Prog Holdings Balances Growth Push With Leasing Headwinds

Prog Holdings, Inc. ((PRG)) has held its Q4 earnings call. Read on for the main highlights of the call.

Prog Holdings’ latest earnings call struck a cautiously optimistic tone, blending solid execution with clear acknowledgment of near‑term pressures. Management highlighted strong growth from newer products and improving margins, even as the core Progressive Leasing business faces softer demand and a smaller portfolio. The message to investors was one of disciplined investment today to drive healthier growth and returns by 2026.

Consolidated GMV Growth and For’s Rapid Scale

Prog’s multiproduct engine is gaining traction, with consolidated GMV up 12.1% in 2025. The standout was For, the company’s BNPL product, which delivered about $730 million in GMV and roughly 144% year‑over‑year growth, marking successive quarters of triple‑digit GMV and revenue expansion.

Adjusted EBITDA and EPS Outperformance

Profitability held up better than expected despite top‑line pressure. Adjusted EBITDA from continuing operations was $269 million for 2025, essentially flat year on year but above the high end of prior guidance, while non‑GAAP EPS reached $3.51, also topping October and February outlooks.

Progressive Leasing Portfolio Health and Margin Expansion

Credit quality at Progressive Leasing remained solid, with full‑year write‑offs at 7.5% and Q4 at 7.6%, both within targeted ranges. Margin work paid off as Q4 gross margin gains translated into a 284‑basis‑point improvement in consolidated gross margin to 36.3%, and leasing EBITDA margins stayed in the 11%–13% target band.

Direct‑to‑Consumer and Ecommerce Momentum

The direct‑to‑consumer push is showing tangible results, with Prog Marketplace GMV roughly doubling to about $82 million in 2025. Ecommerce penetration at Progressive Leasing hit a record, with online channels representing about 30% of Q4 GMV and 23% for the full year, up sharply from 17% in 2024.

Cross‑product Engagement Driving Incremental GMV

Prog is starting to harvest benefits from its ecosystem strategy as customers move between For, Money App and leasing. Cross‑sell activity generated about $45 million of incremental leasing GMV in 2025, nearly doubling from $23 million a year earlier and signaling rising lifetime engagement across the platform.

Improving Unit Economics and Profitability Trajectory for New Products

Newer offerings are transitioning from investment mode toward profitability, led by For, which produced roughly $9.9–$10 million of adjusted EBITDA in 2025 at about a 13.5% margin. Money App closed the year near adjusted EBITDA breakeven, suggesting the company’s newer products are approaching sustainable unit economics.

Technology, AI and Operational Efficiency Gains

Management pointed to technology and AI as key levers for scale and efficiency, citing the Piper Plus platform resolving more than 18,000 inquiries with over half handled on first contact. AI‑driven decisioning cut decision times by around 75% while lifting marketplace conversion, and over 600 knowledge workers now use secure AI tools across the business.

Balance Sheet Liquidity, Capital Return and Strategic Portfolio Actions

Even amid investment and acquisition activity, liquidity remained robust, with year‑end cash of about $308.8 million and total available liquidity near $659 million. In 2025 the company repurchased roughly 1.8 million shares at an average price of $28.20 and paid dividends, while selling Vibe and completing the Purchasing Power acquisition to sharpen focus and broaden channels.

2026 Financial Outlook with Growth and Profitability Targets

For 2026, Prog guided to revenues of $3.0–$3.1 billion, adjusted EBITDA of $320–$350 million and non‑GAAP EPS of $4.00–$4.45 under a cautious macro view. Purchasing Power is expected to add about $680–$730 million of revenue and $50–$60 million of EBITDA, while For continues strong GMV growth with rising margins and Money App hovers near EBITDA neutrality.

Progressive Leasing GMV Declines and Portfolio Contraction

The core leasing business is under pressure, with leasing GMV down 8.6% in 2025 and Progressive Leasing GMV falling 10.6% in Q4. The company starts 2026 with a leased asset base about 9.4% smaller than a year ago, setting up a revenue headwind in the near term even as management leans on margin discipline.

Top‑line Pressure and Segment Revenue Declines

These portfolio dynamics fed directly into revenue, as Q4 consolidated revenue from continuing operations slipped 5.2% year over year to $574.6 million. Progressive Leasing’s Q4 revenue fell roughly 8% to $545 million, reflecting weaker originations and the smaller lease book despite healthier unit economics.

Near‑term Leverage Increase from Purchasing Power Acquisition

Prog used its balance sheet to expand with the Purchasing Power deal, pushing net leverage from 1.1x at year‑end 2025 to about 2.5x afterward, excluding nonrecourse ABS. Management emphasized that reducing leverage back toward a 1.5x–2.0x target range is now a capital allocation priority alongside continued investment in growth.

Seasonality, One‑time and Partner Bankruptcy Impacts

The quarter also absorbed some one‑off shocks, notably the Big Lots bankruptcy, which management said cut roughly $40 million of GMV in Q4 and drove around $5 million of related costs. Additional drag came from about $30 million in GMV lost to deliberate credit tightening and softer demand in October and early November.

SG&A and Investment Spending Pressures

Operating expenses climbed as the company funded technology, infrastructure and strategic initiatives, with consolidated SG&A rising about 19% as a percentage of revenue in Q4. These higher costs weighed on near‑term profitability but were framed as necessary to scale new products, modernize systems and support the expanding ecosystem.

Seasonal Losses and Provisioning at For in Q4

For’s rapid growth also brings some accounting and seasonal noise, as Q4 saw an adjusted EBITDA loss of $1.2 million driven by heavy holiday originations. Under CECL rules, upfront provisioning pulls forward expected losses, creating short‑term margin volatility even as management reiterated confidence in the product’s long‑term profitability profile.

Macro Sensitivity and Consumer Discretionary Pressure

Executives stressed that the backdrop for big‑ticket retail categories like furniture and appliances remains challenging, affecting both demand and early buyout behavior. Uncertainty around the size and timing of 2026 tax refunds adds another variable for lease performance, keeping the company cautious on originations and credit posture.

Guidance and Forward‑looking Priorities

Looking ahead, Prog aims to balance growth with discipline by leaning on Purchasing Power’s contribution, scaling For and Money App and stabilizing Progressive Leasing. The guidance assumes a soft but not collapsing consumer environment, flat SG&A as a share of revenue at leasing and steady write‑offs, while free cash flow is steered first toward deleveraging before more aggressive shareholder returns.

Prog Holdings’ earnings call painted a story of a business in transition, with legacy leasing volumes under strain but newer products and technology investments beginning to carry more weight. For investors, the key watchpoints into 2026 will be Progressive Leasing’s stabilization, execution on Purchasing Power and the company’s ability to grow EPS while methodically lowering leverage.