Upbound Group Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Bobby Griffin - Raymond James - Analyst : Good morning, everybody. Thanks for taking the questions. And, Mitch, con congrats on the retirement. It's been great working with you over the years. I've learned a lot and Sammy, congrats on the new role.

Question: Bobby Griffin - Raymond James - Analyst : I guess first I want to start at maybe a high level and can you talk a little bit about your view of your core customer where they sit today versus a couple of months ago, obviously the low end consumer's been under pressure. It looked like it stabilized a little and then we kind of saw some comments out of you guys as well. As one of your peers and some fighting in the fourth quarter and maybe even some in 25. So just how do you view the consumer now heading into 25, kind of how you're approaching managing that risk and any details there to help us think about what's going on from the core business customer?

Question: Bobby Griffin - Raymond James - Analyst : And I guess secondly for me, I mean, maybe we dive into one of the strategic priorities? I think it's on slide 6 you guys referenced on the theme of business improving margins, understand that some of the dynamics between early buyouts a little out of your control back to that trade down aspect. But If you could maybe highlight a couple of things that you believe are in your control that you can, what's going to get worked on this year, dive into that a little bit, the timing of it, just anything there to help us understand the variables that you feel are opportunities within the team's control from an improvement on even flow through and margin structure of that benefit or that segment excuse me.

Question: Bobby Griffin - Raymond James - Analyst : Thank you. I appreciate the details and best of luck here in 25. Thanks Bobby. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 20, 2025 / 2:00PM, UPBD.OQ - Q4 2024 Upbound Group Inc Earnings Call

Question: Vincent Caintic - BTIG - Analyst : Hey, good morning. Thanks for taking my questions, but first, a round of congratulations to both of you, Mitch. It's been great seeing you over the past decades to build up a center, then rescue in the center and then build up to his face so well deserved retirement fondly. It's been great seeing you as well, the past previously and well deserved on your role as CEO so congratulations to both of you. First question on the, so kind of a follow up on previously and on the kind of the macro environment, if you could talk about maybe how much you tightened, and where you see some of the weakness, you get a couple of detail about your applications are up 19%. You're in the sea but your GMV growth is up 15%. So I wonder if that kind of implies the level of tightening. And then if you could also talk about you highlighted the furniture that makes differences between Acima and Rent-A-Center and attributed some of that to you know some of the sales differences there like how much of that has been ahead and are there other categories where you may be seeing some strength or other categories point out.

Question: Vincent Caintic - BTIG - Analyst : Okay, that's perfect, very helpful detail, and that actually answered all my questions. So thanks again and congratulations.

Question: Hoang Nguyen - TD Cowen - Analyst : Thank you and congratulations on your retirement, Mitch, and congrats on your new role as Sammy. Maybe if you can touch a little bit on Bridget, so you've closed the acquisitions for a month now. Maybe can you update us on the integration process so far? I know that previously you mentioned one of the benefits from Bridget is cash flow underwriting. I guess I mean how is that going on your side in terms of in terms of integration and what's your on your product road map and how do you plan to cross sell. To, I guess the customer base of the two companies. Thank you.

Question: Hoang Nguyen - TD Cowen - Analyst : Got it. And I think you mentioned earlier that you had the two sizable merchant wins in the quarter. Maybe can you talk a little bit about your pipeline, how to start tracking, and what has contributed to the success of your sales team in I guess winning over merchants from other providers. Thank you.

Question: Kyle Joseph - Stephens - Analyst : Hey, good morning. Let me echo, congratulations to you both. Just a question for me, regarding furniture retailers, seen a lot of headlines on bankruptcies there. I just want, and I understand that, seem has been relatively immune to that given diversification, but on the rental center side of the business, is that a big opportunity for you as brick and mortar locations of pure play furniture retailers are on the decline?

Question: Kyle Joseph - Stephens - Analyst : Got it, thanks. Yeah, and then just on the credit side of things, Acima losses are moving in or moved in the opposite direction of rack. You guys touched on this, I think you mentioned that some of that's trade down and some of that the integration of ANO and Acima, you know what's driving that and then I know I know you highlighted that you, underwriting changes at both in different timing there as well.

Question: Kyle Joseph - Stephens - Analyst : Great, thanks very much for answering my questions and congrats again.

Question: John Hecht - Jefferies - Analyst : Good morning. Thanks for taking my questions, and, I definitely want to echo the congratulations, to both you, Mitch and Fahmi, good story and a good transition and, just, congratulations all around. I guess that yeah a lot of the questions you've been asked for me, the first one is, I know it's the first day of tax season that she just included to that, but is there any structural, I mean, we've heard that tax season, the from different operators or credit offers that, tax season, the influence of tax season has changed over the past couple years. Partly because of timing factors and some other, and some structured tax changes you anything you want to call out this year that you're just looking out for and how that might influence the business.

Question: John Hecht - Jefferies - Analyst : Okay, that, that's great. Second, you guys have done a good job building out DTC, volume of products and services and so forth. Maybe can you talk about the customer acquisition there, is that the is that as much cross sellers and as new customers. You know what's the opportunity set there and how does that influence? I'm assuming it's a the customer acquisition profile or the cost might be a little different. So how does it impact the metrics, and then how does the new acquisition influence that over the next, few quarters as well. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 20, 2025 / 2:00PM, UPBD.OQ - Q4 2024 Upbound Group Inc Earnings Call

Question: John Hecht - Jefferies - Analyst : Great. I appreciate that and congratulations again.

Question: John Rowan - Janney Montgomery Scott - Analyst : Morning guys. I'll add my congratulations for both a great career, Mitch and obviously a good promotion. So Mitch, you'll be missed. I obviously, I'm late in the questions here, so most of my questions have been answered, but any updates on the CFPB lawsuits between CFPB and Acima given the changes at the bureau?

Question: John Rowan - Janney Montgomery Scott - Analyst : Okay, I just, I guess kind of staying with the CFPV to some degree for a second. The, obviously trade down is a big part of the story and You know how much do you think that that's influenced by, or at least was influenced by the pending implementation of the late fee rule and obviously, that's another murky issue at this point but you know how are you looking at, the future of trade downs assuming that you know the late fee rule does not go into effect as ever.

Question: John Rowan - Janney Montgomery Scott - Analyst : Okay, fair enough, thank you.

Question: Anthony Chukumba - Loop Capital Markets - Analyst : Good morning. Let me add my congratulations as well on the retirement and the promotion. So just real quickly, you talked about a seamen marketplace and you talked about the fact that you added these, new, partners, certainly very impressive. Names. I was, I guess I just had two quick questions. One, even just directionally if you can just let us know what the marketplace, how much GMV had accounted for in 2024, and then, how did that grow in 2024 and sort of what is your expectation in 2025 thanks.

Question: Anthony Chukumba - Loop Capital Markets - Analyst : That's helpful. Thank you.

Question: Bill Rutter - Bank of America - Analyst : Hi, most of mine have been asked. I just have one. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 20, 2025 / 2:00PM, UPBD.OQ - Q4 2024 Upbound Group Inc Earnings Call You mentioned that there's nothing imminent in terms of the M&A pipeline, but you also mentioned that you will continue to look for additional technology solutions to add or digital solutions to add to the platform. I guess how do you think about the next year? Would you be in a position to buy something over the next year or will you be focusing on optimization of Bridget over that period? That's it, thanks.