Upbound Stock Gains 6% After Reporting Q4 Earnings & Revenue Beat

Upbound Group, Inc. UPBD reported fourth-quarter 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. UPBD’s revenues increased and earnings declined year over year.

The fourth quarter was impacted by continued macroeconomic pressure on its core customer base, including inflationary strain on discretionary spending and normalization in credit trends. Despite these headwinds, the company’s disciplined underwriting, expanding digital ecosystem and growing contribution from higher-margin fintech offerings continue to support its long-term fundamentals. 

Its integrated model across Acima’s virtual marketplace, Brigit’s subscription-based financial tools and Rent-A-Center’s omnichannel retail footprint strengthens recurring revenue visibility and cross-selling opportunities. Reflecting investor confidence in its strategic positioning and 2026 outlook, UPBD shares gained 6.3% yesterday.

Upbound’s Quarterly Performance: Key Insights

UPBD posted adjusted earnings of $1.01 per share, surpassing the Zacks Consensus Estimate of 97 cents. The bottom line declined 3.8% from $1.05 in the year-ago quarter.

Total revenues were $1,196.4 million, surpassing the consensus estimate of $1,182 million. The metric increased 10.9% year over year, primarily driven by the acquisition of Brigit, along with continued strong revenue growth at Acima.

Adjusted EBITDA totaled $125.9 million, up 2.6% from the prior-year period. The increase was mainly driven by the addition of the Brigit segment and higher adjusted EBITDA in the Acima segment, partially offset by a decline in adjusted EBITDA in the Rent-A-Center segment.

The company’s adjusted EBITDA margin was 10.5%, down 90 basis points from the prior-year period, reflecting lower margins in the Rent-A-Center segment, partially offset by the addition of the Brigit segment.

UPBD’s Q4 Segmental Details

Revenues in the Rent-A-Center segment remained flat year over year at $479.9 million. Company-owned same-store sales increased 0.8% year over year. The Rent-A-Center segment’s financials now include all franchised locations. The Zacks Consensus Estimate for the Rent-A-Center segment’s revenues was pegged at $463.3 million for the quarter.

Adjusted EBITDA for the Rent-A-Center segment was $69.2 million compared with $80 million in the year-ago period. The adjusted EBITDA margin was 14.4%, down 230 basis points year over year. Lease charge-offs for company-owned stores were 4.9%, decreasing 10 basis points year over year. The segment ended the quarter with 1,722 company-owned stores across the United States and Puerto Rico.

Revenues for the Acima segment increased 8.6% year over year to $631 million, lagging the consensus estimate of $638.3 million. Gross Merchandise Volume (GMV) rose 0.4% year over year to $549.8 million. GMV from Acima’s direct-to-consumer marketplace surged more than 60% year over year in the fourth quarter and represented nearly 10% of the total GMV.

Adjusted EBITDA for the Acima segment was $86.9 million compared with $80.9 million in the year-ago period. The adjusted EBITDA margin was 13.8%, down 10 basis points year over year. The lease charge-off rate was 10.1%, up 110 basis points year over year.

UPBD Stock Past 3-Month Performance

Brigit reported total revenues of $64.6 million in the fourth quarter, beating the consensus estimate of $62 million. Paying subscribers increased 28.9% year over year to 1.55 million. Average monthly revenues per user rose 9.7% year over year to $14.15, driven by higher expedited transfer revenues, stronger engagement with marketplace offers and a continued shift toward Brigit’s Premium tier. The cash advance volume reached $404.7 million. The segment’s highly efficient, scalable technology platform drives more than $1.5 million in annualized revenues per full-time employee. Adjusted EBITDA came in at $11.1 million, yielding a margin of 17.2%. 

The Zacks Rank #5 (Strong Sell) company’s Mexico segment generated $20.9 million in revenues, up 14.7% year over year and surpassed the consensus estimate of $17.6 million. Adjusted EBITDA totaled $1.6 million, up from $1.1 million in the year-ago period.

Upbound’s Financial Health Snapshot

The company ended 2025 with cash and cash equivalents of $120.5 million compared with $60.9 million a year ago. Debt outstanding stood at $1.6 billion, while total liquidity was $358.1 million, including $237.6 million of availability under its revolving credit facility. Stockholders’ equity increased to $695.7 million as of Dec. 31, 2025. The company reported a net leverage ratio of 2.9X, supported by strong cash flow generation during the year.

Cash flow from operations totaled $305.6 million for fiscal 2025, reflecting a significant year-over-year improvement.

UPBD’s Q1 Guidance

For the first quarter of  2026, revenues are expected between $1.16 billion and $1.26 billion, with adjusted EBITDA projected at $120-$130 million. Adjusted earnings per share are anticipated to be $1.05-$1.15.

From a credit and operating standpoint in the first quarter, Rent-A-Center’s lease charge-off rate is expected to be flat to slightly rise sequentially. Acima’s lease charge-offs are expected to improve sequentially, finishing the quarter in the mid-9% range, with GMV projected to be relatively flat year over year due to tighter underwriting actions taken to maintain portfolio quality. Brigit’s net advance loss rate is expected to be 3-3.5%.

UPBD’s 2026 Outlook

For 2026, management expects revenues of $4.70-$4.95 billion. Adjusted EBITDA is projected between $500 million and $535 million. Adjusted earnings per share are anticipated to be $4.00 to $4.35. 

The company anticipates a free cash flow of $200 million for 2026, driven by improved profitability and accelerated tax depreciation benefits. This outlook includes an estimated $72-million cash outflow related to non-ordinary course legal and regulatory settlements. Capital expenditure is expected to be relatively flat with the 2025 reported level. Corporate expenses are projected to be 4% of revenues.

At the segment level for 2026, Acima is expected to generate mid-single-digit GMV and revenue growth, with the adjusted EBITDA margin consistent with that reported in 2025 and loss rates stabilizing at 9.5% for the year. Brigit is expected to deliver annual revenues between $265 million and $285 million, reflecting growth of more than 30%, with adjusted EBITDA projected between $50 million and $60 million. Rent-A-Center is expected to produce flat to modest revenue growth, with the adjusted EBITDA margin in line with the 2025 reported level.

The stock has gained 30.4% in the past three months as compared with the industry’s growth of 17.8%.

Eye These Better-Ranked Picks

Some better-ranked stocks are FIGS Inc. FIGS, American Eagle Outfitters Inc. AEO and Boot Barn Holdings, Inc. BOOT.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales indicates growth of 450% and 7.1%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It currently flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for AEO’s current fiscal-year earnings and sales implies a decline of 20.7% and growth of 2.6%, respectively, from the year-ago actuals. American Eagle delivered a trailing four-quarter average earnings surprise of 35.1%.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently has a Zacks Rank of 2 (Buy).

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 26% and 17.6%, respectively, from the year-ago actuals. BOOT delivered a trailing four-quarter average earnings surprise of 4.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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