PRG Q3 2025: Four Technologies GMV Up 160%, Offsetting Leasing Headwinds
PRG’s Q3 2025 results highlight a decisive pivot toward high-growth digital platforms, as Four Technologies’ buy now, pay later (BNPL) GMV surged over 160%. Leasing GMV remains pressured by macro softness and discrete headwinds, but portfolio quality and margin discipline underpin stable profitability. Divestiture of the VIVE portfolio and exclusive retail partnerships signal a capital allocation reset and a multi-year platform expansion strategy.
Summary
- BNPL Expansion Outpaces Leasing Drag: Four Technologies’ GMV and revenue both grew triple digits, driving ecosystem momentum.
- Capital Reallocation Accelerates: VIVE portfolio sale injects $150 million, sharpening focus on core growth and digital initiatives.
- Margin Resilience Anchors Outlook: Portfolio quality and disciplined cost structure shield earnings despite soft consumer demand.
Performance Analysis
PRG’s Q3 2025 results delivered a strategic beat, with non-GAAP EPS of $0.90, exceeding the high end of guidance and marking a 17% YoY improvement. Revenue of $595.1 million declined modestly YoY, reflecting the ongoing drag from the Big Lots bankruptcy and deliberate tightening in lease approvals. However, the company’s BNPL arm, Four Technologies, posted its eighth consecutive quarter of triple-digit GMV and revenue growth, with active shoppers up over 160% YoY and a take rate of 10%—a key monetization metric in BNPL, representing revenue as a percentage of gross merchandise volume.
Progressive Leasing, PRG’s core lease-to-own segment, saw GMV fall 10% YoY to $410.9 million, but adjusted for Big Lots and underwriting actions, underlying GMV grew mid-single digits, underscoring operational resilience. Portfolio write-offs improved to 7.4%, within the targeted 6–8% range, while gross margin expanded 80 basis points YoY to 32%, driven by customer retention and improved risk analytics. Marketplace, the direct-to-consumer channel, grew GMV 59% YoY, evidencing traction in digital and omnichannel strategies.
- BNPL Profitability Surges: Four Technologies delivered YTD adjusted EBITDA of $11.1 million and a 23% margin, though seasonal Q4 losses are expected.
- Omnichannel Penetration Rises: E-commerce GMV now represents 23% of Progressive Leasing’s total, up from 16.6% a year ago.
- Portfolio Quality Holds Amid Stress: Deliberate tightening and data-driven decisioning kept write-offs in check despite consumer headwinds.
Overall, PRG’s multi-product ecosystem and disciplined execution are cushioning macro softness, with digital growth and capital redeployment setting the stage for a more agile, scalable model.
Executive Commentary
"This quarter's outperformance reflects the discipline of our team, the strength of our business model, and our ability to execute through macroeconomic volatility. We delivered strong earnings, improved portfolio performance, and successfully executed the strategic divestiture of a portfolio business, allowing us to reallocate capital towards our highest conviction opportunities."
Steve Michaels, President and Chief Executive Officer
"Our third quarter results highlight execution and innovation across our product offerings. Once again, we exceeded the high end of our guidance on revenue and earnings despite pressures on consumer demand across our key categories. This outperformance reflects a combination of three key factors: strength in our portfolio performance, closely monitoring levels of spend, and momentum from our buy now, pay later and direct consumer initiatives."
Brian Garner, Chief Financial Officer
Strategic Positioning
1. Digital Acceleration and BNPL Growth
Four Technologies, PRG’s BNPL business, is emerging as the company’s primary growth engine. With eight quarters of triple-digit GMV and revenue growth, a 10% take rate, and over 80% of GMV from active subscribers, Four is now profitable YTD and expanding its role as both a standalone business and a cross-sell driver for Progressive Leasing. Organic customer acquisition, low-cost marketing, and high engagement are powering this expansion, positioning PRG to capture younger, digitally native consumers.
2. Leasing Portfolio Resilience and Selective Tightening
Progressive Leasing’s portfolio quality is the bedrock of PRG’s earnings stability. Write-offs improved sequentially and YoY, with deliberate underwriting tightening earlier in the year shielding against rising consumer stress. The company leverages short-duration portfolios and real-time data analytics, allowing for rapid response to emerging credit trends. Exclusive long-term contracts now cover nearly 70% of GMV to 2030 and beyond, locking in partner relationships and providing visibility for future growth.
3. Capital Efficiency and Divestitures
The sale of the VIVE portfolio for $150 million marks a decisive move to improve capital efficiency and redeploy resources toward higher-return opportunities. Management signaled continued focus on organic growth, strategic M&A, and shareholder returns through buybacks and dividends. Balance sheet flexibility is enhanced, with net leverage at 1.1x pre-divestiture and no revolver borrowings.
4. Omnichannel and Direct-to-Consumer Ecosystem
PRG’s omnichannel push is broadening its reach, with e-commerce GMV up to 23% of leasing volume and Marketplace delivering 59% GMV growth. AI-powered customer service tools and digital application flows are reducing friction and improving retention, especially among Millennials and Gen Z. New retail partnerships, though undisclosed, are expected to drive incremental GMV and deepen PRG’s competitive moat.
5. Margin Discipline and Technology Investment
Despite top-line headwinds, gross margin and EBITDA margin both improved YoY, reflecting cost discipline and higher customer retention. Targeted investments in technology modernization and partner enablement are supporting long-term margin stability and operational agility.
Key Considerations
PRG is navigating a challenging consumer environment, yet its multi-product ecosystem and digital investments are driving new growth vectors and margin resilience. The company’s capital allocation reset, with the VIVE sale and a focus on exclusive retail contracts, aligns resources for scalable expansion.
Key Considerations:
- BNPL Growth as a Strategic Hedge: Four Technologies’ recurring triple-digit growth offsets leasing cyclicality and opens new cross-sell opportunities.
- Portfolio Quality Underpins Profitability: Data-driven underwriting and proactive tightening have kept write-offs within target, even as delinquencies rise.
- Capital Deployment Optionality: VIVE divestiture and strong cash flow provide dry powder for growth, M&A, and buybacks.
- Omnichannel Penetration Expands TAM: E-commerce and direct-to-consumer channels are capturing younger, digitally native customers, supporting long-term relevance.
- Exclusive Partnerships Lock in Share: Renewed multi-year contracts with major retailers secure future GMV and integration opportunities.
Risks
Consumer credit stress remains elevated, especially among lower-income cohorts, with rising delinquencies and softening labor markets posing ongoing risk to GMV and portfolio performance. Macroeconomic uncertainty and discretionary demand softness could weigh on leasing volume into Q4, while BNPL seasonality introduces earnings volatility. Execution risk around digital expansion and cross-sell integration also persists as the company pivots toward new growth engines.
Forward Outlook
For Q4 2025, PRG guided to:
- Consolidated revenues of $2.41–$2.435 billion (full year, post-VIVE divestiture)
- Adjusted EBITDA of $258–$265 million
- Non-GAAP EPS of $3.35–$3.45
Management expects continued soft demand for consumer durable goods and no material change in underwriting stance. BNPL will post a seasonal Q4 EBITDA loss due to upfront provisioning, with a rebound expected in Q1 2026. Capital allocation remains focused on organic growth, selective M&A, and shareholder returns, with excess capital deployment dependent on market conditions and growth opportunities.
- Q4 leasing GMV will face similar headwinds as prior quarters until comps ease in 2026.
- New retail partnerships and digital channel momentum are expected to contribute more meaningfully in 2026.
Takeaways
PRG’s Q3 2025 results underscore a business in strategic transition, balancing leasing headwinds with digital acceleration and capital redeployment.
- BNPL and Marketplace Growth Drive Ecosystem Value: Four Technologies’ surge and Marketplace expansion are offsetting leasing cyclicality and deepening customer engagement.
- Portfolio Discipline Anchors Earnings: Proactive risk management and margin expansion are sustaining profitability amid macro headwinds.
- Capital Flexibility Sets Up 2026 Inflection: VIVE divestiture and exclusive retail partnerships position PRG for renewed GMV growth as discrete headwinds abate.
Conclusion
PRG is executing a deliberate pivot toward digital-first, high-growth platforms, with Four Technologies’ BNPL momentum and omnichannel expansion increasingly central to its value proposition. Capital discipline and portfolio quality provide a resilient base, setting the stage for renewed growth as macro and comp headwinds fade into 2026.
Industry Read-Through
PRG’s results offer a clear read-through for the broader consumer finance and retail fintech sector. The outperformance of BNPL and direct-to-consumer channels signals that digital-first, subscription-based models are capturing share from traditional leasing, especially among younger, mobile-centric consumers. Portfolio risk management and rapid data-driven decisioning are now table stakes, as macro volatility and consumer stress persist. Capital redeployment from legacy to growth assets is likely to accelerate across the industry, with exclusive partnerships and ecosystem integration emerging as key competitive differentiators.