Upbound Group Q2 2025 Earnings: Revenue Up 7.52%, Adjusted EBITDA Margin Increases 11.5% YoY

Upbound Group, Inc. (UPBD) reported Q2 2025 financial results with revenues increasing 7.52% YoY to $1.158 billion and adjusted EBITDA margin up 11.5% YoY to $133.2 million. The company formerly known as Rent-A-Center saw a significant jump in retailing activity.

Upbound Group, Inc. (UPBD), formerly known as Rent-A-Center, has released its Q2 2025 financial results, showcasing a robust performance with revenues increasing by 7.52% year-over-year (YoY) to $1.158 billion. The company's adjusted EBITDA margin also saw a significant jump, rising 11.5% YoY to $133.2 million. This growth is attributed to a surge in retailing activity and the company's expanding lease-to-own (LTO) business.

One of the key drivers behind this performance is the acquisition of Acima in 2021, which has contributed 53.5% of the company's revenue by Q2 2025. This segment has seen a consistent growth in gross merchandise value (GMV) over the past seven quarters. Additionally, the acquisition of Brigit has brought in a new revenue stream, with its subscriber base growing by 24.1% YoY and segment revenues rising by 39.3% YoY.

The legacy business segment, Rent-A-Center, has also shown resilience despite a 7.1% YoY decline in revenue. The company expects to stabilize the operations of these franchises in the second half of 2025, with novel ecommerce initiatives planned for 2026.

Upbound's positive net debt status, with debt at $1.85 billion and a cash balance of $106.84 million, adds to its financial stability. The company's forward price-to-earnings (P/E) ratio of 9.09X is significantly lower than the industry median of 19.98X, indicating potential undervaluation.

The company's attractive dividend yield of 6.28% and consistent dividend growth over the past five years make it an appealing choice for income-focused investors. The annualized dividend growth rate stands at $1.56, a 4% YoY increase from $1.50 in FY 2024.

Despite the strong performance, Upbound's revenue guidance for FY 2025 remained unchanged despite the addition of Brigit in Q1 2025. The company does not anticipate any changes to its earnings per share (EPS) or free cash flow into 2026.

In summary, Upbound Group's Q2 2025 results demonstrate a strong performance driven by the expansion of its LTO business and acquisitions. The company's attractive dividend yield and undervalued stock make it a potential investment opportunity for investors seeking growth and income. However, the stagnant revenue guidance and the need to stabilize franchise operations in the legacy segment may pose some risks.

References:

[1] https://seekingalpha.com/article/4819818-upbound-group-onwards-to-growing-brand-visibility-into-2026-amid-high-retailing-activity
[2] https://www.marketbeat.com/instant-alerts/upbound-group-inc-nasdaqupbd-receives-average-recommendation-of-moderate-buy-from-brokerages-2025-09-03/