Upbound Narrows 2026 Outlook as Q3 Profit Rises

Upbound Group (UPBD) narrowed its full-year 2026 guidance across all disclosed metrics and increased the midpoint of its non-GAAP diluted earnings-per-share range after third-quarter GAAP profit rose sharply despite a modest decline in revenue. Growth at financial wellness app Brigit and improved profitability at Acima helped offset weaker Acima volume and lower earnings from the Rent-A-Center business.

For the three months ended September 30, consolidated revenue fell 1.6% year over year to $1.15 billion. Net income increased by $21.1 million to $34.3 million, while GAAP diluted EPS rose to $0.58 from $0.22.

Adjusted EBITDA was nearly unchanged at $123.4 million, compared with $123.6 million a year earlier. Non-GAAP diluted EPS increased by one cent to $1.01. The non-GAAP results exclude items including acquired-asset depreciation and amortization, store consolidation expenses and compensation costs associated with the Brigit acquisition.

Brigit expands as loss rate rises

Brigit remained Upbound’s fastest-growing segment. Revenue increased 37% year over year to $78.8 million, while paying users rose 27% to 1.84 million. Average monthly revenue per paying user increased 5% to $14.39.

Subscriptions accounted for 67% of Brigit’s revenue, followed by expedited transfers at 19%, marketplace revenue at 12% and other sources at 2%. Segment adjusted EBITDA was $14.7 million, up from $9.3 million in the prior-year quarter.

The expansion was accompanied by higher credit losses. Brigit’s net advance loss rate reached 4.4%, an increase of 111 basis points from a year earlier. The measure represents charge-offs of cash advances at least 45 days past due as a percentage of advances originated during the period.

Acima profitability improves despite lower volume

Acima revenue declined 6% to $584.7 million, and gross merchandise volume fell 11% to $431 million. Furniture generated 38% of rental revenue, with wheel and tire products accounting for 23% and jewelry contributing 19%.

Despite the revenue and volume declines, Acima’s adjusted EBITDA increased 15% to $86.0 million. Its lease charge-off rate improved by 104 basis points to 8.7% of revenue.

Rent-A-Center revenue was approximately flat at $459.0 million, while its same-store average portfolio value was unchanged at $80,000. Adjusted EBITDA declined 11% to $66.3 million. The segment’s lease charge-off rate rose 75 basis points to 5.4%, contrasting with the improvement recorded at Acima.

Cash generation supports capital allocation plans

Net cash provided by operating activities increased by $73.2 million to $163.1 million. Upbound spent $16.1 million on capital expenditures and paid $23.5 million in dividends during the quarter.

At quarter-end, the company reported $576.3 million of liquidity and $1.2 billion of net debt. Its net leverage ratio was 2.4 times trailing 12-month adjusted EBITDA. Upbound said its cash generation and liquidity position support planned execution of its previously authorized share-repurchase program.

Full-year guidance narrowed

For 2026, Upbound expects revenue of $4.68 billion to $4.78 billion, adjusted EBITDA excluding stock-based compensation of $510 million to $525 million, and non-GAAP diluted EPS of $4.15 to $4.30. The company said it narrowed all three ranges while increasing the midpoint of its non-GAAP EPS outlook.

For the fourth quarter, management projects revenue of $1.15 billion to $1.25 billion, adjusted EBITDA excluding stock-based compensation of $125 million to $135 million, and non-GAAP diluted EPS of $1.00 to $1.10.

Upbound identified several uncertainties around its outlook, including the cost and complexity of integrating Brigit, the timing and extent of expected acquisition benefits, changes in product mix and future cash requirements. The company also cited consumer spending and payment behavior, inflation, monetary policy, economic weakness, credit availability, and legal and regulatory matters as factors that could cause actual results to differ from its projections.