PROG Holdings Raises Outlook as Revenue Growth Accelerates
Quarterly merchandise volume reached $902.0 million as newer businesses expanded.
PROG Holdings (PRG), the financial-technology holding company, reported a 22.3% increase in second-quarter revenue to $719.7 million, accelerating from 11.1% growth in the prior quarter. Revenue declined 3.1% sequentially from $742.7 million.
Non-GAAP diluted earnings rose 19.0% to $1.19 a share, following 37.8% growth in the first quarter. Net earnings from continuing operations were nearly unchanged at $37.4 million, while adjusted EBITDA increased 22.8% to $88.4 million. The adjusted EBITDA margin edged up to 12.3% from 12.2% a year earlier and in the prior quarter.
Consolidated gross merchandise volume increased 60.1% from a year earlier and 12.0% sequentially, with the Purchasing Power acquisition and continued expansion at Four contributing to the growth. Progressive Leasing returned to year-over-year GMV growth, rising 3.4% to $428.1 million after a 2.2% decline in the first quarter.
Progressive Leasing revenue fell 3.4% from a year earlier to $550.6 million, a narrower decline than the first quarter's 8.4%. Credit performance weakened during the period: the provision for lease-merchandise write-offs increased to 8.4% of leasing revenue from 7.3%, moving above the company's 6% to 8% annual target range. The segment's adjusted EBITDA slipped to $69.9 million from $76.7 million sequentially.
Four's GMV rose 110.6% from a year earlier to $315.1 million, though its growth moderated from 133.6% in the first quarter. Sequentially, revenue was nearly flat at $35.1 million and adjusted EBITDA fell 32.6% to $8.7 million. Purchasing Power, consolidated after its January acquisition, produced $130.4 million of revenue and $10.6 million of adjusted EBITDA while recording a $0.3 million pretax loss.
PROG now expects 2026 revenue of $3.025 billion to $3.1 billion, lifting the lower end by $25 million. It raised its adjusted EBITDA forecast to $355 million to $375 million and its non-GAAP earnings outlook to $4.75 to $5.00 a share. Four's adjusted EBITDA forecast increased to $30 million to $34 million, while Progressive Leasing's pretax-earnings range was lowered to $188.5 million to $193.0 million.
The company repaid $50 million of debt during the quarter, reducing net leverage to 1.7 times from 2.0 times at the end of March and about 2.5 times immediately after the Purchasing Power acquisition. PROG also resumed share repurchases, buying $10.2 million of stock and leaving $299.4 million under its authorization.