December 31, 2025, we operated 20 Home Choice stores in Minnesota. North Carolina has no rental purchase legislation.
We believe that by leveraging our advertising efforts to highlight the benefits of the lease purchase transaction, we will continue to educate our customers and potential customers about the lease-to-own alternative to credit as well as promote our reputation as a leading provider of high-quality, branded merchandise and services.
We believe that by leveraging our advertising efforts to highlight the benefits of accessible and inclusive financial solutions, we will continue to educate our customers and potential customers about the ways we address the evolving needs and aspirations of underserved consumers.
Removed
Most merchandise returned from an Acima lease-to-own transaction is subsequently donated or offered for lease at one of our Rent-A-Center stores. Our Acima segment comprised approximately 52% of our consolidated revenues for the year ended December 31, 2024.
Added
Financial Wellness Products Through our mobile and web application our Brigit segment offers various financial wellness products and tools to help users improve their financial health.
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As of December 31, 2024, we operated 1,728 company-owned stores in the United States and Puerto Rico, including 51 retail installment sales stores under the names “Get It Now” and “Home Choice.” We routinely evaluate the locations in which we operate to optimize our store network.
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The application provides certain services at no cost to the customer, including Finance Helper which provides users with budgeting tools and financial insights on spending habits and bills, and Deals & Offers which provides subscribers with a way to earn and save more money via offers from our partners.
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Our Rent-A-Center segment comprised approximately 43% of our consolidated revenues for the year ended December 31, 2024. Mexico Our Mexico segment consists of our company-owned lease-to-own stores in Mexico that lease durable goods to customers on a lease-to-own basis.
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The application also provides for paid subscription tiers called Brigit Plus and Brigit Premium, which bundle access to additional features and services. Instant Cash is available to eligible subscribers at no cost, and is also included as part of the Brigit Plus and Brigit Premium subscription tiers.
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As of December 31, 2024, we operated 132 stores in Mexico. 6 Franchising Rent-A-Center Franchising International, Inc., an indirect wholly-owned subsidiary of the Company (our “Franchising Segment”), is a franchisor of lease-to-own stores. The stores in our Franchising segment use our Rent-A-Center, ColorTyme or RimTyme trade names, service marks, trademarks and logos, and operate under distinctive operating procedures and standards.
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Through the paid subscription tiers the customers gain access to some or all of the following services: Credit Monitoring, Credit Builder, and Identity Theft Protection. Instant Cash. Brigit’s Instant Cash product provides Earned Wage Access (“EWA”) advances to customers.
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As of December 31, 2024, we franchised 448 stores in 29 states operating under the Rent-A-Center (412 stores), ColorTyme (7 stores) and RimTyme (29 stores) trade names. These lease-to-own stores primarily offer high quality products such as furniture and accessories, consumer electronics, appliances, computers, wheels and tires.
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By leveraging cash flow information from the customer’s bank account as well as customer verified income information, Brigit’s technology assesses the customer’s earned income and ability to repay with no FICO or credit check needed and no impact on credit scores. Brigit offers an optional expedited delivery of the cash advance for a small payment (Expedited Transfer Fee). Credit Builder.
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As franchisor, Franchising receives royalties of 3.0% to 6.0% of the franchisees’ monthly gross revenue and, generally, an initial fee of up to $10,000 per new location.
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Credit Builder helps customers establish or improve their credit while saving through personal loans. The loans are originated by and held with Brigit’s bank partner. Unlike traditional loans, the primary goal of Credit Builder is not to provide immediate access to funds, but to allow customers to demonstrate creditworthiness through consistent repayment history.
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The following table summarizes our store locations allocated among the Rent-A-Center, Mexico and Franchising operating segments as of December 31 of each of the years indicated below: 2024 2023 2022 Rent-A-Center 1,728 1,839 1,851 Mexico 132 131 126 Franchising 448 440 447 Total locations 2,308 2,410 2,424 The following discussion applies generally to all of our operating segments, unless otherwise noted.
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The Credit Builder loan forms a new trade line on the borrower’s credit report. The customer can choose the amount that they are able to repay each month, and they then make installment payments towards the loan. These payments are reported to the three largest credit reporting agencies.
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Acima locations offer merchandise available for sale in-store and online through third-party retailers, including furniture and accessories, consumer electronics and appliances, wheels and tires, and jewelry. 7 Product Turnover On average, in the Rent-A-Center segment, lease renewals of 17 months or exercising an early purchase option is generally required to obtain ownership of new merchandise.
Added
Our Operating Segments On January 31, 2025, we established a new operating segment following the acquisition of Bridge IT, Inc. (“Brigit”). Please reference Note B in our consolidated financial statements included in this Annual Report on Form 10-K for additional discussion of the acquisition. In addition, effective January 1, 2025, we combined our Franchising segment with our Rent-A-Center segment.
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Ownership is attained in approximately 38% of lease purchase agreements in the Rent-A-Center segment. The average total life for each product in our Rent-A-Center segment is approximately 16 months, which includes the initial lease period, all additional lease periods and idle time in our system.
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Financial information disclosed within this report has been recast for the related prior year period to reflect this additional change. Brigit’s results of operations are reflected in our Consolidated Statements of Operations beginning January 31, 2025, the date on which we acquired Brigit. We report financial operating performance under four operating segments.
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However, any termination or disruption to our relationship with Ashley Furniture Industries, Whirlpool or other significant suppliers could materially adversely impact our results. With respect to our Franchising segment, our franchise agreements with franchisees require the franchised stores to exclusively offer for rent or sale only those brands, types and models of products that Franchising has approved.
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In virtual locations, customers, either directly or with the assistance of a representative of the third-party retailer, initiate the lease-to-own transaction online in the retailer's locations using our virtual solutions.
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The franchised stores are required to maintain an adequate mix of inventory that consists of approved products for rent as dictated by Franchising policy manuals. Franchisees can purchase product through us or directly from various approved suppliers.
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Our Rent-A-Center segment operates through our company-owned stores, franchise stores and e-commerce platforms through rentacenter.com, getitnowstores.com and homechoicestores.com. We routinely evaluate the locations in which we operate to optimize our store network. Brigit Our Brigit segment, which operates in the United States, was acquired on January 31, 2025 (the “Closing Date”).
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To support our strategic efforts we have hired additional key management members in recent years.
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The Brigit segment, through mobile and web applications, offers various financial health products and tools to help users improve their financial health, such as Finance Helper, Deals & Offers, Instant Cash, Credit Builder, Identity Theft Protection and more.
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The Franchising segment licenses the use of the Rent-A-Center ® and ColorTyme ® trademarks and service marks to its franchisees under its franchise agreements with such franchisees.
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These products and tools help customers improve their financial health and literacy, find ways to earn and save money, access their earned wages before their regularly scheduled payday, build their credit through savings, and protect themselves from identity theft. Mexico Our Mexico segment consists of our company-owned stores in Mexico that lease durable goods to customers on a lease-to-own basis.
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The Franchising segment also owns various trademarks and service marks, including ColorTyme ® and RimTyme ® , that are used in connection with its operations and have been registered with the United States Patent and Trademark office.
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The Brigit segment, through its mobile and web applications, offers a suite of financial health products and tools designed to help users improve their financial well-being. These include Finance Helper, Deals & Offers, Instant Cash, Credit Builder, Identity Theft Protection and more.
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Together, these offerings help customers budget more effectively, build financial literacy, discover ways to earn and save, access earned wages ahead of payday, strengthen credit through savings-based programs, and protect themselves from identity theft. Product Turnover Product turnover is the number of times a product is rented to a different customer.
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Our regional and district managers generally have long tenures with us, and we have a history of promoting management personnel from within. To support our strategic efforts we have hired additional key management members in recent years. We believe our executive management team's extensive industry and company experience will allow us to effectively execute our strategies.
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Our Brigit segment also faces significant competition from other providers of EWA, credit building products and other financial health technology solutions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Relating to Legal and Compliance Matters • We may be subject to legal or regulatory proceedings from time to time that result in damages, penalties or other material monetary obligations or material restrictions on our business operations, and our use of arbitration agreements may not allow us to avoid costly litigation. 12 • The outcome of the previously disclosed investigations by the CFPB, multi-state attorneys' general group and the New York Attorney General into certain of Acima’s business practices is uncertain and may materially and adversely affect our business. • Federal and state regulatory authorities are increasingly focused on the lease‑to‑own industry, and any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced or interpreted could expose us to significant additional costs or compliance-related burdens and could require us to alter our business practices in a manner that may be materially adverse to us. • Our lease‑to‑own transactions are regulated by and subject to the requirements of federal and state laws and regulations that vary by jurisdiction, which require significant compliance costs and expose us to regulatory action or other litigation. • Laws and regulations regarding information security and data collection, use and privacy are increasingly rigorous and subject to change, which may cause us to incur significant compliance costs and subject us to adverse impacts in the event of actual or alleged compliance failures. • Our reputation, ability to do business and operating results may be impaired by improper conduct by any of our employees, agents or business partners, including third-party retailers. • Our products and services may be negatively characterized by consumer advocacy groups, the media and certain federal, state and local government officials, and if those negative characterizations become increasingly accepted by consumers and/or our third-party retailers, demand for our goods and the transactions we offer could decrease and our business could be materially and adversely affected. • We may be unable to protect our intellectual property, or may be alleged to have infringed upon the intellectual property rights of others, which could result in a loss of our competitive advantage, a diversion of resources and a material adverse effect on our business and results of operations. • Brigit previously entered into a settlement with the FTC under which it continues to have ongoing compliance obligations, noncompliance with which could result in material regulatory enforcement. • Our Brigit business is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws. • If our Brigit business were determined to be operating without having obtained necessary state or local licenses, registrations, or similar regulatory filings or approvals, it could adversely affect Brigit’s business, results of operations, financial condition, and future prospects. • Federal and state regulatory authorities are increasingly focused on the earned wage access industry, and any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced or interpreted could expose Brigit to significant additional costs or compliance-related burdens and could require Brigit to alter its business practices in a manner that may be materially adverse to Brigit.
Biggest changeFailure of our systems or those of our third-party retailers, bank partners or other commercial counterparties could negatively impact our business, financial condition and results of operations. • If we fail to protect the integrity and security of customer, employee, supplier, third-party retailer, bank partner or other third-party information, or if our third-party retailers, bank partners, outsourced technology providers or other third parties fail to protect the integrity and security of customer, employee or other sensitive information, we could incur significant liability and damage our reputation, and our business could be materially and adversely affected. • Our Brigit segment’s EWA advances expose Brigit to the repayment risk of Brigit’s customers and if Brigit’s decisioning criteria for EWA advance eligibility is not sufficient to mitigate against this risk, or if the data Brigit uses to assess customer earned wages is inaccurate or incomplete, Brigit’s financial condition and operating results could be adversely affected if a substantial number of Brigit’s customers are unable to repay the EWA advance they receive. • If we are unable to attract, train and retain managerial personnel and hourly associates in our Rent-A-Center stores and staffed Acima locations, our reputation, sales and operating results may be materially and adversely affected. • Environmental impacts and increased focus by stakeholders on environmental issues could adversely affect our business, financial condition and operating results. 13 Risks Relating to Legal and Compliance Matters • Our businesses and industries are heavily regulated and subject to active enforcement including legal and regulatory proceedings that have in the past and may in the future result in damages, penalties or other significant monetary obligations and restrictions on our business operations. • Our use of arbitration agreements may not allow us to avoid costly litigation or mass arbitrations. • Federal and state regulatory authorities are increasingly focused on the lease‑to‑own industry, and any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced or interpreted could expose us to significant additional costs or compliance-related burdens and could require us to alter our business practices in a manner that may be materially adverse to us. • Our lease‑to‑own transactions are regulated by and subject to the requirements of federal and state laws and regulations that vary by jurisdiction, which require significant compliance costs and expose us to regulatory action or other litigation. • Laws and regulations regarding information security and data collection, use and privacy are increasingly rigorous and subject to change, which may cause us to incur significant compliance costs and subject us to adverse impacts in the event of actual or alleged compliance failures. • Our reputation, ability to do business and operating results may be impaired by improper conduct by any of our employees, agents or business partners, including third-party retailers. • Our products and services may be negatively characterized by consumer advocacy groups, the media and certain federal, state and local government officials, and if those negative characterizations become increasingly accepted by consumers and/or our third-party retailers, bank partners or other commercial counterparties, demand for our goods and the transactions we offer could decrease and our business could be materially and adversely affected. • We may be unable to protect our intellectual property, or may be alleged to have infringed upon the intellectual property rights of others, which could result in a loss of our competitive advantage, a diversion of resources and a material adverse effect on our business and results of operations. • Brigit previously entered into a settlement with the FTC under which it continues to have ongoing compliance obligations, noncompliance with which could result in material regulatory enforcement. • Our Brigit segment is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws. • If our Brigit segment is unable to obtain, or was determined to be operating without having obtained, necessary state or local licenses, registrations, or similar regulatory filings or approvals that are required or deemed required by regulatory authorities for certain of its products and services, it could adversely affect Brigit’s business, results of operations, financial condition, and future prospects. • Federal and state regulatory authorities are increasingly focused on the EWA industry, and any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced or interpreted could expose Brigit to significant additional costs or compliance-related burdens and could require Brigit to alter its business practices in a manner that may be materially adverse to Brigit.
This “cost-of-rental” amount, which is generally defined as total lease fees paid in excess of the “retail” price of the goods, is from time to time characterized by consumer advocacy groups and media reports as predatory or abusive without discussing the fundamental difference between a credit transaction and a lease transaction, lease customers' early purchase options, the fact that consumers can return their leased merchandise at any time without penalty or further payment obligations or the numerous other benefits to consumers of lease-to-own programs compared to traditional financing, or the lack of viable alternatives available to many of these consumers to obtain critical household items.
This “cost-of-rental” amount, which is generally defined as total lease fees paid in excess of the “retail” price of the goods, is from time to time characterized by consumer advocacy groups and media reports as predatory or abusive without discussing the fundamental difference between a credit transaction and a lease transaction, lease customers' early purchase options, the fact that consumers can terminate and return their leased merchandise at any time without penalty or further payment obligations or the numerous other benefits to consumers of lease-to-own programs compared to traditional financing, or the lack of viable alternatives available to many of these consumers to obtain critical household items.
The regulatory environment related to information security and data collection, use and privacy is increasingly rigorous, with new and constantly-changing requirements applicable to certain aspects of our business, including our collection practices (as well as those of third parties), the manner in which we contact our customers, our decisioning process regarding whether to lease merchandise to customers or otherwise approve customers for our products or services, any payment information we may decide to furnish to consumer reporting agencies, our credit reporting practices, our ability to share customer information between our affiliated businesses and with third parties, and the manner in which we process and store certain customer, employee and other information.
The regulatory environment related to information security and data collection, use and privacy is increasingly rigorous, with new and constantly-changing requirements applicable to certain aspects of our business, including our collection practices (as well as those of third parties), the manner in which we contact our customers, our decisioning process regarding whether to lease merchandise to customers or otherwise approve customers for our products or services, any payment information we may 27 decide to furnish to consumer reporting agencies, our credit reporting practices, our ability to share customer information between our affiliated businesses and with third parties, and the manner in which we process and store certain customer, employee and other information.
Our Rent-A-Center store operations, as well as those of our third-party retailers at Acima, are subject to the effects of adverse acts of nature, such as pandemics and other public health crises, winter storms, hurricanes, hail storms, strong winds, earthquakes, tornadoes and wildfires, which have in the past caused damage such as flooding and other damage to our stores and those of our third-party retailers in specific geographic locations, including in Mexico, Puerto Rico, Florida, Louisiana and 21 Texas, and may, depending upon the location and severity of such events, materially and unfavorably impact our business continuity.
Our Rent-A-Center store operations, as well as those of our third-party retailers at Acima, are subject to the effects of adverse acts of nature, such as pandemics and other public health crises, winter storms, hurricanes, hail storms, strong winds, earthquakes, tornadoes and wildfires, which have in the past caused damage such as flooding and other damage to our stores and those of our third-party retailers in specific geographic locations, including in Mexico, Puerto Rico, Florida, Louisiana and Texas, and may, depending upon the location and severity of such events, materially and unfavorably impact our business continuity.
As we execute on our strategic plans, we may continue to expand into complementary businesses that engage in financial, banking or lending services, or lease-to-own or rent-to-rent transactions involving products that we do not currently offer our customers, all of 24 which may be subject to a variety of additional statutory and regulatory requirements not presently applicable to our operations.
As we execute on our strategic plans, we may continue to expand into complementary businesses that engage in financial, banking or lending services, or lease-to-own or rent-to-rent transactions involving products that we do not currently offer our customers, all of which may be subject to a variety of additional statutory and regulatory requirements not presently applicable to our operations.
There is a possibility of further changes in the law from the NLRB, as well as other agencies and state governments that may cause us or our franchisees to be liable or held responsible for unfair labor practices, violations of wage and hour laws, or other violations or require our franchises to conduct collective bargaining negotiations regarding employees of our franchisees.
There is a possibility of further changes in the law from the NLRB, as well as other agencies and state governments that may cause us or our franchisees to be liable or held responsible for unfair labor practices, violations of wage and hour laws, or other violations or require us to conduct collective bargaining negotiations regarding employees of our franchisees.
In the event of a default that is not cured or waived within any applicable cure periods, the lenders’ commitment to extend further credit under the ABL Credit Facility could be terminated, our outstanding obligations could become immediately 33 due and payable, outstanding letters of credit may be required to be cash collateralized and remedies may be exercised against the collateral.
In the event of a default that is not cured or waived within any applicable cure periods, the lenders’ commitment to extend further credit under the ABL Credit Facility could be terminated, our outstanding obligations could become immediately due and payable, outstanding letters of credit may be required to be cash collateralized and remedies may be exercised against the collateral.
These weather events could also lead to an increased rate of temporary store closures and reduced customer traffic at our stores and impact the availability and costs of products, commodities and energy, which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require.
These weather events could also lead to an increased rate of temporary store closures and reduced customer traffic at our stores and impact the availability and costs 24 of products, commodities and energy, which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require.
Any failure or perceived failure to comply with any of these laws or regulations could subject Brigit to lawsuits or governmental actions and/or damage its reputation, which could materially and adversely affect Brigit’s business. Moreover, any competitors subject to different, or in some cases less restrictive, legislative or regulatory regimes may have or obtain a competitive advantage over Brigit.
Any failure or perceived failure to comply with any of these laws or regulations could subject Brigit to lawsuits, arbitrations or governmental actions and/or damage its reputation, which could materially and adversely affect Brigit’s business. Moreover, any competitors subject to different, or in some cases less restrictive, legislative or regulatory regimes may have or obtain a competitive advantage over Brigit.
If we fail to adequately mitigate any such future losses, our business and financial condition could be materially and adversely affected. 22 Our businesses are typically subject to seasonality, which causes our revenues and operating cash flows to fluctuate and may adversely affect our ability to borrow on our credit facilities, service our debt obligations and fund our operations.
If we fail to adequately mitigate any such future losses, our business and financial condition could be materially and adversely affected. Our businesses are typically subject to seasonality, which causes our revenues and operating cash flows to fluctuate and may adversely affect our ability to borrow on our credit facilities, service our debt obligations and fund our operations.
If our Brigit business fails to comply with its obligations under license or technology agreements with third parties, or if Brigit cannot license rights to use technologies on reasonable terms, we could be required to pay damages, lose license rights that are critical to Brigit’s business or be unable to commercialize new products and services in the future.
If our Brigit segment fails to comply with its obligations under license or technology agreements with third parties, or if Brigit cannot license rights to use technologies on reasonable terms, we could be required to pay damages, lose license rights that are critical to Brigit’s business or be unable to commercialize new products and services in the future.
The settlement also requires Brigit to comply with certain obligations regarding reporting settlement-relevant information to the FTC, recordkeeping, and responding to further requests from the FTC. Monetary elements of the settlement have been satisfied, but requirements to engage in FTC-facing compliance obligations continue for up to 15 years and injunctive relief related to ROSCA and FTC Act is permanent.
The settlement also requires Brigit to comply with certain obligations regarding reporting settlement-relevant information to the FTC, recordkeeping, and responding to further requests from the FTC. Monetary elements of the settlement have been satisfied, but requirements to engage in compliance obligations continue for up to 15 years and injunctive relief related to ROSCA and FTC Act is permanent.
If we fail to comply with legal requirements or rules and best practices established by a network or industry group, including those related to data security, we could be assessed significant monetary fines and other penalties, including, in certain cases, the termination of our right to use the applicable network or system.
If we fail to comply with legal requirements or rules and best practices established by a network or industry group, including those related to data security, we could be assessed significant monetary fines and other penalties, 25 including, in certain cases, the termination of our right to use the applicable network or system.
One additional state has a retail installment sales statute that excludes leases, including lease-to-own transactions, from its coverage if the lease provides for more than a nominal purchase price at the end of the rental 26 period. The specific rental purchase laws generally require certain contractual and advertising disclosures.
One additional state has a retail installment sales statute that excludes leases, including lease-to-own transactions, from its coverage if the lease provides for more than a nominal purchase price at the end of the rental period. The specific rental purchase laws generally require certain contractual and advertising disclosures.
In addition to compliance costs, we have in the past and may continue to incur substantial expenses to respond to federal and state government investigations and enforcement actions, proposed fines and penalties, criminal or civil sanctions, and private litigation, including those arising out of our or our franchisees’ alleged violations of existing laws and/or regulations.
In addition to compliance costs, we have in the past and may continue to incur substantial expenses to respond to federal and state government investigations and enforcement actions, proposed fines and penalties, criminal or civil sanctions, and private litigation and arbitration, including those arising out of our or our franchisees’ alleged violations of existing laws and/or regulations.
In addition, while we believe these synergies are achievable, our ability to achieve such estimated synergies and the timing of achieving any such synergies is subject to various assumptions by our management, which may or may not be realized, as well as the incurrence of other costs in our operations that offset all or a portion of such synergies.
While we believe these synergies are achievable, our ability to achieve such estimated synergies and the timing of achieving any such synergies is subject to various assumptions by our management, which may or may not be realized, as well as the incurrence of other costs in our operations that offset all or a portion of such synergies.
Brigit’s business may suffer if any current or future licenses or other grants of rights to our Brigit business terminate, if the licensors (or other applicable counterparties) fail to abide by the terms of the license or other applicable agreement, if the licensors fail to enforce the licensed intellectual property rights against infringing third parties, or if the licensed intellectual property rights are found to be invalid or unenforceable.
Brigit’s business may suffer if any current or future licenses or other grants of rights to our Brigit segment terminate, if the licensors (or other applicable counterparties) fail to abide by the terms of the license or other applicable agreement, if the licensors fail to enforce the licensed intellectual property rights against infringing third parties, or if the licensed intellectual property rights are found to be invalid or unenforceable.
Our failure to comply with any of these covenants could result in reduced borrowing capacity and/or an 34 event of default that, if not cured or waived, could result in the acceleration of certain of our debt, which could have a material adverse effect on our business, financial condition and results of operations.
Our failure to comply with any of these covenants could result in reduced borrowing capacity and/or an event of default that, if not cured or waived, could result in the acceleration of certain of our debt, which could have a material adverse effect on our business, financial condition and results of operations.
In the event our debt is accelerated, our assets may not be sufficient to repay such debt in full. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates.
In the event our debt is accelerated, our assets may not be sufficient to repay such debt in full. 35 Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates.
The failure to pay any material judgment would constitute a default under the ABL Credit Facility, the Term Loan Facility and the Notes (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 7 of this Annual Report on Form 10-K).
In addition, the failure to pay any material judgment would constitute a default under the ABL Credit Facility, the Term Loan Facility and the Notes (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 7 of this Annual Report on Form 10-K).
In addition, we may be subject to claims by our franchisees relating to our franchise disclosure documents, including claims based on financial information contained in those documents. Engaging in such litigation may be costly, time-consuming and may distract management and materially and adversely affect our relationships with or ability to attract new franchisees.
In addition, we may be subject to claims by our franchisees relating to our franchise disclosure documents, including claims based on financial information contained in those documents. Engaging in such litigation may be costly, time-consuming and may distract management and materially and adversely affect 32 our relationships with or ability to attract new franchisees.
Given the complex, rapidly changing and competitive technological and business environment in which we operate, and the potential risks and uncertainties of intellectual property-related litigation, an assertion of an infringement claim against us may cause us to spend significant amounts of money to defend the claim (even if we ultimately prevail).
Given the complex, rapidly changing and competitive technological and business environment in which we operate, and the potential risks and uncertainties of intellectual property-related litigation, an assertion of an infringement claim against us may cause us to spend significant amounts of money to 29 defend the claim (even if we ultimately prevail).
Our indebtedness currently has a non-investment grade rating, and any rating assigned to our debt could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant.
Our indebtedness currently has a non-investment grade rating, and any rating assigned to our debt could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the 37 rating, such as adverse changes, so warrant.
Our arrangements with our suppliers and vendors may be materially and adversely affected by changes in our financial results or financial position or changes in consumer demand, which could materially and adversely affect our business. Substantially all of our lease-to-own merchandise suppliers and vendors sell to us on open account purchase terms.
Our arrangements with our lease-to-own merchandise suppliers and other vendors may be materially and adversely affected by changes in our financial results or financial position or changes in consumer demand, which could materially and adversely affect our business. Substantially all of our lease-to-own merchandise suppliers and vendors sell to us on open account purchase terms.
Failure to achieve and maintain an effective internal control environment could cause investors to lose confidence in our reported financial information, which could have a material adverse effect on our ability to raise capital, and may also expose us to potential claims and losses.
Failure to achieve and maintain an effective internal control environment could cause investors to lose confidence in our reported financial information, which could have a material adverse effect on our ability to raise capital, and 23 may also expose us to potential claims and losses.
We would be required to record a charge in our financial statements during the period in which any impairment of our goodwill or intangible assets is determined, which may be significant and would negatively affect our results of operations reported under U.S. GAAP.
We would be required to record a charge in our financial statements during the period in which any impairment of our goodwill or intangible assets is determined, which may be significant and would negatively affect our results of operations reported under U.S.
A disruption in our information management systems, or our inability to improve, upgrade, integrate or expand our systems to meet our evolving business requirements, could impair our ability to achieve critical strategic initiatives and could materially and adversely affect our business, financial condition and results of operations.
A disruption in our information management systems, or our inability to improve, upgrade, integrate or expand our systems to meet our evolving 21 business requirements, could impair our ability to achieve critical strategic initiatives and could materially and adversely affect our business, financial condition and results of operations.
Moreover, an adverse outcome from a lawsuit, even one against one of our competitors, could result in changes in the way we and others in the industry do business, possibly leading to significant costs or decreased revenues or profitability.
Moreover, an adverse outcome from a lawsuit or arbitration, even one against one of our competitors, could result in changes in the way we and others in the industry do business, possibly leading to significant costs or decreased revenues or profitability.
In addition, we may elect to eliminate or reduce our common stock dividend or not to implement additional stock repurchases in the future for any reason. Any elimination of or reduction in the amount of our common stock 36 dividend or the failure to implement future stock repurchases could materially and adversely affect the market price of our common stock.
In addition, we may elect to eliminate or reduce our common stock dividend or not to implement additional stock repurchases in the future for any reason. Any elimination of or reduction in the amount of our common stock dividend or the failure to implement future stock repurchases could materially and adversely affect the market price of our common stock.
For example, California recently finalized a new regulation under the California Consumer Finance Protection Law requiring EWA providers to register with the state, but not imposing rate or fee restrictions on EWA products at this time.
For example, California finalized a new regulation under the California Consumer Finance Protection Law requiring EWA providers to register with the state, but not imposing rate or fee restrictions on EWA products at this time.
These potential risks include, among others: • reliance on the ability of unaffiliated third-party retailers to attract customers and to maintain quality and consistency in their operations and their ability to continue to provide eligible durable goods desired by customers; • establishing and maintaining relationships with unaffiliated third-party retailers; • reliance on unaffiliated third-party retailers for many important business functions, from advertising through assistance with lease transaction applications, including, for example, adhering to Acima’s merchant policies and procedures, properly explaining the nature of the lease-to-own transaction to potential customers, properly handling customer inquiries made directly to the third-party retailer and properly explaining that the lease transaction is with Acima and not with the third-party retailer; • increased regulatory focus on the virtual lease-to-own transaction and/or the potential that regulators adopt new regulations or legislation (or existing laws and regulations may be interpreted in a manner) that negatively impact Acima’s ability to offer virtual lease-to-own programs or certain products or services through third-party retailers, and/or that regulators may attempt to force the application of laws and regulations on Acima’s lease-to-own business or certain products or services in inconsistent and unpredictable ways that could increase the compliance-related costs incurred by us, restrict certain business activities and negatively impact our financial and operational performance (see, for example, the regulatory matters discussed in Note M to our consolidated financial statements included in this Annual Report on Form 10-K); • reliance on automatic bank account drafts for lease payments, which may become disfavored as a payment method for these transactions by regulators and/or providers, or may otherwise become unavailable; • more product diversity within Acima’s merchandise inventory relative to our traditional store-based lease-to-own business, which can complicate matters such as merchandise repair and disposition of merchandise that is returned and which exposes us to risks associated with products with which we have limited experience; • lower barriers to entry and start-up capital costs to launch a competitor due to the reliance of Acima and its competitors on the store locations and inventories of third-party retailers, and online connections with retailers, rather than incurring the cost to obtain and maintain brick and mortar locations and in-store or in-warehouse inventories; • indemnification obligations to Acima’s third-party retailers and their service providers for losses stemming from Acima’s failure to perform with respect to its products and services, to comply with applicable laws or regulations or to take steps to protect its third-party retailers’' and their customers’ data and information from being accessed or stolen by unauthorized third-parties, including through cyberattacks; • increased risk of consumer fraud with respect to Acima’s lease-to-own business and e-commerce business as compared to the traditional store-based Rent‑A‑Center Business; • increased risk of merchant fraud due to the planned growth in third-party retailers and other merchants from which customers can select products to lease from Acima; • reduced gross margins compared to the Rent-A-Center segment because Acima generally purchases merchandise it leases to customers at retail, rather than wholesale, prices; • operational, financial, regulatory or other risks associated with the development and implementation of new digital technologies that are intended to enhance the customer and third-party retailer experience and to differentiate Acima from competing consumer offerings, including Acima direct to consumer offerings; and • the ability of Acima to adequately protect its proprietary technologies or to address any claims of infringement by third-parties.
These potential risks include, among others: • reliance on the ability of unaffiliated third-party retailers to attract customers and to maintain quality and consistency in their operations and their ability to continue to provide eligible durable goods desired by customers; • establishing and maintaining relationships with unaffiliated third-party retailers; • reliance on unaffiliated third-party retailers for many important business functions, from advertising through assistance with lease transaction applications, including, for example, adhering to Acima’s merchant policies and procedures, properly explaining the nature of the lease-to-own transaction to potential customers, properly handling customer 19 inquiries made directly to the third-party retailer and properly explaining that the lease transaction is with Acima and not with the third-party retailer; • increased regulatory focus on the virtual lease-to-own transaction and/or the potential that regulators adopt new regulations or legislation (or existing laws and regulations may be interpreted in a manner) that negatively impact Acima’s ability to offer virtual lease-to-own programs or certain products or services through third-party retailers, and/or that regulators may attempt to force the application of laws and regulations on Acima’s lease-to-own business or certain products or services in inconsistent and unpredictable ways that could increase the compliance-related costs incurred by us, restrict certain business activities, impose restrictions on pricing, and negatively impact our financial and operational performance (see, for example, the regulatory matters discussed in Note M to our consolidated financial statements included in this Annual Report on Form 10-K); • reliance on automatic bank account drafts for lease renewal payments, which may become disfavored as a payment method for these transactions by regulators and/or providers, or may otherwise become unavailable; • more product diversity within Acima’s merchandise inventory relative to our traditional store-based lease-to-own business, which can complicate matters such as merchandise repair and disposition of merchandise that is returned and which exposes us to risks associated with products with which we have limited experience; • lower barriers to entry and start-up capital costs to launch a competitor due to the reliance of Acima and its competitors on the store locations and inventories of third-party retailers, and, in some cases, online connections with retailers, rather than incurring the cost to obtain and maintain brick and mortar locations and in-store or in-warehouse inventories; • indemnification obligations to Acima’s third-party retailers and their service providers for losses stemming from Acima’s failure to perform with respect to its products and services, to comply with applicable laws or regulations or to take steps to protect its third-party retailers’ and their customers’ data and information from being accessed or stolen by unauthorized third-parties, including through cyberattacks; • increased risk of consumer fraud with respect to Acima’s lease-to-own business and e-commerce business as compared to the traditional store-based Rent‑A‑Center transactions; • increased risk of merchant fraud due to the planned growth in third-party retailers and other merchants from which customers can select products to lease from Acima; • reduced gross margins compared to the Rent-A-Center segment because Acima generally purchases merchandise it leases to customers based on retail, rather than wholesale, prices; • operational, financial, regulatory or other risks associated with the development and implementation of new digital technologies that are intended to enhance the customer and third-party retailer experience and to differentiate Acima from competing consumer offerings, including Acima’s direct-to-consumer offerings; and • the ability of Acima to adequately protect its proprietary technologies or to address any claims of infringement by third-parties.
In the ordinary course of business, we collect, store and process certain personal information provided to us by our customers, including social security numbers, dates of birth, banking information, credit and debit card information and data we receive from consumer reporting companies, including credit report information, as well as certain confidential information about our third-party retailers and employees, among others.
In the ordinary course of business, we collect, store and process certain personal information provided to us by our customers, including social security numbers, dates of birth, banking information, credit and debit card information and data we receive from consumer reporting companies, including credit report information, as well as certain confidential information about our third-party retailers, bank partners and employees, among others.
Such merger and acquisition opportunities, such as our recent Brigit acquisition, may involve numerous risks, including the following: • difficulties in integrating the operations, systems, technologies, products and personnel of the acquired businesses; • difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets may have stronger market positions; • application of regulatory regimes that have not previously applied to, and may significantly impact, our business; • diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations; • the potential loss of key employees, vendors and other business partners of the businesses we acquire; • the incurrence of debt, contingent liabilities and amortization expenses and write‑offs of goodwill in connection with such activities that could harm our financial condition; and • dilutive issuances of common stock or other equity securities.
Such merger and acquisition opportunities may involve numerous risks, including the following: • difficulties in integrating the operations, systems, technologies, products and personnel of the acquired businesses; • difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets may have stronger market positions; • application of regulatory regimes that have not previously applied to, and may significantly impact, our business; • diversion of management’s attention from normal daily operations of the business and the challenges of managing larger, more complex and more widespread operations; • the potential loss of key employees, vendors and other business partners of the businesses we acquire; • the incurrence of debt, contingent liabilities and amortization expenses and write‑offs of goodwill in connection with such activities that could harm our financial condition; and • dilutive issuances of common stock or other equity securities.
The success of our business depends in part on identification of the names “Upbound”, “Rent-A-Center”, “Acima” and “Brigit”, and the success of our lease-to-own, EWA decisioning and other models necessary to offer our products and services depend in large part on our proprietary decisioning algorithms, our e‑commerce platform and other proprietary technologies that we currently have or may develop in the future.
The success of our business depends in part on identification of the names “Upbound”, “Rent-A-Center”, “Acima” and “Brigit”, and the success of our lease-to-own, EWA decisioning and other models necessary to offer our products and services depend in large part on our proprietary decisioning algorithms, our e‑commerce platforms and other proprietary technologies that we currently have or may develop in the future.
In addition, any of our intellectual property rights may be challenged, which could result in their being narrowed in scope or declared 29 invalid or unenforceable.
In addition, any of our intellectual property rights may be challenged, which could result in their being narrowed in scope or declared invalid or unenforceable.
In addition if key employees terminate their employment, Brigit’s business activities may be adversely affected, and Brigit’s management’s attention may be diverted to hiring suitable replacements, all of which may cause Brigit’s business to suffer. Brigit also may not be able to locate or retain suitable replacements for any key employees who leave Brigit. 37 Item 1B. Unresolved Staff Comments.
In addition if key employees terminate their employment, Brigit’s business activities may be adversely affected, and Brigit’s management’s attention may be diverted to hiring suitable replacements, all of which may cause Brigit’s business to suffer. Brigit also may not be able to locate or retain suitable replacements for any key employees who leave Brigit. 38 Item 1B. Unresolved Staff Comments.
If we misjudge any of the market for our merchandise, our customers’ product preferences or our customers’ leasing behaviors, our revenue may decline significantly, and we may not have sufficient quantities of merchandise to satisfy customer demand, or we may be required to mark down excess inventory, either of which would result in lower revenue and profit.
If we misjudge any of the markets for our merchandise, our customers’ product preferences or our customers’ leasing behaviors, our revenue may decline significantly, and we may not have sufficient quantities of merchandise to satisfy customer demand, or we may be required to mark down excess inventory, either of which would result in lower revenue and profit.
There can be no assurance we will be successful in continuing to develop the technologies and digital solutions necessary to grow our e-commerce business in a profitable manner. Certain of our competitors, and a number of e-commerce retailers, have established e-commerce operations against which we compete for customers.
There can be no assurance we will be successful in continuing to develop the technologies and digital solutions necessary to grow our e-commerce platforms in a profitable manner. Certain of our competitors, and a number of e-commerce retailers, have established e-commerce operations against which we compete for customers.
Brigit has obtained incrementally more EWA-related licenses and been subject to increasing disclosure and practice requirements with respect to its Instant Cash product over time, and it expects to continue doing so into the near future. Some states, however, have adopted more restrictive approaches.
Brigit has obtained incrementally more EWA-related licenses and been subject to increasing disclosure and practice requirements with respect to its EWA product over time, and it expects to continue doing so into the near future. Some states, however, have adopted more restrictive approaches.
If our Brigit business is unable to retain key employees, including management, who are critical to the successful integration and future operations of the Brigit business, Brigit could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.
If our Brigit segment is unable to retain key employees, including management, who are critical to the successful integration and future operations of the Brigit segment, Brigit could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.
The scope of such requirements varies by jurisdiction and the application of some consumer financial licensing laws to Brigit’s products and activities is unclear but may include providing EWA, offering or facilitating the originating of loans, and servicing or collecting loans, among other regulated activities.
The scope of such requirements varies by jurisdiction and the application of some consumer financial licensing laws to Brigit’s products and activities is unclear but may include providing EWA, offering subscription programs, offering or facilitating the originating of loans, and servicing or collecting loans, among other regulated activities.
The Credit Builder product made available through Brigit by Coastal Community Bank is subject to regulation and supervision by Coastal Community Bank’s regulators, including the FDIC and the Washington State Department of Financial Institutions, and Brigit, as a service provider to Coastal Community Bank, undertakes certain compliance obligations.
For example, the Credit Builder product made available through Brigit by Coastal Community Bank is subject to regulation and supervision by Coastal Community Bank’s regulators, including the FDIC and the Washington State Department of Financial Institutions, and Brigit, as a service provider to Coastal Community Bank, undertakes certain compliance obligations.
Risks Relating to Our Structure or an Investment in Our Common Stock We are a holding company and are dependent on the operations and funds of our subsidiaries. We are a holding company, with no revenue generating operations and no assets other than our ownership interests in our direct and indirect subsidiaries.
GAAP. 36 Risks Relating to Our Structure or an Investment in Our Common Stock We are a holding company and are dependent on the operations and funds of our subsidiaries. We are a holding company, with no revenue generating operations and no assets other than our ownership interests in our direct and indirect subsidiaries.
Many categories of products we lease and sell from time to time, including furniture, appliances and electronics such as televisions, computers and smartphones, are the subject of intense competition from a number of types of competitors, including national, regional and local operators of lease-to-own stores, virtual lease-to-own companies, traditional and online providers of used goods and merchandise, traditional, “big-box” and e-commerce retailers, fintech firms and others.
In our lease-to-own segments, many categories of products we lease and sell from time to time, including furniture, appliances and electronics such as televisions, computers and smartphones, are the subject of intense competition from a number of types of competitors, including national, regional and local operators of lease-to-own stores, virtual lease-to-own companies, traditional and online providers of used goods and merchandise, traditional, “big-box” and e-commerce retailers, fintech firms and others.
In addition, in the event of such a product quality or safety issue, our customers who have leased the defective merchandise from us could terminate their lease agreements for that merchandise and/or not renew those lease arrangements, which could have a material adverse effect on our financial condition if we are unable to recover those losses from the vendor who supplied us with the relevant merchandise.
In addition, in the event of such a product quality or safety issue, our customers who have leased the defective merchandise from us could terminate their lease agreements for that merchandise and/or not renew those lease agreements, which could have a material adverse effect on our results of operations or financial condition if we are unable to recover those losses from the vendor who supplied us with the relevant merchandise.
While we believe Brigit’s relationship with Costal Community Bank, and the products offered and activities conducted in connection with such relationship, comply with applicable law, regulatory or private plaintiff actions relating to bank partnerships, or the general evolution of regulatory requirements arising from bank partnerships, may result in penalties, compliance costs, required product or practice changes, or other business restrictions that may be material.
While we believe Brigit’s relationship with Coastal Community Bank and other bank partners, and the products offered and activities conducted in connection with such relationship, comply with applicable law, regulatory or private plaintiff actions relating to bank partnerships, or the general evolution of regulatory requirements arising from bank partnerships, may result in penalties, compliance costs, required product or practice changes, or other business restrictions that may be material.
Our data providers could stop providing data, provide untimely, incorrect or incomplete data, or increase the costs for their data for a variety of reasons, including a perception that our systems are insecure as a result of a data-security breach, regulatory concerns or for competitive reasons.
Our data providers could stop providing data, provide untimely, incorrect or incomplete data, or increase the costs for their data for a variety of reasons, including a perception that our systems are unsecure as a result of a data-security breach, regulatory concerns or for competitive reasons.
Our ability to control labor costs is also subject to numerous external factors and compliance with regulatory structures, including competition for and availability of qualified personnel in a given market, unemployment levels within those markets, governmental regulatory bodies such as the Equal Employment Opportunity Commission and the National Labor Relations Board, prevailing wage rates and wage and hour laws, minimum wage laws, the impact of legislation governing labor and employee relations or benefits, such as the Affordable Care Act, health insurance costs and our ability to maintain good relations with our employees.
Our ability to control labor costs is also subject to numerous external factors and compliance with regulatory structures, including competition for and availability of qualified personnel in a given region, unemployment levels within those regions, governmental regulatory bodies such as the Equal Employment Opportunity Commission and the National Labor Relations Board, prevailing wage rates and wage and hour laws, minimum wage laws, the impact of legislation governing labor and employee relations or benefits, such as the Affordable Care Act, health insurance costs and our ability to maintain good relations with our employees.
Our host retailers in our Acima segment may face similar risks, which could adversely impact the results of our Acima segment. The success of our Franchising segment is dependent on the ability and success of our third-party franchisees, over which we have limited control.
Our third-party retailers in our Acima segment may face similar risks, which could adversely impact the results of our Acima segment. The success of our franchising business is dependent on the ability and success of our third-party franchisees, over which we have limited control.
Our Brigit business licenses certain third-party intellectual property that is important to Brigit’s business, including data, technologies, content and software from third parties, and in the future Brigit may license additional valuable third-party data, 23 intellectual property or technology.
Our Brigit segment licenses certain third-party intellectual property that is important to Brigit’s business, including data, technologies, content and software from third parties, and in the future Brigit may license additional valuable third-party data, intellectual property or technology.
In an attempt to limit costly and lengthy consumer, employee and other litigation, including class actions, we require our customers and, with the exception of our Brigit business, our employees to sign arbitration agreements, including class action waivers.
In an attempt to limit costly and lengthy consumer, employee and other litigation, including class actions, we require our customers and, with the exception of our Brigit segment, our employees to sign arbitration agreements, including class action waivers.
In particular, in 2023, legislatures or consumer financial regulators in Connecticut and Maryland issued guidance and/or changes in law or regulation, indicating that EWA products, in certain cases, would be considered loans or otherwise regulated under loan regulatory regimes imposing licensing, rate and fee limitation, and origination and servicing practice limitations on providers of such EWAs.
For example, in 2023, legislatures or consumer financial regulators in Connecticut and Maryland issued guidance and/or changes in law or regulation, indicating that EWA products, in certain cases, would be considered loans or otherwise regulated under loan regulatory regimes imposing licensing, rate and fee limitation, and origination and servicing practice limitations on providers of such EWAs.
If the information management systems sustain repeated failures, we may not be able to manage our store and virtual operations or our Brigit operations, which could have a material adverse effect on our business, financial condition and results of operations. We continuously need to improve and upgrade our systems and technology while maintaining their reliability and integrity.
If our information management systems sustain repeated failures, we may not be able to manage our store and virtual lease-to-own operations or our Brigit operations, which could have a material adverse effect on our business, financial condition and results of operations. We continuously need to improve and upgrade our systems and technology while maintaining their reliability and integrity.
To grow our operations and meet the needs and expectations of our customers, we must attract, train, and retain a large number of hourly associates, while at the same time controlling labor costs. We compete with other retail businesses as well as restaurants for many candidates for employment at our store locations and staffed Acima locations.
To grow our operations and meet the needs and expectations of our customers, we must attract, train, and retain a large number of hourly associates, while at the same time controlling labor costs. We compete with other retail businesses as well as restaurants and other industries for many candidates for employment at our Rent-A-Center store locations and staffed Acima locations.
Unfavorable general economic changes, due to any one or more of these or other factors, could reduce demand for our products and services resulting in lower revenue or negatively impact consumer payment behavior resulting in higher than expected losses and negatively impacting our business and financial results.
Unfavorable general economic changes, due to any one or more of these or other factors, could reduce demand for our lease-to-own, EWA and other products and services resulting in lower revenue or negatively impact consumer payment behavior resulting in higher than expected losses and negatively impacting our business and financial results.
Our Acima segment offers the lease-to-own transaction through the stores or websites of third-party retailers and, therefore, faces risks different from those that have historically been associated with our traditional lease-to-own business conducted in our Rent-A-Center store locations.
Our Acima segment offers the lease-to-own transaction primarily through the stores or websites of third-party retailers and, therefore, faces risks different from those that have historically been associated with our traditional direct-to-consumer lease-to-own business conducted in our Rent-A-Center store locations.
Additionally, if the negative characterization of lease‑to‑own transactions is accepted by regulators and legislators, our business may become subject to more restrictive laws and regulations and more stringent enforcement of existing laws and regulations, any of which could have a material adverse effect on our business, results of operations and financial condition.
Additionally, if the negative characterization of our consumer transactions is accepted by regulators and legislators, our business may become subject to more restrictive laws and regulations and more stringent enforcement of existing laws and regulations, any of which could have a material adverse effect on our business, results of operations and financial condition.
The negative impacts of these or other events may be amplified as consumers and other stakeholders increase or change their expectations regarding the conduct of public companies, sustainability efforts, and corporate responsibility.
The negative impacts of these or other events may be amplified as consumers and other stakeholders increase or change their expectations regarding the conduct of public companies and corporate responsibility.
We have defended against, continue to defend against, and may in the future defend against, legal and regulatory proceedings from time to time, including class action lawsuits and regulatory enforcement proceedings alleging various regulatory violations.
We have defended against, continue to defend against, and may in the future defend against, legal and regulatory proceedings from time to time, including class action lawsuits, mass arbitrations and regulatory enforcement proceedings alleging various regulatory violations.
Such recalls and voluntary removal of products can result in, among other things, lost sales, diverted resources, potential harm to our reputation and increased customer service costs, each of which could have a material adverse effect on our financial condition.
Such recalls and voluntary removal of products can result in, among other things, lost sales, diverted resources, potential harm to our reputation and increased customer service costs, each of which could have a material adverse effect on our results of operations or financial condition.
Even after the effect of the current macroeconomic conditions subside, unexpected changes in behavior caused by macroeconomic conditions such as the U.S. economy experiencing a recession or slowdown in economic growth and job losses related thereto, a continued high interest rate environment, inflationary pressures, reduced availability or elimination of government subsidies, changes in consumer preferences, availability of alternative products or other factors, could lead to increased incidence and costs related to lease merchandise write-offs or other customer losses.
Even after the effect of the current macroeconomic conditions subside, unexpected changes in behavior caused by macroeconomic conditions such as the U.S. economy experiencing a recession or slowdown in economic growth and job losses related thereto, a continued high interest rate environment, inflationary pressures, reduced availability or elimination of government subsidies relied on by our target customers, changes in consumer preferences, availability of alternative products or other factors, could lead to increased incidence and costs related to lease merchandise write-offs or other customer losses.
The price of our common stock has been volatile and can be expected to be significantly affected by factors such as: • our perceived ability to meet market expectations with respect to the growth and profitability of each of our operating segments; • quarterly variations in our results of operations, which may be impacted by, among other things, changes in same store sales, invoice volume or when and how many locations we acquire, franchise, open, sell or close; • quarterly variations in our competitors’ results of operations; • changes in earnings estimates or buy/sell recommendations by financial analysts; • how our actual financial performance compares to the financial performance guidance we provide; • state or federal legislative or regulatory proposals, initiatives, actions or changes that are, or are perceived to be, adverse to our business; • the stock price performance of comparable companies; • the unpredictability of global and regional economic and political conditions; • general conditions in the consumer financial service industry, the domestic or global economy or the domestic or global credit or capital markets; • negative commentary regarding us and corresponding short-selling market behavior; • adverse developments in our relationships with our customers, third-party retailers or vendors; • legal proceedings brought against us or our officers and directors, including the matters described in Note M to our consolidated financial statements included in this Annual Report on Form 10-K; • changes in our senior management team; and • the impact of any of the other risk factors discussed or incorporated by reference herein.
The price of our common stock has been volatile and can be expected to be significantly affected by factors such as: • our perceived ability to meet market expectations with respect to the growth and profitability of each of our operating segments; • quarterly variations in our results of operations, which may be impacted by, among other things, changes in same store sales, invoice volume, customer growth, loss rates, when and how many locations we acquire, franchise, open, sell or close, accruals recorded in a quarter for contingent liabilities and other factors; • quarterly variations in our competitors’ results of operations; • changes in earnings estimates or buy/sell recommendations by financial analysts; • how our actual financial performance compares to the financial performance guidance we provide; • state or federal legislative or regulatory proposals, initiatives, actions or changes that are, or are perceived to be, adverse to our business; • the stock price performance of comparable companies; • the unpredictability of global and regional economic and political conditions; • general conditions in the consumer financial service industry, the domestic or global economy or the domestic or global credit or capital markets; • negative commentary regarding us and corresponding short-selling market behavior; • adverse developments in our relationships with our customers, third-party retailers, bank partners or vendors; • legal proceedings brought against us or our officers and directors, including the matters described in Note M to our consolidated financial statements included in this Annual Report on Form 10-K; • changes in our senior management team; and • the impact of any of the other risk factors discussed or incorporated by reference herein.
Federal and state regulatory authorities are increasingly focused on the earned wage access industry, and any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced or interpreted could expose Brigit to significant additional costs or compliance-related burdens and could require Brigit to alter its business practices in a manner that may be materially adverse to Brigit.
Federal and state regulatory authorities are increasingly focused on the EWA industry, and any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced or interpreted could expose Brigit to significant additional costs or compliance-related burdens and could require Brigit to alter its business practices in a manner that may be materially adverse to Brigit.
Risks Relating to Our Indebtedness and Other Financial Matters • We have significant indebtedness, and the level of our indebtedness could materially and adversely affect us. • The amount of borrowings permitted under the Asset Based Loan Credit Facility (the “ABL Credit Facility”) is limited to the value of certain of our assets, and Upbound Group, Inc. relies in part on available borrowings under the ABL Credit Facility for cash to operate its business, which subjects it to market and counterparty risk, some of which is beyond Upbound Group, Inc.’s control. • Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. • Our organizational documents and our current or future debt instruments contain or may contain provisions that may prevent or deter another group from paying a premium over the market price to Upbound Group, Inc.’s stockholders to acquire its stock. • If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.
Risks Relating to Our Indebtedness and Other Financial Matters • We have significant indebtedness, and the level of our indebtedness could materially and adversely affect us. • The amount of borrowings permitted under the ABL Credit Facility is limited to the value of certain of our assets, and we rely in part on available borrowings under the ABL Credit Facility for cash to operate our business, which subjects us to market and counterparty risk, some of which is beyond our control. • Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. • Our organizational documents and our current or future debt instruments contain or may contain provisions that may prevent or deter another group from paying a premium over the market price to Upbound Group, Inc.’s stockholders to acquire its stock. • If our goodwill or other intangible assets become impaired, we may be required to record a significant charge to earnings.
Risks Relating to Our Acquisition of Brigit • We may be unable to realize the anticipated benefits of the Brigit acquisition, including synergies, and expect to incur substantial expenses related to the acquisition, which could have a material adverse effect on our business, financial condition and results of operations.
Risks Relating to Our Acquisition of Brigit We may be unable to realize the anticipated benefits of the Brigit acquisition, including synergies, and have incurred substantial expenses related to the acquisition, which could have a material adverse effect on our business, financial condition and results of operations.
Our arrangements with our suppliers and vendors may also be impacted by media reports regarding our financial position or other factors relating to 14 our business.
Our arrangements with 15 our suppliers and vendors may also be impacted by media reports regarding our financial position or other factors relating to our business.
In addition, our level of profitability and success in our Rent-A-Center segment depends on our ability to successfully re-lease our inventory of merchandise that is returned by customers of our Rent-A-Center or Acima segments, due to their lease agreements expiring, or otherwise.
In addition, our level of profitability and success in our Rent-A-Center segment depends on our ability to successfully re-lease our inventory of merchandise that is returned by customers of our Rent-A-Center or Acima segments, due to their lease agreements being terminated, or otherwise.
In addition, due to the competitive environment in our industries and increasing price transparency, we may not be able to recover all or even a portion of such cost increases by increasing our merchandise or other prices, fees, or otherwise.
In addition, due to the competitive environment in our industries and increasing price comparison tools, we may not be able to recover all or even a portion of such cost increases by increasing our merchandise or other prices, fees, or otherwise.
We believe our proprietary customer lease decisioning process to be a key to the success of our business for both Acima and Rent-A-Center. Brigit also employs a proprietary decisioning process to approve consumers for its products and services. We assume behavior and attributes observed from prior customers, among other factors, are indicative of performance by future customers.
We believe our proprietary customer lease decisioning process to be a key to the success of our business for both Acima and Rent-A-Center. Brigit also employs a proprietary decisioning process to assess eligibility for its products and services. We assume behavior and attributes observed from prior customers, among other factors, are indicative of performance by future customers.
The consumer advocacy groups and media reports generally focus on the total cost to a consumer to acquire an item, which is often alleged to be higher than the interest typically charged by banks or similar lending institutions to consumers with better credit histories seeking to borrow money to finance purchases.
For lease-to-own transactions, the consumer advocacy groups and media reports generally focus on the total cost to a consumer to acquire an item, which is often alleged to be higher than the interest typically charged by banks or similar lending institutions to consumers with better credit histories seeking to borrow money to finance purchases.
Because franchisees are independent businesses and not employees, we are not able to control them to the same extent as our Rent‑A‑Center stores, and the ultimate success and quality of a franchise ultimately rests with the franchisee. Certain state franchise laws may also limit our ability to terminate, not renew or modify our franchise agreements.
Because franchisees are independent businesses and not employees, we are not able to control them as with our corporate-owned Rent‑A‑Center stores, and the ultimate success and quality of a franchise ultimately rests with the franchisee. Certain state franchise laws may also limit our ability to terminate, not renew or modify our franchise agreements.
Our Brigit business relies on agreements with bank partners, including Coastal Community Bank, to provide certain of its products and services to customers.
Our Brigit segment relies on agreements with bank partners, including Coastal Community Bank, to provide certain of its products and services to customers.
The acquisitions of Merchants Preferred and Acima Holdings in recent years, including scalable technology offering, robust decision engine, enhanced infrastructure and experienced management team members accelerated the development of our virtual lease-to-own offering. Since 2021, we have further executed on our virtual growth strategy through, among other things, continued investments in Acima’s proprietary offerings, technologies and organizational enhancements.
The acquisition of Acima Holdings in recent years, including a scalable technology offering, robust decision engine, enhanced infrastructure and experienced management team members, accelerated the development of our virtual lease-to-own offering. Since 2021, we have further executed on our virtual growth strategy through, among other things, continued investments in Acima’s proprietary offerings, technologies and organizational enhancements.
Allegations of or actual product safety and quality control issues, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs. The products we lease and sell in our Rent-A-Center segment and Acima segment are subject to regulation by the U.S.
Allegations of or actual product safety and quality control issues for our leased products, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs. The products we lease and sell in our Acima and Rent-A-Center segments are subject to regulation by the U.S.
Risks Relating to Our Vendors, Suppliers and Products • Disruptions in our supply chain and other factors affecting the distribution of our merchandise could materially and adversely affect our business. • We rely on the receipt of information from third-party data vendors, and inaccuracies in or delays in receiving such information, or the termination of our relationships with such vendors, could have a material adverse effect on our business, operating results and financial condition. • We must successfully manage our inventory to reflect customer demand and anticipate changing consumer preferences and leasing trends or our revenue and profitability could be materially and adversely affected. • Allegations of or actual product safety and quality control issues, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs.
Risks Relating to Our Vendors, Suppliers, Products and Services • Disruptions in our lease-to-own supply chain and other factors affecting the distribution of our merchandise could materially and adversely affect our business. • We rely on the receipt of information from third-party data vendors across our business segments, and inaccuracies in or delays in receiving such information, or the termination of our relationships with such vendors, could have a material adverse effect on our business, operating results and financial condition. • We must successfully manage our Rent-A-Center inventory to reflect customer demand and anticipate changing consumer preferences and leasing trends or our revenue and profitability could be materially and adversely affected. • Allegations of or actual product safety and quality control issues for our leased products, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs.
Furthermore, Acima’s lease-to-own competitors may deploy different business models, such as direct-to-consumer strategies, that forego reliance on third-party retailer relationships that may prove to be more successful.
Furthermore, Acima’s lease-to-own competitors may deploy different business models, such as a core focus on direct-to-consumer strategies, that forego reliance on third-party retailer relationships that may prove to be more successful.
Our inability to address these concerns or otherwise to achieve targeted results associated with our initiatives could materially and adversely affect our results of operations, or negatively impact our ability to successfully execute future strategies, which may result in a material adverse effect on our business and financial results.
Our inability to implement these strategies or otherwise to achieve targeted results associated with our initiatives could materially and adversely affect our prospects, or results of operations, or negatively impact our ability to successfully execute future strategies, which may result in a material adverse effect on our business and financial results.
Our franchisees may fail in key areas, or experience significant business or financial difficulties, which could slow our growth, reduce our franchise fees, royalties and revenue, damage our reputation, expose us to regulatory enforcement actions or private litigation and/or cause us to incur additional costs.
Our franchisees have in the past and may in the future fail in key areas, or experience significant business or financial difficulties, which could slow our growth, reduce our franchise fees, royalties and revenue, damage our reputation, expose us to regulatory enforcement actions or private litigation and/or cause us to incur additional costs.
If a large number of Brigit’s customers do not repay advances, Brigit’s financial condition and operating results would be adversely affected. Brigit’s underwriting standards may not offer adequate protection against the risk of non-payment, especially in periods of economic uncertainty.
If a large number of Brigit’s customers do not repay advances, Brigit’s financial condition and operating results would be adversely affected. Brigit’s customer transaction eligibility standards may not offer adequate protection against the risk of non-payment, especially in periods of economic uncertainty.
These risks could have a material adverse effect on Acima, which could negatively impact our ability to grow the Acima segment and result in a material adverse effect on our results of operations.
These risks could have a material adverse effect on Acima, which could negatively impact our ability to grow the Acima segment and meet our growth targets and result in a material adverse effect on our results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe cybersecurity program is being enhanced to ensure that critical vendors and other third-parties are risk assessed prior to being given access to the Company’s information assets and networks. Additionally, processes are currently in place to review existing third-party access to systems that have a material impact on the financial statements of the Company.
Biggest changeAdditionally, processes are currently in place to review existing third-party access to systems that have a material impact on the financial statements of the Company.
Significant cybersecurity events and strategic risk management 38 decisions would be directed to the Committee for additional comprehensive oversight of the Company’s response measures and public disclosure of the event as appropriate.
Significant cybersecurity events and strategic risk management decisions would be directed to the Committee for additional comprehensive oversight of the Company’s response measures and public disclosure of the event as appropriate.
We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. We regularly assess the cybersecurity landscape to holistically evaluate the threat of cybersecurity risks and seek to mitigate such risks through a layered cybersecurity strategy based on identification, protection, detection and recovery.
We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. We regularly assess the cybersecurity landscape to holistically evaluate the threat of cybersecurity risks and seek to mitigate such risks through a layered cybersecurity strategy based on identification, protection, detection, incident response and recovery.
We believe we devote appropriate resources to cybersecurity and risk management processes to adapt to the changing cybersecurity landscape and respond to emerging threats in a timely and effective manner. The Cybersecurity and Privacy team, which maintains our cybersecurity function, reports to our Chief Technology and Digital Officer, who reports directly to our Chief Executive Officer.
We believe we devote appropriate resources to cybersecurity and risk management processes to adapt to the changing cybersecurity landscape and respond to emerging threats in a timely and effective manner. The Cybersecurity and Privacy team, which maintains our cybersecurity function, reports to our Chief Technology Officer (“CTO”), who reports directly to our Chief Executive Officer.
In addition, the Committee reviews key cybersecurity risks at least three times per year to help ensure such risks are incorporated into the Company’s Enterprise Risk Management framework. The Committee also meets at least three times per year in executive session with the Company's Chief Information Security Officer.
In addition, the Committee reviews key cybersecurity risks at least three times per year to help ensure such risks are incorporated into the Company’s Enterprise Risk Management framework. The Committee also meets at least three times per year in executive session with the Company's CISO.
To assist with their oversight of the Company's cybersecurity programs and mitigation efforts as they relate to the broader cybersecurity landscape, our Committee will attend cybersecurity awareness training or other educational events presented by third-party cybersecurity experts.
To assist with their oversight of the Company's cybersecurity programs and mitigation efforts as they relate to the broader cybersecurity landscape, our Committee periodically participates in cybersecurity awareness training or other educational events presented by third-party cybersecurity experts.
In the event of a cybersecurity incident, we have developed and implemented a communication and disclosure framework, which includes processes for escalating communication of the event to members of our internal disclosure committee for assessment of materiality and disclosure, executive management team members, internal and external legal counsel, internal and external audit teams, and other internal stakeholders.
This committee meets on a quarterly basis. 39 In the event of a cybersecurity incident, we have developed and implemented a communication and disclosure framework, which includes processes for escalating communication of the event to members of our internal disclosure committee for assessment of materiality and disclosure, executive management team members, internal and external legal counsel, internal and external audit teams, and other internal stakeholders.
The Cybersecurity and Privacy team is led by our Chief Information Security Officer (“CISO”), who is responsible for developing and implementing our cybersecurity program and reporting on cybersecurity matters. The CISO and Chief Technology and Digital Officer report to the Cybersecurity, Technology and Innovation Committee (the “Committee”) at least three times per year.
The Cybersecurity and Privacy team is led by our Chief Information Security Officer (“CISO”), who is responsible for developing and implementing our cybersecurity program and reporting on cybersecurity matters. The CISO reports to the Cybersecurity, Technology and Innovation Committee of our Board of Directors (the “Committee”) at least three times per year.
Our Enterprise Cybersecurity Policy includes guidance related to encryption standards, antivirus protection, remote access, multi-factor authentication, confidential information and the use of the internet, social media, email and wireless devices. This policy is reviewed for updates annually and approved by appropriate members of management.
Our Enterprise Cybersecurity Policy includes guidance related to encryption standards, vulnerability management, identity management, end point malware protection, security awareness, remote access, multi-factor authentication, protection of confidential information and the appropriate use of the internet, social media, email and wireless devices. This policy is reviewed for updates annually and approved by appropriate members of management.
Our CISO has been a cybersecurity leader for 20 years, maintains appropriate security certifications, and has extensive experience in building and maintaining cybersecurity risk and compliance programs. The cybersecurity team includes members who also have various levels of cybersecurity experience and maintain relevant cybersecurity certifications. The CISO implements and oversees processes for the regular monitoring of our information systems.
Our CISO has been a cybersecurity leader for more than 20 years, maintains appropriate security certifications, and has extensive experience in building and maintaining cybersecurity risk and compliance programs. The cybersecurity team includes members who also have various levels of cybersecurity experience and maintain relevant cybersecurity certifications.
This includes the deployment of advanced security controls and technologies and ongoing scanning and testing of Company information systems by internal teams as well as third-party organizations to identify potential vulnerabilities.
The CISO implements and oversees processes for the regular monitoring of our information systems. This includes the deployment of advanced security controls and technologies and ongoing scanning and testing of Company information systems by internal teams as well as third-party organizations to identify potential vulnerabilities.
All coworkers are required to acknowledge review of the policy and complete cybersecurity and privacy awareness training annually. We also provide coworkers with additional cybersecurity training through online offerings, company broadcasts and security awareness events. In addition to assessing our own cybersecurity preparedness, we also consider and evaluate cybersecurity risks associated with the use of third-party service providers.
All coworkers are required to acknowledge review of the policy and complete cybersecurity and privacy awareness training annually. We also provide coworkers with additional cybersecurity training through online offerings, company broadcasts and security awareness events. The Committee was formed in December 2024 and is responsible for cybersecurity, technology and innovation oversight previously performed by the Audit and Risk Committee.
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The Committee was formed in December 2024 and is responsible for cybersecurity, technology and innovation oversight previously performed by the Audit and Risk Committee.
Added
In addition to assessing our own cybersecurity preparedness, we also consider and evaluate cybersecurity risks associated with the use of third-party service providers. The cybersecurity program has been enhanced to help ensure that critical vendors and other third parties are risk assessed prior to being given access to the Company’s information assets and networks.
Removed
While we have experienced cybersecurity incidents in the past, none have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
Added
Privacy is a critical pillar of the program and we routinely monitor evolving state and federal regulations to help ensure that our systems, networks, websites and applications remain compliant and that necessary controls are in place to protect the privacy of our coworkers and customers.
Added
We also formed our Data and AI Governance Committee, which includes company executives, to address the risks of AI-based technology use on an ongoing basis.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMost of our store leases are five-year leases and contain renewal options for additional periods ranging from three to five years at rental rates adjusted according to agreed formulas. Store sizes average approximately 4,800 square feet. Approximately 75% of each store’s space is generally used for showroom space and 25% for offices and storage space.
Biggest changeMost of our store leases are five-year leases and contain renewal options for additional periods ranging from three to five years at rental rates adjusted according to agreed-upon formulas. Store sizes average approximately 4,800 square feet. Approximately 75% of each store’s space is generally used for showroom space and 25% for offices and storage space.
Item 2. Properties. We lease space for all of our Rent-A-Center and Mexico stores under operating leases expiring at various times through 2034. In addition, we lease space for certain support facilities under operating leases expiring at various times through 2032.
Item 2. Properties. We lease space for all of our Rent-A-Center and Mexico stores under operating leases expiring at various times through 2036. In addition, we lease space for certain support facilities under operating leases expiring at various times through 2032.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changePlease see Note M to our consolidated financial statements and “ Risks Relating to Legal and Compliance Matters” contained in Item 1A of this Annual Report on Form 10-K for additional discussion of certain of our legal proceedings and governmental inquiries. Item 4. Mine Safety Disclosures. Not applicable. 39 PART II
Biggest changeItem 3. Legal Proceedings. Please see Note M to our consolidated financial statements and “ Risks Relating to Legal and Compliance Matters” contained in Item 1A of this Annual Report on Form 10-K for additional discussion of certain of our legal proceedings and governmental inquiries. Item 4. Mine Safety Disclosures. Not applicable. 40 PART II
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Item 3. Legal Proceedings. We, along with our subsidiaries, are party to various legal proceedings and governmental inquiries and investigations given the nature of our business.
Removed
We regularly monitor developments related to these matters, determine whether a reserve is appropriate if the loss is both probable and reasonably estimable, and review the adequacy of our reserves for such matters on a quarterly basis.
Removed
As a result, we do not have reserves for all matters with respect to which we may or will have future liability, and no assurance can be given that our reserves, when recorded, will be adequate to cover the full amount of any loss we may ultimately incur.
Removed
In addition, certain of the matters described herein involve demands for monetary relief and changes to our business practices that could materially and adversely impact our business, financial condition and results of operations were we to agree to them as part of a settlement or be subject to them following an adverse result in litigation.
Removed
We cannot predict the ultimate resolution of our pending legal proceedings and governmental inquiries and investigations or other similar matters that may arise in the future given the nature of our business and the inherent uncertainty associated with legal proceedings and governmental inquiries and investigations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe are not obligated to acquire any shares under the program, and the program may be suspended or discontinued at any time. There were no repurchases of our common stock during the year ended December 31, 2024. During 2023, we repurchased 1,706,277 shares of our common stock for an aggregate purchase price of approximately $50.0 million.
Biggest changeWe are not obligated to acquire any shares under the program, and the program may be suspended or discontinued at any time. There were no repurchases of our common stock during the years ended December 31, 2025 and 2024. Approximately $235.0 million remains available for repurchases under the current authorization at December 31, 2025.
The graph assumes $100 was invested on December 31, 2019, and dividends, if any, were reinvested for all years ending December 31. Item 6. Reserved. 40
The graph assumes $100 was invested on December 31, 2020, and dividends, if any, were reinvested for all years ending December 31. Item 6. Reserved. 41
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the Nasdaq Global Select Market ® under the symbol “UPBD.” As of February 18, 2025, there were approximately 58 record holders of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the Nasdaq Stock Market ® under the symbol “UPBD.” As of February 13, 2026, there were approximately 86 record holders of our common stock.
As of December 31, 2024, under the December 2021 Program, approximately $235.0 million remains available for repurchases. Stock Performance Graph The following chart represents a comparison of the five year total return of our common stock to the NASDAQ Composite Index and the S&P 1500 Specialty Retail Index.
Stock Performance Graph The following chart represents a comparison of the five year total return of our common stock to the NASDAQ Composite Index and the S&P 1500 Specialty Retail Index.

Item 7. Management's Discussion & Analysis

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

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Biggest changeYear Ended December 31, 2024 Rent-A-Center Mexico Franchising Total Locations at beginning of period 1,839 131 440 2,410 New location openings 3 3 1 7 Conversions (52) — 52 — Closed locations Merged with existing locations (60) — (2) (62) Sold or closed with no surviving location (2) (2) (43) (47) Locations at end of period 1,728 132 448 2,308 Acquired locations closed and accounts merged with existing locations 3 — — 3 Total approximate purchase price of acquired stores (in thousands) $ 1,463 $ — $ — $ 1,463 Year Ended December 31, 2023 Rent-A-Center Mexico Franchising Total Locations at beginning of period 1,851 126 447 2,424 New location openings 7 6 2 15 Conversions (7) — 7 — Closed locations Merged with existing locations (12) (1) — (13) Sold or closed with no surviving location — — (16) (16) Locations at end of period 1,839 131 440 2,410 Acquired locations closed and accounts merged with existing locations 1 — — 1 Total approximate purchase price of acquired store (in thousands) $ 39 $ — $ — $ 39 Year Ended December 31, 2022 Rent-A-Center Mexico Franchising Total Locations at beginning of period 1,846 123 466 2,435 New location openings 16 4 1 21 Conversions 1 — (1) — Closed locations Merged with existing locations (12) (1) — (13) Sold or closed with no surviving location — — (19) (19) Locations at end of period 1,851 126 447 2,424 Acquired locations closed and accounts merged with existing locations 4 — — 4 Total approximate purchase price of acquired stores (in thousands) $ 995 $ — $ — $ 995 48 Senior Debt.
Biggest changeYear Ended December 31, 2024 Rent-A-Center Mexico Total Locations at beginning of period 2,279 131 2,410 New location openings 4 3 7 Closed locations Merged with existing locations (62) — (62) Sold or closed with no surviving location (1) (45) (2) (47) Locations at end of period (2) 2,176 132 2,308 Acquired locations closed and accounts merged with existing locations 3 — 3 Total approximate purchase price of acquired store (in thousands) $ 1,463 $ — $ 1,463 (1) Includes closure of 43 Rent-A-Center franchisee store locations.
Therefore, we are unable to determine with certainty whether the continuation of this trend toward increased e-commerce transactions will have a significant impact to our financial statements in future periods or be favorable or unfavorable to our financial results. Results of Operations The following discussion focuses on our results of operations and our liquidity and capital resources.
Therefore, we are unable to determine with certainty whether the continuation of this trend toward increased e-commerce transactions will have a significant impact on our financial statements in future periods or be ultimately favorable or unfavorable to our financial results. Results of Operations The following discussion focuses on our results of operations and our liquidity and capital resources.
At that 50 time, we evaluate the adequacy of our reserves by comparing amounts reserved on our balance sheet for anticipated losses to our updated actuarial loss forecasts and third-party claim administrator loss estimates, and make adjustments to our reserves as needed.
At that time, we evaluate the adequacy of our reserves by comparing amounts reserved on our balance sheet for anticipated losses to our updated actuarial loss forecasts and third-party claim administrator loss estimates, and make adjustments to our reserves as needed.
A commitment fee equal to 0.250% to 0.375% of the unused portion of the ABL Credit Facility fluctuates dependent upon average utilization for the prior month as defined by a pricing grid included in the documentation governing the ABL Credit Facility.
A commitment fee equal to 0.250% to 0.375% of the unused portion of the ABL Credit Facility fluctuates dependent upon average utilization for the prior month as defined by a 50 pricing grid included in the documentation governing the ABL Credit Facility.
Depreciation of merchandise for Acima Holdings is recognized using a straight-line method over the term of the lease contract. Depreciation under the straight-line method is recognized each period over the term of the lease-to-own contract irrespective of receipt of revenue payments from the customer.
Depreciation of merchandise for Acima Holdings is recognized using a straight-line 52 method over the term of the lease contract. Depreciation under the straight-line method is recognized each period over the term of the lease-to-own contract irrespective of receipt of revenue payments from the customer.
You should read the following discussion in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. For similar historical operating and financial data and discussion of our year ended December 31, 2023 results compared to our year ended December 31, 2022 results, refer to Part II. Item 7.
You should read the following discussion in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. For similar historical operating and financial data and discussion of our year ended December 31, 2024 results compared to our year ended December 31, 2023 results, refer to Part II. Item 7.
In recent years, we have experienced significant change in business and operational trends driven by macroeconomic conditions, which have directly impacted our customers as well as our operations, including significant changes in the U.S. consumer price index, changes in demand for certain consumer retail categories, changes in consumer payment behaviors, a condensed labor market, which has also contributed to wage inflation, rapid increases in interest rates, and global supply chain disruptions resulting in reduced product availability and rising product costs.
In recent years, we have experienced significant change in business and operational trends driven by macroeconomic conditions, which have directly impacted our customers as well as our operations, including significant changes in the U.S. consumer price index, changes in demand for certain consumer retail categories, changes in consumer payment behaviors, a condensed labor market, which has also contributed to wage inflation, rapid increases in interest rates, changes in tariff and trade policies, and global supply chain disruptions resulting in reduced product availability and rising product costs.
Same Store Lease Portfolio Value : Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Rent-A-Center lease-to-own stores that were operated by us for 13 months or more at the end of any given period.
Same Store Lease Portfolio Value : Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Company-owned Rent-A-Center lease-to-own stores that were operated by us for 13 months or more at the end of any given period.
During the period from our 2023 goodwill impairment assessment through the third quarter 2024, we periodically analyzed whether any indicators of impairment had occurred, including by comparing the estimated fair value of the Company, as determined based on our consolidated stock price, to its net book value.
During the period from our 2024 goodwill impairment assessment through the third quarter 2025, we periodically analyzed whether any indicators of impairment had occurred, including by comparing the estimated fair value of the Company, as determined based on our consolidated stock price, to its net book value.
Same Store Sales: Same store sales generally represents revenue earned in Rent-A-Center stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period.
Same Store Sales: Same store sales generally represents revenue earned in Company-owned Rent-A-Center stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period.
Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Rent-A-Center lease-to-own stores and e-commerce platform at the end of any given period.
Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Company-owned Rent-A-Center lease-to-own stores and e-commerce platform at the end of any given period.
Lease Charge-Offs (“LCOs”) (previously referred to as “skip/stolen losses”): Represents charge-offs of the net book value of unrecoverable on-rent merchandise with lease-to-own customers who are past due. This is typically expressed as a percentage of revenues for the applicable period. For the Rent-A-Center segment, LCOs exclude Get It Now and Home Choice locations.
Lease Charge-Offs (“LCOs”) (previously referred to as “skip/stolen losses”): Represents charge-offs of the net book value of unrecoverable on-rent merchandise with lease-to-own customers who are past due. This is typically expressed as a percentage 43 of revenues for the applicable period. For the Rent-A-Center segment, LCOs exclude Get It Now, Home Choice and franchise-owned Rent-A-Center locations.
You should read this discussion in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2024 included in Part II, Item 8 of this Annual Report on Form 10-K.
You should read this discussion in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2025 included in Part II, Item 8 of this Annual Report on Form 10-K.
Brigit is a holistic financial health technology company that has helped millions of Americans budget better, access their earned wages before their regularly scheduled payday, build their credit through savings, protect themselves from identity theft, and find ways to earn and save money. Its mission is to help everyday Americans build a better financial future.
Brigit is a holistic financial health technology company that has helped millions of Americans improve their financial health and literacy, find ways to earn and save money, access their earned wages before their regularly scheduled payday, build their credit through savings, and protect themselves from identity theft. Its mission is to help everyday Americans build a better financial future.
Loans under the ABL Credit Facility may be borrowed, repaid and re-borrowed until June 7, 2029, at which time all amounts borrowed must be repaid. The obligations under the ABL Credit Facility are guaranteed by us and certain of our material wholly owned domestic restricted subsidiaries, subject to certain exceptions.
Loans under the ABL Credit Facility may be borrowed, repaid and re-borrowed until June 7, 2029 (subject to certain springing maturity provisions), at which time all amounts borrowed must be repaid. The obligations under the ABL Credit Facility are guaranteed by us and certain of our material wholly owned domestic restricted subsidiaries, subject to certain exceptions.
We have self-insured retentions with respect to losses under our workers' compensation, general liability, vehicle liability and health insurance programs. We establish reserves for our liabilities associated with these losses by obtaining forecasts for the ultimate expected losses and estimating amounts needed to pay losses within our self-insured retentions.
We have self-insured retentions with respect to losses under our workers' compensation, general liability and vehicle liability. We establish reserves for our liabilities associated with these losses by obtaining forecasts for the ultimate expected losses and estimating amounts needed to pay losses within our self-insured retentions.
Growth in GMV was primarily due to an increase in third-party retailer locations and productivity, which resulted in more leases per retailer, in addition to expanded direct-to-consumer offerings. Gross Profit. Gross profit increased for the year ended December 31, 2024 compared to 2023, driven primarily by the increase in revenues described above.
Growth in GMV was primarily due to an increase in new third-party retailer locations and productivity, which resulted in more leases per retailer, in addition to expanded direct-to-consumer offerings. Gross Profit. Gross profit increased for the year ended December 31, 2025, as compared to 2024, driven primarily by the increase in revenues described above.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K , for the year ended December 31, 2023, incorporated herein by reference, which was filed with the SEC on February 27, 2024. Recent Developments Brigit Acquisition.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K , for the year ended December 31, 2024, incorporated herein by reference, which was filed with the SEC on February 25, 2025. Recent Developments Brigit Acquisition.
Unless otherwise discussed, we believe the impact of any other recently issued standards that are not yet effective are either not applicable to us at this time or will not have a material impact on our consolidated financial statements upon adoption.
As of December 31, 2025, unless otherwise discussed, we believe the impact of any other recently issued standards that are not yet effective are either not applicable to us at this time, or will not have a material impact on our consolidated financial statements upon adoption.
See “Segment Performance” below for further discussion of Acima segment operating results for the year ended December 31, 2024.
See “Segment Performance” below for further discussion of Acima segment operating results for the year ended December 31, 2025.
Increases to our reserves would reduce earnings and, similarly, reductions to our reserves would increase our earnings. A pre-tax change of approximately $0.8 million in our estimates would result in a corresponding $0.01 change in our diluted earnings per common share as of December 31, 2024. Self-Insurance Liabilities.
Increases to our reserves would reduce earnings and, similarly, reductions to our reserves would increase our earnings. A pre-tax change of approximately $0.9 million in our estimates would result in a corresponding $0.01 change in our diluted earnings per common share as of December 31, 2025. Self-Insurance Liabilities.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Objective We report financial operating performance under four operating segments, including our Acima segment, which includes our virtual and staffed business models; our Rent-A-Center segment, which represents our company-owned stores and e-commerce platform through rentacenter.com; and our Mexico and Franchising segments.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Objective We report financial operations under four operating segments, including our Acima segment, which includes our virtual and staffed business models; our Rent-A-Center segment, which includes our company-owned stores, franchise stores, and e-commerce platform through rentacenter.com; and our Brigit and Mexico segments.
On February 17, 2021, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and lenders party thereto, that provides for a five-year asset-based revolving credit facility with commitments of $550 million and a letter of credit sublimit of $150 million, which commitments may be increased, at our option and under certain conditions, by up to an additional $125 million in the aggregate (as amended on June 7, 2024, the “ABL Credit Facility”).
On February 17, 2021, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and lenders party thereto, that provides for a five-year asset-based revolving credit facility with commitments of $550 million and a letter of credit sublimit of $150 million, which commitments may be increased, at our option and under certain conditions, by up to an additional $125 million in the aggregate (as most recently amended on August 29, 2025, the “ABL Credit Facility”).
On December 4, 2024, we announced that our board of directors approved a quarterly cash dividend of $0.39 per share for the first quarter of 2025. The dividend was paid on January 7, 2025 to our common stockholders of record as of the close of business on December 18, 2024. Business and Operational Trends Macroeconomic Conditions.
On December 4, 2025, we announced that our Board of Directors approved a quarterly cash dividend of $0.39 per share for the first quarter of 2026. The dividend was paid on January 6, 2026 to our common stockholders of record as of the close of business on December 17, 2025. Business and Operational Trends Macroeconomic Conditions.
Merchandise losses in our Rent-A-Center lease-to-own stores due to other merchandise losses, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 1.3% for the year ended December 31, 2024, compared to 1.4% in 2023. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims. Mexico segment.
Merchandise losses in our Rent-A-Center lease-to-own stores due to other merchandise losses, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 1.0% for the year ended December 31, 2025, compared to 1.3% in 2024. Other merchandise losses include unrepairable and missing merchandise and loss/damage waiver claims. Brigit segment.
We make capital expenditures in order to maintain our existing operations, acquire new capital assets in new and acquired stores and invest in information technology. We spent $56.3 million, $53.4 million and $61.4 million on capital expenditures in the years 2024, 2023 and 2022, respectively.
We make capital expenditures in order to maintain our existing operations, acquire new capital assets in new and acquired stores and invest in information technology. We spent $66.9 million, $56.3 million and $53.4 million on capital expenditures in the years 2025, 2024 and 2023, respectively.
See Note J of our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our effective tax rate.
See Note J of our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our effective tax rate. 46 Segment Performance Acima segment.
As of December 31, 2024, the amount reserved for losses within our self-insured retentions with respect to workers’ compensation, general liability and vehicle liability insurance was $61.1 million, as compared to $71.6 million at December 31, 2023.
As of December 31, 2025, the amount reserved for losses within our self-insured retentions with respect to workers’ compensation, general liability and vehicle liability insurance was $65.9 million, as compared to $61.1 million at December 31, 2024.
On February 17, 2021, we also entered into a term loan credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and lenders party thereto, that provides for a seven-year $875 million senior secured term loan facility (as amended on May 28, 2024, the “Term Loan Facility”).
On February 17, 2021, we also entered into a term loan credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and lenders party thereto, that provides for a seven-year $875 million senior secured term loan facility (as most recently amended on August 19, 2025, the “Term Loan Facility”).
Interest on borrowings under the Term Loan Facility is payable at a fluctuating rate of interest determined by reference to the Term SOFR rate plus an applicable margin of 2.75%, subject to a 0.50% Term SOFR floor, which, as of February 18, 2025, was 7.04%.
Interest on borrowings under the Term Loan Facility is payable at a fluctuating rate of interest determined by reference to the Term SOFR rate plus an applicable margin of 2.75%, subject to a 0.50% Term SOFR floor, which, as of February 13, 2026, was 6.42%.
Subject in each case to certain restrictions and conditions, we may add up to $500 million of incremental term loan facilities to the Term Loan Facility or utilize incremental capacity under the Term Loan Facility at any time by issuing or incurring incremental equivalent term debt.
Subject in each case to certain restrictions and conditions, we may add up to $625 million (plus additional amounts subject to the satisfaction of certain financial ratios) of incremental term loan facilities to the Term Loan Facility or utilize incremental capacity under the Term Loan Facility at any time by issuing or incurring incremental equivalent term debt.
Three of the store locations were closed upon acquisition and consolidated into existing store operations in our Rent-A-Center segment and three remained open as part of our Rent-A-Center segment. 47 The tables below summarize the location activity for the years ended December 31, 2024, 2023 and 2022 for our Rent-A-Center, Mexico and Franchising operating segments.
One store location was closed upon acquisition and consolidated into existing store operations in our Rent-A-Center segment and three remained open as part of our Rent-A-Center segment. 49 The tables below summarize the location activity for the years ended December 31, 2025, 2024 and 2023 for our Rent-A-Center and Mexico operating segments.
Revenues for 2024 were negatively impacted by exchange rate fluctuations of approximately $2.2 million, as compared to 2023. On a constant currency basis, revenues for the year ended December 31, 2024 increased approximately $6.3 million, compared to 2023. Gross Profit.
Exchange rate fluctuations negatively impacted gross profit by approximately $3.1 million for the year ended December 31, 2025, as compared to 2024. On a constant currency basis, gross profit for the year ended December 31, 2025 increased by approximately $3.2 million, as compared to 2024.
Gross profit as a percentage of total revenue decreased to 48.1% in 2024, as compared to 50.7% in 2023. Operating Labor. Operating labor includes all salaries and wages paid to store operational employees and district managers, together with payroll taxes and benefits.
Gross profit as a percentage of total revenue increased to 48.4% in 2025, as compared to 48.1% in 2024. Operating Labor. Operating labor includes all salaries and wages paid to operational employees and district managers, together with payroll taxes and benefits.
The ABL Credit Facility bears interest at a fluctuating rate determined by reference to an adjusted Term SOFR rate plus an applicable margin of 1.50% to 2.00%, which, as of February 18, 2025, was 6.41%.
The ABL Credit Facility bears interest at a fluctuating rate determined by reference to an adjusted Term SOFR rate plus an applicable margin of 1.50% to 2.00%, which, as of February 13, 2026, was 5.77%.
We also lease vehicles for all of our Mexico stores which have terms expiring at various times through 2029 with rental rates adjusted periodically for inflation. As of December 31, 2024, our total remaining obligation for existing Mexico vehicle lease contracts was approximately $3.1 million.
As of December 31, 2025, our total remaining minimum obligation for existing Rent-A-Center vehicle lease contracts was approximately $3.2 million. We also lease vehicles for all of our Mexico stores which have terms expiring at various times through 2030 with rental rates adjusted periodically for inflation.
Our primary liquidity requirements are for rental merchandise purchases, which are impacted by consumer demand for our lease-to-own solutions. Other capital requirements include expenditures for technology and property assets, and debt service. Our primary source of liquidity has been cash provided by operations.
Our primary liquidity requirements are for rental merchandise purchases in our Acima and Rent-A-Center segments, which are impacted by consumer demand for our lease-to-own solutions, and customer advances in our Brigit segment. Other capital requirements include expenditures for technology and property assets, and debt service. Our primary source of liquidity has been cash provided by operations.
Merchandise losses in our Rent-A-Center lease-to-own stores due to LCOs, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 4.7% for the year ended December 31, 2024, compared to 4.5% in 2023.
Merchandise losses in our Rent-A-Center lease-to-own stores due to LCOs, expressed as a percentage of Rent-A-Center lease-to-own revenues, were approximately 4.7% for both years ended December 31, 2025 and 2024.
Merchandise losses consist of the following: Year Ended December 31, (in thousands) 2024 2023 2022 Lease charge-offs $ 316,402 $ 284,703 $ 336,475 Other merchandise losses (1) 30,670 29,112 38,734 Total merchandise losses $ 347,072 $ 313,815 $ 375,209 (1) Other merchandise losses include unrepairable and missing merchandise, and loss/damage waiver claims. Capital Expenditures .
Merchandise losses consist of the following: Year Ended December 31, (in thousands) 2025 2024 2023 Lease charge-offs $ 338,999 $ 316,402 $ 284,703 Other merchandise losses (1) 27,136 30,670 29,112 Total merchandise losses $ 366,135 $ 347,072 $ 313,815 (1) Other merchandise losses include unrepairable and missing merchandise, and loss/damage waiver claims. Capital Expenditures .
Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00% per annum of the original aggregate principal amount thereof, with the remaining balance due at final maturity.
Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.000% per annum of the original aggregate principal amount thereof, with the remaining balance due at final maturity on August 19, 2032 (subject to certain springing maturity provisions).
We may redeem some or all of the Notes at any time for cash at the redemption prices set forth in the indenture governing the Notes, plus accrued and unpaid interest to, but not including, the redemption date.
Interest on the Notes is payable in arrears on February 15 and August 15 of each year, beginning on August 15, 2021. We may redeem some or all of the Notes at any time for cash at the redemption prices set forth in the indenture governing the Notes, plus accrued and unpaid interest to, but not including, the redemption date.
Gross profit for the year ended December 31, 2024 was negatively impacted by exchange rate fluctuations of approximately $1.6 million, as compared to 2023. On a constant currency basis, gross profit for the year ended December 31, 2024 increased by approximately $5.2 million, compared to 2023.
Exchange rate fluctuations negatively impacted revenues by approximately $4.2 million for the year ended December 31, 2025, as compared to 2024. On a constant currency basis, revenues for the year ended December 31, 2025 increased approximately $4.9 million, as compared to 2024. Gross Profit.
While the lease-to-own industry has historically remained a resilient business model throughout various economic cycles, the full extent to which our risk management strategy and these macroeconomic trends (including consumer spending and payment behavior) may impact our business in future periods is uncertain.
While our businesses have historically remained resilient through various economic cycles, the full extent to which our risk management strategy and these macroeconomic trends (including consumer spending and payment behavior) may impact the Company in future periods is uncertain.
The increase in revenues for the year ended December 31, 2024 compared to 2023 was primarily due to increases in rentals and fees revenue and merchandise sales revenue of $244.9 million and $84.1 million, respectively, primarily resulting from higher GMV.
The increase in revenues for the year ended December 31, 2025, as compared to 2024, was primarily due to increases in rentals and fees revenues and merchandise sales revenue of $192.5 million and $59.0 million, respectively, resulting from higher GMV.
We completed a qualitative assessment for impairment of goodwill as of October 1, 2024, concluding it was not more likely than not that the carrying value of the net assets of our reporting units exceeded their respective fair values.
We completed a qualitative assessment for impairment of goodwill as of October 1, 2025, concluding it was not more likely than not that the carrying value of the net assets of our reporting units exceeded their respective fair values. At December 31, 2025 and 2024, the amount of goodwill allocated to the Acima segment was $288.3 million and $288.3 million.
Operating profit increased $128.7 million, or 79.1%, to $291.6 million for the year ended December 31, 2024, as compared to $162.9 million in 2023, primarily due to an increase in gross profit and decreases in other gains and charges and labor operating expenses, partially offset by increases in non-labor operating and general and administrative expenses as described above.
Operating profit decreased by $68.3 million, or 23.4%, to $223.3 million for the year ended December 31, 2025, as compared to $291.6 million in 2024, primarily due to the increases in non-labor operating expenses, other gains and charges and general and administrative expenses, partially offset by an increase in gross profit and decreases in operating labor, as described above.
At December 31, 2024 and 2023, the amount of goodwill allocated to the Rent-A-Center segment was $1.9 million and $1.5 million, respectively. At both December 31, 2024 and 2023, the amount of goodwill allocated to the Acima segment was $288.3 million. Contingencies.
At December 31, 2025 and 2024, the amount of goodwill allocated to the Rent-A-Center segment was $3.0 million and $1.9 million, respectively. At December 31, 2025, the amount of goodwill allocated to the Brigit segment was $196.9 million. Contingencies.
Operating profit increased approximately $6.9 million for the year ended December 31, 2024, primarily due to decreases in non-labor operating expenses and operating labor expenses of $13.4 million and $5.7 million, respectively partially offset by an increase in other gains and charges of $7.3 million and a decrease in gross profit of $5.2 million.
Operating profit increased approximately $39.4 million for the year ended December 31, 2025, primarily due to an increase in gross profit of $60.3 million and decreases in operating labor costs and other gains and charges of $4.4 million and $1.7 million, respectively, partially offset by an increase in non-labor operating expenses of $26.4 million.
Cost of rentals and fees consists primarily of depreciation of rental merchandise. Cost of rentals and fees for the year ended December 31, 2024 increased by $156.3 million, or 13.0%, to $1,355.5 million, as compared to $1,199.2 million in 2023.
Cost of Rentals and Fees. Cost of rentals and fees consists primarily of depreciation of rental merchandise. Cost of rentals and fees for the year ended December 31, 2025 increased by $86.3 million, or 6.4%, to $1,441.8 million, as compared to $1,355.5 million in 2024.
Gross profit as a percentage of segment revenues decreased to 69.4% in 2024 from 69.6% in 2023, primarily due to mix-shift changes between lease merchandise product categories. Operating Profit. Operating profit as a percentage of segment revenues was 15.0% for 2024 compared to 14.7% for 2023.
Gross profit as a percentage of segment revenues increased to 67.0% in 2025 from 66.7% in 2024, primarily due to mix-shift changes between lease merchandise product categories. Operating Profit. Operating profit as a percentage of segment revenues was 13.2% for 2025, as compared to 15.0% for 2024.
Operating profit expressed as a percentage of total revenue was 6.7% for the year ended December 31, 2024, compared to 4.1% in 2023. 44 Income Tax Expense. Income tax expense decreased by $3.9 million to $54.1 million for the year ended December 31, 2024, as compared to $58.0 million in 2023.
Operating profit expressed as a percentage of total revenue was 4.8% for the year ended December 31, 2025, compared to 6.7% in 2024. Income Tax Expense.
Gross profit as a percentage of segment revenues decreased to 31.1% for the year ended December 31, 2024, compared to 33.4% in 2023, primarily due to an increase in merchandise sales as a percent of total revenue, and the conversion of Acceptance Now locations to the Acima platform. Operating Profit .
Gross profit as a percentage of segment revenues decreased to 30.4% for the year ended December 31, 2025, compared to 31.1% in 2024, primarily due to the conversion of Acceptance Now locations to the Acima Holdings Lease Management platform. Operating Profit .
Gross profit as a percentage of segment revenues increased to 71.7% in 2024, compared to 70.8% in 2023. Operating Profit. Operating profit for the year ended December 31, 2024 was minimally impacted by exchange rate fluctuations, as compared to 2023.
Gross profit as a percentage of segment revenues was 71.2% for the year ended December 31, 2025, as compared to 71.7% for 2024. Operating Profit. Exchange rate fluctuations negatively impacted operating profit by approximately $0.4 million for the year ended December 31, 2025, as compared to 2024.
The increase of $2.9 million for the year ended December 31, 2024 is primarily due to higher investment in store-related assets in our Rent-A-Center segment. Acquisitions and New Location Openings. During 2024, we acquired six lease-to-own store locations and customer accounts for an aggregate purchase price of approximately $1.5 million.
The increase of $10.6 million for the year ended December 31, 2025 is primarily due to higher investment in software development. New Location Openings and Acquisitions. During 2025, we acquired four lease-to-own store locations and customer accounts for an aggregate purchase price of approximately $2.2 million.
We are currently assessing the ASU and the impact it will have on our financial statements following adoption. From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that we adopt as of the specified effective date.
We are in the preliminary stages of assessing this ASU and the impact, if any, it will have on our disclosures within our interim financial statements filed on our Quarterly Reports on Form 10-Q. From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that we adopt as of the specified effective date.
Gross profit increased by $58.1 million, or 2.9%, to $2,080.4 million for the year ended December 31, 2024, from $2,022.3 million in 2023, primarily due to an increase of $58.2 million in the Acima segment, as discussed further in the section “Segment Performance” below.
Gross profit increased by $191.3 million, or 9.2%, to $2,271.7 million for the year ended December 31, 2025, from $2,080.4 million in 2024, primarily due to the addition of the Brigit segment with $182.1 million in gross profit and an increase of $60.3 million in the Acima segment, partially offset by a decrease of approximately $51.1 million in the Rent-A-Center segment, as discussed further in the “Segment Performance” section below.
Year Ended December 31, 2024-2023 Change (dollar amounts in thousands) 2024 2023 $ % Revenues $ 78,726 $ 74,625 $ 4,101 5.5 % Gross profit 56,432 52,869 3,563 6.7 % Operating profit 4,806 4,846 (40) (0.8) % Change in same store sales (1) 8.1 % Stores in same store sales calculation 117 (1) See Key Metrics described above for additional information Revenues.
Year Ended December 31, 2025-2024 Change (dollar amounts in thousands) 2025 2024 $ % Revenues $ 79,392 $ 78,726 $ 666 0.8 % Gross profit 56,538 56,432 106 0.2 % Operating profit 5,450 4,806 644 13.4 % Change in same store sales (1) 5.3 % Stores in same store sales calculation 125 (1) See Key Metrics described above for additional information Revenues.
Reference Note G of our consolidated financial statements included in this Annual Report on Form 10-K for additional discussion of our store operating leases. Uncertain Tax Position. As of December 31, 2024, we have recorded $0.4 million in uncertain tax positions.
As of December 31, 2025, our total remaining obligation for existing Mexico vehicle lease contracts was approximately $3.0 million. 51 Reference Note G of our consolidated financial statements included in this Annual Report on Form 10-K for additional discussion of our store operating leases. Uncertain Tax Position.
Executive Management Changes. • On February 20, 2025, we announced that Mitchell E. Fadel will retire from his position as Chief Executive Officer and as a member of the Board of Directors, effective June 1, 2025. Fahmi Karam will succeed Mr. Fadel as Chief Executive Officer and a member of the Board of Directors at that time. Mr.
Executive Management Changes. • On June 1, 2025, Mitchell E. Fadel retired from his position as Chief Executive Officer and as a member of the Board of Directors. Fahmi Karam, our former Chief Financial Officer, succeeded Mr.
We perform an assessment of goodwill for impairment at the reporting unit level annually as of October 51 1 or when events or circumstances indicate that impairment may have occurred.
As of December 31, 2025 and 2024, the reserve for merchandise losses was $97.6 million and $83.6 million, respectively. Valuation of Goodwill. We perform an assessment of goodwill for impairment at the reporting unit level annually as of October 1 or when events or circumstances indicate that impairment may have occurred.
If we experience specific kinds of change in control, we will be required to offer to purchase the Notes at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest.
If we experience specific kinds of change in control, we will be required to offer to purchase the Notes at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest. See Note L of our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our senior notes.
However, we are unable to quantify the extent to which e-commerce revenues are incremental compared to what our overall revenues would have been in the absence of those e-commerce transactions. In addition, the profitability of e-commerce transactions can be impacted by different merchandise loss factors compared to traditional store-based transactions in the Rent-A-Center segment.
In addition, the profitability of e-commerce transactions can be impacted by different merchandise loss factors compared to traditional store-based transactions in the Rent-A-Center segment.
Non-labor operating expenses expressed as a percentage of total revenue excluding franchise merchandise sales and royalty income and fees were 19.3% for the year ended December 31, 2024, compared to 20.0% in 2023. General and Administrative Expenses.
Non-labor operating expenses expressed as a percentage of total revenue was 20.2% for the year ended December 31, 2025, as compared to 18.8% in 2024. General and Administrative Expenses.
We expect the adoption of this ASU to result in additional disaggregation in the income taxes footnote disclosures. 52 In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions.
Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions. In January 2025, the FASB issued ASU 2025-01, which clarifies the effective date for ASU No. 2024-03.
The Acima segment revenues increased approximately by $330.1 million for the year ended December 31, 2024, due to increases in rentals and fees revenues and merchandise sales of $244.9 million and $84.1 million, respectively, primarily resulting from an increase in GMV of 17.1%.
The Acima segment revenues increased approximately $251.0 million for the year ended December 31, 2025, due to increases in rentals and fees revenues and merchandise sales of $192.5 million and $59.0 million, respectively, primarily resulting from higher GMV of 8.6%.
Operating labor decreased by $4.3 million, or 0.7%, to $609.2 million for the year ended December 31, 2024, as compared to $613.5 million in 2023, primarily attributable to a decrease of $5.7 million in the Rent-A-Center segment, partially offset by an increase of $1.2 million in the Mexico segment.
Operating labor decreased by $6.9 million, or 1.1%, to $602.3 million for the year ended December 31, 2025, as compared to $609.2 million in 2024, primarily due to decreases of $6.4 million and $4.4 million in the Rent-A-Center and Acima segments, respectively, partially offset by the addition of the Brigit segment with $4.0 million in operating labor.
Total revenue increased by $328.2 million, or 8.2%, to $4,320.6 million for the year ended December 31, 2024, from $3,992.4 million for 2023. The increase was primarily due to an increase of approximately $330.1 million in the Acima segment, as discussed further in the section “Segment Performance” below. Cost of Rentals and Fees.
Total revenue increased by $374.5 million, or 8.7%, to $4,695.1 million for the year ended December 31, 2025, from $4,320.6 million for 2024, primarily due to an increase of approximately $251.0 million in the Acima segment and the addition of the Brigit segment with $206.0 million in revenue, partially offset by a decrease of approximately $83.2 million in the Rent-A-Center segment, as discussed further in the “Segment Performance” section below.
Cash used in financing activities decreased to $93.5 million in 2024, compared to $202.1 million in 2023, primarily due to an increase in borrowings under the ABL Credit Facility of $250.0 million and a decrease in share repurchases of $50.0 million, partially offset by an increase in debt repayments of $185.1 million. Liquidity Requirements .
Cash provided by (used in) financing activities increased by $250.0 million to $156.5 million in 2025, compared to $(93.5) million in 2024, primarily due to an increase in borrowings under the ABL Credit Facility of $456.0 million, partially offset by an increase in debt repayments of $192.8 million for the year ended December 31, 2025. Liquidity Requirements .
On a constant currency basis, the decrease in operating profit was less than $0.1 million for the year ended December 31, 2024, as compared to 2023. Operating profit as a percentage of segment revenues decreased to 6.1% in 2024, compared to 6.5% in 2023. Franchising segment.
On a constant currency basis, operating profit for the year ended December 31, 2025 increased by approximately $1.0 million, as compared to 2024. Operating profit as a percentage of segment revenues increased to 6.9% for the year ended December 31, 2025, as compared to 6.1% for 2024. Liquidity and Capital Resources Overview.
This increase in cost of rentals and fees was primarily attributable to an increase of $156.7 million in the Acima segment, driven by an increase in rentals and fees revenue. Cost of rentals and fees expressed as a percentage of rentals and fees revenue increased to 38.6% for the year ended December 31, 2024 as compared to 36.8% in 2023.
Cost of rentals and fees expressed as a percentage of rentals and fees revenue increased to 39.8% for the year ended December 31, 2025, as compared to 38.6% in 2024, primarily due to the continued growth of the Acima segment as a percent of total rentals and fees revenue. Cost of Merchandise Sold.
Operating profit increased by approximately $128.7 million, primarily due to decreases in other gains and charges of $112.3 million and operating labor expenses of $4.3 million in addition to the increase in gross profit noted above, partially offset by increases in non-labor operating expenses of $35.7 million and general and administrative expense of $10.8 million.
Operating profit decreased by approximately $68.3 million, primarily due to increases in non-labor operating expenses, other gains and charges and general and administrative expenses of $138.3 million, $107.6 million and $19.5 million, respectively, partially offset by the increase in gross profit noted above and a decrease in operating labor expenses of $6.9 million.
Operating profit increased approximately $20.1 million for the year ended December 31, 2024, primarily due to an increase in gross profit of $58.2 million and a decrease in other gains and charges of $11.6 million, partially offset by an increase in non-labor operating expenses of approximately $49.2 million.
Operating profit decreased approximately $47.6 million for the year ended December 31, 2025, primarily due to a decrease in gross profit of approximately $51.1 million driven by lower revenues, in addition to higher general and administrative expenses and other gains and charges of approximately $9.1 million and $6.2 million, respectively, partially offset by decreases in non-labor operating expenses and operating labor expense of approximately $13.2 million and $6.4 million, respectively.
We classify these leases as short-term and have elected the short-term lease exemption for our vehicle leases, and have therefore excluded them from our operating lease right-of-use assets within our Consolidated Balance Sheets. As of December 31, 2024, our total remaining minimum obligation for existing Rent-A-Center vehicle lease contracts was approximately $5.4 million.
We lease vehicles for all of our Rent-A-Center stores under operating leases with lease terms expiring twelve months after the start date of the lease. We classify these leases as short-term and have elected the short-term lease exemption for our vehicle leases, and have therefore excluded them from our operating lease right-of-use assets within our Consolidated Balance Sheets.
Amounts are drawn as needed due to the timing of cash flows and are generally paid down as cash is generated by our operating activities. We believe cash flow generated from operations and availability under our ABL Credit Facility, will be sufficient to fund our operations during the next twelve months.
In that regard, we may from time to time draw funds under the ABL Credit Facility for general corporate purposes. Amounts are drawn as needed due to the timing of cash flows and are generally paid down as cash is generated by our operating activities.
The obligations under the Term Loan Facility are guaranteed by us and our material wholly-owned domestic restricted subsidiaries that also guarantee the ABL Credit Facility. On January 31, 2025, we used $323 million of our available commitments under our ABL Credit Facility to finance the Brigit acquisition.
The obligations under the Term Loan Facility are guaranteed by us and our material wholly-owned domestic restricted subsidiaries that also guarantee the ABL Credit Facility. At February 13, 2026, we had outstanding borrowings of $872.8 million under the Term Loan Facility and available commitments of $216.6 million under our ABL Credit Facility, net of letters of credit.
In January 2025, the FASB issued ASU 2025-01, which clarifies the effective date for ASU No. 2024-03. The adoption of ASU 2024-03 will be required for us for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.
The adoption of ASU 2025-11 will be required for us for annual reporting periods beginning 54 after December 15, 2027 and interim reporting periods within those annual reporting periods.
Revenues in our Rent-A-Center segment decreased approximately $0.7 million for the year ended December 31, 2024, primarily due to decreases in merchandise sales and installment sales of $1.0 million and $2.7 million, partially offset by an 42 increase in rentals and fees revenue of $3.1 million, resulting from an increase in same store sales of 1.5%.
Revenues in our Rent-A-Center segment decreased approximately $83.2 million for the year ended December 31, 2025, due to decreases in same store sales of 2.2% and lower corporate-owned store count as a result of prior year store closures, resulting in decreases in rentals and fees revenues and merchandise sales of $79.9 million and $3.5 million, respectively.
Although these positions represent a potential future cash liability to us, the amounts and timing of such payments are uncertain. Seasonality. Our revenue mix is moderately seasonal, with the first quarter of each fiscal year generally providing higher sales than any other quarter during a fiscal year.
Our revenue mix in our lease-to-own businesses is moderately seasonal, with the first quarter of each fiscal year generally providing higher sales than any other quarter during a fiscal year.
General and administrative expenses increased by $10.8 million, or 5.3%, to $212.5 million for the year ended December 31, 2024, as compared to $201.7 million in 2023, primarily due to higher compensation. General and administrative expenses expressed as a percentage of total revenue were 4.9% for the year ended December 31, 2024, compared to 5.1% in 2023.
General and administrative expenses expressed as a percentage of total revenue were 4.9% for both the years ended December 31, 2025 and 2024. Other gains and charges. Other gains and charges increased by $107.6 million to $212.2 million in 2025, as compared to $104.6 million in 2024.
We generally utilize our ABL Credit Facility for the issuance of letters of credit, as well as to manage normal fluctuations in operational cash flow caused by the timing of cash receipts. In that regard, we may from time to time draw funds under the ABL Credit Facility for general corporate purposes.
We generally utilize our ABL Credit Facility for the issuance of letters of credit to manage normal fluctuations in operational cash flow caused by the timing of cash payments relative to cash receipts, and to potentially fund strategic initiatives including acquisitions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe also had $802.3 million outstanding under the Term Loan Facility and $75.0 million outstanding under our ABL Credit Facility, each at interest rates indexed to the Term SOFR rate or the prime rate. Carrying value approximates fair value for such indebtedness. Interest Rate Risk Our primary market risk exposure is fluctuations in interest rates.
Biggest changeWe also had $872.8 million outstanding under the Term Loan Facility and $264.0 million outstanding under our ABL Credit Facility, each at interest rates indexed to the Term SOFR rate or the prime rate. Carrying value of the Term Loan Facility and ABL Credit Facility approximates fair value for such indebtedness.
Foreign Currency Translation We are also exposed to market risk from foreign exchange rate fluctuations of the Mexican peso to the U.S. dollar as the financial position and operating results of our stores in Mexico are translated into U.S. dollars for consolidation. Resulting translation adjustments are recorded as a separate component of stockholders’ equity. 53
Foreign Currency Translation We are also exposed to market risk from foreign exchange rate fluctuations of the Mexican peso to the U.S. dollar as the financial position and operating results of our stores in Mexico are translated into U.S. dollars for consolidation. Resulting translation adjustments are recorded as a separate component of stockholders’ equity. 55
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Interest Rate Sensitivity As of December 31, 2024, we had $450 million in Notes outstanding at a fixed interest rate of 6.375%.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Interest Rate Sensitivity As of December 31, 2025, we had $450 million in Notes outstanding at a fixed interest rate of 6.375%.
Monitoring and managing this risk is a continual process carried out by our senior management. We manage our market risk based on an ongoing assessment of trends in interest rates and economic developments, giving consideration to possible effects on both total return and reported earnings.
Interest Rate Risk Our primary market risk exposure is fluctuations in interest rates. Monitoring and managing this risk is a continual process carried out by our senior management. We manage our market risk based on an ongoing assessment of trends in interest rates and economic developments, giving consideration to possible effects on both total return and reported earnings.
As of December 31, 2024, we have not entered into any interest rate swap agreements. Based on our overall interest rate exposure at December 31, 2024, a hypothetical 1.0% increase or decrease in market interest rates would have the effect of causing an additional $8.8 million additional annualized pre-tax charge or credit to our Consolidated Statements of Operations.
As of December 31, 2025, we have not entered into any interest rate swap agreements. Based on our overall interest rate exposure at December 31, 2025, a hypothetical 1.0% increase or decrease in market interest rates would have the effect of causing an additional $11.4 million annualized pre-tax charge or credit to our Consolidated Statements of Operations.

Other UPBD 10-K year-over-year comparisons