Upbound Group, Inc. ((UPBD)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Upbound Group’s recent earnings call expressed a generally positive sentiment despite facing some challenges. The company showcased strong growth driven by Assima’s outstanding performance and successful acquisitions. However, Rent-A-Center experienced difficulties, and there are ongoing pressures in the furniture segment. Nevertheless, Upbound remains optimistic about future growth, particularly through technology-driven initiatives.
Strong Revenue Growth
The company reported a 6% year-over-year increase in revenue for the fourth quarter, primarily driven by Assima’s performance. For the full year, revenue grew by 8.2%, surpassing $4.3 billion.
Assima’s Impressive Performance
Assima stood out with over 17% top-line growth for the year, ending with approximately $2.3 billion in revenue. This segment achieved double-digit growth for four consecutive quarters, underscoring its robust performance.
Successful Acquisitions and Integration
The acquisitions of Assima and Bridgion were highlighted as transformative for Upbound, establishing the company as a technology-driven growth entity. Bridgion adds new digital products like earned wage access and credit-building programs to the company’s portfolio.
Improved Profitability Metrics
Adjusted EBITDA for the fourth quarter increased by over 14% year-over-year, with margins rising to 11.4%. The full-year adjusted EBITDA was over $473 million, a 3.8% increase from the prior year.
Assima’s Expanding Customer Base
Assima onboarded nearly a million new customers in 2024, with GMV for the fourth quarter growing by 15.3% year-over-year. This expansion showcases the segment’s strong market presence and customer acquisition capabilities.
Rent-A-Center Challenges
Rent-A-Center faced a challenging environment, with revenue declining by approximately $15 million year-over-year due to store consolidations and franchise sales.
Pressure on Furniture Segment
The furniture segment continues to experience pressure, with no major recovery anticipated in 2025. This remains a significant concern for the company.
Regulatory and Economic Uncertainty
Macroeconomic conditions and regulatory uncertainties, including potential impacts from the CFPB and international geopolitical factors, were identified as challenges that could affect the company’s operations.
Forward-Looking Guidance
Upbound Group provided guidance for 2025, projecting revenue between $4.5 billion and $4.75 billion, and adjusted EBITDA between $500 million and $540 million. Non-GAAP earnings per share are expected between $3.90 and $4.40. Assima is anticipated to achieve high single to low double-digit growth, while Rent-A-Center’s revenue is expected to decrease in the low single-digit range. Bridgion is projected to contribute revenue between $200 million and $230 million.
In summary, Upbound Group’s earnings call highlighted a positive outlook driven by strong segments like Assima and successful acquisitions, despite challenges faced by Rent-A-Center and ongoing pressures in the furniture segment. The company’s forward-looking guidance reinforces its commitment to growth through technology-driven initiatives and strategic acquisitions.
