Q1 2024 Upbound Group Inc Earnings Call Transcript
Key Points
- Upbound Group Inc reported strong first quarter revenues of nearly $1.1 billion, with adjusted EBITDA of $109 million and non-GAAP earnings per share of $0.79.
- The company experienced a double-digit increase in GMV for the second consecutive quarter, nearly 20% year over year, driven by high performance in both Acima and Rent-A-Center segments.
- Upbound Group Inc has enhanced its underwriting capabilities, integrating new tools and datasets, which has improved risk management and is expected to reduce lease charge-off rates.
- The company has successfully expanded its merchant count and increased productivity per existing location, leading to significant revenue growth in its segments.
- Upbound Group Inc is making strategic investments in digital tools and direct-to-consumer channels, which are expected to drive future growth and customer engagement.
- Despite strong GMV growth, the company's approval rates for leases were lower year over year, which could impact future revenue growth if not managed effectively.
- The company faces challenges from persistent inflation trends, which continue to impact customers' discretionary spending.
- Upbound Group Inc reported a decrease in consolidated gross margin by 150 basis points year over year, primarily due to increased costs in the Acima segment.
- The company's lease charge-off rate increased by 30 basis points from the prior-year period, indicating potential risks in lease portfolio quality.
- While the company is focusing on deleveraging, it reported a net leverage ratio of approximately 2.7 times, unchanged from the fourth quarter, indicating ongoing high debt levels.
Good day and thank you for standing by, and welcome to the Upbound Group Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Chestnut.
Good morning and thank you all for joining us to discuss the company's performance for the first quarter of 2024. We issued our earnings release this morning before the market opened, and the release and all related materials, including a link to the live webcast, are available on our website at investor.upbound.com. On the call today from Upbound Group, we have Mitch Fadel, our CEO; and Fahmi Karam, our CFO.
As a reminder, some of the statements provided on this call are forward looking and subject to factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release, as well as in the company's SEC filings.
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