10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________

FORM 10-Q

________________________________

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2025

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                      TO

COMMISSION FILE NUMBER 1-39628

________________________________

PROG HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_________________________________

Georgia			85-2484385
(State or other jurisdiction of<br>incorporation or organization)			(I. R. S. Employer<br>Identification No.)
256 W. Data Drive	Draper,	Utah	84020-2315
(Address of principal executive offices)			(Zip Code)

(385) 351-1369

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.50 Par Value	PRG	New York Stock Exchange

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

___________________________________

Indicate by check mark whether registrant (l) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of l934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	☒		Accelerated Filer	☐
Non-Accelerated Filer	☐	(Do not check if a smaller reporting company)	Smaller Reporting Company	☐
Emerging Growth Company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act				☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Title of Each Class	Shares Outstanding as of<br><br>July 18, 2025
Common Stock, $0.50 Par Value	39,543,750

PROG HOLDINGS, INC.

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets –June30, 2025 (Unaudited) and December 31, 2024	3
Condensed Consolidated Statements of Earnings (Unaudited) – Threeand SixMonths EndedJune30, 2025 and 2024	4
Condensed Consolidated Statements of Cash Flows (Unaudited) –SixMonths EndedJune30, 2025 and 2024	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	37
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39
Signatures	40

ITEM 1.FINANCIAL STATEMENTS

PROG HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	June 30,<br>2025		December 31,<br>2024
	(In Thousands, Except Share Data)
ASSETS:
Cash and Cash Equivalents	$	222,027	$	95,655
Accounts Receivable (net of allowances of $68,788 in 2025 and $71,607 in 2024)	60,531		80,225
Lease Merchandise (net of accumulated depreciation and allowances of $440,339 in 2025 and $440,831 in 2024)	526,303		680,242
Loans Receivable (net of allowances and unamortized fees of $58,930 in 2025 and $57,342 in 2024)	148,320		146,985
Property and Equipment, Net	21,179		21,443
Operating Lease Right-of-Use Assets	3,352		4,035
Goodwill	296,061		296,061
Other Intangibles, Net	65,774		73,775
Income Tax Receivable	8,817		10,644
Deferred Income Tax Assets	26,472		26,472
Prepaid Expenses and Other Assets	75,760		78,230
Total Assets	$	1,454,596	$	1,513,767
LIABILITIES & SHAREHOLDERS’ EQUITY:
Accounts Payable and Accrued Expenses	$	92,765	$	93,190
Deferred Income Tax Liabilities	54,271		74,320
Customer Deposits and Advance Payments	35,504		40,917
Operating Lease Liabilities	9,171		11,496
Debt, Net	594,212		643,563
Total Liabilities	785,923		863,486
Commitments and Contingencies (Note 4)
SHAREHOLDERS' EQUITY:
Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at June 30, 2025 and December 31, 2024; Shares Issued: 82,078,654 at June 30, 2025 and December 31, 2024	41,039		41,039
Additional Paid-in Capital	349,707		358,538
Retained Earnings	1,531,768		1,469,450
	1,922,514		1,869,027
Less: Treasury Shares at Cost
Common Stock: 42,535,192 Shares at June 30, 2025 and 41,262,901 at December 31, 2024	(1,253,841)		(1,218,746)
Total Shareholders’ Equity	668,673		650,281
Total Liabilities & Shareholders’ Equity	$	1,454,596	$	1,513,767

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

PROG HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended <br>June 30,				Six Months Ended<br>June 30,
	2025		2024			2025		2024
	(In Thousands, Except Per Share Data)
REVENUES:
Lease Revenues and Fees	$	569,674	$	570,516		$	1,221,231	$	1,191,066
Interest and Fees on Loans Receivable	34,989		21,645			67,520		42,965
	604,663		592,161			1,288,751		1,234,031
COSTS AND EXPENSES:
Depreciation of Lease Merchandise	385,107		384,799			845,550		816,370
Provision for Lease Merchandise Write-offs	42,633		43,783			90,651		86,924
Operating Expenses	116,199		107,901			235,505		235,242
	543,939		536,483			1,171,706		1,138,536
OPERATING PROFIT	60,724		55,678			117,045		95,495
Interest Expense, Net	(8,149)		(7,339)			(17,239)		(15,589)
EARNINGS BEFORE INCOME TAX EXPENSE	52,575		48,339			99,806		79,906
INCOME TAX EXPENSE	14,092		14,565			26,605		24,166
NET EARNINGS	$	38,483	$	33,774		$	73,201	$	55,740
EARNINGS PER SHARE
Basic	$	0.96	$	0.79		$	1.81	$	1.29
Diluted	$	0.95	$	0.77		$	1.78	$	1.26
CASH DIVIDENDS DECLARED PER SHARE:
Common Stock	$	0.13	$	0.12		$	0.26	$	0.24
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	40,130		42,955			40,484		43,325
Diluted	40,559		43,721			41,203		44,124

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

PROG HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended<br>June 30,
	2025		2024
	(In Thousands)
OPERATING ACTIVITIES:
Net Earnings	$	73,201	$	55,740
Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
Depreciation of Lease Merchandise	845,550		816,370
Other Depreciation and Amortization	12,111		14,515
Provisions for Accounts Receivable and Loan Losses	198,650		174,822
Stock-Based Compensation	14,536		13,737
Deferred Income Taxes	(20,049)		(16,973)
Impairment of Assets	—		6,018
Non-Cash Lease Expense	(1,642)		(1,603)
Other Changes, Net	(943)		(155)
Changes in Operating Assets and Liabilities:
Additions to Lease Merchandise	(784,951)		(836,084)
Book Value of Lease Merchandise Sold or Disposed	93,340		89,549
Accounts Receivable	(147,179)		(145,312)
Prepaid Expenses and Other Assets	5,480		377
Income Tax Receivable and Payable	1,749		26,206
Accounts Payable and Accrued Expenses	(4,620)		(5,113)
Customer Deposits and Advance Payments	(5,413)		(967)
Cash Provided by Operating Activities	279,820		191,127
INVESTING ACTIVITIES:
Investments in Loans Receivable	(370,099)		(172,513)
Proceeds from Loans Receivable	339,206		158,644
Purchases of Property and Equipment	(3,896)		(3,999)
Other Proceeds	—		46
Cash Used in Investing Activities	(34,789)		(17,822)
FINANCING ACTIVITIES:
Repayments on Revolving Facility	(50,000)		—
Dividends Paid	(10,443)		(10,346)
Acquisition of Treasury Stock	(51,775)		(61,177)
Issuance of Stock Under Stock Option and Employee Purchase Plans	1,028		799
Cash Paid for Shares Withheld for Employee Taxes	(7,385)		(7,863)
Debt Issuance Costs	(84)		—
Cash Used in Financing Activities	(118,659)		(78,587)
Increase in Cash and Cash Equivalents	126,372		94,718
Cash and Cash Equivalents at Beginning of Period	95,655		155,416
Cash and Cash Equivalents at End of Period	$	222,027	$	250,134
Net Cash Paid During the Period:
Interest	$	18,795	$	18,461
Income Taxes	$	45,044	$	12,728

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

PROG Holdings, Inc. ("we," "our," "us," the "Company," or "PROG Holdings") is a financial technology holding company that provides transparent and competitive payment options to consumers. PROG Holdings has two reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products.

Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and e-commerce website partners in the United States and Puerto Rico (collectively, "POS partners"). It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers.

Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs, with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers.

PROG Holdings’ ecosystem of financial technology offerings also includes Four Technologies, Inc. ("Four"), a Buy Now, Pay Later ("BNPL") company that allows shoppers to pay for merchandise through four interest-free installments. Shoppers use Four to purchase clothing, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not a reportable segment for the three and six month periods ended June 30, 2025 as its financial results are not significant to the Company's condensed consolidated financial results.

Basis of Presentation

The preparation of the Company's condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management does not believe these estimates or assumptions will change significantly in the future absent unidentified and unforeseen events, such as the possible direct or indirect impacts associated with elevated inflation, increasing unemployment rates, tariffs, and/or a recession in the United States.

The accompanying unaudited condensed consolidated financial statements do not include all information required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report") filed with the United States Securities and Exchange Commission on February 19, 2025. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of operating results for the full year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of PROG Holdings, Inc. and its subsidiaries, each of which is wholly-owned. Intercompany balances and transactions between consolidated entities have been eliminated.

Accounting Policies and Estimates

See Note 1 to the consolidated financial statements in the 2024 Annual Report for an expanded discussion of accounting policies and estimates.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Earnings Per Share

Earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. The computation of diluted earnings per share includes the dilutive effect of stock options, restricted stock units ("RSUs"), performance share units ("PSUs") and awards issuable under the Company's employee stock purchase plan ("ESPP") (collectively, "share-based awards") as determined under the treasury stock method. The following table shows the calculation of dilutive share-based awards:

	Three Months Ended June 30,		Six Months Ended June 30,
(Shares In Thousands)	2025	2024	2025	2024
Weighted Average Shares Outstanding	40,130	42,955	40,484	43,325
Dilutive Effect of Share-Based Awards	429	766	719	799
Weighted Average Diluted Shares Outstanding	40,559	43,721	41,203	44,124

Approximately 779,000 and 547,000 weighted-average share-based awards were excluded from the computation of diluted earnings per share during the three and six months ended June 30, 2025, respectively, as the awards would have been anti-dilutive for the periods presented.

Approximately 496,000 and 647,000 weighted-average share-based awards were excluded from the computation of diluted earnings per share during the three and six months ended June 30, 2024, respectively, as the awards would have been anti-dilutive for the periods presented.

Revenue Recognition

Lease Revenues and Fees

Progressive Leasing provides merchandise, consisting primarily of furniture, appliances, electronics, mobile phones and accessories, jewelry, mattresses, automobile electronics and accessories, and a variety of other products, to its customers for lease under terms agreed to by the customer. Progressive Leasing offers customers of traditional and e-commerce retailers a lease-purchase solution through leases with payment terms that can generally be renewed up to 12 months. Progressive Leasing does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through early buyout options or through payment of all required lease payments. The agreements are cancellable at any time by either party without penalty.

All of Progressive Leasing's customer agreements are considered operating leases. The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under the lease ownership agreements. Initial lease payments made by the customer upon lease execution are recognized as deferred revenue and are amortized as lease revenue over the estimated lease term on a straight-line basis. Initial lease payments and other payments collected in advance of being due or earned are recognized as deferred revenue within customer deposits and advance payments in the accompanying condensed consolidated balance sheets. All other customer lease billings are earned prior to the lease payment due date and are recorded net of related sales taxes as earned. Payment due date terms include weekly, bi-weekly, semi-monthly and monthly frequencies. Revenue recorded prior to the payment due date results in unbilled receivables recognized in accounts receivable, net of allowances, in the accompanying condensed consolidated balance sheets. Lease revenues are recorded net of a provision for uncollectible renewal payments.

Initial direct costs related to lease purchase agreements are capitalized as incurred and amortized as operating expense over the estimated lease term. The capitalized costs have been classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.

Interest and Fees on Loans Receivable

Interest and fees on loans receivable is primarily generated from our Vive segment, Four and, to a lesser extent, from our other strategic businesses. Vive extends or declines credit to an applicant through its bank partners based upon the applicant's credit rating and other factors. Qualifying applicants are approved for a specified maximum revolving credit card line to finance their initial purchase and to use in subsequent purchases at the merchant or other participating merchants for an initial 24-month period, which Vive may renew if the cardholder remains in good standing.

Vive acquires the loan receivable from its third-party bank partners at a discount from the face value of the loan. The discount is comprised of a merchant fee discount and a promotional fee discount, if applicable.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The merchant fee discount represents a pre-negotiated, nonrefundable discount that generally ranges from 3% to 30% of the loan face value. The discount is designed to cover the risk of loss related to the portfolio of cardholder charges and Vive's direct origination costs. The merchant fee discount and origination costs are presented net in the condensed consolidated balance sheets in loans receivable. Cardholders generally have an initial 24-month period that the card is active. The merchant fee discount, net of the origination costs, is amortized on a net basis and is recorded as interest and fees on loans receivable in the condensed consolidated statements of earnings on a straight-line basis over the initial 24-month period. If the loan receivable is paid off or charged off during the 24-month period, the remaining net merchant fee discount is recognized as interest and fees on loans receivable at that time.

The discount from the face value of the loan on the acquisition of the loan receivable from the merchant through the third-party bank partners may also include a promotional fee discount, which generally ranges from 1% to 8%. The promotional fee discount is intended to compensate the holder of the loan receivable (i.e., Vive) for deferred or reduced interest rates that are offered to the cardholder for a specified period on the outstanding loan balance (generally for six, 12 or 18 months). The promotional fee discount is amortized as interest and fees on loans receivable in the condensed consolidated statements of earnings on a straight-line basis over the promotional interest period (i.e., over six, 12 or 18 months, depending on the promotion). If the loan receivable is paid off or charged off prior to the expiration of the promotional period, the remaining promotional fee discount is recognized as interest and fees on loans receivable at that time. The unamortized promotional fee discount is presented net within loans receivable in the condensed consolidated balance sheets.

The customer is typically required to make monthly minimum payments of at least 3.5% of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically 27% to 35.99%, are compounded daily for cards that do not qualify for deferred or reduced interest promotional periods. Interest income, which is recognized based upon the amount of the loans outstanding, is recognized as interest and fees on loans receivable when earned if collectibility is reasonably assured. For credit cards that provide deferred interest, if the balance is not paid off during the promotional period or if the cardholder defaults, interest is billed to the customers at standard rates and the cumulative amount owed is charged to the cardholder account in the month that the promotional period expires. The Company recognizes interest revenue during the promotional period based on its historical experience related to cardholders that fail to pay off balances during the promotional period if collectibility is reasonably assured.

Annual fees are charged to cardholders at the commencement of the loan and on each subsequent anniversary date. Annual fees are deferred and recognized into revenue on a straight-line basis over a one-year period. Under the provisions of the credit card agreements, Vive also may assess fees for missed or late payments, which are recognized as revenue in the billing period in which they are assessed if collectibility is reasonably assured. Annual fees and other fees are recognized as interest and fees on loans receivable in the condensed consolidated statements of earnings.

Accounts Receivable

Accounts receivable consist primarily of receivables due from customers of Progressive Leasing and amounted to $60.5 million and $80.2 million, net of allowances, as of June 30, 2025 and December 31, 2024, respectively.

The Company maintains an accounts receivable allowance, which primarily relates to its Progressive Leasing operations. The Company’s policy is to record an allowance for uncollectible renewal payments based on historical collection experience. Other qualitative factors, such as current and forecasted business trends, are considered in estimating the allowance. Given the significant uncertainty regarding the impacts of inflation, elevated interest rates, unemployment rates, and/or tariffs on our business, a level of estimation was involved in determining the allowance. Therefore, actual future accounts receivable write-offs may differ materially from the allowance. The provision for uncollectible renewal payments is recorded as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. For customer lease agreements that are past due, the Company's policy is to write off lease receivables after 120 days.

The following table shows the components of the accounts receivable allowance:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands)	2025		2024		2025		2024
Beginning Balance	$	73,868	$	64,272	$	71,607	$	64,180
Net Book Value of Accounts Written Off	(98,028)		(86,548)		(192,238)		(171,835)
Recoveries	10,671		9,576		22,546		20,599
Accounts Receivable Provision	82,277		77,382		166,873		151,738
Ending Balance	$	68,788	$	64,682	$	68,788	$	64,682

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Lease Merchandise

Progressive Leasing's merchandise consists primarily of furniture, appliances, electronics, mobile phones and accessories, jewelry, mattresses, automobile electronics and accessories, and a variety of other products, and is recorded at the lower of depreciated cost or net realizable value. Progressive Leasing depreciates lease merchandise to a $0 salvage value generally over 12 months. Depreciation is accelerated upon early buyout. All of Progressive Leasing's merchandise, net of accumulated depreciation and allowances, represents on-lease merchandise.

The Company records a provision for write-offs using the allowance method. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based on historical write-off experience. Other qualitative factors, such as current and forecasted customer payment trends, are considered in estimating the allowance. Given the significant uncertainty regarding the impacts of inflation, elevated interest rates, unemployment rates, and/or tariffs on our business, a level of estimation was involved in determining the allowance as of June 30, 2025. Actual lease merchandise write-offs may differ materially from the allowance as of June 30, 2025. For customer lease agreements that are past due, the Company's policy is to write off lease merchandise after 120 days.

The following table shows the components of the allowance for lease merchandise write-offs, which is included within lease merchandise, net in the condensed consolidated balance sheets:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands)	2025		2024		2025		2024
Beginning Balance	$	55,070	$	48,250	$	51,874	$	44,180
Net Book Value of Merchandise Written off	(51,167)		(45,256)		(97,812)		(85,993)
Recoveries	2,327		1,891		4,150		3,557
Provision for Write-offs	42,633		43,783		90,651		86,924
Ending Balance	$	48,863	$	48,668	$	48,863	$	48,668

Vendor Incentives and Rebates Provided to POS Partners

Progressive Leasing has agreements with some of its POS partners that require additional consideration to be paid to the POS partner, including payments for exclusivity, rebates based on lease volume originations generated through the POS partners, and payments to the POS partners for marketing or other development initiatives to promote additional lease originations through these POS partners. Payments made to POS partners as consideration for them providing exclusivity to Progressive Leasing for lease-to-own transactions with customers of the POS partner are expensed on a straight-line basis over the exclusivity term. Rebates are accrued over the period the POS partner is earning the rebate, which is typically based on quarterly or annual lease origination volumes. Payments made to POS partners for marketing or development initiatives are expensed on a straight-line basis over the period the POS partner is earning the funds or the specified marketing term. Progressive Leasing expensed $8.0 million and $17.1 million for such additional consideration to POS partners during the three and six months ended June 30, 2025, respectively, compared to $7.9 million and $16.7 million during the three and six months ended June 30, 2024. Expenses related to additional consideration provided to POS partners are classified within operating expenses in the condensed consolidated statements of earnings.

Loans Receivable, Net

Gross loans receivable primarily represents the principal balances of credit card charges at Vive's participating merchants that remain due from cardholders, plus unpaid interest and fees due from cardholders. The allowance and unamortized fees represent uncollectible amounts; merchant fee discounts, net of capitalized origination costs; promotional fee discounts; and deferred annual card fees. Loans receivable, net, also includes $32.0 million and $34.9 million of outstanding receivables from customers of Four as of June 30, 2025 and December 31, 2024, respectively.

Economic conditions and loan performance trends are closely monitored to manage and evaluate exposure to credit risk. Trends in delinquency rates are an indicator of credit risk within the loans receivable portfolio, including the migration of loans between delinquency categories over time. Charge-off rates represent another indicator of the potential for future credit losses. The risk in the loans receivable portfolio is correlated with broad economic trends, such as current and projected unemployment rates, stock market volatility, and changes in medium and long-term risk-free rates, which are considered in determining the allowance for loan losses and can have a material effect on credit performance.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Expected lifetime losses on loans receivable are recognized upon loan acquisition, which requires the Company to make its best estimate of probable lifetime losses at the time of acquisition. Vive's credit card loans do not have contractually stated maturity dates, which requires the Company to estimate an average life of loan by analyzing historical payment trends to determine an expected remaining life of the loan balance. Vive segments its loans receivable portfolio into homogenous pools by Fair Isaac and Company ("FICO") score and by delinquency status and evaluates loans receivable collectively for impairment when similar risk characteristics exist.

The Company calculates Vive's allowance for loan losses based on internal historical loss information and incorporates observable and forecasted macroeconomic data over a six-month reasonable and supportable forecast period. Incorporating macroeconomic data could have a material impact on the measurement of the allowance to the extent that forecasted data changes significantly, such as higher forecasted inflation and unemployment rates. Subsequent to the six-month reasonable and supportable forecast period described above, the Company reverts to using historical loss information on a straight-line basis over a three-month period. The Company may also consider other qualitative factors in estimating the allowance, as necessary. For the purposes of determining the allowance as of June 30, 2025, management considered qualitative factors such as the macroeconomic conditions associated with the impacts of the economic uncertainty resulting from inflation, unemployment rates, and tariffs. The allowance for loan losses is maintained at a level considered appropriate to cover expected future losses of outstanding principal, interest and fees associated with the loans receivable portfolio. The appropriateness of the allowance is evaluated at each period end. To the extent that actual results differ from estimates of uncollectible loans receivable, the Company's results of operations and liquidity may be materially affected.

Vive's delinquent loans receivable includes those that are 30 days or more past due based on their contractual billing dates. Vive's loans receivable are placed on nonaccrual status when they are greater than 90 days past due or upon notification of cardholder bankruptcy, death or fraud. The Company discontinues accruing interest and fees and amortizing merchant fee discounts and promotional fee discounts for Vive's loans receivable in nonaccrual status. Loans receivable are removed from nonaccrual status when cardholder payments resume, the loan becomes 90 days or less past due and collection of the remaining amounts outstanding is deemed probable. Payments received on nonaccrual loans are allocated according to the same payment hierarchy methodology applied to loans that are accruing interest. Loans receivable are charged off no later than the end of the following month after the billing cycle in which the loans receivable become 120 days past due.

Vive extends or declines credit to an applicant through its bank partners based primarily upon the applicant's credit rating and other factors. Four extends or declines credit on an individual transaction basis using its proprietary decisioning platform, without using customer credit ratings. Four instead uses an internal model that utilizes factors such as banking data and user history to generate internal proprietary risk scores. Four's credit risk exposure is limited by smaller transaction values and a short loan duration.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

(In Thousands)	June 30, 2025		December 31, 2024
Prepaid Expenses	$	36,175	$	38,621
Prepaid Lease Merchandise	9,170		12,540
Prepaid Software Expenses	11,161		9,908
Unamortized Initial Direct Costs on Lease Agreement Originations	5,588		7,883
Other Assets	13,666		9,278
Prepaid Expenses and Other Assets	$	75,760	$	78,230

The Company incurs costs to implement cloud computing arrangements ("CCA") that are hosted by third-party vendors. Implementation costs associated with CCA are capitalized when incurred during the application development phase and are recorded within prepaid software expenses above. Amortization is calculated on a straight-line basis over the contractual term of the arrangement and is included within computer software expense as a component of operating expenses in the condensed consolidated statements of earnings.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

(In Thousands)	June 30, 2025		December 31, 2024
Accounts Payable	$	16,060	$	13,117
Accrued Salaries and Benefits	20,127		24,206
Accrued Sales and Personal Property Taxes	11,596		11,080
Income Taxes Payable	3,544		3,622
Uncertain Tax Positions	785		785
Accrued Vendor Rebates	7,171		11,704
Other Accrued Expenses and Liabilities	33,482		28,676
Accounts Payable and Accrued Expenses	$	92,765	$	93,190

Debt

On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350.0 million senior revolving credit facility (the "Revolving Facility"). Under the credit agreement, as amended, all borrowings and commitments will mature or terminate on November 15, 2029. The Company uses the Revolving Facility when necessary to provide for working capital and capital expenditures, to finance future permitted acquisitions, and for other general corporate purposes. The Company incurred a total of $5.0 million of lender and legal fees related to the Revolving Facility and amendments thereto, which were recorded within prepaid expenses and other assets in the condensed consolidated balance sheets and will be deferred and amortized through the maturity date. The Company had $50.0 million of outstanding borrowings under the Revolving Facility as of December 31, 2024, which was subsequently repaid in full in January 2025. The Company had no outstanding borrowings and $350.0 million total available credit under the Revolving Facility as of June 30, 2025.

On November 26, 2021, the Company entered into an indenture in connection with an offering of $600 million aggregate principal amount of its 6.00% senior unsecured notes due 2029 (the "Senior Notes"). The Senior Notes were issued at 100% of their par value. Interest payments on the Senior Notes are payable semi-annually on May 15 and November 15 of each year, which commenced on May 15, 2022. The Senior Notes will mature on November 15, 2029. The Senior Notes are general unsecured obligations of the Company and are guaranteed by certain of the Company’s existing and future domestic subsidiaries.

The net proceeds from the Senior Notes were used to fund the purchase price, and related fees and expenses, of the Company’s tender offer to purchase $425 million of the Company’s common stock in 2022. The remaining proceeds were used for additional share repurchases in 2023.

At June 30, 2025, the Company was in compliance with all covenants related to its outstanding debt. See Note 7 to the consolidated financial statements in the 2024 Annual Report for further information regarding the Company's indebtedness.

Goodwill

Goodwill represents the excess of the purchase price paid over the fair value of the identifiable net tangible and intangible assets acquired in connection with business acquisitions. Progressive Leasing and Four are the only reporting units with goodwill. Impairment occurs when the reporting unit's carrying value exceeds its fair value. The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an impairment may have occurred. Factors which could necessitate an interim impairment assessment include a sustained decline in the Company’s stock price, prolonged negative industry or economic trends and significant underperformance relative to historical results, projected future operating results, or the Company failing to successfully execute on one or more elements of Progressive Leasing and/or Four's strategic plans.

The Company determined that there were no events or circumstances that occurred during the six months ended June 30, 2025 that would more likely than not reduce the fair value of Progressive Leasing or Four below their carrying amounts.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Stock-Based Compensation

During the six months ended June 30, 2025, the Company issued 525,270 restricted stock units and 279,301 performance share units to certain employees, which vest over one to three-year periods for certain units or upon the achievement of specified performance conditions for other units. The weighted average fair value of the restricted stock and performance share awards was $29.00, which was based on the fair market value of the Company’s common stock on the dates of grant. The Company also issued 137,189 performance share units which may be earned after a three-year vesting period by achieving specified levels of total shareholder return ("TSR") of the Company’s common stock relative to the TSR of the S&P 600 Small Cap Index. The fair value of the TSR performance share units was $34.14, which was based on a grant date value using a Monte Carlo simulation model. The Company will recognize the grant date fair value of the restricted stock units and TSR performance share units as stock-based compensation expense over the requisite service period determined in accordance with the terms of the grant agreement. The Company will recognize the grant date fair value of the performance units as stock-based compensation expense over the estimated vesting period based on the Company's projected assessment of the performance conditions that are probable of being achieved in accordance with ASC 718, Stock-based Compensation.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Shareholders' Equity

Changes in shareholders' equity for the six months ended June 30, 2025 and 2024 are as follows:

	Treasury Stock			Common Stock			Additional<br>Paid-in Capital		Retained Earnings		Total Shareholders’ Equity
(In Thousands)	Shares	Amount		Shares	Amount
Balance, December 31, 2024	(41,263)	$	(1,218,746)	82,079	$	41,039	$	358,538	$	1,469,450	$	650,281
Cash Dividends, $0.13 per share	—	—		—	—		—		(5,465)		(5,465)
Stock-Based Compensation	—	—		—	—		7,806		—		7,806
Reissued Shares	474	14,338		—	—		(21,062)		—		(6,724)
Repurchased Shares	(936)	(26,168)		—	—		—		—		(26,168)
Net Earnings	—	—		—	—		—		34,718		34,718
Balance, March 31, 2025	(41,725)	$	(1,230,576)	82,079	$	41,039	$	345,282	$	1,498,703	$	654,448
Cash Dividends, $0.13 per share	—	—		—	—		—		(5,418)		(5,418)
Stock-Based Compensation	—	—		—	—		6,646		—		6,646
Reissued Shares	90	2,629		—	—		(2,221)		—		408
Repurchased Shares	(900)	(25,894)		—	—		—		—		(25,894)
Net Earnings	—	—		—	—		—		38,483		38,483
Balance, June 30, 2025	(42,535)	$	(1,253,841)	82,079	$	41,039	$	349,707	$	1,531,768	$	668,673			Treasury Stock			Common Stock			Additional<br>Paid-in Capital		Retained Earnings		Total Shareholders’ Equity
---	---	---	---	---	---	---	---	---	---	---	---	---
(In Thousands)	Shares	Amount		Shares	Amount
Balance, December 31, 2023	(38,405)	$	(1,095,202)	82,079	$	41,039	$	352,421	$	1,293,073	$	591,331
Cash Dividends, $0.12 per share	—	—		—	—		—		(5,337)		(5,337)
Stock-Based Compensation	—	—		—	—		6,689		—		6,689
Reissued Shares	281	7,391		—	—		(12,460)		—		(5,069)
Repurchased Shares	(781)	(24,490)		—	—		—		—		(24,490)
Net Earnings	—	—		—	—		—		21,966		21,966
Balance, March 31, 2024	(38,905)	$	(1,112,301)	82,079	$	41,039	$	346,650	$	1,309,702	$	585,090
Cash Dividends, $0.12 per share	—	—		—	—		—		(5,275)		(5,275)
Stock-Based Compensation	—	—		—	—		7,335		—		7,335
Reissued Shares	172	4,438		—	—		(6,433)		—		(1,995)
Repurchased Shares	(1,030)	(37,076)		—	—		—		—		(37,076)
Net Earnings	—	—		—	—		—		33,774		33,774
Balance, June 30, 2024	(39,763)	$	(1,144,939)	82,079	$	41,039	$	347,552	$	1,338,201	$	581,853

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting the Company's own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The Company measures a liability related to its non-qualified deferred compensation plan, which represents benefits accrued for plan participants and is valued at the quoted market prices of the participants' investment election, at fair value on a recurring basis. The Company maintains certain financial assets and liabilities that are not measured at fair value but for which fair value is disclosed.

The fair values of the Company's other current financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to their short-term nature.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2023-07, "Segment Reporting (Topic 280): Improvements to Reporting Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 requires expanded disclosures, including the disclosure of significant segment expenses and other segment items required to reconcile the difference between segment revenue and segment expenses to segment profit or loss on an annual and interim basis. ASU 2023-07 also requires disclosure of the title and position of the chief operating decision maker, and is required to be applied retrospectively. It is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 for the year ended December 31, 2024, and included additional disclosures as required in the 2024 Annual Report and Note 6 of this Quarterly Report on Form 10-Q. There was no impact on our financial position and/or results of operations.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The amended guidance will improve the transparency of income tax disclosures by requiring specific categories in the effective tax rate reconciliation and the disclosure of income taxes paid disaggregated by jurisdiction, along with other disclosure requirements. It is effective for fiscal years beginning after December 15, 2024, and can be applied on a prospective or retrospective basis. Early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning January 1, 2025, and will include the additional disclosures as required in the Company's 2025 Annual Report on Form 10-K. We do not expect the amended guidance to have a material impact on our consolidated financial statements.

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" ("ASU 2024-03"), which requires more detailed disclosures of certain categories of expenses, such as employee compensation, depreciation, and intangible asset amortization that are components of existing expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect that this standard will have on its financial statement disclosures.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2. FAIR VALUE MEASUREMENT

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes financial liabilities measured at fair value on a recurring basis:

(In Thousands)	June 30, 2025						December 31, 2024
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Deferred Compensation Liability	$	—	$	3,353	$	—	$	—	$	2,971	$	—

The Company maintains the PROG Holdings, Inc. Deferred Compensation Plan, which is an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. The liability is recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets. The liability represents benefits accrued for plan participants and is valued at the quoted market prices of the participants’ investment elections, which consist of equity and debt "mirror" funds. As such, the Company has classified the deferred compensation liability as a Level 2 liability.

Financial Assets and Liabilities Not Measured at Fair Value for Which Fair Value is Disclosed

Vive's loans receivable are measured at amortized cost, net of an allowance for loan losses and unamortized fees in the condensed consolidated balance sheets. In estimating fair value for Vive's loans receivable, the Company utilized a discounted cash flow methodology. The Company used various unobservable inputs reflecting its own assumptions, such as contractual future principal and interest cash flows, future loss rates, and discount rates (which consider current interest rates and are adjusted for credit risk, among other factors).

Four's loans receivable, net of an allowance for loan losses and unamortized fees, are included within loans receivable, net in the condensed consolidated balance sheets and approximated fair value based on a discounted cash flow methodology.

On November 26, 2021, the Company entered into an indenture in connection with its offering of $600 million aggregate principal amount of its Senior Notes due in 2029. The Senior Notes are carried at amortized cost in the condensed consolidated balance sheets and are measured at fair value for disclosure purposes. The fair value of the Senior Notes was estimated based on quoted market prices in less active markets and has been classified as Level 2 in the fair value hierarchy.

The following table summarizes the fair value of the Company's fixed-rate debt and the loans receivable held by Vive and Four:

(In Thousands)	June 30, 2025						December 31, 2024
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Senior Notes	$	—	$	576,000	$	—	$	—	$	573,720	$	—
Loans Receivable, Net	$	—	$	—	$	178,591	$	—	$	—	$	172,892

NOTE 3. LOANS RECEIVABLE

The following is a summary of the Company’s loans receivable, net:

(In Thousands)	June 30, 2025		December 31, 2024
Loans Receivable, Gross	$	207,250	$	204,327
Unamortized Fees	(9,958)		(9,559)
Loans Receivable, Amortized Cost	197,292		194,768
Allowance for Loan Losses	(48,972)		(47,783)
Loans Receivable, Net of Allowances and Unamortized Fees1	$	148,320	$	146,985

1 Loans Receivable, Net of Allowances and Unamortized Fees attributable to Four was $32.0 million and $34.9 million as of June 30, 2025 and December 31, 2024, respectively.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Vive extends or declines credit to an applicant through its bank partners based primarily upon the applicant's credit rating and other factors. Four extends or declines credit on an individual transaction basis using its proprietary decisioning platform, without using customer credit ratings. Four instead uses an internal model that utilizes factors such as banking data and user history to generate internal proprietary risk scores. Four groups its internal risk scores into three categories that range from A to C, with an A rating representing the highest credit quality. Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2025 and December 31, 2024 by FICO score and proprietary risk category, as determined at the time of loan origination:

FICO Score Category	June 30, 2025		December 31, 2024
Vive - FICO Score Category:
700 or greater	13.1	%	12.8	%
Between 700 and 600	74.7	%	76.9	%
600 or less	12.2	%	10.3	%
Four - Proprietary Risk Category:
Category A	28.2	%	26.9	%
Category B	43.5	%	48.6	%
Category C	28.3	%	24.5	%

The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year:

As of June 30, 2025 (In Thousands)	2025		2024		2023 and Prior		Revolving Loans		Total
Vive - FICO Score Category:
700 or greater	$	—	$	—	$	—	$	19,199	$	19,199
Between 700 and 600	—		—		—		112,678		112,678
600 or less	—		—		—		18,371		18,371
Four - Propriety Risk Category:
Category A	11,377		—		—		—		11,377
Category B	17,569		—		—		—		17,569
Category C	11,415		—		—		—		11,415
No Score Identified	6,683		—		—		—		6,683
Total Amortized Cost	$	47,044	$	—	$	—	$	150,248	$	197,292
Gross Charge-offs by Origination Year for the Six Months Ended June 30, 2025	$	4,804	$	9,969	$	—	$	21,043	$	35,816

Included in the table below is an aging of the loans receivable, gross balance:

(Dollar Amounts in Thousands)
Aging Category	June 30, 2025			December 31, 2024
30-59 Days Past Due	8.0		%	7.7		%
60-89 Days Past Due	4.7		%	3.8		%
90 or More Days Past Due	4.8		%	4.9		%
Past Due Loans Receivable	17.5		%	16.4		%
Current Loans Receivable	82.5		%	83.6		%
Balance of Credit Card Loans on Nonaccrual Status	$	3,364		$	4,793
Balance of Loans Receivable Greater than 90 Days Past Due and Still Accruing Interest and Fees	$	—		$	—

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The table below presents the components of the allowance for loan losses:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands)	2025		2024		2025		2024
Beginning Balance	$	47,364	$	38,997	$	47,783	$	40,620
Provision for Loan Losses	17,415		12,035		31,777		23,084
Charge-offs	(18,501)		(12,755)		(35,816)		(27,178)
Recoveries	2,694		1,965		5,228		3,716
Ending Balance	$	48,972	$	40,242	$	48,972	$	40,242

NOTE 4. COMMITMENTS AND CONTINGENCIES

Legal and Regulatory Proceedings

From time to time, the Company is party to various legal and regulatory proceedings arising in the ordinary course of business.

Some of the proceedings to which the Company is currently a party are described below. The Company believes it has meritorious defenses to all of the claims described below, and intends to vigorously defend against the claims. However, these proceedings are still developing and due to the inherent uncertainty in litigation, regulatory and similar adversarial proceedings, there can be no guarantee that the Company will ultimately be successful in these proceedings, or in others to which it is currently a party. Substantial losses from these proceedings or the costs of defending them could have a material adverse impact upon the Company’s business, financial position and results of operations.

The Company establishes an accrued liability for legal and regulatory proceedings when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. The Company continually monitors its litigation and regulatory exposure and reviews the adequacy of its legal and regulatory reserves on a quarterly basis. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters.

At June 30, 2025 and December 31, 2024, the Company had accrued $3.8 million and $0.5 million, respectively, for pending legal and regulatory matters for which it believes losses are probable and the amount of the loss can be reasonably estimated. The Company records its best estimate of the loss to legal and regulatory liabilities in accounts payable and accrued expenses in the condensed consolidated balance sheets. The Company estimates the aggregate range of reasonably possible loss in excess of accrued liabilities for such probable loss contingencies is immaterial. Those matters for which a probable loss cannot be reasonably estimated are not included within the estimated ranges. At June 30, 2025, the Company had a $3.3 million receivable for a legal settlement that will be paid by the Company's cybersecurity insurance, which is included in prepaid expenses and other assets on the Company's condensed consolidated balance sheets.

At June 30, 2025, the Company estimated that the aggregate range of loss for all material pending legal and regulatory proceedings for which a loss is reasonably possible, but less likely than probable (i.e., excluding the contingencies described in the preceding paragraph), is immaterial. Those matters for which a reasonable estimate is not possible are not included within estimated ranges and, therefore, the estimated ranges do not represent the Company's maximum loss exposure. The Company’s estimates for legal and regulatory accruals, aggregate probable loss amounts and reasonably possible loss amounts are all subject to the uncertainties and variables described above.

Regulatory Inquiries

In April 2020, Progressive Leasing entered into a settlement (the "FTC Settlement") with the Federal Trade Commission ("FTC") to resolve allegations by the FTC that certain of Progressive Leasing’s advertising and marketing practices violated the FTC Act. Progressive Leasing did not admit any violations of the FTC Act or any other laws in connection with the FTC Settlement. Under the terms of the FTC Settlement, Progressive Leasing paid $175 million to the FTC and agreed to enhance certain of its compliance-related activities, including augmenting disclosures to its customers and expanding its POS partner monitoring programs. Progressive Leasing further agreed to submit compliance reports or produce other requested documents and information to the FTC upon written request by the FTC.

During the third quarter of 2024, Progressive Leasing received a written request from the FTC to evidence Progressive Leasing’s compliance with the FTC Settlement by providing the FTC with information and documents, including those related to customer complaints and advertising and marketing materials. The FTC’s request is not a civil investigative demand. The Company is fully cooperating with the FTC in responding to the FTC’s request for information and documents.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Litigation Matters

During the third quarter of 2023, Progressive Leasing experienced a cybersecurity incident affecting certain data and IT systems of Progressive Leasing. Promptly after detecting the incident, the Company engaged third-party cybersecurity experts and took immediate steps to respond to, remediate and investigate the incident. Law enforcement was also notified. Based on the Company's investigation, the Company determined that the data involved in the incident contained a substantial amount of personally identifiable information, including social security numbers, of Progressive Leasing's customers and other individuals. With the assistance of its cybersecurity experts, the Company located the Progressive Leasing customers and other individuals whose information was impacted and notified them, consistent with state and federal requirements. The Company also took a number of additional measures to demonstrate its continued support and commitment to data privacy and protection.

As a result of the cybersecurity incident, Progressive Leasing was named a defendant in multiple lawsuits which alleged, among other things, various damages arising out of the incident. All of those lawsuits were consolidated into a single action in the United States District Court for the District of Utah (the "District Court"). On June 30, 2025, the parties reached an agreement, subject to District Court approval, to resolve all of the alleged claims in the litigation in exchange for a settlement payment of $3.3 million, the full amount of which will be paid by the Company's cybersecurity insurance upon the District Court's final approval of the settlement. The settlement amount is included in accounts payable and accrued expenses, along with a corresponding insurance recovery receivable included in prepaid expenses and other assets on the Company's condensed consolidated balance sheets.

Other Contingencies

Management regularly assesses the Company’s insurance deductibles, monitors the Company's litigation and regulatory exposure with the Company's attorneys and evaluates its loss experience. The Company also enters into various contracts in the normal course of business that may subject it to risk of financial loss if counterparties fail to perform their contractual obligations.

Off-Balance Sheet Risk

The Company, through its Vive segment, had unconditionally cancellable unfunded lending commitments totaling $460.2 million and $461.1 million as of June 30, 2025 and December 31, 2024, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represent the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5. RESTRUCTURING EXPENSES

During 2022, the Company initiated restructuring activities intended to reduce expenses, consolidate certain segment corporate headquarters, and align the cost structure of the business with the Company's near-term revenue outlook. The Company has incurred aggregate expenses of $44.2 million since the inception of the restructuring activities in 2022. These costs were primarily comprised of early contract termination costs related to certain independent sales agreements and a third party service and marketing agreement, employee severance within Progressive Leasing, and operating lease right-of-use ("ROU") asset impairment charges related to the relocation of the Vive corporate headquarters to the Company's corporate office building and a reduction of management and information technology space. The Company will continue to monitor the impacts of changes in macroeconomic conditions on its businesses and may take additional steps to further adjust the Company's cost structure based on unfavorable changes in these conditions, which may result in further restructuring charges in future periods.

The Company had no new restructuring activities during the three and six months ended June 30, 2025. The following tables summarize restructuring charges recorded within operating expenses in the condensed consolidated statements of earnings for the three and six months ended June 30, 2024:

	Three Months Ended June 30, 2024
(In Thousands)		Progressive Leasing		Vive		Other		Total
Severance		$	230	$	—	$	628	$	858
Early Contract Termination Costs		—		—		2,000		2,000
Other Restructuring Activities		28		—		—		28
Total Restructuring Expenses		$	258	$	—	$	2,628	$	2,886
	Six Months Ended June 30, 2024
---	---	---	---
(In Thousands)		Progressive Leasing		Vive		Other		Total
Severance		$	4,336	$	—	$	628	$	4,964
Right-of-Use Asset Impairment1		4,515		—		—		4,515
Property and Equipment Impairment		1,503		—		—		1,503
Early Contract Termination Costs		7,750		—		2,000		9,750
Other Restructuring Activities		168		—		—		168
Total Restructuring Expenses		$	18,272	$	—	$	2,628	$	20,900

1 To determine the amount of impairment for vacated office space, the fair value of the right-of-use asset is calculated based on the present value of the estimated net cash flows related to the right-of-use asset.

The following table summarizes the accrual and payment activity related to the restructuring program for the six months ended June 30, 2025 and 2024:

(In Thousands)	Severance		Early Contract Termination Costs		Other Restructuring Activities		Total
Balance at December 31, 2024	$	2,325	$	1,600	$	—	$	3,925
Cash Payments	(541)		—		—		(541)
Balance at June 30, 2025	$	1,784	$	1,600	$	—	$	3,384		(In Thousands)	Severance		Early Contract Termination Costs		Other Restructuring Activities		Total
---	---	---	---	---	---	---	---	---
Balance at December 31, 2023	$	2,675	$	2,500	$	—	$	5,175
Charges	4,964		9,750		168		14,882
Cash Payments	(5,888)		(10,650)		(135)		(16,673)
Balance at June 30, 2024	$	1,751	$	1,600	$	33	$	3,384

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6. SEGMENTS

As of June 30, 2025, the Company has two reportable segments: Progressive Leasing and Vive.

Progressive Leasing partners with traditional and e-commerce retailers, primarily in the consumer residential electronics, furniture and appliance, mobile phones and accessories, jewelry, mattresses, and automobile electronics and accessories industries to offer a lease-purchase solution primarily for customers who may not have access to traditional credit-based financing options. It does so by offering leases with monthly, semi-monthly, bi-weekly and weekly payment frequencies.

Vive offers a variety of second-look financing programs originated through third-party federally insured banks to customers of participating merchants and, together with Progressive Leasing, allows the Company to provide POS partners with near-prime and below-prime customers one source for financing and leasing transactions.

Four is a BNPL company that allows shoppers to pay for merchandise through four interest-free installments. Four is not a reportable segment for the three and six month periods ended June 30, 2025 and 2024 as its financial results are not significant to the Company's consolidated financial results. The revenues, earnings (loss) before income taxes, and assets of Four are included within Other, along with the Company's other strategic initiatives.

Factors Used by Management to Identify the Reportable Segments

The Company's reportable segments are based on the operations of the Company that the chief operating decision maker ("CODM") regularly reviews to analyze performance and allocate resources among business units of the Company. The Company's CODM is its President and CEO.

Segment Assets and Segment Profit or Loss

The CODM evaluates operating segment performance and decides how to allocate resources based on segment revenues and earnings (loss) before income tax expense. The Company determines earnings (loss) before income tax expense for all reportable segments in accordance with U.S. GAAP. The CODM uses this information to evaluate the profitability of the Company's reportable segments and make decisions on future business plans.

The Company incurred various corporate overhead expenses for certain executive management, legal, human resources, finance, facilities, audit, risk management, technology, and other overhead functions during the three and six months ended June 30, 2025 and 2024. Corporate overhead expenses incurred are primarily reflected as expenses of the Progressive Leasing segment and an immaterial amount was allocated to the Vive segment and Other. The allocation of corporate overhead costs to Progressive Leasing, Vive and Other was consistent with how the CODM analyzed performance and allocated resources among the segments of the Company.

The following is a summary of total assets by segment:

(In Thousands)	June 30, 2025		December 31, 2024
Assets:
Progressive Leasing	$	1,230,249	$	1,282,585
Vive	140,475		137,762
Other	83,872		93,420
Total Assets	$	1,454,596	$	1,513,767

The following is a summary of capital expenditures by segment:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands)	2025		2024		2025		2024
Capital Expenditures:1
Progressive Leasing	$	1,346	$	1,250	$	2,565	$	2,655
Vive	19		100		38		168
Other	569		553		1,293		1,176
Total Capital Expenditures	$	1,934	$	1,903	$	3,896	$	3,999

1Capital expenditures primarily consists of internal-use software, as well as computer hardware and furniture and equipment.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents a summary of segment revenues, significant segment expenses, other segment items, and profit and loss information for the three and six months ended June 30, 2025 and 2024. The revenues and earnings (loss) before income taxes within Other is comprised of the operating activities of Four and certain other strategic initiatives.

	Three Months Ended June 30, 2025								Three Months Ended June 30, 2024
(In Thousands)	Progressive Leasing		Vive		Other		Total		Progressive Leasing		Vive		Other		Total
Revenues:
Lease Revenues and Fees1	$	569,674	$	—	$	—	$	569,674	$	570,516	$	—	$	—	$	570,516
Interest and Fees on Loans Receivable2	—		16,160		18,829		34,989		—		15,421		6,224		21,645
Total Revenues	569,674		16,160		18,829		604,663		570,516		15,421		6,224		592,161
Significant Segment Expenses:3
Depreciation of Lease Merchandise	385,107		—		—		385,107		384,799		—		—		384,799
Provision for Lease Merchandise Write-offs	42,633		—		—		42,633		43,783		—		—		43,783
Selling, General and Administrative	78,892		5,961		7,942		92,795		74,395		6,251		5,837		86,483
Provision for Loan Losses	—		9,372		8,043		17,415		—		8,373		3,662		12,035
Total	506,632		15,333		15,985		537,950		502,977		14,624		9,499		527,100
Other Segment Items:
Depreciation and Amortization4	5,072		139		778		5,989		5,660		166		671		6,497
Restructuring Expenses	—		—		—		—		258		—		2,628		2,886
Interest Expense5	10,111		181		1,862		12,154		9,989		—		—		9,989
Interest Income5	(3,687)		(2)		(316)		(4,005)		(2,334)		—		(316)		(2,650)
Total	11,496		318		2,324		14,138		13,573		166		2,983		16,722
Earnings (Loss) Before Income Tax Expense	$	51,546	$	509	$	520	$	52,575	$	53,966	$	631	$	(6,258)	$	48,339

1 Revenue within the scope of ASC 842, "Leases."

2 Revenue within the scope of ASC 310, "Receivables." Also included within Interest and Fees on Loans Receivable for the Other category is $2.8 million and $2.3 million of subscription fee and interchange revenue within the scope of ASC 606, "Revenues from Contracts with Customers," for the three months ended June 30, 2025 and 2024, respectively.

3 The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

4 Excludes depreciation of lease merchandise, which is not included in the CODM's measure of depreciation and amortization.

5 Intersegment interest income and expense of $1.7 million and $0.3 million are included within the amounts shown for the three months ended June 30, 2025 and 2024, respectively.

PROG HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Six Months Ended June 30, 2025								Six Months Ended June 30, 2024
(In Thousands)	Progressive Leasing		Vive		Other		Total		Progressive Leasing		Vive		Other		Total
Revenues:
Lease Revenues and Fees1	$	1,221,231	$	—	$	—	$	1,221,231	$	1,191,066	$	—	$	—	$	1,191,066
Interest and Fees on Loans Receivable2	—		31,820		35,700		67,520		—		31,471		11,494		42,965
Total Revenues	1,221,231		31,820		35,700		1,288,751		1,191,066		31,471		11,494		1,234,031
Significant Segment Expenses:3
Depreciation of Lease Merchandise	845,550		—		—		845,550		816,370		—		—		816,370
Provision for Lease Merchandise Write-offs	90,651		—		—		90,651		86,924		—		—		86,924
Selling, General and Administrative	161,072		13,260		17,285		191,617		150,968		13,019		12,756		176,743
Provision for Loan Losses	—		18,233		13,544		31,777		—		16,571		6,513		23,084
Total	1,097,273		31,493		30,829		1,159,595		1,054,262		29,590		19,269		1,103,121
Other Segment Items:
Depreciation and Amortization4	10,200		286		1,625		12,111		12,891		332		1,292		14,515
Restructuring Expenses	—		—		—		—		18,272		—		2,628		20,900
Interest Expense5	20,075		369		3,603		24,047		19,982		—		—		19,982
Interest Income5	(6,488)		(4)		(316)		(6,808)		(3,760)		—		(633)		(4,393)
Total	23,787		651		4,912		29,350		47,385		332		3,287		51,004
Earnings (Loss) Before Income Tax Expense	$	100,171	$	(324)	$	(41)	$	99,806	$	89,419	$	1,549	$	(11,062)	$	79,906

1 Revenue within the scope of ASC 842, "Leases."

2 Revenue within the scope of ASC 310, "Receivables." Also included within Interest and Fees on Loans Receivable for the Other category is $5.2 million and $3.7 million of subscription fee and interchange revenue within the scope of ASC 606, "Revenues from Contracts with Customers," for the six months ended June 30, 2025 and 2024, respectively.

3 The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

4 Excludes depreciation of lease merchandise, which is not included in the CODM's measure of depreciation and amortization.

5 Intersegment interest income and expense of $3.7 million and $0.6 million are included within the amounts shown for the six months ended June 30, 2025 and 2024, respectively.

NOTE 7. SUBSEQUENT EVENT

On July 4, 2025, the President signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation on qualified property acquired and placed in service after January 19, 2025. ASC 740, "Income Taxes," requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. We expect these legislative changes will result in a reduction in our cash paid for taxes due to the 100% bonus depreciation for tax purposes on acquired leased merchandise.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Information: Except for historical information contained herein, the matters set forth in this Form 10-Q are forward-looking statements. These statements are based on management’s current expectations and plans, which involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "delivering", "driving", "advancing," "expectation," "target," "uncertainty," "outlook," "assumes" and similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the filing date of this Quarterly Report and which involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. These risks and uncertainties include factors that could cause our actual results and financial condition to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Annual Report") and in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the filing date of this Quarterly Report.

The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three and six months ended June 30, 2025 and 2024, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2024 Annual Report.

Business Overview

PROG Holdings, Inc. ("we," "our," "us," the "Company," or "PROG Holdings") is a financial technology holding company that provides transparent and competitive payment options to consumers. PROG Holdings has two reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; and (ii) Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products.

Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and e-commerce website partners (collectively, "POS partners"). It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers.

Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers.

Four Technologies, Inc. ("Four") is a Buy Now, Pay Later ("BNPL") company that allows shoppers to pay for merchandise through four interest-free installments. Four’s proprietary platform capabilities and its base of customers and retailers expand PROG Holdings’ ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer financial technology offerings. Shoppers use Four to purchase clothing, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not expected to be a reportable segment in 2025 as its financial results are not expected to be significant to the Company's consolidated financial results in 2025. Four's financial results are reported within "Other" for segment reporting purposes.

PROG Holdings also owns Build, a credit building financial management tool. Build is not expected to be a reportable segment in 2025 as its financial results are not expected to be significant to the Company's consolidated financial results in 2025. Build's financial results are reported within "Other" for segment reporting purposes.

Macroeconomic and Business Environment

Progressive Leasing entered 2025 with a larger lease portfolio, as measured by its gross leased asset balance, compared to 2024, which resulted in an increase in lease revenues in the first half of 2025 when compared to the same period in 2024. The Company continues to operate in a challenging macroeconomic environment. For example, Big Lots, Inc. ("Big Lots"), one of Progressive Leasing's major POS partners filed for bankruptcy in late 2024, resulting in the closure of many of its stores. The loss of Big Lots resulted in an unfavorable impact on Progressive Leasing's Gross Merchandise Volume ("GMV"), revenue, and earnings before income tax expense in the first half of 2025.

Progressive Leasing customer payment delinquencies were elevated at the end of 2024 and during the first quarter of 2025, which prompted us to tighten our decisioning posture to maintain a healthy lease portfolio. While that action benefited our lease portfolio performance and helped us achieve a provision for lease merchandise write-offs of 7.5% of lease revenues in the second quarter of 2025, it also had an unfavorable impact on Progressive Leasing's GMV during that period.

Due to inflationary pressures in recent years, the cost of living remains significantly higher than it was prior to 2020, particularly with respect to housing, food and gas costs. We believe the increased cost of living has had a disproportionate negative effect on the customers we serve and an unfavorable impact on our GMV and financial performance in the first half of 2025. We believe the inflationary pressures, the cost of living and elevated interest rates for extended periods, coupled with uncertainty in the overall macroeconomic environment, including recent changes in tariff-related policies, also unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners.

Highlights

The following summarizes significant financial highlights from the three months ended June 30, 2025:

•We reported revenues of $604.7 million, which was a 2.1% increase compared to the $592.2 million we reported for the second quarter of 2024. The increase in revenue was driven primarily by growth in our Other operations.

•GMV decreased by $40.6 million for Progressive Leasing and increased by $8.2 million for Vive in the second quarter of 2025, compared to the same period in the prior year. The decrease in GMV for Progressive Leasing was due to the bankruptcy of Big Lots in late 2024 and tightening of our decisioning posture. We believe the reduction in GMV was also driven by inflationary pressures, elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. The increase in GMV for Vive was due to the expansion of loan origination programs associated with Vive's national retail merchants. GMV from our other operations increased by $93.5 million, due to an increase in Four loan originations in the second quarter of 2025 compared to the second quarter of 2024.

•Earnings before income taxes increased to $52.6 million compared to $48.3 million in the same period in 2024. The increase was primarily driven by lower restructuring costs and increased revenues, partially offset by increases in provision for loan losses, and certain sales, general and administrative expenses.

Key Operating Metrics

Gross Merchandise Volume. We believe GMV is a key performance indicator of our Progressive Leasing and Vive segments, as it provides the total value of new leases and loans written into our portfolio over a specified time period. GMV does not represent revenues earned by the Company, but rather is a leading indicator we use in forecasting revenues the Company may earn in the short-term. Progressive Leasing's GMV is defined as the retail price of merchandise acquired by Progressive Leasing, which it then expects to lease to its customers. GMV for Vive and Other are defined as gross loan originations.

The following table presents our GMV for the Company for the periods presented:

	Three Months Ended <br>June 30,				Change
(Unaudited and In Thousands)	2025		2024			%
Progressive Leasing	$	413,872	$	454,508		(8.9)	%
Vive	43,990		35,757		8,233	23.0
Other	149,632		56,139		93,493	166.5
Total GMV	$	607,494	$	546,404		11.2	%

All values are in US Dollars.

Progressive Leasing's GMV decreased compared to the second quarter of 2024 due to the bankruptcy of Big Lots in late 2024 and tightening of its decisioning posture. We believe the reduction in GMV was also driven by inflationary pressures, an elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. E-commerce channels generated 20.9% of Progressive Leasing's GMV in the second quarter of 2025 compared to 14.4% in the second quarter of 2024. The increase in Vive's GMV was due to the expansion of loan origination programs associated with Vive's national retail merchants when compared to the same period in the prior year. GMV from Other increased due to an increase in Four loan originations.

Active Customer Count. Our active customer count represents the total number of customers that have an active lease agreement with Progressive Leasing, or an active loan with Vive or our other operations. Active customer counts include customers that may have an active lease or loan agreement with more than one segment. The following table presents our active customer count for each segment and Other:

As of June 30 (Unaudited and In Thousands)	2025	2024
Active Customer Count:
Progressive Leasing	802	834
Vive	93	85
Other	271	127

The number of active customers for Progressive Leasing decreased due to the tightening of our decisioning posture and the bankruptcy of Big Lots in late 2024. The number of active customers for Vive increased due to an increase in loan originations when compared to the same period in the prior year. The increase in the number of customers for Other was the result of continued growth in Four and our other strategic businesses.

Key Components of Earnings Before Income Tax Expense

In this MD&A section, we review our condensed consolidated results. For the three and six months ended June 30, 2025 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Revenues. We separate our total revenues into two components: (i) lease revenues and fees and (ii) interest and fees on loans receivable. Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Interest and fees on loans receivable represents merchant fees, finance charges and annual and other fees earned on outstanding loans in our Vive segment and from Four and our other strategic businesses.

Depreciation of Lease Merchandise. Depreciation of lease merchandise reflects the expense associated with depreciating merchandise leased to customers by Progressive Leasing.

Provision for Lease Merchandise Write-offs. The provision for lease merchandise write-offs represents the estimated merchandise losses incurred but not yet identified by management and adjustments for changes in estimates for the allowance for lease merchandise write-offs.

Operating Expenses. Operating expenses include personnel costs, the provision for loan losses, restructuring expenses, sales acquisition expense, computer software expense, stock-based compensation expense, intangible asset amortization, professional services expense, advertising, bank service charges, fixed asset depreciation, occupancy costs, and decisioning expense, among other expenses.

Interest Expense, Net. Interest expense, net consists of interest incurred on the Company's Senior Notes and senior secured revolving credit facility (the "Revolving Facility"). Interest expense is presented net of interest income earned on the Company's deposits in cash and cash equivalents.

Results of Operations – Three months ended June 30, 2025 and 2024

	Three Months Ended <br>June 30,				Change
(In Thousands)	2025		2024			%
REVENUES:
Lease Revenues and Fees	$	569,674	$	570,516		(0.1)	%
Interest and Fees on Loans Receivable	34,989		21,645		13,344	61.6
	604,663		592,161		12,502	2.1
COSTS AND EXPENSES:
Depreciation of Lease Merchandise	385,107		384,799		308	0.1
Provision for Lease Merchandise Write-Offs	42,633		43,783		(1,150)	(2.6)
Operating Expenses	116,199		107,901		8,298	7.7
	543,939		536,483		7,456	1.4
OPERATING PROFIT	60,724		55,678		5,046	9.1
Interest Expense, Net	(8,149)		(7,339)		(810)	11.0
EARNINGS BEFORE INCOME TAX EXPENSE	52,575		48,339		4,236	8.8
INCOME TAX EXPENSE	14,092		14,565		(473)	(3.2)
NET EARNINGS	$	38,483	$	33,774		13.9	%

All values are in US Dollars.

Revenues

Information about our revenues by source and reportable segment is as follows:

	Three Months Ended June 30, 2025								Three Months Ended June 30, 2024
(In Thousands)	Progressive Leasing		Vive		Other		Total		Progressive Leasing		Vive		Other		Total
Lease Revenues and Fees	$	569,674	$	—	$	—	$	569,674	$	570,516	$	—	$	—	$	570,516
Interest and Fees on Loans Receivable	—		16,160		18,829		34,989		—		15,421		6,224		21,645
Total	$	569,674	$	16,160	$	18,829	$	604,663	$	570,516	$	15,421	$	6,224	$	592,161

Progressive Leasing revenues in the second quarter of 2025 were flat compared to the same quarter in 2024. Vive revenues increased due primarily to a larger loan portfolio during the second quarter of 2025 as compared to the second quarter of 2024. The increase in Other revenue was primarily driven by an increase in Four's GMV as compared to the same period in 2024, due to increased loan originations.

Operating Expenses

Information about certain significant components of operating expenses for the second quarter of 2025 as compared to the second quarter of 2024 is as follows:

	Three Months Ended <br>June 30,				Change
(In Thousands)	2025		2024			%
Personnel Costs1	$	39,775	$	41,724		(4.7)	%
Stock-Based Compensation	6,634		7,095		(461)	(6.5)
Occupancy Costs	834		922		(88)	(9.5)
Advertising	4,322		4,603		(281)	(6.1)
Professional Services	11,788		8,148		3,640	44.7
Sales Acquisition Expense2	7,800		6,760		1,040	15.4
Computer Software Expense3	8,429		6,936		1,493	21.5
Bank Service Charges	2,847		2,619		228	8.7
Other Sales, General and Administrative Expense	10,366		7,676		2,690	35.0
Sales, General and Administrative Expense	92,795		86,483		6,312	7.3
Provision for Loan Losses	17,415		12,035		5,380	44.7
Depreciation and Amortization	5,989		6,497		(508)	(7.8)
Restructuring Expense	—		2,886		(2,886)	(100.0)
Operating Expenses	$	116,199	$	107,901		7.7	%

All values are in US Dollars.

1 Personnel costs excludes stock-based compensation expense, which is reported separately in the operating expense table.

2 Sales acquisition expense includes vendor incentives and rebates to POS partners (excluding retailer marketing and development initiatives), external sales commissions, amortization of initial direct costs and amounts paid to various POS partners to be their exclusive provider of lease-to-own solutions.

3 Computer software expense consists primarily of software subscription fees, licensing fees and non-capitalizable software implementation costs.

Professional services increased $3.6 million compared to the same period in 2024, primarily due to a $3.3 million increase at Progressive Leasing resulting from higher technology-related expenses, legal costs, and contract labor costs for various technology initiatives and customer service support. Professional services also increased $0.3 million at Vive resulting from an increase in legal costs.

Other sales, general and administrative expense increased $2.7 million compared to the same period in 2024, primarily due to a $2.4 million increase within our Other operations, due to higher customer payment processing fees arising from the continued GMV growth at Four and our other strategic operations.

Provision for loan losses increased $5.4 million compared to the same period in 2024. The increase was primarily the result of a $4.4 million increase in the provision for loan losses for our Other operations, due to the continued growth of our Four business and our other strategic operations. The provision for loan losses at Vive also increased $1.0 million resulting from an increase in GMV compared to the same period in 2024.

Restructuring expense decreased $2.9 million compared to the same period in 2024. In 2025, there were no new restructuring activities. For the same period in 2024, restructuring costs were primarily within our other strategic operations and included $2.0 million associated with the early termination of a third-party vendor agreement and $0.9 million of employee severance.

Other Costs and Expenses

Depreciation of lease merchandise. Depreciation of lease merchandise was flat during the three months ended June 30, 2025 compared to the same period in 2024. As a percentage of lease revenues and fees, depreciation of lease merchandise increased slightly to 67.6% from 67.4% in the prior year quarter, due to a higher level of early buyouts during the three months ended June 30, 2025 as compared to the same period in 2024.

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs decreased $1.2 million compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues decreased to 7.5% during the second quarter of 2025 from 7.7% in the same period in 2024. The decrease was due to a tighter decisioning posture in 2025 as compared to the same period in 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of June 30, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Interest expense, net. Information about interest expense and interest income is as follows:

	Three Months Ended <br>June 30,				Change
(In Thousands)	2025		2024			%
Interest Expense, Net:
Interest Expense	$	9,794	$	9,673		1.3	%
Interest Income	(1,645)		(2,334)		689	(29.5)
Total Interest Expense, Net	$	8,149	$	7,339		11.0	%

All values are in US Dollars.

Earnings Before Income Tax Expense

Information about our earnings before income tax expense by reportable segment is as follows:

	Three Months Ended <br>June 30,				Change
(In Thousands)	2025		2024			%
EARNINGS BEFORE INCOME TAX EXPENSE:
Progressive Leasing	$	51,546	$	53,966		(4.5)	%
Vive	509		631		(122)	(19.3)
Other	520		(6,258)		6,778	nmf
Total Earnings Before Income Tax Expense	$	52,575	$	48,339		8.8	%

All values are in US Dollars.

nmf - Calculation is not meaningful

The earnings (loss) before income tax expense within Other includes income from our Four operations, partially offset by losses related to our other strategic operations. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Income Tax Expense

Income tax expense decreased to $14.1 million for the three months ended June 30, 2025 compared to $14.6 million in the prior year comparable period. The effective income tax rate was 26.8% for the three months ended June 30, 2025 compared to 30.1% for the same period in 2024. The decrease in the effective income tax rate was primarily the result of discrete income tax expense recognized in 2024 related to uncertain tax position liabilities and stock-based compensation.

Results of Operations – Six Months Ended June 30, 2025 and 2024

	Six Months Ended<br>June 30,				Change
(In Thousands)	2025		2024			%
REVENUES:
Lease Revenues and Fees	$	1,221,231	$	1,191,066		2.5	%
Interest and Fees on Loans Receivable	67,520		42,965		24,555	57.2
	1,288,751		1,234,031		54,720	4.4
COSTS AND EXPENSES:
Depreciation of Lease Merchandise	845,550		816,370		29,180	3.6
Provision for Lease Merchandise Write-Offs	90,651		86,924		3,727	4.3
Operating Expenses	235,505		235,242		263	0.1
	1,171,706		1,138,536		33,170	2.9
OPERATING PROFIT	117,045		95,495		21,550	22.6
Interest Expense, Net	(17,239)		(15,589)		(1,650)	10.6
EARNINGS BEFORE INCOME TAX EXPENSE	99,806		79,906		19,900	24.9
INCOME TAX EXPENSE	26,605		24,166		2,439	10.1
NET EARNINGS	$	73,201	$	55,740		31.3	%

All values are in US Dollars.

Revenues

Information about our revenues by source and reportable segment is as follows:

	Six Months Ended June 30, 2025								Six Months Ended June 30, 2024
(In Thousands)	Progressive Leasing		Vive		Other		Total		Progressive Leasing		Vive		Other		Total
Lease Revenues and Fees	$	1,221,231	$	—	$	—	$	1,221,231	$	1,191,066	$	—	$	—	$	1,191,066
Interest and Fees on Loans Receivable	—		31,820		35,700		67,520		—		31,471		11,494		42,965
Total Revenues	$	1,221,231	$	31,820	$	35,700	$	1,288,751	$	1,191,066	$	31,471	$	11,494	$	1,234,031

The increase in Progressive Leasing revenues was primarily due to a larger lease portfolio entering the period, as measured by its gross leased asset balance, resulting from the 9.1% increase in GMV for the fourth quarter of 2024 as compared to the fourth quarter of 2023. The increase in revenues was partially offset by the decrease in GMV at Progressive Leasing for the six months ended June 30, 2025, as compared to the same period in the prior year. Vive revenues were flat compared to the six months ended June 30, 2024. The increase in Other revenue was primarily driven by a 156.8% increase in Four's GMV as compared to the six months ended June 30, 2024.

Operating Expenses

Information about certain significant components of operating expenses for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 is as follows:

	Six Months Ended<br>June 30,				Change
(In Thousands)	2025		2024			%
Personnel Costs1	$	84,931	$	86,429		(1.7)	%
Stock-Based Compensation	14,536		13,737		799	5.8
Occupancy Costs	1,729		2,289		(560)	(24.5)
Advertising	8,480		8,297		183	2.2
Professional Services	21,428		14,694		6,734	45.8
Sales Acquisition Expense2	16,057		14,665		1,392	9.5
Computer Software Expense3	15,976		14,223		1,753	12.3
Bank Service Charges	5,805		5,571		234	4.2
Other Sales, General and Administrative Expense	22,675		16,838		5,837	34.7
Sales, General and Administrative Expense	191,617		176,743		14,874	8.4
Provision for Loan losses	31,777		23,084		8,693	37.7
Depreciation and Amortization	12,111		14,515		(2,404)	(16.6)
Restructuring Expense	—		20,900		(20,900)	(100.0)
Operating Expenses	$	235,505	$	235,242		0.1	%

All values are in US Dollars.

1 Personnel costs excludes stock-based compensation expense, which is reported separately in the operating expense table.

2 Sales acquisition expense includes vendor incentives and rebates to POS partners (excluding retailer marketing and development initiatives), external sales commissions, amortization of initial direct costs and amounts paid to various POS partners to be their exclusive provider of lease-to-own solutions.

3 Computer software expense consists primarily of software subscription fees, licensing fees and non-capitalizable software implementation costs.

Professional services increased $6.7 million compared to the same period in 2024, primarily due to higher technology-related expenses and an increase in contract labor costs for various technology initiatives and customer service support at Progressive Leasing. Professional services also increased $0.5 million at Vive, primarily due to an increase in contract labor costs.

Other sales, general and administrative expense increased $5.8 million compared to the same period in 2024, primarily due to a $5.2 million increase within our Other operations, driven by higher customer payment processing fees and decisioning expenses associated with the continued GMV growth at Four and our other strategic operations.

The provision for loan losses increased $8.7 million compared to the same period in 2024. The increase is primarily the result of a $7.0 million increase in the provision for loan losses for our Other operations, due to the continued growth of Four and our other strategic operations. The provision for loan losses at Vive also increased $1.7 million resulting from an increase in GMV compared to the same period in 2024.

Depreciation and amortization decreased $2.4 million compared to the same period in 2024, primarily due to a decrease of $2.7 million at Progressive Leasing resulting from a decline in depreciable assets compared to 2024, and some intangible assets becoming fully amortized in 2024. The decrease was partially offset by an increase of $0.3 million at Four and our other strategic operations.

Restructuring expense decreased $20.9 million compared to the same period in 2024. In 2025, there were no new restructuring activities. For the six months ended June 30, 2024, restructuring costs included $7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing, $2.0 million associated with the early termination of a third party vendor agreement within other strategic operations, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, and $5.0 million of employee severance for Progressive Leasing and our other strategic operations.

Other Costs and Expenses

Depreciation of lease merchandise. Depreciation of lease merchandise increased by 3.6% during the six months ended June 30, 2025 compared to the same period in 2024. The increase was primarily due to growth in the Company's lease portfolio entering 2025. As a percentage of lease revenues and fees, depreciation of lease merchandise increased to 69.2% from 68.5% in the prior year period, primarily due to a higher level of early buyouts during the six months ended June 30, 2025 as compared to the same period in 2024.

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs increased $3.7 million when compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.4% during the six months ended June 30, 2025 from 7.3% in the same period in 2024. The increase in the provision was a result of higher write-offs and delinquencies compared to the same period in 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of June 30, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Interest expense, net. Information about interest expense and interest income is as follows:

	Six Months Ended<br>June 30,				Change
(In Thousands)	2025		2024			%
Interest Expense, Net:
Interest Expense	$	19,758	$	19,349		2.1	%
Interest Income	(2,519)		(3,760)		1,241	33.0
Total Interest Expense, Net	$	17,239	$	15,589		10.6	%

All values are in US Dollars.

Earnings Before Income Tax Expense

Information about our earnings before income tax expense by reportable segment is as follows:

	Six Months Ended<br>June 30,				Change
(In Thousands)	2025		2024			%
EARNINGS BEFORE INCOME TAX EXPENSE:
Progressive Leasing	$	100,171	$	89,419		12.0	%
Vive	(324)		1,549		(1,873)	nmf
Other	(41)		(11,062)		11,021	(99.6)
Total Earnings Before Income Tax Expense	$	99,806	$	79,906		24.9	%

All values are in US Dollars.

nmf - Calculation is not meaningful

The loss before income tax expense within Other primarily relates to losses from our other strategic operations. Factors impacting the change in earnings before income tax expense for each reporting segment are discussed above.

Income Tax Expense

Income tax expense increased to $26.6 million for the six months ended June 30, 2025 compared to $24.2 million in the prior year comparable period due to higher earnings before income tax expense. The effective income tax rate was 26.7% for the six months ended June 30, 2025 compared to 30.2% for the same period in 2024. The decrease in the effective tax rate was primarily due to discrete income tax expense recognized in 2024 related to uncertain tax position liabilities and stock-based compensation.

Overview of Financial Position

The major changes in the condensed consolidated balance sheet from December 31, 2024 to June 30, 2025 include:

•Cash and cash equivalents increased $126.3 million to $222.0 million during the six months ended June 30, 2025. For additional information, refer to the "Liquidity and Capital Resources" section below.

•Accounts receivable, net of allowances, decreased $19.7 million primarily due to a decrease in Progressive Leasing's GMV for the second quarter of 2025 as compared to the fourth quarter of 2024.

•Lease merchandise, net of accumulated depreciation and allowances, decreased $153.9 million due primarily to a decrease in Progressive Leasing's GMV for the second quarter of 2025 as compared to the fourth quarter of 2024. Higher exercises of early buyouts during the six months ended June 30, 2025 also contributed to the decrease.

•Deferred income tax liabilities decreased $20.0 million primarily due to the decrease in federal bonus depreciation allowed in 2025 as a result of the scheduled phase out under the Tax Cuts and Jobs Act of 2017.

•Debt, net decreased $49.4 million primarily due to repayment in January 2025 of the $50.0 million balance that was outstanding on the Revolving Facility as of December 31, 2024.

Liquidity and Capital Resources

General

We expect that our primary capital requirements will consist of:

•Reinvesting in our business, including buying merchandise for the operations of Progressive Leasing. Because we believe Progressive Leasing will continue to grow over the long-term, we expect that the need for additional lease merchandise will remain a major capital requirement;

•Making merger and acquisition investment(s) to further broaden our product offerings; and

•Returning excess cash to shareholders through periodically repurchasing stock and/or paying dividends.

Other capital requirements include (i) expenditures related to software development; (ii) expenditures related to our corporate operating activities; (iii) personnel expenditures; (iv) income tax payments; (v) funding of loans receivable for Vive and Four; and (vi) servicing our outstanding debt obligations.

Our capital requirements have been financed through:

•cash flows from operations;

•private debt offerings;

•bank debt; and

•stock offerings.

As of June 30, 2025, the Company had $222.0 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of gross indebtedness.

Cash Provided by Operating Activities

Cash provided by operating activities was $279.8 million and $191.1 million during the six months ended June 30, 2025 and 2024, respectively. The $88.7 million increase in operating cash flows was primarily due to a $51.1 million decrease in cash paid for lease merchandise and an increase in cash received from exercises of early lease buyout options. Operating cash flows were negatively impacted by a $32.3 million increase in cash paid for taxes when compared to the same period in 2024. Other changes in cash provided by operating activities are discussed above in our discussion of results for the six months ended June 30, 2025.

Cash Used in Investing Activities

Cash used in investing activities was $34.8 million and $17.8 million during the six months ended June 30, 2025 and 2024, respectively. The $17.0 million increase in investing cash outflows was primarily the result of a $197.6 million increase in cash investments in loans receivable, due mainly to growth in loan originations at Four and Vive. This increase in loan originations was partially offset by a $180.6 million increase in proceeds from loans receivable, primarily due to an increase in Four loan repayments.

Cash Used in Financing Activities

Cash used in financing activities was $118.7 million during the six months ended June 30, 2025 compared to $78.6 million during the same period in 2024. Cash used in financing activities during the six months ended June 30, 2025 was primarily for the repayment of $50.0 million that was drawn on our revolving credit facility during the fourth quarter of 2024, $51.8 million for share repurchases and $10.4 million paid for cash dividends. Cash used in financing activities during the six months ended June 30, 2024 was primarily for the Company's repurchase of $61.2 million of its common stock and $10.3 million paid for cash dividends.

Share Repurchases

We purchase our stock in the market from time to time as authorized by our Board of Directors. Effective February 21, 2024, the Company's Board of Directors reauthorized the repurchase of Company common stock at an aggregate purchase price of up to $500 million under the Company's existing share repurchase program, with such reauthorized share repurchase program to be extended for a period of three years from February 21, 2024, or until the $500 million aggregate purchase price of Company common stock purchased pursuant to the reauthorized share repurchase program has been met, whichever occurs first.

The Company repurchased 1,835,792 shares for $51.8 million during the six months ended June 30, 2025. That amount does not include any excise tax that may be assessed on those repurchases. As of June 30, 2025, we had the authority to purchase additional shares up to our remaining authorization limit of $309.6 million.

Dividends

On May 7, 2025, our Board of Directors declared a quarterly cash dividend in the amount of $0.13 per share of outstanding common stock, which was paid on June 3, 2025. Aggregate dividend payments during the six months ended June 30, 2025 were $10.5 million. While we expect to continue paying quarterly cash dividends in future periods, the future payment of dividends, if permitted, will be at the sole discretion of our Board of Directors and will depend on our capital allocation strategy at that time as well as other factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant.

Debt Financing

On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350.0 million senior revolving credit facility (the "Revolving Facility"). On November 15, 2024, the Company entered into an amendment to the Revolving Facility, the primary purpose of which was to extend the maturity date of the Revolving Facility from November 24, 2025 to November 15, 2029.

The Revolving Facility includes an uncommitted incremental facility increase option ("Incremental Facilities") which, subject to certain terms and conditions, permits the Company at any time prior to the maturity date to request an increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $300.0 million. As of June 30, 2025, the Company had no outstanding balance and $350.0 million remaining available for borrowings on the Revolving Facility.

The Revolving Facility is fully secured and contains certain financial covenants, which include requirements that the Company maintain ratios of (i) total net debt to EBITDA of no more than 2.50:1.00 and (ii) consolidated interest coverage of no less than 3.00:1.00. The Company will be in default under the Revolving Facility if it fails to comply with these covenants, and all borrowings outstanding may become due immediately. As of June 30, 2025, the Company was in compliance with the financial covenants set forth in the Revolving Facility and believes it will continue to be in compliance in the future.

On November 26, 2021, the Company entered into an indenture in connection with its offering of $600 million aggregate principal amount of its senior unsecured notes due 2029 (the "Senior Notes"). The Senior Notes were issued at 100.0% of their par value with a stated fixed annual interest rate of 6.00%. Interest accrues on the outstanding balance and is payable semi-annually. The Senior Notes are general unsecured obligations of the Company and are guaranteed by certain of the Company's existing and future domestic subsidiaries.

The indenture discussed above contains various other covenants and obligations to which the Company and its subsidiaries are subject while the Senior Notes are outstanding. The covenants in the indenture may limit the extent to which, or the ability of the Company and its subsidiaries to, among other things: (i) incur additional debt and guarantee debt; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) issue certain preferred stock or similar equity securities; (v) make loans and investments; (vi) sell assets; (vii) incur liens; (viii) enter into transactions with affiliates; (ix) enter into agreements restricting the ability of the Company’s subsidiaries to pay dividends; and (x) consolidate, merge or sell all or substantially all of the Company’s assets. The indenture also contains customary events of default for transactions of this type and amount. The Company was in compliance with these covenants at June 30, 2025 and believes that it will continue to be in compliance in the future.

Commitments

Income Taxes

During the six months ended June 30, 2025, we made net tax payments of $45.0 million. Within the next six months, we anticipate making an immaterial amount of estimated net tax payments for United States federal income taxes and state income taxes. That expectation includes anticipated favorable impacts on the Company's cash taxes resulting from the One Big Beautiful Bill Act, which was signed into law on July 4, 2025.

Deferred income tax liabilities as of June 30, 2025 were $54.3 million. Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods.

Leases

We lease management and information technology space for corporate functions under operating leases expiring at various times through 2028. Our corporate and segment management office leases contain renewal options for additional periods ranging from three to five years.

Contractual Obligations and Commitments

Future interest payments on the Company's variable-rate debt are based on a rate per annum equal to, at our option, (i) the Secured Overnight Financing Rate ("SOFR") plus a margin within the range of 1.5% to 2.5% for revolving loans, based on total leverage, or (ii) the administrative agent's base rate plus a margin ranging from 0.5% to 1.5%, as specified in the agreement. Future interest payments related to our Revolving Facility are based on the borrowings outstanding at that time and may be different depending on future borrowing activity and interest rates. The Company had no outstanding borrowings under the Revolving Facility as of June 30, 2025.

On November 26, 2021, the Company issued $600 million aggregate principal amount of Senior Notes that bear a fixed annual interest rate of 6.0%. Interest accrues on the outstanding balance and is payable semi-annually. The Senior Notes will mature on November 15, 2029.

The Company has no long-term commitments to purchase merchandise nor does it have significant purchase agreements that specify minimum quantities or set prices that exceed our expected requirements for three months.

Unfunded Lending Commitments

The Company, through its Vive business, had unconditionally cancellable unfunded lending commitments totaling approximately $460.2 million and $461.1 million as of June 30, 2025 and December 31, 2024, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represented the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Critical Accounting Policies

Refer to the 2024 Annual Report.

Recent Accounting Pronouncements

Refer to Note 1 to the condensed consolidated financial statements for a discussion of recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2025, we had no outstanding borrowings under our Revolving Facility. Borrowings under the Revolving Facility are indexed to the SOFR or the prime rate, which exposes us to the risk of increased interest costs if interest rates rise. Based on the fact that the Company had no variable-rate debt outstanding as of June 30, 2025, a hypothetical 1.0% increase or decrease in interest rates would not affect interest expense.

We do not use any significant market risk sensitive instruments to hedge commodity, foreign currency or other risks, and hold no market risk sensitive instruments for trading or speculative purposes.

ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures.

An evaluation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, was carried out by management, with the participation of the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as of the end of the period covered by this Quarterly Report on Form 10-Q.

This evaluation is performed to determine if our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures, however, are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Based on management’s evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of the date of the evaluation to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Changes in Internal Control Over Financial Reporting.

During the three months ended June 30, 2025, as part of a multi-phase implementation of a new enterprise resource planning ("ERP") system, the Company began utilizing certain aspects of the new ERP system. The new ERP replaces legacy systems and is designed to, among other things, streamline and enhance the Company's financial and accounting processes through a comprehensive, integrated solution. In connection with the implementation, certain existing internal controls were modified or removed, and new internal controls and procedures were designed and implemented to align with the new ERP system. As the phased implementation of the new ERP system progresses, the Company continues to emphasize the maintenance of effective internal controls and expects that changes to certain processes and procedures are likely to result in the design of new internal controls and modification and/or enhancement of existing internal controls over financial reporting. We will evaluate quarterly whether these changes materially affect our internal control over financial reporting.

Except as described above, there have been no changes in the Company's internal control over financial reporting during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 1.LEGAL PROCEEDINGS

From time to time, we are party to various legal proceedings arising in the ordinary course of business. While any proceeding contains an element of uncertainty, we do not currently believe that any of the outstanding legal proceedings to which we are a party will have a material adverse impact on our business, financial position or results of operations. However, an adverse resolution of a number of these items may have a material adverse impact on our business, financial position or results of operations. For further information, see Note 4 in the accompanying condensed consolidated financial statements under the heading "Legal and Regulatory Proceedings," which discussion is incorporated by reference in response to this Item 1.

ITEM 1A.RISK FACTORS

The Company does not have any updates to its risk factors disclosure from that previously reported in the 2024 Annual Report.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents our share repurchase activity for the three months ended June 30, 2025:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 1
April 1, 2025 through April 30, 2025	100,000	$	25.87	100,000	$	332,644,162
May 1, 2025 through May 31, 2025	525,000	28.57		525,000	317,642,752
June 1, 2025 through June 30, 2025	274,800	29.36		274,800	309,573,987
Total	899,800			899,800

1 Share repurchases are conducted under authorizations made from time to time by the Company’s Board of Directors. The authorization, effective February 21, 2024, provided the Company with the ability to repurchase shares up to a maximum amount of $500 million. Subject to the terms of the Board's authorization and applicable law, repurchases may be made at such times and in such amounts as the Company deems appropriate. Repurchases may be discontinued at any time.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

During the three months ended June 30, 2025, none of our directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

ITEM 6.EXHIBITS

EXHIBIT<br>NO.	DESCRIPTION OF EXHIBIT
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL (included in Exhibit 101)
*Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PROG Holdings, Inc.
			(Registrant)
Date:	July 23, 2025	By:	/s/ BRIAN GARNER
			Brian Garner
			Chief Financial Officer
			(Principal Financial Officer)
Date:	July 23, 2025	By:	/s/ MATT SEWELL
			Matt Sewell
			Vice President, Financial Reporting
			(Principal Accounting Officer)

40

Document

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

	I, Steven A. Michaels, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of PROG Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.		Date:	July 23, 2025	/s/ Steven A. Michaels
---	---	---
		Steven A. Michaels
		Chief Executive Officer

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EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

	I, Brian Garner, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of PROG Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:	July 23, 2025	/s/ Brian Garner
---	---	---
		Brian Garner
		Chief Financial Officer

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EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven A. Michaels, Chief Executive Officer of PROG Holdings, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 that:

The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2025 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 23, 2025	/s/ Steven A. Michaels
		Steven A. Michaels
		Chief Executive Officer

Document

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian Garner, Chief Financial Officer of PROG Holdings, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 that:

The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2025 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 23, 2025	/s/ Brian Garner
		Brian Garner
		Chief Financial Officer