Financial technology company PROG Holdings (NYSE: PRG) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 7.8% year on year to $574.6 million. On the other hand, the company’s full-year revenue guidance of $3.08 billion at the midpoint came in 8% above analysts’ estimates. Its non-GAAP profit of $0.74 per share was 22.3% above analysts’ consensus estimates.

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StockStory’s Take

PROG Holdings' fourth quarter was marked by a decline in revenue as the company navigated both a challenging retail environment and the fallout from a major partner bankruptcy. Management attributed the dip to reduced activity in Progressive Leasing, which was intentionally tightened to protect portfolio quality. CEO Steve Michaels pointed to “meaningful disruption following the bankruptcy of a large retail partner” and described the quarter as a period that required “balance, discipline, and focus.” Notably, the company’s buy now, pay later platform, For, delivered triple-digit growth, helping to offset leasing headwinds and demonstrating the value of a diversified product approach.

Looking ahead, PROG Holdings’ guidance for the coming year is shaped by its expanded multi-product ecosystem and the integration of Purchasing Power, a recent acquisition. Management believes that broadening offerings across leasing, buy now pay later, and employee purchase programs will drive growth, even as consumer spending in durable goods remains pressured. CFO Brian Garner emphasized, “Our approach remains disciplined, eliminating unnecessary cost, and managing spend through a portfolio lens to optimize return on investment.” The company is focused on scaling its digital channels, leveraging cross-product marketing, and maintaining credit discipline to support profitability as it enters 2026.

Key Insights from Management’s Remarks

Management cited the deliberate tightening of leasing approvals, strong momentum in digital channels, and the expansion of the For platform as key themes impacting the quarter’s outcomes.

• Leasing tightening and portfolio health: The company intentionally tightened approval criteria in Progressive Leasing to protect portfolio performance, resulting in lower gross merchandise volume (GMV) but expanding gross margins as credit quality improved.
• Retail partner bankruptcy impact: The bankruptcy of a major retail partner, Big Lots, created a significant GMV and revenue headwind, though underlying GMV in other channels grew in the mid-single digits after adjusting for this disruption.
• For platform scaling rapidly: For, PROG Holdings’ buy now, pay later (BNPL) platform, delivered triple-digit GMV and revenue growth for the ninth consecutive quarter, with active shoppers and purchase frequency both increasing substantially. Over 80% of GMV was generated by active subscribers to the For Plus model.
• Cross-product engagement: Cross-selling initiatives, particularly between For, Money App (a cash advance product), and Progressive Leasing, drove $45 million in incremental leasing GMV, highlighting the benefits of a connected ecosystem.
• Vibe divestiture and new acquisition: The company divested its Vibe portfolio to redeploy capital and completed the acquisition of Purchasing Power, expanding into employee purchase programs and adding a new growth channel that management views as highly complementary to its existing offerings.

Drivers of Future Performance

Management expects the company's growth in the next year to be driven by scaling digital and BNPL channels, integrating Purchasing Power, and maintaining disciplined portfolio management while navigating a cautious consumer environment.

• Purchasing Power integration: The recently acquired Purchasing Power segment is expected to deliver low double-digit revenue growth and contribute to both scale and margin improvement over time. Management noted that initial synergies will come from operational efficiencies and cross-selling, with the largest opportunities tied to accelerating customer and partner penetration.
• Continued BNPL expansion: The For platform is projected to maintain rapid growth, with management focused on increasing active subscribers and improving unit economics through disciplined underwriting and ongoing product enhancements. Scale is expected to drive higher EBITDA margins for this segment in 2026.
• Macro and credit environment focus: Management cautioned that elevated prices and pressure on discretionary income continue to impact demand for big-ticket items, but expects higher tax refunds to provide some near-term support. Maintaining credit quality remains a priority, with credit tightening measures to be adjusted as needed based on ongoing data and consumer trends.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be watching (1) the pace of integration and revenue contribution from Purchasing Power, (2) the continued growth and profitability improvements of the For platform, and (3) signs of stabilization or renewed growth in Progressive Leasing’s GMV as macro pressures and partner disruptions are lapped. Monitoring credit quality and early indications from tax refund season will also be important indicators for near-term performance.

PROG currently trades at $36.11, up from $33.87 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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