Upbound Group 2025 Q2 Earnings Mixed Results as Net Income Declines 54%

Upbound Group (UPBD) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. The company posted revenue of $1.16 billion, slightly below the consensus estimate. Adjusted EPS exceeded expectations at $1.12, despite a GAAP diluted EPS of $0.26 missing forecasts. The company anticipates continued growth in the second half of 2025, projecting a positive trajectory in market share expansion. Management guides for investments in technology and operational efficiencies, aiming to enhance customer engagement and drive revenue.

Revenue
The total revenue of Upbound Group saw a 7.5% increase, reaching $1.15 billion in 2025 Q2, compared to $1.07 billion in 2024 Q2. Segment-wise, Rentals and fees contributed $904.58 million, Merchandise sales added $192.22 million, Subscriptions and fees generated $51.89 million, while Other revenue accounted for $8.85 million. Together, these segments culminated in total revenues of $1.16 billion.

Earnings/Net Income
Upbound Group's EPS declined by 56.5% to $0.27 in 2025 Q2 from $0.62 in 2024 Q2. The company's net income fell to $15.48 million, down 54.4% from $33.95 million in 2024 Q2. The EPS performance was notably poor.

Price Action
The stock price of Upbound Group has plummeted 17.36% during the latest trading day, has plummeted 18.05% during the most recent full trading week, and has plummeted 17.79% month-to-date.

Post Earnings Price Action Review
The strategy of purchasing Upbound Group shares following a quarter-over-quarter revenue increase on the financial report release date and holding for 30 days has resulted in poor outcomes over the past three years. This approach yielded a return of -24.57%, considerably underperforming the benchmark return of 85.57%, leading to an excess return of -110.14%. The compound annual growth rate (CAGR) was -5.52%, indicating significant losses and declining portfolio value. The strategy also experienced a high maximum drawdown of 0.00% and a Sharpe ratio of -0.11, suggesting a highly risky and volatile approach with notable downside protection.

CEO Commentary
Fahmi Karam, Chief Executive Officer, highlighted that Upbound Group, Inc. achieved total revenue of $1,158 million for the second quarter of 2025, reflecting the company's commitment to delivering accessible financial solutions. He emphasized the growth drivers, including the strong performance of brands like Acima and Brigit, while acknowledging challenges faced in the competitive landscape. Karam reaffirmed the strategic priorities of enhancing market positioning through technology and data-driven innovations. His outlook remains optimistic, indicating confidence in sustaining momentum and adapting to evolving consumer needs.

Guidance
The company anticipates continued growth in the second half of 2025, expecting to leverage its diverse offerings to enhance customer engagement and drive revenue. Management guides for sustained investments in technology and operational efficiencies, projecting a positive trajectory in market share expansion. The outlook emphasizes a commitment to addressing the financial needs of underserved consumers, with an expectation of improved financial performance in upcoming quarters.

Additional News
Recently, Upbound Group announced its decision to pay an annualized dividend of $1.54, reflecting a current yield of 6.12%. In corporate leadership developments, Mr. Tyler Montrone has joined as the Executive Vice President of Acima, complementing Mr. Anthony J. Blasquez's role as Executive Vice President of Rent-A-Center Business. These appointments align with Upbound's strategic focus on enhancing leadership within its prominent brands. Additionally, the company has garnered attention due to its robust stock trading volume, with 0.67 million shares changing hands, surpassing its average volume of 0.57 million shares.