Q2 2024 Upbound Group Inc Earnings Call Transcript
Key Points
- Upbound Group Inc (UPBD) reported strong revenue growth of nearly 10% year-over-year, with Acima up 19% and Rent-A-Center up 1.9%.
- The company achieved a notable 35% increase in applications compared to the previous year, indicating strong demand and effective marketing strategies.
- Acima's adjusted EBITDA margin improved significantly by 310 basis points to 14.7% in the second quarter, showcasing operational efficiency.
- The company raised the midpoint of its guidance for revenue, adjusted EBITDA, and non-GAAP diluted EPS, reflecting confidence in future performance.
- Upbound Group Inc (UPBD) successfully onboarded new merchant partners, including two of the top 50 furniture retailers in the US, enhancing its market presence.
- Consolidated gross margin decreased by 230 basis points year-over-year, indicating pressure on profitability.
- The consolidated lease charge-off rate increased by 30 basis points from the prior year period, reflecting potential risk management challenges.
- Adjusted EBITDA decreased by 4.6% year-over-year, impacted by higher corporate costs and lower margins in the Rent-A-Center segment.
- The company is involved in a legal dispute with the CFPB, which could pose regulatory and financial risks.
- Free cash flow generation was significantly lower compared to the prior year, primarily due to increased GMV at Acima and higher working capital needs.
Good day. Thank you for standing by. Welcome to the Q2 2024 Upbound Group, Inc. 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 Chesnut, Head of IR. Please go ahead.
Good morning, and thank you all for joining us to discuss the company's performance for the second 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 are 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
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