PROG Holdings' second quarter saw the company surpass Wall Street’s revenue and non-GAAP earnings expectations, yet the market responded negatively. Management attributed the quarter’s results to strong performances across all business lines—Progressive Leasing, Four, and Purchasing Power—amid a challenging consumer environment. CEO Steven Michaels highlighted that “every product in our ecosystem contributed,” with notable gains from Four’s buy-now-pay-later (BNPL) platform and Purchasing Power’s employer channel. However, the quarter was also marked by increased lease merchandise write-offs and a sharp decline in operating margin, reflecting both portfolio management decisions and ongoing consumer cost pressures.
Is now the time to buy PRG? Find out in our full research report (it’s free for active Edge members).
PROG (PRG) Q2 CY2026 Highlights:
- Revenue: $719.7 million vs analyst estimates of $714 million (22.3% year-on-year growth, 0.8% beat)
- Adjusted EPS: $1.19 vs analyst estimates of $0.95 (25.8% beat)
- The company slightly lifted its revenue guidance for the full year to $3.06 billion at the midpoint from $3.05 billion
- Management raised its full-year Adjusted EPS guidance to $4.88 at the midpoint, a 6% increase
- EBITDA guidance for the full year is $365 million at the midpoint, above analyst estimates of $352.9 million
- Operating Margin: 16.6%, in line with the same quarter last year
- Market Capitalization: $1.83 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From PROG’s Q2 Earnings Call
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Kyle Joseph (Stephens): asked how the health of the consumer is impacting lease buyout activity and demand recovery. CEO Steven Michaels described the consumer as “stressed but resilient,” noting strength in e-commerce and BNPL, but continued softness in large-ticket categories.
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Hal Goetsch (B. Riley Securities): inquired about investments in Four’s team and technology, and the sustainability of high margins. Michaels explained that Four operates with a lean, globally distributed team, leveraging AI to drive efficiency and support continued growth without significant headcount increases.
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Bobby Griffin (Raymond James): pressed on the elevated write-off rate in Progressive Leasing and the strategy for returning to lower annualized levels. CFO Brian Garner confirmed that this was a deliberate decision to maximize profitability, and that the company remains confident in meeting its targeted annual write-off range.
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Brad Thomas (KeyBanc Capital Markets): sought clarity on GMV growth drivers and whether current margin dynamics are sustainable. Michaels emphasized the benefit of lapping prior headwinds, strong e-commerce and marketplace performance, and ongoing work to improve retailer relationships.
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Vincent Caintic (BTIG): asked about credit trends in Four and Purchasing Power, and the timeline for onboarding large new employer clients. Garner noted stable provision rates at Four, while Purchasing Power’s integration and margin improvement are expected to progress over a two- to three-year ramp.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will focus on (1) whether Progressive Leasing can maintain positive GMV trends and manage write-offs within annual targets, (2) the pace at which Purchasing Power onboards new employer clients and translates them into GMV growth, and (3) the ability of Four to sustain high growth and margin efficiency as it scales. Progress in cross-selling across the ecosystem and continued advances in AI-driven customer experience will also be key markers of execution.
PROG currently trades at $45.86, up from $45.08 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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