Upbound Jumps on Q4 Beat, Sets 2026 Targets

Upbound Group, Inc. reported fourth-quarter 2025 results that exceeded Wall Street expectations on both revenue and earnings, prompting a 6.3% rise in the share price. Adjusted earnings per share came in at $1.01, ahead of the Zacks Consensus Estimate of $0.97, though down 3.8% from $1.05 a year earlier.

Total revenue for the quarter was $1,196.4 million, beating the consensus estimate of $1,182 million and increasing 10.9% year over year. The company cited the acquisition of Brigit and continued strong revenue growth at Acima as the primary drivers of the top-line expansion.

Adjusted EBITDA rose 2.6% to $125.9 million, with margin declining 90 basis points to 10.5%. Management attributed the margin contraction mainly to lower profitability in the Rent-A-Center segment, partly offset by contributions from Brigit and higher EBITDA in Acima.

Rent-A-Center segment revenue was flat year over year at $479.9 million, slightly ahead of expectations, while company-owned same-store sales increased 0.8%. Adjusted EBITDA for the segment fell to $69.2 million from $80 million, and margin declined 230 basis points to 14.4% despite a modest improvement in lease charge-offs to 4.9%.

Acima revenue grew 8.6% to $631 million, below consensus projections. Gross merchandise volume was essentially flat at $549.8 million, but GMV from Acima’s direct-to-consumer marketplace jumped more than 60% and reached nearly 10% of total GMV. Adjusted EBITDA improved to $86.9 million, though margin slipped slightly to 13.8% as lease charge-offs rose to 10.1%.

Brigit, acquired earlier, reported Q4 revenue of $64.6 million, surpassing estimates. Paying subscribers increased 28.9% year over year to 1.55 million, and average monthly revenue per user rose 9.7% to $14.15, supported by higher expedited transfer revenues, stronger marketplace engagement and a shift toward the Premium tier.

The Brigit segment generated adjusted EBITDA of $11.1 million, with a 17.2% margin. Cash advance volume reached $404.7 million, and the company highlighted more than $1.5 million in annualized revenue per full-time employee, underscoring the scalability of Brigit’s technology platform.

In Mexico, revenue grew 14.7% to $20.9 million, topping consensus, while adjusted EBITDA increased to $1.6 million from $1.1 million. These smaller operations contributed to overall diversification and incremental profit growth.

Upbound ended 2025 with $120.5 million in cash and cash equivalents, roughly double the prior year’s $60.9 million. Total debt stood at $1.6 billion, and liquidity was $358.1 million, including $237.6 million of availability under the revolving credit facility.

Stockholders’ equity increased to $695.7 million as of December 31, 2025. The company reported a net leverage ratio of 2.9x, supported by cash from operations of $305.6 million for the year, which management described as a significant year-over-year improvement.

For the first quarter of 2026, Upbound expects revenue between $1.16 billion and $1.26 billion. Adjusted EBITDA is projected in the $120 million to $130 million range, with adjusted EPS of $1.05 to $1.15.

Management anticipates Rent-A-Center lease charge-offs will be flat to slightly higher sequentially, while Acima’s lease charge-off rate is expected to improve to the mid-9% range, with GMV roughly flat year over year due to tighter underwriting. Brigit’s net advance loss rate is forecast between 3% and 3.5%.

For 2026, Upbound guided to total revenue of $4.70 billion to $4.95 billion and adjusted EBITDA of $500 million to $535 million. Adjusted EPS is expected between $4.00 and $4.35, and free cash flow is projected at about $200 million, inclusive of an estimated $72 million cash outflow for non-ordinary legal and regulatory settlements.

Capital expenditures are planned to be relatively flat versus 2025, and corporate expenses are projected at 4% of revenue. Segment expectations include mid-single-digit GMV and revenue growth at Acima with a 2026 loss rate stabilizing at 9.5% and EBITDA margin consistent with 2025.

Brigit is projected to generate $265 million to $285 million in revenue, implying growth of more than 30%, with adjusted EBITDA of $50 million to $60 million. Rent-A-Center is expected to deliver flat to modest revenue growth with margins in line with 2025. Over the past three months, Upbound shares have gained 30.4%, outpacing the industry’s 17.8% rise.