Upbound Group, Inc.

Thank you for standing by. My name is Rosselle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Quarter 1 2025 AppBound Group Inc. earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone K-pad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Mr. Jeff Chesnett. Please go ahead.

Good morning, and thank you all for joining us to discuss. We issued our earnings release this morning

before the market opened, and the release and all related materials, including the link to the live webcast, are available on our website at .upbound.com. On the call today from UpBound Group, we have Mitch Fadal, our CEO, and Danny Cudham, our CFO. As a reminder, some of the statements provided on this call are forward-looking and are subject to factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release as well as in the company's SEC violence. UpBound Group undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. This call will also include references to non-GAAP financial measures. Please refer to today's earnings release, which can be found on our website, for a description of the non-GAAP financial measures and the reconciliations to the most comparable GAAP financial measures. Finally, UpBound Group is not responsible for and does not editor guarantee the accuracy of our earnings teleconference transcripts provided by third parties. Please refer to our website for the only authorized webcasts. With that, I'll turn the call over

to Mitch. Thank you, Jeff, and good morning, everyone. As I start my 30th and final earnings call as UpBound CEO, I'd like to share with you my perspective on the state of our business. When I started in this business over 40 years ago, the industry was just starting to transition from a highly fragmented and localized model to a more centralized and professionally run model. And that evolution delivered a host of benefits for our customers, including a consistent experience across all of our stores, as well as unlocking the benefits of our scale, which enabled lower prices and enhanced services across our growing national footprint. That's the playbook that ultimately led to our IPO and powered our success thereafter. As the world changed, our customers changed, and we responded by changing our business as well. And today, UpBound is committed to our mission of elevating financial opportunity for all with a goal of becoming the financial platform that meaningfully and seamlessly improves our customers' financial lives. And I'll start on slide four and talk just about how we're going to deliver and how we do deliver on that mission. We acquired a SEMA in 2021 to grow our ability to offer leases virtually, which dramatically expanded our PAM and enabled us to become a critical sales enablement partner for what's now over 35,000 retail and locations across the country. Since then, we've provided more than 14 million leases to over 6.5 million customers who do not typically have access to the traditional financial services ecosystem. Along the way, we've developed a proprietary and differentiated view of the underserved population, and we know we can leverage that knowledge base to responsibly help those customers with new products through our growing digital channels while delivering that same superior level of customer service. And that's why we added the Bridget business. Their team has developed an innovative set of products that help customers save money, avoid fees, learn to budget better, build credit, and with more offerings on the horizon. Those products are built upon a foundation of data elements and risk insights from banking connections and cashflow underwriting technology. Ultimately, what it means is Bridget has a real time, robust view of its customers' financial needs and can continue to build new products that meet and exceed those needs to help those customers live better lives. Collectively, our brands have a wealth of consumer intelligence of unmatched quality, depth, and breadth covering the non-prime segment, and it makes for a really, really powerful combination that we can harness and unify the data between our businesses on an underserved population that, as I mentioned, doesn't participate in the traditional credit system, and it's looking for options. And this all allows us to be a stronger and more holistic financial partner to them and a more indispensable partner to our merchant roster. You know, over my 40 years in the business, I've seen every cycle the market has experienced. And our business has weathered them all and emerged stronger on the other side every single time, primarily because we kept it simple. We focused on doing what's best for our customers, and when we do that, we earn their trust, their loyalty, and their future business. Because of that commitment, delivered each day by our team, Upbound is stronger today than it's ever been. And with that background, I wanna move to the key highlights from the first quarter of 2025, as well as a discussion on the progress we've made on our priorities for the year, and then, Fami will share a more detailed review of our financial results and, of course, of our outlook, and after that, we'll take some questions. Let's move to slide five and discuss some of the key drivers of our performance this quarter. At ASEMA, we carried last year's momentum into 2025 with GMV growth of nearly 9% year over year on higher applications and funded leases in this quarter relative to the first quarter of last year. As we mentioned before, ASEMA's growth comes from a highly diversified lineup of merchant relationships with the top 10 merchants representing about 30% of the total GMV. ASEMA achieved that growth, that roughly 9% year over year growth, while improving its lease chargeouts by 70 basis points from last year, leading to a step up in adjusted EBITDA margin of 170 basis points.

I'm

gonna say it another way for emphasis, and just to put it simply, ASEMA's been on a tear since late 2023, and it just booked its highest ever quarterly revenue figure while concurrently delivering year over year improvements in EBITDA margins and lease charge off rates. Without question, the world is changing, but we believe ASEMA's growing roster of over 35,000 merchant locations is a unique differentiator that enhances its presence wherever and whenever durable good transactions are occurring. On top of that, our direct to consumer marketplace and AI powered leasability engine unlocks leasing opportunities with unintegrated retailers where we did not yet have a formal relationship. These advantages are meaningful and sustainable, and it's why we expect to see low double digit GMV growth across the balance of the year, and that's on top of 17% last year. At -A-Center, same-source sales were down 2%, mostly as a result of two adjustments we implemented in the second half of last year, and we previously mentioned that we tightened our underwriting to protect our charge operate, knowing that it would also impact our interest growth rate, since that segment doesn't see the trade down benefit as quickly as ASEMA does. In addition to tightening up the underwriting, we removed certain higher loss products from our lineup to optimize efficiency and margins, which created a secondary headwind to top line growth. Overall, that's what drove the slightly negative minus 2% same-source sales. These decisions did yield the expected benefit and produced the least charge operate of .6% for the first quarter, down 10 basis points year over year and 40 basis points sequentially. In a couple of slides, I'll highlight some of the key digital initiatives that we're rolling out at -A-Center to drive even more customer engagement and activity. Now, Bridget joined up on January 31st, and its financial wellness solutions continue to resonate with consumers as we put mid 20% growth in both subscribers and cash advances versus the year ago period. On a pro forma basis, revenue for the full three month quarter was up 38% year over year. We're very pleased with those results, especially when you think about Bridget customarily dials back its marketing spend in the first quarter due to the positive impact of tax refunds on consumer liquidity. That growth also preceded the trials of our cross-sell initiatives, which we purposely started as tax season was concluding. Bridget's emphasis on sustainable growth resulted in customer acquisition costs and a net advance loss rate within our expectations. So let's go to slide six and recap our consolidated financial results in Q1. First quarter revenue of nearly 1.2 billion was a .3% increase from a year ago period, mainly driven by strength of the SEMA, plus the addition of two months of Bridget. Upbound delivered 126 million of adjusted EBITDA, which was a lift of almost 16% against Q1 of 2024 and adjusted EBITDA margins of 10.7%, which was up 70 basis points from last year. 90% diluted EPS was a dollar, which was about 27% higher than a year ago quarter. Upbound generated free cashflow of 127 million, which is nearly four times larger than last year's first quarter result. Each of these figures, each of these really strong figures exceeds the midpoint for the high end of our guidance rates that we provided on our last call. In terms of these charge-offs, we finished the quarter at .9% for SEMA and .6% for Renna Center, representing improvements both year over year and sequentially. These are really strong results and I'm pleased that Upbound delivered them during a period of macro uncertainty and our customers, as you know, are seeing the same headlines as the market, whether it's tariff escalations or a sticky inflation. On the other hand, unemployment is around 4%, which is below the pre-COVID 10-year average and the average tax refund has been ahead of the prior two years, slightly ahead at least, which affords our customers a boost to either their spending power or their savings cushion.

Additionally, there's been

a nice pullback in gas prices at the pump, which is meaningful for lower income consumers. Non-balanced, our consumers are confronting that volatility with deliberate shopping and spending decisions. As I've seen quite a few times in the last 40 years, a tougher macro environment gives us as many tailwinds as it does headwinds. Just look at the trade-down impact that the SEMA is seeing right now. We've proven over the years that our business can be more and more relevant to consumers in times like these. Durable disc categories like furniture, appliances, and tires are often necessities that need to be addressed in the moment. And our value proposition of high quality goods and low payments, no long-term financial commitment, and tremendous flexibility can attract even more new customers to LTO offerings during uncertain conditions. Just go back and look at our results during the Great Recession in 2008, where we outperformed the market, grew our business, and managed losses at our normal levels. Additionally, we have new products outside of Leastone with our new instant cash advances via Bridges that can help customers manage their liquidity and avoid expensive bank fees. And this is how the full spectrum of up-bound solutions can make a meaningful difference in people's lives. And the current economic climate really amplifies the value proposition we deliver for our customers. Convenience, flexibility, access to name-brand durable goods on the LTO side, and now liquidity solutions and financial literacy smart alerts, credit building and the like, many financial wellness tools on the Bridges side. We're well-prepared to support our existing customers while welcoming these new customers to our family of brands. With our existing offerings and a pipeline of new products coming this year, which is a good segue really to slide seven, which discusses our strategic priorities for 2025 that we outlined a few months ago. Across the first quarter, we make great progress in our digital investments, so it's a stronger, more efficient, more unified customer experience. And we're continuing to build new connections between our segments towards our goal of providing a seamless set of financial solutions to our customers. At Acima, we debuted an upgraded product experience. The new design was informed by the latest intelligence and customer preferences and shopping habits, resulting in a more personalized and tailored experience for Acima's user community. That personalization is unlocked by the product ability to capture more insights about the customer, such as their shopping preferences in stores and online, their favorite categories, which the app can then feature, and their leasing history, so Acima's recommendation engine can suggest related products collectively. It means we can communicate more effectively and more efficiently with our customers. They have them return for the next lease more quickly and drive GMB growth. I'm also pleased to preview a new initiative for Acima, which is to launch a pilot in the Mexican market later this year or early next year, depending on regulatory approvals. And Acima's expansion in New Mexico is a natural extension of the success that it has achieved here in the US in a market where we already conduct business around the center with millions of target consumers who can benefit with a low payment, flexible lease product to access durable goods. Acima's leveraging the established local expertise of the Renna Center Mexico team for in-depth visibility in the consumer spending and payment patterns, decisioning models, and account management strategies, along with operational support tied to the 130-store footprint we already have down there. Acima's scalable platform combined with Renna Center Mexico's local infrastructure creates a strong foundation for cost-effective, accelerated growth, and we look forward to updating you on our progress across the balance of the year. At Renna Center, we are seeing promising early returns on our digital enhancements, which are designed to boost the conversions from shoppers to customers. These include the new Google AI search functionality on the core website, which is now returning search results more tightly aligned with our shoppers' intent. We also rolled out a new online chatbot to more intelligently guide customers through the shopping journey towards the right leasable item, and for when they're ready to apply for a lease, they will really appreciate our streamlined application flow, which is designed to deliver a more frictionless experience and minimize abandoned. From an account management standpoint, we recently embedded Cash App payment capabilities, and we know Renna Center customers will appreciate more ways for us to pay, especially considering it's already high penetration with our customer base. So, really happy about adding Cash App payment capabilities. In addition to our continuing digital investments, enhanced collaboration is a paramount priority for this year, especially with the addition of Bridget. A key differentiator for Bridget is this cash-low underwriting platform, which Renna Center and Acima will test into over time. We believe that real-time data will produce more approvals and fewer losses across the business, and right now, we're focused on introducing our Renna Center and Acima customers to Bridget offerings through digital messaging and marketing collateral in our stores. We're just ramping up that effort, but over time, we believe we can deliver new customers to Bridget at essentially no incremental cost, which will lower Bridget's customer acquisition costs and drive further growth. As always, our teams will continue to develop collaborative approaches to support our customers in reinforced transaction volumes. And before Fami takes you through our segment results in a little more detail, I'd like to acknowledge how talented and dedicated our team is, and they continue to turn our aspirations into reality. And every day, our teams relentlessly focus on our customer, helps bring our mission to life, and their commitment and motivation is second to none, and I'm really humbled each day to be a part of such a special group. I know I'm gonna miss being part of this group. They're doing such a great job, and I sure appreciate each and every one of them. And with that, I'll hand it over to Fami.

Thank you, Mitch, and good morning, everyone. Let's now turn to the segment results and then discuss our outlook for the balance of 2025, after which we will take questions. ACIMA recorded Q1 GMV growth of .8% year over year, in line with our expectations and an impressive print, given we are comping nearly 20% growth in the same quarter of 2024, resulting in approximately 29% GMV growth on a stacked two-year basis. ACIMA's GMV this quarter was the highest it's been in the first quarter since the pull forward in 2021, and it was driven by an increase in applications of more than 10% year over year. The quarter started off slowly with a delayed tax season that picked up meaningfully in March, with double-digit growth year over year, which continued into April. In the first quarter, the GMV growth was sourced from new merchants added during the quarter, and also an impressive increase of nearly 80% year over year from our -to-consumer marketplace channel. Our sales team's success in onboarding new merchants reinforces our diversified lineup and minimizes concentration risk, and this quarter our top 10 retailers represented just over 30% of GMV. Our largest product category, furniture, only represented approximately 40% of GMV in the first quarter compared to approximately 45% last year. ACIMA revenues grew .5% year over year, which was the fifth consecutive quarter of double-digit growth, and adjusted EBITDA was up 31% from a year ago. Adjusted EBITDA margins were up 170 basis points from Q1 of 2024, driven by three main factors. First is the multi-quarter run of strong GMV growth that is now producing higher returns as more of those customers are staying on rent longer and driving a larger portfolio. Second is that ACIMA's loss rate of .9% for the first quarter declined 70 basis points year over year and 10 basis points sequentially, which aligns with our expectations as trade-down has given us the ability to tighten underwriting in certain high-risk segments. And the third element also ties back to the elevated trade-down levels ACIMA saw across 2024 and into 2025. We have highlighted that while those customers more often elect the earliest purchase option, which is a lower margin result for ACIMA, they also often come back for a second or third lease, and those repeat leases are more profitable than the first lease, even if the customer elects the 90-day early purchase option each time. Despite that short-term impact to gross margins, we were able to expand our EBITDA margins again this quarter, consistent with our guide for

the year. On page nine, let's discuss our first quarter with Bridget. Since closing the

deal on January 31st, the Bridget team has maintained their momentum and ended the first quarter with over 1.2 million subscribers, which is up more than 26% year over year and up over 2% sequentially, consistent with our expectations given the seasonal impacts of tax refund receipts, which reduced the need for liquidity solutions in Q1. ARPU, or average revenue per user, was $12.88 on a monthly basis during the two months following the acquisition, up nearly 6% from the corresponding period a year ago, from a combination of user-mixed shifts between Bridget's Plus and Premium plans, improved revenue collection models, and the contribution from expedited transfer fees. The subscription income made up about 3 quarters of Bridget's revenue, with the balance coming from the expedited transfer fees and the marketplace, through which Bridget receives affiliate income. At quarter end, Bridget finished with approximately 49 million of cash advance volume on the balance sheet, after making over 335 million in advances from the start of the year, a 27% increase from Q1 of 2024. The shorter duration advances result in capital efficiency while enabling the team to quickly adjust underwriting and turn over the book within two or three weeks, rather than months or quarters, to manage risk in response to changing market conditions. For the two months following the acquisition, Bridget's cash advance loss rate was 2.4%, defined as cash advance losses divided by total originations in the period. In terms of financial metrics, Bridget recorded 32 million of revenue and 11 million of adjusted evidav for the February and March ownership period, with top-line results representing an increase of about 35% against Bridget's performance from the corresponding period a

year ago. Let's move to the Renna Center results, starting on page 10. Beginning this

quarter, we combined our Renna Center segment and the franchising segment to align with our organizational structure and how this segment will be managed. Their results will be presented on a combined basis going forward. From a mapping standpoint, franchise merchandise sales will now be reflected in merchandise sales, and royalty income will now be presented in other revenues.

There was no

change to the bulk of Renna Center's revenue, which is rentals and fees. With that context, Renna Center delivered revenue of $489 million, down .9% from the year ago quarter, due to 110 fewer company-owned stores after the consolidation and franchising efforts in the second half of 2024. This outcome was consistent with the -single-digit setback we highlighted on our last call. Same-store sales were down 2% -over-year, reflecting fewer deliveries in the first quarter relative to the prior year period, due primarily to our decision to exit certain product categories and tighten underwriting. Streamlining our lineup of lower profitability items will impact demand in the near term, but protect our margins in the longer term. In terms of the product mix, furniture and appliances represented approximately 66% of revenue, which was consistent with the year ago and sequential periods. Renna Center's adjusted EBITDA was $72 million, down 14% from the first quarter of 2024, due to less rental income, as I mentioned. As our digital efforts continue to transform our service model, we expect to operate more efficiently and over time reduce the fixed-cost infrastructure. For the first quarter, e-commerce represented approximately 27% of total -to-own revenue, up slightly from both a year ago period and sequentially. Renna Center's loss rate finished at .6% for the first quarter, an improvement of 10 basis points year over year and 40 basis points sequentially. Our targeted tightening in the back half of 2024 is benefiting the health of the portfolio, but in contrast to a SEMA, it has a bigger impact to the size of Renna Center's portfolio. A SEMA benefits from trade-down in real time at the point of sale, whereas Renna Center has not realized this benefit yet. If the macro backdrop does deteriorate, Renna Center could also see a trade-down impact and an uptick in

demand. Let's cover our liquidity and capital allocation policies on slide 11. When the market

is characterized by heightened volatility and uncertainty, it is reassuring to have a durable business model, strong balance sheet, reliable access to funding, and bedrock principles for allocating capital. Coming off the holiday shopping season and supported by tax refund payments, our business generated over 127 million of free cash flow in the first quarter, up substantially from 34 million in the prior year. We are committed to investing for the future, but we are reassured that if we choose to moderate our growth, the business can generate meaningful cash flow. We finished the first quarter with 312 million in liquidity between cash on hand and our revolver availability. Despite the expectation for continued growth at a SEMA and Bridges, we expect liquidity to improve across the courses of the year, thanks to the cash generated from the Renna Center segment. And while it is not expected to be needed in the near term, Bridges' instant cash advance receivable balance can be leveraged opportunistically in the future to potentially up-stuype the company's revolver capacity. With the profile of our existing balance sheet, we are confident that UpBound can support our capital allocation priorities, which continue to focus on investments in the business, supporting the dividend, and delevering. As for leverage, our net leverage ratio was approximately 2.9 times on March 31st, up slightly from 2.7 times at year

end, reflecting the closure of the Bridges transaction. Let's shift to our financial outlook, beginning with the potential impacts of tariff changes. The introduction

of the new tariff schedule did not directly impact our first quarter results. The turbulence associated with the implementation and the response by other countries has impacted market expectations and consumer confidence, with potential implications for lower investment, limited hiring, and higher inflation in the broader economy. In response, many of Renna Center's suppliers, which are the same for Acima's merchants, have diversified or are diversifying their global supply lines by shifting manufacturing to low-cost, low-tariff regions, or even nearshoring their operations to Central America, so they are better prepared for however the final trade deals land. We are also assessing alternative suppliers who may be less impacted by potential tariffs based on their manufacturing and sourcing footprint. Overall, we believe Renna Center's direct tariff exposure is modest. Furniture and appliances, our two largest categories at Renna Center, over 70% of the expected 2025 purchase volume is assembled in the US, with much of the balance sourced from Vietnam, Taiwan, India, and Mexico. Our direct from China exposure is less than 20% of the -to-date orders, and that volume is nearly all computers and gaming consoles, where certain exemptions currently apply. Renna Center's top suppliers in those categories are actively adjusting their supply chains in response to the targeted tariffs, which we expect will help offset any exposure to possible pricing actions. Let's spend a moment on the unique element of Renna Center's model, and how we are different than a traditional retailer. In this environment, inventory is critical, and Renna Center has a natural buffer to potential tariff impacts through the floor inventory, and any merchandise that is returned to be re-rented. It allows us to meet demand and manage our margins without raising prices on most items. From a consumer behavior standpoint, Renna Center's customers have historically returned rented merchandise at a higher rate in difficult times, mainly to protect the relationship they have with the brand. Renna Center expects that will be a key factor towards mitigating its charge-off rate, while also maintaining inventory levels and creating new opportunities for re-rentals. On the -to-market side, we have two primary levers when originating a -to-own agreement, which are the weekly payment and the term to achieve full ownership. Each of these can be adjusted on the margin, meaning by one or two dollars per week, or by adding an extra few weeks at the end of the term to preserve the affordable access and price points that our customers prioritize while passing on any price increases. We believe these efforts will limit any potential pricing shocks and minimize the impact on consumer demand, while also still supporting our sales enablement efforts at our merchants during such an uncertain time. Our team has seen a version of this environment before, during the post-COVID supply chain bottlenecks in 2021. Because of that experience and our long-time relationships with our vendors, we are reacting with speed and precision to protect our customers, our merchants, and our business during this period. Beyond our operational levers, we're also sensitive to potential changes in consumer behavior. We have not seen any slowdown in purchasing or payment behavior yet. The momentum we experienced in March continued in April with another strong GMV month. We will continue to monitor the environment and we will carefully adapt our value proposition, our sourcing strategies, and our underwriting accordingly. Just to be clear, we see this as an opportunity in the months ahead. If the trade policies result in real or perceived pressure on non- and near-prime household liquidity, which causes the lenders above us to tighten further, we expect to benefit from further trade-down. Our Bridget business, which should also benefit from more consumers looking for liquidity or looking for ways to save money and or for

budgeting insights. In terms of how it affects our guidance, these currents and

counter currents mean less visibility into the quarterly cadence of our results for the year. However, ASEMA's momentum reinforces the resilience of our model and gives us the confidence to up-bound as well-positioned to achieve the guidance for 2025 that we shared on our prior call. We had a very strong first quarter and are confident in our ability to successfully manage through uncertain economic times as we have demonstrated in the past year. in the number of non-GAPs alluded over the years. As a result, we are pleased to tighten our ranges and raise the midpoint of our full-year 2025 targets for revenue, adjusted EBITDA, and non-GAPs alluded EPS. As we build towards the full year, we are sharing our initial view on the second quarter with revenues ranging from 1.05 billion to 1.15 billion, adjusted EBITDA of 125 million to 135 million, and non-GAP EPS from $1 to $1.10 for the quarter. At the segment level, we expect ASEMA to deliver low double-digit GMB and revenue growth, with EBITDA margins slightly better than the year ago period. These charge-offs are expected to remain stable sequentially. Renna Center's revenue should follow the same seasonal sequential path as 2024, with a -single-digit step back in Q2 compared to Q1, with EBITDA margins down slightly sequentially despite an improvement in loss rates. Bridget's Q2 revenue will reflect a full quarter of ownership, with expected mid-teens EBITDA margins and a net advance loss rate similar to Q1. For Bridget, let me highlight a classification item. Their administrative costs will be reported in upbound corporate segment, which elevates Bridget's segment-reported EBITDA results compared to the original guide, which at the time represented the business results on a standalone basis. We implemented this reporting element for consistency with our other business segments, but these expenses will be counted as a deduction to Bridget's results when calculating the 2026 performance base to earn out. Upbound's original guide for Bridget this year was 25 to 30 million of EBITDA, but with the reclass of certain expenses to corporate, the segment results should be 35 to 40 million. Again, this change is net neutral on a consolidated basis. As a result, our corporate costs will be slightly higher in 2025 and 2024 in the mid to high single-digit area. Also at the corporate level, we are modeling one interest rate reduction in September. We expect the tax rate to be consistent with 2024 at approximately 26% and steady across the quarters, with an average alluded share count for the year of approximately 58.9 million shares, which includes the shares issued for the Bridget acquisition. For the year, we are revising revenues up to be in the 4.6 billion to 4.75 billion range, adjusted EBITDA to be 510 million to 540 million, and we're tightening our full year guide of non-GAAP EPS to a range of $4 per share to $4.40 per share. The midpoint of our revised guidance compared to 2024 represents an increase in revenue of more than 8%, an increase in adjusted EBITDA of nearly 11%, and an increase in non-GAAP EPS of about 10%, with no share repurchases assumed. We feel very well positioned today, given our experienced team, our resilient business model, our underwriting expertise, diversified product offerings, a strong balance sheet, and long experience serving the non-prime consumer. Let's wrap up with some key takeaways. For our stakeholders, it is critical to recognize that this was a milestone quarter for our business. On the operational and strategic growth side, we closed on the Bridget acquisition and welcomed their team to the upbound family. We added a sixth quarter to a team's run of strong GMB growth, and we took targeted actions to spur run of centers growth, while delivering P&L results ahead of our guidance. At the upbound level, as previously disclosed, we successfully resolved the CFPB matter after their voluntary dismissal with prejudice. This was a longstanding regulatory matter involving a SEMA that we are pleased is behind us, with no changes to our business or financial penalty. As I shift into the CEO role next month, I wanna emphasize that our team is committed to staying on our strategic course, which is to be the holistic financial platform dedicated to the underserved consumer that seamlessly improves our users' financial lives and reduces their financial stress. Our fundamental priorities will remain hyper-focused on delivering consolidated top-line growth through combining our broad set of capabilities with our unwavering commitment to our customers and our merchants. We will also elevate our operational performance and our collaboration across segments to drive innovation and efficiencies in our products and processes. And finally, we will deploy capital effectively towards those goals and towards shareholder returns. Together, we believe we are well positioned to achieve sustainable value creation for all of our stakeholders. Thank

you all for your time this morning. Operator, you may now open the line for questions.

At this time, I would like to remind everyone in order to ask a question, press star then the number one in your telephone keypad. You will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Brad Thomas with K-Bank Capital Markets. Please go ahead.

Hi, good morning, and Mitch, thanks for all the help. It's been a pleasure working with you all the years. And Tommy, congratulations on the new opportunity for you.

Thanks, Brad. Thank you, Brad.

I wanted to start with a tariff question and was, you gave some very helpful commentary there about your exposure and levers that you can pull. But I was wondering if you could just give us a little bit more color in terms of what if anything you're seeing in terms of price increases from suppliers to the -a-censor stores and what you're expecting going forward.

Good morning, Brad, thanks for the question. So yeah, a lot of uncertainty right now and a lot of headlines around tariffs. And to date, we have not encountered any price changes at all across the board. And in certain segments or certain categories, TVs, and even in certain appliances, we've actually seen a reduction of what we're buying today versus the same time last year. So to date, no price increases. Of course, that can change relatively quickly, but as of this morning, no changes to any of our prices. But I think also, and just as important, we mentioned it in the prepared remarks, is our ability and demonstrated track record of being able to adjust our pricing by the weekly payment, a dollar or two a week, or even adding just a few weeks to the end of the term, can make up for any price increases that we've seen in the past. And we're confident we can pass that on again if need be. And also, I also wanna keep in mind that if it does happen and inflation does tick up, the benefits of the business model itself and some of the upside we'll see from more folks choosing lease to own, whether it's through RAC or a SEMA, as we said, we view it as potential upside to the story and to the guide this year. So we'll watch it very closely, we'll monitor it, and we'll be able to adapt as we see things kind of get finalized, hopefully over the next few weeks.

Yeah, good morning, Brad. This is Mitch. I just had some family comments there. As he said in the prepared comments, we expect any price increase to be pretty modest because something like 75% of the furniture and appliances we get today are made in the USA anyhow. Very little exposure really to China. It's mostly the game councils, I think he said, in your prepared comments, family, game councils and computers, which at this point are tariff exempt. And we and our suppliers are looking to put them together in the US versus getting them from China and all those kinds of things. So it's pretty modest, although on the other hand, as Fami mentioned, keep in mind that when the dollar to a week that Fami was mentioning, if we have to add a dollar a week to our rates, on average, that's a 4% price increase and it's only a dollar to the customer. Yeah, that covers 4%. If we had a month to our average term of about 15 months with that 7%, one over 15. So if you had a month at 7%, you had a dollar, it's 4%. And also when you think about the fact that our margins on the renter center side are pretty high, if you have a $100 price increase somewhere, our cost increase in our average margin, you know our pricing model, Brad, more like about two times cost is our cash price and two times cash price is our rent own amount, at least contractually for someone to take ownership. So you're talking about, if you get a $100 cost, you're gonna have about $400 worth of revenue against it. So what we saw during COVID when supply chain got tight and we had to raise prices as costs went up, it actually helps same source sales and so forth. So you get trade down to family's point, plus actually some higher prices don't hurt and you don't eliminate people's affordability because it's adding a dollar or two or a month. So it's not gonna affect us the way it would affect maybe traditional retail. And I guess the last point you gotta remember in this environment, our inventory, we have a lot of inventory and about half the inventory that we run on the rental center site gets returned. So it's in our system about 15 months on average. So all the inventory we have now really becomes our friend in this case. And the cost is already there and it's gonna be in our system about 15 months. So our current inventory is our friend, as I said. So lots of reasons not to be near as concerned as maybe traditional retail.

That's very helpful. For my follow up question I wanted to ask about Bridget, seems like it has a very exciting outlook just on a standalone basis. And again, lots to be excited about there. How are you thinking about the roadmap or potentially integrating it more across the business and synergies that you might be able to have from owning it and the timeline for that?

Yeah, Brad, I would say yeah, to your point, the results have been really good. Better than even we expected to start off with the first couple months of ownership with revenue up over 35%, subscribers up 26%. And that is actually, as we said in the prepared comments, we have started email campaigns of introducing -A-Center and Acima customers to the Bridget brand, but we kind of waited till after tax season had kind of gotten underway and almost finished up just to hopefully be more well-timed as far as our reaching out to those customers. So good progress there on track. As we said, we're gonna start with marketing collaboration. And then we've also started down the path of some of the data collaboration and sharing data, especially around some of the cashflow insights that we've highlighted with Bridget and some of that proprietary modeling and then just consumer transparency in their data and their information. So that's on the come. I do think you'll start seeing that maybe later in the year being something that we utilize across all of our brands to not only approve more customers, but also mitigate losses as well. So I would say we're on track from kind of the integration plan and still super excited about having them part of

the upbounding group.

Very helpful, thank you so much.

Thanks, Fred.

Your next question comes from the line of Bobby Griffin with Raymond James. Please go ahead.

Good morning, buddy. Thanks for taking my questions and congrats on a good start to the year.

Thanks, Bobby.

I guess, firstly, I want to go back to Bridget. Looks like the business, as you guys were talking about, is off to a great start. Can you help us understand a little bit of the seasonality of this business? You mentioned tax refunds need less liquidity, but the EBITDA for two months was pretty good. Just kind of asking in the context, if we take this two-month rate and even look at it at the changes in guide to account for the accounting differences, it still looks like the business is off to a very good start. So is there some seasonality we need to keep in mind as tax refunds roll off or different things like that?

Yeah, Bobby, good morning. There is some seasonality, especially when it comes to the margin profile. Q1 is going to be the highest margin profile for the year. As we mentioned, you have a little bit less marketing spend given liquidity is pretty flush during tax season. So we pull back a little bit on the marketing side. You also have seasonally low losses. So from a margin standpoint, that is a %-ish margin that we posted for the two months of ownership. That will come down. And we said that in the guide to call it mid-teens in the second quarter. So there is some seasonality when it relates to kind of marketing spend and margins, adding subscribers as well. It's pretty flat, Q4 to Q1. That's been the trend over the last few years that continued this year, but then you should start seeing it pick up post-tax season. Collections is strong. And the collections have been good. Yeah, in the first quarter, that helps collect. It's a lot of budgets. And so margins are good in the first quarter. We'll start spending a little bit more on the marketing side. You should see an uptick in the number of subscribers in Q2 and Q3.

Okay, that's helpful. I appreciate that. And then maybe secondly, kind of different topic, but just the call out of the test or the expansion of a SEMA in Mexico. Can you unpack that aspect a little bit more, just kind of how you'll go about that balancing the upside scenarios, obviously, but with the risk of from the loss ratios or kind of going into a new market with a new product?

Yeah, good question. Bob, we were pretty excited about taking SEMA to Mexico. I know the team is as well. And the risk of going into a new market certainly would be much, much higher had we not had Renison down there since 2010. So with 130 some Renison stores down there and performing well, with the dollar, the currency stuff, you don't see as much EBITDA as maybe would warrant. But in pesos, they continue to grow their profit year over year. And some of it gets lost in the currency translation, like I said, but we're doing very well down there in the Renison center store. So we've learned a lot from a decisioning standpoint, collection standpoint, and all those kinds of things that a SEMA is gonna piggyback. So I don't think there's the normal risk of going into a new market the way there would be if we hadn't already been down there with Renison. And obviously, a lot of the Renison infrastructure is gonna support the SEMA team as they expand down there. So we're excited about it. There's millions and millions of customers down there as you probably realize. And it just seems like a great extension, a great growth vehicle for SEMA without a lot of risk, because we already know the market with our Renison stores down there. Without a lot of capital spend either. Yeah, without building store. We just can't grow Renison fast enough down there really. Who wants to open another 500 brick and mortar stores today, whether it's in the US or Mexico for that matter, and the capital expense. And you'd wonder about the investment at the market that from a US standpoint makes $7 or $8 million of EBITDA and how much you're gonna put into it by opening a whole lot more Renison to take advantage of all the demand. But a SEMA with a low capital model obviously is the way we believe we should grow down there.

Very good. And I'll add my congrats, Mitch. Best of luck in retirement. It's been great working with you going all the way back to my research associate days and family. Look forward to continue to work with you in your new role.

Thanks a lot, Bobby. Appreciate it.

Your next question comes from the line of Hong Wen with Ido Cohen. Please go ahead.

Hi, guys. And yeah, best of luck to your retirement, Mitch, and congrats on the new role, Femi. I just want to touch a little bit on Bridget. So it looks like revenue growth in one key was about 35%. I think in the original plan that you guys laid out that calls for acceleration in revenue growth maybe towards the later part of this year, next year. Now that you have had two months of looking into this, can you give us a little bit more color on the plan, how you guys are gonna accelerate growth in Bridget going forward?

Yeah, Hong, I would say what we've experienced over the last two months, three months since we announced the deal has been pretty much in line with what we expected. And we're on track to hit the numbers that we outlined in the initial guide for 2025 and on track to hit what we predicted for 2026. So nothing really has surprised us, nothing has really changed. I think the macro backdrop is very conducive for people to need liquidity and need the products that Bridget offers, not just the instant cash, but the credit building and all the financial literacy tools. So we're just as excited and feel like the growth is on track based on everything that we're seeing. The pipeline of new products that we're piloting now that will also add more to the bundle and actually have new bundles on the way. All of those things are gonna going to contribute to the revenue growth as well as the EBITDA expansion that we expect from 25 to 26. So I would say everything that we expected is on track. Nothing has slowed us down. If anything, we're more positive on the story and the integration possibilities between the three brands.

Yeah, the cross-selling is really, even though we waited till the tech season was winding down, they're putting a lot of good stuff together, the marketing teams are working great together very collaboratively on the cross-selling start, as I mentioned, and working with Zubin, Hamill, Farah, Arvind and those folks at Bridget has gone really smoothly with our marketing folks here to get that cross-selling going. So yeah, if anything, we're more excited than we were a few months ago when we closed it.

Got it. And I mean, as you guys cross-sell more between Bridget and I guess the least owned business, I mean, is there an argument to be made that it's gonna, I guess, reduce the cyclicality of your overall business? And can you give us some of the timeline of that cross-selling efforts that you guys are gonna roll out?

Well, the cross-selling efforts have already begun and we've seen some good response rates from some of the email campaigns that we've done for both Renes Center and Acima customers, but again, still very early stages. You know, as far as the business itself, I mean, I think both of our, all of our businesses today are conducive to being recession-proof or countercyclical, meaning when times get tough, the demand for those products should go up. If you think about the least owned product, what it offers from a low payment, low entry point to the flexibility with no financial commitment going forward, you know, again, the low payment and flexibility really should drive demand in tough times. And with Bridget, you know, thinking about liquidity solutions, getting up to $250 in between paychecks, helping you understand how to save your money and maybe earn more along the way, all of those things are, you know, will help keep the business resilient and

countercyclical. Got it. Thank you and best of luck to you both. Thanks, Tom.

Thanks, Tom. Your next question comes from the line of Anthony Cicamba with Look Capital. Please go ahead.

Good morning and Mitch, thanks for all your help over the years. It's been great working with you through good times and bad. And Fahmy, you know, congrats on the promotion and look forward to continuing to work with you. And also congrats on the strong start to the year. So my question... Thanks,

Anthony.

Yeah. So first question, you mentioned in the -A-Center business, you know, sort of exiting or cutting back on some lower margin, you know, products. What specifically were those products and why were they lower margin? I'm assuming it's like just higher or least charge off rates, but if you could just give a little bit of color on that.

Sure, Anthony. Morning. So on the -A-Center side, those products mostly were mobile phones, handheld devices, but mostly mobile phones. Yeah, to your point, we just weren't seeing the loss performance, the profitability wasn't there. A lot of demand for those types of products, obviously, but, you know, we just have to filter that demand into, you know, hopefully furniture and appliances, which have better losses and better profitability. So we thought it was good use of trimming the product line. It does have a little bit of a near term headwind as far as deliveries go and maybe gross profit, but longer term, we think it will be even dot positive for us to eliminate those kind of low profitability type products.

Yeah, I think the other thing I'd add to that is it was an easier decision too, Anthony. When you think about the two kind of self-induced reasons we've gone from slightly positive to slightly, you know, slightly negative, same sort of sales around the center at minus two. The underwriting, tightening the underwriting, and then the products, as you tighten the underwriting, we're gonna approve a whole lot less of those phones anyhow because they're at a high loss rate. So they kind of go together, tightening the underwriting and getting rid of those. And the other thing that made it easier was that mobile phones and mobile devices are really an important product for Asima and they do well with them. They don't have that loss problem. You need that difference in the customer. You know, the Renisoner customers, there's a step below income level wise and even credit score wise than the Asima customer, right? So you need that step up. And so basically we're putting that business over in Asima and at this point when someone at Renisoner wants a mobile phone, we're trying to get them over to Asima to get their mobile phone where they're used to underwriting for that particular product. And not many of the Renisoner customers will get approved for mobile phones at Asima, but a few will. But we really need that customer to be a little higher up. And I guess my point is it's not like you can't lease mobile devices, you can at the Asima level. But what we found is that the Renisoner level is not the best product. And for those few customers at the Renisoner level that should get approved, we're trying to get them over to Asima. So that's that whole strategy.

Got it. And just to confirm, so essentially what you're saying is because that Asima customer's generally a higher income customer, then if they're approved for a mobile phone, there's probably gonna be a lower lease charge off rate because they are a more well-hosed customer. Is that the right way to kind of think about it at a high level? I don't mean to belabor the point. Yeah,

no, you're right. Our mobile phone category at Asima performs. So you can rent them, you just need to be a little higher income level than the Renisoner customer.

The approval rates that we have at the Asima for mobile devices is gonna be pretty low because of that risk. But for those that we do approve and book, it performs in line with our expectations and we can make some money out of it. Of course, on

a phone, you can have a low approval rate and still do a lot of business because everybody always wants a new phone whereas unlike furniture and a refrigerator, you can do so much more with phones. You can have a low approval rate. You can really filter through and still do a lot of business. But it's just a better business for Asima than it is for Renisoner.

Well, for whatever it's worth, I'm sticking with my iPhone 14, but thanks for the update.

I appreciate the case. I would have too, and mine didn't end up in the pool last year. So I would have stuck with my iPhone 10,

but got it. Thank you. Thanks, guys. Thanks, Anthony.

Next question comes from the line of John Rowan with Johnny. Please go ahead.

Good morning.

Good morning. John?

Mitch, I'll offer my congratulations on a good career. It's certainly been quite a long time. It's been a lot of fun.

Thank you.

It's been a lot

of

fun

for me, for

sure. So just one, I guess, one housekeeping question first. Just looking at kind of the non-GAAP table and what goes back into it. Where should we expect things to change going forward? I'm assuming with the CFPB matter settled and obviously the Bridget transaction behind us, those two line items are significantly reduced or kind of go away entirely. It's one of the bigger chunks out of the special items that were called out.

Yeah,

you know,

John, that legal matters line item that you're referring to in the table covers more than the CFPB matter. So you'll still see it there as we work through some of the other cases that that relates to. And yeah, you know, we're kind of winding down some of the adjustments related to the ACIMA acquisition just to ramp up some of the adjustments for the Bridget acquisition in that reconciliation. So that will take some time for us to work through. But as far as the legal matters go, we still are dealing with a couple other cases. And so you should see that accrual move as we progress on those claims.

Okay, and then just maybe one other kind of slight angle change on the tariff question. You know, I've been around long enough to, you know, know that there has always been a waterline where, you know, an item requires financing, right? It used to be $300, right? Where anything below $300 was really more of a cash purchase for your customer above that really required some type of financing. Is there any possibility that tariffs, whether or not they cause price inflation of goods, can bring customers back into the fold because they require financing now? And maybe $300 number is a really old number. Is there kind of an updated number where, you know, that cash purchase line, you know, that cash purchase line is for the consumer?

No, that's a good question, John. And $300 is still about the ballpark of where we do business at 300 and above. So you're still spot on with that. And I think you're spot on with the point that, especially on electronics, the deflation we've seen in TVs since they, well, we've always seen a lot of deflation in TVs, right? Then they went up with COVID supply chain problems and now they've kind of cratered again on deflation. So any increases there, you know, I dare say would help us. And, you know, to rent more, again, you go back to we can add a dollar or two, we can add a month or two and easily still make it affordable for the consumer. So I think it's a tailwind. And, you know, people hesitate to believe our recession resilient story. You know, I think guys roll when we talk about it, but we have a 40 year track record or maybe I have a 40 year track record, but -A-Center has a 50 year track record through different economic times. And I mentioned in my prepared comments, look at 2008. I mean, this is a business that's not only resilient, but outperforms in tough times. And you're seeing it would trade down right now at a SEMA. Famie mentioned, we expect, you know, the first quarter got stronger as it went on, as the economy weakened. And he talked about low double digit growth as the quarter ended and then April performed the same. So we're looking at low double digit growth, which is actually an acceleration from the beginning of the year to SEMA. So, you know, and -A-Center being minus 2% is more self-induced on underwriting in those products we took out, like I mentioned. So this is a, in so many ways, this is a recession resilient story. And there's a lot more with all the things out there right now, including the uncertainty, there's a lot more tailwind there for us than headwinds. And even the uncertainty is a tailwind in that if the consumer's uncertain, well, why would you go take on debt? Why wouldn't you just lease it and see what happens? And that's what we've seen in the past. And I believe that's what we'll see again and we're already seeing it. So I think your question's a good one. And it could benefit us a whole lot more than it could ever be a headwind.

Great, thank you, Mitch. Thanks, John.

Your next question comes from the line of Bill Reiter with Bank of America. Please go ahead.

Hi, good morning. Two hopefully quick ones. The first, the 70 to 75% of products assembled in the US, I was wondering if that was specific to -A-Center or if that was across the industry. And I was kind of wondering whether you had talked to your customers on the Athena side and knew whether some of them were manufacturing more in China and may have indicated that they will be pushing through price increases.

The number I was referring to was a -A-Center number of what we buy versus knowing everything that our partners buy. But I can tell you talking to some of our bigger partners at the Athena side, that there's not a lot of, a lot of people have gotten out of China over the last few years anyhow. Vietnam's become the bigger place for getting furniture kits made or different furniture. So I think a SEMA, it's gonna be similar numbers without a lot of risk to tariffs, but the numbers I was quoting was -A-Center. Maybe, and we think it's modest to the SEMA as well. And we're not hearing anything yet from any of our larger partners about any big scare on tariffs. It's certainly not the furniture guys. We were just met with one of our, well, we've met with two of our larger furniture partners in the last couple of weeks and not a whole lot of concern on their end that prices are gonna spike.

All great to hear. And then secondly, given the integration of Bridget, would you say that you're currently kind of in a period where you're not looking at much M&A as you kind of move towards that two times target? And that's all for me and thanks for fitting me in with the question.

Sure, Bill, I think that's a fair way of looking at it. I think we've got a lot of room to go between integrating Bridget, cross collaborating with -A-Center and SEMA, a lot of different initiatives that we have in-house, whether it's on the rentacenter.com and the digital channels and the consumer driven approach at SEMA. I think we have plenty in front of us to hit our growth targets and plus some. And then with this level of uncertainty in the market, it definitely makes M&A even tougher. So I think that's a fair comment.

Great, thanks again. Thanks,

Bill.

Again, if you would like to ask a question, press star one on your telephone cable. Your final question comes from the line of Carla Casella with JP Morgan, please go ahead.

Hi, thanks for taking the question. And I'm sorry if you answer this, I had to jump on a few minutes late, but my question is related to the early buyout, the trend in Q1 versus last year. And as we're starting to near the end of the tax refund season, any color you can give us on what you're seeing.

Sure, good morning Carla. So on really both segments on uptick in buyout activity, year over year, it was more pronounced on the -A-Center side than the SEMA side, at least compared to our expectations. But both of them, when you look at activity year over year, tax season got off to a slow start, probably a week or so delayed, but by the end of March, we got caught up, and I would say buyout activity was higher year over year, and you can see that in our gross margins, that really both segments.

Okay, great. And then just any additional consumer trends either pre-tariff or are you seeing any major differences between your stores and your partner stores in terms of just traffic?

I haven't really noticed anything on the traffic side. I would characterize the state of the consumer is pretty stable. Despite all the other kind of headlines and noise that we've gone through, I would say it's been pretty stable over the last few quarters as far as their behavior, both on the demand side and on the payment side. And if you look at our numbers, delinquencies are stable, flat to down in both segments, losses improved sequentially and year over year in both segments, and still doing that with growing SEMA at a double-digit clip. So again, mixed signals on the macro and the consumer, tariff and inflation is potentially there, but you still have low unemployment and some wage growth kind of offsetting some of those things. So I would say, based on our underwriting, based on what we're seeing to date, I would say the consumer is relatively stable.

And for us, I mean, with the benefit of trade down, we're gonna continue to see great traffic, especially the SEMA. And even from a renter center standpoint, we haven't seen any change in consumer behavior. I mean, if we had not tightened underwriting and still were running mobile devices, we'd have had positive same-source sales again. But we just thought it's more prudent to get rid of some of those high-loss items. So no change in consumer behavior at all. We're seeing, if anything, it's positive from a trade-down standpoint.

Okay, that's great. And if I could just, I wanna follow up from Bill's question. It sounds like you've got a lot of internal opportunities, collaboration for growth. Any new wins or losses we should be watching for potential for 25, 26 on the SEMA side in terms of customer wins or losses?

Yeah, I think based on what the momentum that we saw throughout the quarter and into the second quarter results, I think that speaks for us taking more share as the year goes on. So I think no nice regional wins. We had a couple last quarter and expect a few more this year. So no, I think the pipeline is still very strong. We still have a few of the enterprise accounts that we're talking to and still in RFPs. So nothing to announce formally today. But yeah, you can say it in our GMV numbers and the trends that we highlighted that we are still taking share.

Yeah, the regional wins have been strong and nothing to announce on the real big enterprise accounts but continue to win regionally. Obviously with the low double digit growth.

Great, thank you.

Thanks, Carla. Thanks, Carla.

Your last question comes from the line of Kyle Joseph with Stephens. Please go ahead.

Hey, good morning guys. Thanks for taking my questions. Most have been answered. But just wanna get your thoughts on underwriting. I know you addressed on the Renna Center side some tightening last year or maybe in the 23 that seems to be having its desired effects. I know on a SEMA, I think you guys tightened all the way back to, was it 22? But just give us a sense for where you are on underwriting given kind of some of the macro changes we've seen.

Yeah, Kyle, good morning. To your point, I think we've been on the conservative side of underwriting and our posture has been relatively conservative now for a couple of years, which actually gives us even more confidence in the guide going forward because we look at our portfolio and compare it to this time last year and even further back and feel really good about the metrics that we're seeing in the current portfolio because of our underwriting tightening that we're doing. So as we mentioned, we're continuously looking at it and finding both areas of opportunities and areas of potential risk and continually to tweak it. And I would say still being very conservative in our approach. We have a little bit more flexibility on the SEMA side to be more conservative because of the trade down. As we mentioned, applications are up 10% at SEMA. The approval rate overall is flat, but if you break it down, we're tighter on the higher risk segments and probably slightly up on like furniture and appliances. So we are finding our spots to, we can be aggressive and we're finding other spots where we can be conservative. So we feel like we're pretty well balanced, but taking the conservative approach in underwriting given the uncertainty in the market, but we think we can hit our low double digit growth at a SEMA and continue to bring our losses down and improve margins. If you think about our margins for the first quarter, year over year, they're up 170 basis points. We expect that trend to continue really for the rest of the year, if not expand as the portfolio continues to grow. So look, if things get a little bit better, we can always relook at underwriting, but for now we're gonna keep it on the conservative side.

Yeah, when you think about that low double digit growth on top of last year's growth, would you say the first quarter two year stack was in your program, it's 29% two years and lowering losses with 29% two year growth is, that's some impressive work by the team. That's all I'll say. And then on the running center side, lowering losses and only sliding 2% on same store sales in this environment. We'd expect the second quarter to be similar by the latter half of the year, we'd expect that to improve the minus 2%. So that's some impressive stuff when you combine it. And I think trade downs, one of the reasons we can do it and the resiliency of our business model, we can do it because we're getting more of the, what you might call the top side customers coming into the category, especially at the SEMA. So very positive stuff there, Kyle.

Got it, thanks for fitting me in Mitch, enjoy retirement and Tommy look forward to working together still.

Thanks Kyle, appreciate it.

I will now turn the call back over to Mitch Fadal at Bound CEO for closing remarks, please go ahead.

Thank you operator and thank you to everyone who joined us today for our first quarter update and our outlook for the balance of 2025. And I wanna thank everybody for everything over the years. And as I signed off, I'd like to thank all of you and all my colleagues and friends who've helped, really helped build up on into the leader that it is today. I think this is a real high note. I knew the company was in great shape when I announced my retirement, it's only gotten better since then. And I know Fami and the team, I wish them the best of luck. I know they're gonna take it to even a higher level than I was able to do. So I sure appreciate everybody and I know I'm gonna miss everybody but I'll be watching from the sidelines. Thank you everybody.

Ladies and gentlemen, that concludes today's call. Thank you all for joining, you may now disconnect.

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