Slide 1: Fourth Quarter & Full Year 2023 Earnings Review
Fourth Quarter & Full Year 2023 Earnings Review February 22, 2024 ™
Slide 2: Disclosures
Disclosures 2 Forward-Looking Statements This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding our goals, plans and projections with respect to our operations, financial positio
Slide 3: 2023 Year in Review
2023 Year in Review 3 Positive results in Q4 continued the momentum experienced throughout 2023, building the foundation to achieve our 2024 – 2026 Shareholder Value Creation plan outlined during Investor Day Expanded customer product choice online Returned to GMV growth in Q4 Became Upbound with gr
Slide 4: 2023 Consolidated Highlights
2023 Consolidated Highlights 2023 Financial Results • 2023 Consolidated revenues of $4.0 billion, -6.0% y/y • 2023 Operating profit of $162.9 million, +9.6% y/y • Adjusted EBITDA1 of $455.7 million, +0.5% y/y on higher Acima segment Adjusted EBITDA, partially offset by lower Rent-A-Center segment Ad
Slide 5: 2023 Business Segment Highlights
2023 Business Segment Highlights Rent-A-CenterAcima • Portfolio returned to growth in Q4 due to strong customer retention and an uptick in sales in back-half of the year; largest portfolio since Q2 2022 • 2023 ending lease portfolio value1 of $145.0M, +1.5% y/y vs. -4.7% y/y for 2022 • Segment reven
Slide 6: 2024 Priorities
2024 Priorities 6 Grow Market Share Expand our retail partnerships and direct to consumer solutions Increase Retention Enhance our product offerings and experience to drive increased engagement and lifetime value for retailers and customers Elevate Digital Capabilities Continuously develop technolog
Slide 7: Q4 2023 Consolidated Financial Highlights
Q4 2023 Consolidated Financial Highlights Q4 2023 $’s millions, except percentages and EPS Actual % of Total Revenue Rent-A-Center 459.3 45.1% Acima 507.9 49.9% Franchising 31.8 3.1% Mexico 19.1 1.9% Total Revenue $1,018.1 100.0% Adj EBITDA(1) Margin Rent-A-Center $66.7 14.5% Acima $75.0 14.8% Franc
Slide 8: Acima GMV Trend and Q4 Highlights
Acima GMV Trend ($M) Acima SSL and Past Due Rates2 Trends Acima Q4 Highlights Financial Results • GMV increased 19.0% y/y and improved sequentially from -1.4% in Q3 2023, led by sequential and year-over-year growth in application volume resulting from expanding merchant network and merchant penetrat
Slide 9: Rent-A-Center Portfolio and Q4 Highlights
Rent-A-Center Portfolio3 and Adjusted EBITDA Margin1 Trends ($M) Rent-A-Center SSL and Past Due Rates2,3 Trends Rent-A-Center Q4 Highlights Financial Results • Revenue of $459.3 million, -1.7% y/y driven primarily by a 12.2% y/y decrease in merchandise sales resulting from fewer customers electing e
Slide 10: Full Year 2024 Guidance
Full Year 2024 Guidance 10 GMV and portfolio growth drive higher revenue with consistent Adjusted EBITDA margins 1. Consolidated includes Acima, Rent-A-Center, Franchising, Mexico and Corporate Segments. 2. Non-GAAP financial measure. See descriptions below in this release. 3. Non-GAAP diluted earni
Slide 11: Capital Allocation & Financial Position
Capital Allocation & Financial Position Capital Allocation • Raised quarterly dividend from $0.34 to $0.37 per share or $1.48 annualized • Translates to a dividend yield of 4% - 5% based on recent share price trading range • Focused on reaching long-term target leverage ratio of 1.5x in a manner tha
Slide 12: Key Takeaways
Key Takeaways 12 Resilient business model across macroeconomic scenarios • Differentiated offerings and balanced approach in physical and virtual channels • Enables adaptability for constantly evolving consumer landscape • Over 2,000 RAC stores and over 35,000 Acima merchant partner locations, both
Slide 13: Appendix
upb ound Appendix
Slide 14: Reconciliation of Net Loss to Non-GAAP Diluted EPS, Q4 2023
Reconciliation of Net (Loss) Earnings to Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share 14 Three Months Ended December 31, 2023 (In thousands) Gross Profit Operating Profit Earnings Before Income Tax Tax Expense Net (Loss) Earnings Diluted (Loss) Earnings per Share GAAP
Slide 15: Reconciliation of Net Earnings to Non-GAAP Diluted EPS, Q4 2022
Reconciliation of Net Earnings (Loss) to Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share Three Months Ended December 31, 2022 (In thousands) Gross Profit Operating Profit Earnings Before Income Tax Tax Expense Net Earnings (Loss) Diluted Earnings (Loss) per Share GAAP Re
Slide 16: Reconciliation of Net Loss to Non-GAAP Diluted EPS, Year 2023
Reconciliation of Net (Loss) Earnings to Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share 16 Year Ended December 31, 2023 (In thousands) Gross Profit Operating Profit Earnings Before Income Tax Tax Expense Net (Loss) Earnings Diluted (Loss) Earnings per Share GAAP Results
Slide 17: Reconciliation of Net Earnings to Non-GAAP Diluted EPS, Year 2022
Reconciliation of Net Earnings (Loss) to Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share Year Ended December 31, 2022 (In thousands) Gross Profit Operating Profit Earnings Before Income Tax Tax Expense (Benefit) Net Earnings (Loss) Diluted Earnings (Loss) per Share GAAP
Slide 18: Operating Profit to Adjusted EBITDA by Segment, Q4 2023
Reconciliation of Operating Profit (Loss) to Adjusted EBITDA (Consolidated and by Segment) Three Months Ended December 31, 2023 (In thousands) Rent-A-Center Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $ 61,880 $ 60,378 $ 1,429 $ 3,807 $ (71,599) $ 55,895 Plus: Amorti
Slide 19: Operating Profit to Adjusted EBITDA by Segment, Q4 2022
Reconciliation of Operating Profit (Loss) to Adjusted EBITDA (Consolidated and by Segment) Three Months Ended December 31, 2022 (In thousands) Rent-A-Center Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $ 63,242 $ 56,983 $ 1,256 $ 3,954 $ (83,097) $ 42,338 Plus: Amorti
Slide 20: Operating Profit to Adjusted EBITDA by Segment, Year 2023
Reconciliation of Operating Profit (Loss) to Adjusted EBITDA (Consolidated and by Segment) Year Ended December 31, 2023 (In thousands) Rent-A-Center Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $ 273,518 $ 235,480 $ 4,846 $ 17,087 $ (368,066) $ 162,865 Plus: Amortizat
Slide 21: Operating Profit to Adjusted EBITDA by Segment, Year 2022
Reconciliation of Operating Profit (Loss) to Adjusted EBITDA (Consolidated and by Segment) Year Ended December 31, 2022 (In thousands) Rent-A-Center Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $ 334,525 $ 151,301 $ 6,267 $ 19,124 $ (362,679) $ 148,538 Plus: Amortizat
Slide 22: Reconciliation of Operating Cash Flow to Free Cash Flow
Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow Three Months Ended December 31, Year Ended December 31, (In thousands) 2023 2022 2023 2022 Net cash (used in) provided by operating activities $ (19,652) $ 56,377 $ 200,290 $ 468,460 Purchase of property assets (
Slide 23: Supplemental Segment Performance Details – GAAP, Q4 2022
Supplemental Segment Performance Details – GAAP 23 Three Months Ended December 31, 2022 (in millions) Rent-A- Center Acima Mexico Franchise Corporate Consolidated Revenue Rentals and fees $ 418.7 $ 371.6 $ 15.4 $ — $ — $ 805.6 Merchandise sales 28.5 104.6 0.9 — — 134.0 Installment sales 20.0 — — — —
Slide 24: Supplemental Segment Details – Non-GAAP Adjustments, Q4 2022
Supplemental Segment Performance Details – Including Non-GAAP Adjustments 24 Three Months Ended December 31, 2022 (in millions) Rent-A- Center Acima Mexico Franchise Corporate Consolidated Revenue Rentals and fees $ 418.7 $ 371.6 $ 15.4 $ — $ — $ 805.6 Merchandise sales 28.5 104.6 0.9 — — 134.0 Inst
Slide 25: Supplemental Segment Performance Details – GAAP, Year 2022
Supplemental Segment Performance Details – GAAP 25 Year Ended December 31, 2022 (in millions) Rent-A- Center Acima Mexico Franchise Corporate Consolidated Revenue Rentals and fees $ 1,724.5 $ 1,589.7 $ 61.2 $ — $ — $ 3,375.5 Merchandise sales 151.7 520.1 3.5 — — 675.3 Installment sales 72.3 — — — —
Slide 26: Supplemental Segment Details – Non-GAAP Adjustments, Year 2022
Supplemental Segment Performance Details – Including Non-GAAP Adjustments 26 Year Ended December 31, 2022 (in millions) Rent-A- Center Acima Mexico Franchise Corporate Consolidated Revenue Rentals and fees $ 1,724.5 $ 1,589.7 $ 61.2 $ — $ — $ 3,375.5 Merchandise sales 151.7 520.1 3.5 — — 675.3 Insta