Upbound Group, Inc. (NASDAQ: UPBD), formerly known as Rent-A-Center, Inc., is an industry leader in providing lease-to-own and other financial services to underserved consumers who don’t normally qualify for traditional credit. Upbound specializes in providing flexible payment options, including lease-to-own services, for durable household goods such as furniture, appliances, electronics, computers, and accessories like wheels and tires. The company is divided into four segments: Rent-A-Center, Acima, Mexico, and Franchising, which collectively serves millions of customers through both physical stores and digital channels.
Let us explain.
The company rebranded to reflect its broader mission of elevating financial opportunities for underserved consumers through 2,300 company-named retail units alongside 400 franchised locations across the United States, Puerto Rico, and Mexico. Customers can lease items with flexible payment terms and have the option to purchase or return them at any time. The Acima segment, a key driver of revenue, provides virtual and in-store LTO solutions through staffed or unstaffed kiosks within 35k third-party retail locations, as well as through e-commerce and mobile channels. This segment caters to consumers seeking alternatives to traditional credit by partnering with thousands of retailers to integrate LTO options at the point of sale. The attractiveness of this embedded finance solution drove Gross Merchandise Volume (GMV) up 9% in the recent 1Q 2025 and 170 bps expansion in Adjusted EBITDA on a 10% increase in applications.
Upbound, after acquiring NYC-based FinTech Brigit in 1Q 2025, now offers financial wellness solutions such as earned wage access (EWA) and credit-building products. EWA allows workers to access their wages before payday for a fee, typically ranging from 2% to 4%. Brigit provides up to $250 in cash advances per pay cycle with a monthly subscription fee of $8.99, roughly equivalent to a 2% transaction fee if used twice a month for $500 total. An expedited cash advance incurs an additional $4 fee. Cash advance volume growth, revenue expansion and subscriber additions are organically advancing over 20% annually. Brigit supports 1.2 million monthly paying subscribers with an average revenue of $13 per month, indicating expedited usage or all-inclusive higher priced premium service fees.
Financial Performance.
For FY2025, management forecasts $4.62 billion in revenue and $520 million in Adjusted EBITDA, or an 11% margin. The recent 1Q results exceeded consensus. Investors should note that Upbound pays a quarterly dividend of $0.39 per share ($1.56 annually and a dividend yield over 7%), a rare combination in the FinTech sector. The company does carry $1.4 billion in net debt and a 2.9x net leverage ratio. We are intrigued by Upbound’s size, business focus and model. The acquisition of Brigit positions Upbound to tap into the growing financial wellness market, while its partnerships with thousands of retailers strengthen its Acima segment’s reach.
