Good morning.
Morning. Morning.
Welcome to the PROG Holdings 2026 Investor Day. It's great to see so many familiar faces here today, and a warm welcome to those who have joined us via the webcast. My name is John Baugh. I'm the Vice President of Investor Relations at PROG Holdings. I joined the company in the fall of 2020. That was about three months before the Aaron's business was spun. Before that, I spent 37 years on Wall Street as an equity research analyst covering multiple industries, including furniture, bedding, floor covering, building products, hard line retailers, and the predecessor company to Progressive, Aaron's. Couple of housekeeping items before we get underway. This is the safe harbor statement. We will be making forward-looking statements today. I urge you to read the safe harbor statement. I will spare you reading it myself.
We do have our entire senior leadership team here today, and if there's anything I'm excited about, it's for you to get a chance to meet them for the first time. I also need to tell you that we're going to webcast this event. It will be taped, and there will be an archived replay available after the event concludes. I'm gonna walk you through the agenda very quickly before we turn it over to Steve. Steve will lead us off. Steve is our CEO and President, and what he's gonna do is sort of set the table. He's gonna talk about our product ecosystem and how the products that we've assembled under the PROG Holdings umbrella has set us up for growth with both our consumers and our partners. After Steve, we'll get presentations from our two largest businesses, the first being Progressive Leasing.
That will be delivered by Nate Rowe. Nate Rowe is our Chief Commercial Officer, and I'm really excited. Part of his program will involve a fireside chat with two of our retail partners. Following Nate will be a Purchasing Power presentation. This is the business we just bought in January. That discussion will be led by Lee Wright, and he's gonna talk about the opportunities in front of us to grow both the top and the bottom line of that business. At that point, we'll have the first of what will be two Q&A sessions, followed by a brief break. When we reconvene after the break, we'll bring up to the front John Trainor. John Trainor is the President of Four Technologies, our fastest-growing business, which is the BNPL business. A lot of runway there, an exciting story. You're gonna look forward to hearing from John.
Following that, we'll bring Lee Wright back up to the stage. Lee Wright runs Money App. Money App is our short-term financial solution product which we are scaling rapidly. We'll bring up Sridhar Nallani. Sridhar is our Chief Technology Officer, and Sridhar is gonna sort of tie these presentations together from a tech perspective. He's gonna discuss how what we are doing on investments, both historically and prospectively, has set us up to enhance both the consumer experience, our partner experience, and help us grow. At that point, our CFO, Brian Garner, will come up, and he'll tie together the presentations from a financial perspective, including giving, for the first time ever, a three-year financial outlook. At that point, Steve will come back up, wrap things up. We'll have the second of our two Q&A sessions, and then we'll promptly conclude at 12 noon.
With that, I'd like to get started, turn the presentation over to our President and CEO, Steve Michaels. Thank you.
Thanks, John, and good morning, everyone. It's great to be here with you this morning. On behalf of our entire team, we really appreciate you spending the morning with us. We know how valuable your time is. Like John said, I see a lot of familiar faces throughout the room as well. But for those who don't know me, let me give you a brief introduction before we get into the PROG story. I'm Steve Michaels, and I'm in my 31st year with this company. The first 25 of those years was spent with the previous parent, the Aaron's company, before we separated the businesses in 2020. While at Aaron's, over those 25 years, I spanned a lot of different functions.
I spent time in franchising, in operations, in strategy, in finance, in analytics and e-commerce before spending my last five years there as the CFO. During the spin transaction, I was fortunate to be offered the role of leading PROG into its next phase as a standalone public company. As you can imagine, over these 30 years, a lot has changed, but there's been one constant, our customer. This customer deserves to be treated with respect and provided with solutions that solve real problems in their lives. We are certainly proud of the service we provide and the lives we've had a positive impact on.
We're excited to share the PROG story with you today, the first ever investor day for us. I look forward to you hearing from some of the broader team, not just about where we've been, but where we're going. This is a business with a long runway for growth built on durable demand, a set of distinctive capabilities, and a clear focus strategy. Everything we do is rooted in our mission, to create a better today and unlock the possibilities of tomorrow through financial empowerment. We build tools and systems that serve everyday real people. These are people that I have had the pleasure of serving for over 30 years now.
I've visited their homes, I have delivered furniture or a new refrigerator, and I have worked out a payment plan with a family that experienced an unexpected bump in the road. These are folks just looking for transparent and flexible ways to get the things they need, and these are the solutions that we provide. This mission grounds us, and as we've scaled, it's what attracts talent, drives innovation, and builds trust with our customers and our partners. There are four key themes I wanna share with you today as I kick this off. First, we're building an integrated industry-leading ecosystem to serve the near and below prime individuals and families. Historically, credit challenge customers have had to navigate a fragmented landscape, patching together opaque, high-cost solutions, or in some cases, just going without.
We're changing that, and we're meeting real people where they are with tools that offer flexibility, clarity, and trust. Second, we're expanding access and reach through direct consumer, through retail channels, and now with the addition of Purchasing Power through employers, all to drive profitable growth. Together, these platforms allow us to meet the customer before they even start shopping, which we believe this access helps us drive lower customer acquisition costs and stronger lifetime value. Now, throughout this presentation, you'll hear more from the team about these products and this platform and the ecosystem that we're creating. Third, we're leaning into data, AI, and technology, not just as buzzwords, but as differentiators that make us faster, more intelligent, and more precise. Over the last three years, we've made strategic investments into our technology stack, with the results being faster decisions, higher conversion, more personalization at scale.
Finally, we have a clear focus strategy around our three-pillared grow, enhance, and expand. This is how we prioritize, how we hold ourselves accountable, how we operate. I'll dig into that a little bit more here shortly, but you'll see throughout today's presentation that these themes reoccur and they're why we believe PROG is positioned for long-term sustainable value creation. What is PROG today? Well, we're a publicly traded company with over $2.5 billion of consolidated GMV on a trailing twelve-month basis, a growing platform of customers, and an integrated set of products, Progressive Leasing, Four Technologies, Money App, and Purchasing Power. Each serves a different use case, but they're unified in mission, and we're working hard to unify them operationally as well. As we scale, these products come together to create real network effects.
One customer might start with a lease and then return to us for a cash advance or a BNPL transaction, and the important thing here is that we're not just building and talking about cross-sell, we're talking about creating a lifelong relationship with a trusted partner. It's been quite a journey. Over the last few years, PROG has been on a transformation journey, and it started with the successful spin of Aaron's in 2020, giving us the independence and focus to evolve our strategy and be more agile to create a scalable organization. We did not have the luxury of a stable macro backdrop. We faced pressures across the board, consumer headwinds, GMV volatility, inflation, shifts in retail traffic, but through all of it, we stayed disciplined.
We just tightened our decisioning posture, we invested in our risk infrastructure, and we began modernizing our technology stack. This was all to lay the foundation for something much bigger than a single product business, because we knew that to reach more customers and be more meaningful and unlock more durable growth, we needed to evolve. 'Cause we're building a financial ecosystem that brings together data, decisioning, and access, all tailored to serve the financial realities of a consumer base that's 100 million strong. All this is possible, by our shared infrastructure. Cross-product data that improves risk accuracy, personalization, and marketing, a harmonized decision engine that gets smarter with every transaction, and omni-channel distribution from in-store, to mobile, to employer portals. We're also embedding more intelligence into the customer journey from smart pre-approvals to re-engagement, which help drive conversion and improve lifetime value.
It's important to know that we're not trying to be all things to all people. We are leaning into the areas where we have a right to win, and that means scaling and investing in the businesses where we've proven product market fit and the data support profitable growth. This is what gives us the confidence in the opportunity ahead, not because it's easy, but because we've done the hard work to be ready for it. Well, for those of you that have tuned into our earnings calls over the last couple of years, this slide could look and sound familiar, because our three-pillared strategy of grow, enhance, expand has been our strategy for a couple of years now, and we consistently reinforce it because we believe it works.
It's not just a slogan, it's how we operate, it's how we prioritize, and how we hold ourselves accountable across the organization. Let me break it down a little bit for you. Grow is about scaling the business. It's about growing new customers, onboarding new retailers, expanding employer reach, and scaling our direct-to-consumer channels. Enhance is all about the experience, but it's not just about the consumer experience, it's about our retailer experience, our employer experience, and our internal teams. It's from personalization, from AI, to streamlining application flows, to creating more digital-first interfaces. The goal is to deliver a faster, smarter experience across the board. Expand speaks to innovation. It's entering new, or creating new products, entering new verticals, and leveraging our platform in new ways.
This includes the addition of Purchasing Power, the robust growth of Four Technologies, the organic development of MoneyApp, and the ongoing build-out of our Prog Marketplace, our direct-to-consumer experience that allows consumers to shop when and where they want. It's not about complexity, it's about consistent, repeatable execution. It all starts with the customer, let's talk about who we serve. Roughly 40% of the U.S. population either lacks access to traditional credit or is underserved by the current financial system. These are hardworking families just navigating financial constraints. Many are managing low incomes with limited short-term savings and access to emergency liquidity. Credit histories vary. Some have thin credit files or no file at all. Others have had a life event or some event that has damaged their traditional bureau score.
At the same time, these consumers are still making essential purchases. They're starting families, they're you know, moving homes, they're replacing broken appliances, they're living their lives, and they just need reliable access to products and services to support that. As we've said, as I've said, traditional financing models often don't meet their needs, or they come with financial barriers that are difficult to navigate. That's where we step in. We built an ecosystem designed for these realities, and one that offers flexible paths to ownership, short-term installment options, low-friction liquidity solutions or employer-sponsored purchase options, purchase platforms. This is about addressing a gap with products that are transparent, tech-enabled, and built for the way real people live. What's powerful about the ecosystem is that while the entry point across the products may differ, the profile is remarkably consistent.
We see strong commonalities across our platform. Most are earning under $100,000 annually. Many are navigating credit constraints, as I said, but they're digitally confident, mobile first, and they value transparency and control. They're often making purchase necessities, not just discretionary splurges. While their core attributes are shared, their entry point can differ. What starts as a $100 cash advance could, the customer could return for a $300 BNPL transaction, could evolve into a larger ticket purchase through Progressive Leasing or Purchasing Power. That's the power of a unified ecosystem. One customer, multiple products, and a single relationship that deepens over time. Think of this as a portfolio of financial tools. We're not trying to fit every customer into a single product.
Instead, we're aligning the right solution to the right need based on purchase size, timing, income cycle, and customer preference. Let's walk through this a little bit. For larger, essential items like electronics, furniture, appliances, Progressive Leasing offers a flexible lease-to-own solution without the need for traditional credit. It offers customers access to new, high-quality merchandise, often from national retailers with clear, flexible terms and early bird purchase options that create quick paths to ownership. For technologies, our buy now, pay later solution is for smaller ticket, digitally native transactions, often in lifestyle, fashion, or electronics. It's preferred by younger customers who value control and transparency and speed, but want to avoid the high-interest credit cards. MoneyApp helps consumers navigate cash flow gaps.
Whether we're talking about covering gas or groceries or an unexpected expense, allowing immediate access to short-term liquidity at a much lower cost than traditional bank overdraft fees delivers immediate value. Finally, Purchasing Power provides access to a wide selection of products and services through a benefit at work. It's simple, it's convenient, and for many, a more manageable way to handle mid-size purchases often tied to family needs or home upgrades. All of these products bring something different to the table, but what they have in common is transparency, ease of use, and a commitment to serving customers in a way that fits their real financial reality, not works against it. Each of our products plays a unique role in the ecosystem, and when they come together, they create value for the customer, but also for us. First, we see lower customer acquisition costs.
When we acquire a customer through one product or channel, we can re-engage them through another, often without incremental spend. This is a huge efficiency driver, especially as we scale up our direct consumer efforts. Second, we have data sharing across our products, which improves our decisioning. Whether it's understanding repayment patterns on a MoneyApp, a Cash Advance transaction, or identifying positive behavior on a lease, that insight is fed back into the system, improving decision accuracy across the board. Third, we can get more personalized cross-product marketing, which leads to higher engagement, stronger conversion, and ultimately better retention. Finally, the ecosystem model gives us more strategic relevance, but it's not just with customers, it's with retailers, it's with employers, and with affiliate networks. The more value we create and deliver, the more essential we become.
As we grow each of these business, it's important to know we're not just building silos, we're building connections, and that's where the real compounding value comes in. Let me step back for a minute and kinda talk about how this is already playing out throughout the system. Historically, PROG has been a leasing-centric, leasing-first model. When we've talked about cross-sell, it's been in that context. It has largely been other products supporting leasing. Over the last couple years, we've been working on this and we've been tracking it and driving it. In 2024, starting from effectively zero, we drove about $22 million worth of GMV into the leasing business by marketing to customers of Four and MoneyApp. Last year, in 2025, that more than doubled to $45 million.
That's real GMV, and that's a great outcome. But it's still a leasing-first, leasing-centric model. Where we're going is fundamentally different. We're evolving into an omnidirectional ecosystem where customers can enter through any product, for leasing, Money App, Purchasing Power, and we can serve them with the next right solution across the platform. In that future, this is important, no single product sits at the center. Instead, the ecosystem, and more importantly, the customer do. They're at the center. To make the shift more real and less aspirational, we've made cross-product engagement a strategic initiative within the company, including having it as part of the executive compensation plans because we feel like it is an unlock to future growth.
A key part of enabling that omnidirectional ecosystem is expanding access for our core customer, and that's exactly what the addition of Purchasing Power did for us, as a complementary product, to the rest of the products. Let's talk about Purchasing Power for a minute. Most of you will have seen that we closed on the acquisition in early January. It's a leading provider of voluntary benefit purchasing platform. Stepping back for a minute, for those of you that know us, you'll know that while we evaluate a lot of M&A opportunities, the bar for us to act is very high. Purchasing Power easily cleared our very disciplined M&A framework, and it was a very highly strategic move for us, one that added scale, growth, and profitability.
Now, Lee is gonna give you much more of a deep dive into Purchasing Power here in a minute, but I'll just give you a primer. Purchasing Power embedded upstream at the employer level gives us access to over 7 million eligible employees through payroll relationships. We enter the conversation earlier in a trusted setting, which leads to lower customer acquisition costs and higher conversion potential. But importantly, it also adds important diversification to our model on, in both revenue and risk. The repayment structure for Purchasing Power through payroll deduction or payroll allotment has historically resulted in lower loss rates and more predictable cash flows. Excitingly, the cross-sell potential is significant.
We've already started discussing with some of our leasing retail partners adding Purchasing Power as a benefit for their employees, as well as approaching some of the partners that Purchasing Power has that happen to be retailers about offering leasing as a solution for their customers. These so far untapped revenue synergies are an exciting aspect of the acquisition, especially when you consider that there is limited overlap between Purchasing Power's customers and the customers PROG served prior to the acquisition. I want to leave you with this on this one. It's not just an acquisition, it's an accelerator, and it expands our reach, strengthens our economics, and fits hand in glove with our mission of providing inclusive financial access. Now that I've talked about our products and our consumer, let's talk about skating to where the puck is going.
We're seeing four major trends shape the financial lives of our consumers. First, there's rising demand for inclusive alternative payment options. As I've said, traditional credit is not available for a large part of the population, especially as prices stay high. Our ecosystem is built to meet that need with flexible products that provide access, not obstacles. Second, BNPL is becoming a mainstream financial budgeting tool, and Four Technologies is built for this. It's not just for big purchases, it's for everyday spending. We offer simple interest-free payments with a digital experience that younger customers prefer. Third, there's explosive demand for cash advance products, but there's also growing concern around pricing and transparency. MoneyApp offers a low-friction, low-cost, fast, and consumer-friendly solution without any hidden fees or any tipping feature. Finally, customers expect a mobile-first embedded financial experience.
Because our platforms share data and infrastructure, we can deliver just that. Smarter decisioning, seamless access across channels, and personalization at scale. PROG is well-positioned to lead in all of these areas. What sets us apart? What makes us hard to replicate? I'll talk about a couple of these six key advantages. First, our unified proprietary data engine allows us to make faster, more accurate decisions, as well as drive personalized engagement that results in stronger conversion and continuous improvement across every customer interaction. Second, our award-winning customer care team provides solutions that are responsive, empathetic, and tailored to each customer's needs. Lastly, our reputation as the gold standard for regulatory and compliance excellence makes us the go-to partner for national retailers and large employers alike. These strengths allow us to be the leader in addressing consumer needs through an inclusive financial ecosystem.
We've made strategic investments over the last several years to strengthen these advantages. We've modernized our lease engine, we've added AI into our decisioning, marketing, and customer service, and we've scaled new brands and entered new channels. We've done all of that while maintaining a healthy balance sheet and strong cash flow. We all know that execution starts with people, and at PROG we've built a leadership team with the right blend of industry experience, operational depth, and strategic alignment. We bring together executives with strong backgrounds in finance, technology, operations, compliance, product, commercial growth, all with accountability around a shared mission. What's most important is this team has led through both challenge and transformation. We've scaled new platforms, we've entered new businesses, and we've done it while staying focused and disciplined.
I'm really happy to have this team here today, and you'll hear more from some of them throughout this morning's presentation. We're aligned, we're ambitious, and we're just getting started. We're also very fortunate to be guided by a great and diverse, highly engaged board of directors. Our board members bring deep expertise across financial services, entrepreneurship, product, marketing, compliance, capital markets, and they've been strong partners as we've evolved PROG into the ecosystem business you see today. They provide the oversight, governance, and long-term perspective that make sure that we're not just growing, but we're growing responsibly, sustainably, and with shareholders' interests front and center. It's a board we work very closely with and one that shares our vision of what this platform can become. Several of our board members are here today as well, and I thank them for their guidance and support.
Let me bring it together for you as I tee up the next couple of hours for us. We built a business that is fundamentally different from where we started. And importantly, it's meaningfully differentiated from others in the market. We're delivering structural cost advantages through AI and technology modernization. We're unlocking compounding growth through a multi-product ecosystem. We're activating proprietary data to drive smarter decisions and stronger personalization, and we're doing it all through a distribution model that is deeply embedded with long-term exclusive retailer contracts, employer access, including many of the large Fortune 500 companies, and a fast-growing direct-to-consumer footprint. Our platforms are more connected, our teams are more aligned, and our strategy to grow, enhance, and expand are delivering results. This is a business positioned to scale efficiently, grow profitably, and create long-term value for shareholders.
We're incredibly excited about where we are, but even more confident in where we're going. With that, I'll get us started on the deep dives, and I'll turn it over to Nate Rowe, Progressive Leasing's Chief Commercial Officer.
Thank you. Thanks, Steve. Good morning, everybody. Thanks for spending time with us today. It's good to be with you. Like Steve said, I'm Nate Rowe, the Chief Commercial Officer here at Progressive Leasing, and I've spent 19 years at the company. Been in a lot of different roles that have put me in front of our retailers, our partners, and my favorite, our customers.
I've spent a lot of time on retail showroom floors with sales associates and a lot of time in the boardroom, working on our product, what it looks like, and execution plans to launch that product with all of our national retail partners. Why I am still here, after 19 years, is pretty simple. The industry and our customer, they really matter. Progressive Leasing creates a win-win for everybody involved. As an example of that, in retail-
When Progressive Leasing is offered, retailers sell a significantly more large amount of retail products. Our customers, they gain access they otherwise didn't have, and shareholders, they benefit. I'm excited today to walk you through our leasing business, what it is, where it's headed, and why it's important. As the largest commercial engine inside PROG Holdings, understanding our leasing business is essential to understanding long-term shareholder returns. Before I go any deeper, I want to anchor us on a few things that actually matter, 'cause everything else I'm gonna say is gonna ladder back to a few of these core ideas. If you remember nothing else from my section today, remember these four things. First, at Progressive Leasing, we're capitalizing on the growing consumer need for flexible, transparent lease-to-own options.
Second, we're building on our leadership position as the leasing partner of choice for large and national retail partners. Third, we're expanding availability and accessibility through our D2C platform called Prog Marketplace. Fourth, we're investing in advanced technology capabilities for simple, frictionless, easy-to-use products and a future-ready business. I want to talk a little bit about Progressive and how it shows up in the real world, what it looks like. We were founded in 1999, so while our products feel modern, if you were out in the marketplace, you'd see a very modern product, but it's built on decades of experience, data, and operational excellence.
You can see here on the screen, there's some of the largest names in retail in America today, and those are some of our large national retail partners that we have exclusive relationships with, retailers that trust us with their customers and trust us with their brand. You can see on the screen as well some of our product mix. Really strong representation in furniture, electronics, and appliances, and strong representation for mobile phones, jewelry, and mattresses. Now, this is a diverse product mix, but if you can think about what it means, these are large products that are generally coming with large tickets and usually at a time of need.
If you were to go into a store and see a set of parents that are looking at a refrigerator, and they're gonna use Progressive Leasing, it's probably 'cause they have kids at home, and their refrigerator went out last night. That's a need that was probably unexpected, and that's where we show up, and that's why our partners and our customers trust us to be the leading in-store, app-based, and e-commerce lease-to-own payment solutions provider. Scale and history, they matter, but they only matter if they translate into results. I wanna talk about why this matters for everyone involved. For our retailers, they get to expand total sales and access to customers they otherwise couldn't serve.
They get integrations into their marketing systems and their point-of-sale systems for an easy-to-use product, and all of the Progressive Leasing transactions go through normal payment rails and don't have any merchant discount rate attached to them. For customers, they get to shop at the largest brands in retail, and they get to shop for products inside those large brands. We provide them with credit right with leasing power, purchasing power right when it's not available, flexible payment options when they need it, and we allow customers to make purchases timely and simply. We also provide a seamless mobile experience that fits the world today and is easy and simple to use. The value only works if it is delivered simply. Anyone in retail will tell you complexity kills conversion and simplicity is what matters, and that's where we win at Progressive Leasing.
I'm gonna play a little demo here of what our product looks like so you can see it and how it shows up in the world. Before I do, I want to read a testimonial. Like I said earlier, one of my favorite parts of my job is I get to spend a lot of time with customers that actually use our product. At Progressive, we survey our customers all the time to get even more feedback. This is a very easy one to read, simple and fast. It literally took less than five minutes for the whole process. You'll see in this demo that's not marketing copy or words on a slide. That's our product truth. As I play this video, keep that in mind. At Progressive Leasing, everything starts with a simple application.
Customers can apply online, through our mobile app, or in-store where leasing is available. After an application is submitted, instant decision is rendered. That provides an approval for customers that they can then start to shop for the merchandise that they're in need of. Those approvals, they last for up to 90 days, so customers can make the best decision for themselves. At the time of purchase, a lease agreement is signed and a small initial payment, the first payment, is taken. At that point, the customer can take their merchandise home, or they can arrange for delivery if that's better for them. Going forward, auto-payments are set up and can be managed online, over the phone, or through the Progressive Leasing app. Like I said, and like the testimonial said, simple and fast, and that's again where Progressive Leasing wins. Behind every transaction is real people.
Today I want to tell you a story about Maria, one of our customers. Now, Maria's a persona, but her story is real. Maria's a single mother. She's about 40 years old, and she has a daughter that's approaching her teenage years, and they've lived together the majority of their life in the same room, in the same home. Now, Maria, as her daughter started approaching her teenage years, started to get anxious, started to get nervous. She knew her daughter needed a place of privacy and a place to grow, and she had not been able to make that happen for her daughter. She decided she would gather the funds that she could and go out into the world and try and fix this problem. She went out. She found herself at a Mattress Firm talking with a sleep expert.
She realized pretty quickly that she didn't have the funds to fix the problem she was trying to provide a solution for. The sleep expert at Mattress Firm gave her a menu of payment options for people that didn't have the money to pay cash that day. Maria knew her credit wasn't fantastic, so she wasn't overly excited to apply. As a last-ditch effort, she decided to apply for Progressive Leasing's no-credit-needed solution. To her astonishment, in seconds she was approved for up to $2,000. Maria had never experienced an approval like this before in her life, so you can imagine the transaction was pretty emotional. Tears were shed, tears of happiness, tears that allowed access to replace limitation. It was a special day for Maria. When she went home, her daughter's life changed that day as well.
She now had a place of privacy, a place to grow, a place to sleep and rest and recover. Most importantly, Maria's daughter now had a place to dream. That's what we do at Progressive, and that's what's important to us. We're not just enabling purchases, we're showing up for customers and creating possibilities at moments in life that really matter. Maria's story, while it's true, it's not unique. Maria represents mainstream America. Millions of customers that we serve each and every year. You can see the age of our customer goes from young to old and everything in between. Household income of about $50,000 a year. Subprime credit scores skew a little bit on the female side, but most importantly, they're all out there looking for something that they need, and that's where we show up for them.
That's our goal, that's our passion. Serving the needs of an underserved population with simple, transparent, easy-to-use payment solutions at a time of need. When you zoom out, the opportunity is pretty substantial, and we believe we're well positioned to capitalize on the growth drivers that are ahead of us right now. Earlier, Steve mentioned 40% of America, over 100 million Americans, are credit underserved, and we see that group growing each and every year. Growing because more people are falling into those buckets, and the younger generation that's unbanked and traditionally does not like normal financial tools. They want simple, transparent, easy-to-understand solutions. We continue to see interest from national and large retailers alike. These retailers have a lot of shoppers in their stores, but not everybody's buying right now.
They're looking for ways to help convert those customers that are on their web pages and on their showroom floors with a need ready to buy. There's a lot of pent-up demand tied to some replacement cycles right now. If you look at furniture and mattress and appliances, those industries have had some headwinds in recent years. We stand at the ready to help our customers as those replacement cycles come through. Our retailers trust us to be there at the time that those products need to be replaced. Finally, I've said it a couple times now, I really like to hear from our customers.
One of the main things I always hear from them is, "How do I use the ability to buy with Progressive at more places?" We continue to see expanding utilization in emerging verticals that are non-traditional lease-to-own categories, and that's really exciting to me and really exciting for our customer. Our strategy, it's built to capture these opportunities. I'm gonna walk through kinda these four pillars so that you can see how we plan to execute, 'cause strategy's great, but you gotta be able to execute it. Given the opportunity that we have in front of us, our strategy is very intentionally focused. First, we're gonna continue to drive existing retail partner adoption and win new pipeline opportunities. Second, we're passionate about elevating consumer and retailer experiences, and we're gonna talk a little bit about that in a minute.
Third, we're gonna expand our D2C model. We've created Prog Marketplace, an exciting place where people can shop for things that they need when they want, where they want, outside of retail if need be. Finally, we're executing a technology roadmap that has our product in a really good place today and our business ready for the future. Strategy only matters if you can execute on it, like I said. Let's take each of these a little bit deeper and go through them one by one. First, we're continuing to solidify our leadership position with leading national retailers.
It's one of our greatest strengths to have these partners, and they look to us because of our unmatched compliance and operational excellence, our ability to have full-stack consumer-friendly payment capabilities and deep integrations into their systems, as well as account teams across the country that support their business and ours. One of my favorite stats from this last year is about 70% of our GMV is now contracted into the 2030s, exclusively with our national retail partners. That doesn't happen unless things are working operationally, commercially, and reputationally. In fact, I think one of our retail partners said it best. "You're not just the best partner in financial services, you're the best partner, period." This foundation allows us not just to retain partners, but to accelerate momentum across our ecosystem.
Still focusing on our existing relationships, we've got great products and decades-long relationships with our national partners. That allows early transactions into our ecosystem and cross-sell opportunities. It allows us to focus on what we can do in the future together. In the new large regional and national space, we continue to sign up new partners each and every year. One of my favorite stats from last year with one of our large retailers is over 75% of the applicants that came to Progressive were net new. Net new customers to PROG.
In the SMB space, we continue to target organic growth, and we continue to see more and more people in that SMB space look to us for our differentiating qualities. We are investing in that, in firepower in that space to grow that SMB business each and every day. You can see our position as the payment solution partner of choice continues to grow, not just for large retailers, but retailers of all size. Second, I'm more passionate about this one. Elevating consumer and retailer experiences. On the customer side, customers get streamlined application experiences that reduce friction, enhancements each and every year, smart decisioning capabilities accelerating approval flow. That's more approvals for more dollars today, not in future quarters, and improved web and in-store experiences that reduce friction and make our navigation and design simple to use.
From a retail standpoint, we're transforming how retailers work with PROG. We're modernizing our retailer experiences, making it easier to use, faster to launch. For our existing partners, we have faster and easier integrations enabling retailers to pilot things in days, not quarters, not years. They can try things quickly. These areas are a big reason why we have 5- 7-year contracts, and those 5- 7-year contracts enable us to invest in long-term capabilities for our customer and for our retail partners. Third, we're expanding our D2C model through like what we call PROG Marketplace. Like I said earlier, this allows customers to shop for what they want, when they want, in leasable categories. This increases the frequency and personalization with which we can communicate with our customer, and I think most importantly, this allows customers to view Progressive Leasing as an extension of their existing wallet.
We want them to be comfortable, and we want them to be able to shop just like they'd shop for anything else, and the marketplace is growing in adoption, and we're really excited about where it's headed in the future. Our last strategic pillar, technology. Underneath everything you've seen and heard today is a platform built to scale. Our faster partner integrations allow for consumers to transact now rather in future quarters. Our AI-driven decisioning and customer service allow more focus on our cross-product ecosystem, and our enhanced internal productivity allows us to continue to refine and capture new growth opportunities. Together, these priorities drive durable growth for us, for our retail partners, and give our consumers more access. Stepping back and looking at the leasing business, I wanna circle around to what I said matters most.
At Progressive Leasing, we're passionate and we're capitalizing on the growing consumer need for transparent, simple-to-use payment solutions. Second, we're building on our leadership position as the leader in the space and the leader of, and the LTO provider of choice for the large and national retailers. Third, we're expanding availability and accessibility through Prog Marketplace, our D2C platform. Fourth, we're investing in advanced technology capabilities that have a modern, simple, easy-to-use product today and a future-ready business. With that, I'm excited to have two of our national retail partners join me up here on the stage today for a discussion about Progressive Leasing and why it matters to them. Please help me welcome Jody Putnam and Lisa Walker up to the stage. Thank you. We got a lot of chairs. We can just jump in right here.
Thank you.
I think you gotta turn it on. Yeah.
More chairs.
Yeah, good idea. Okay. Jody, Lisa, thanks so much for being here with us today. We appreciate your partnership, and excited to be able to have a little chat today about Progressive Leasing. We'll start off with some easy questions. If you could each just introduce yourself, your role at the company, and how Progressive fits into your role. Jody, we can start with you.
Jody Putnam, Chief Revenue Officer of Mattress Firm. Oversee our retail stores, our web business, our direct-to-consumer business, our B2B business. That's a lot of businesses there I guess.
Yeah. How does Progressive fit into your role?
Helps us drive conversion. It's one of the payment options we have for customers, as you mentioned, and I see that can't use traditional financing.
Great. Lisa?
Hi, good morning. I'm Lisa Walker. I'm the President of Jewelry Services for Signet Jewelers. We are the parent company of Kay, Zales, Jared, Blue Nile, and other brands. I'm the President of Jewelry Services, and that includes all of our payment products, our repair business, our warranty business, and our repair network of over 1,600 jewelers around the country. How Progressive fits in, we believe at Signet, our mission is to celebrate life and help customers celebrate life and express love. For many of those customers, our products are out of reach financially unless they have a payment solution like Progressive Leasing.
Great. Thank you. Jody, we'll start another question for you. Before partnering with Progressive Leasing, what customer market challenge were you trying to solve, and what does Progressive Leasing do to enable a solution to that problem?
You know, at the time, this was a long time, I mean, 16 years ago now.
16 years ago.
We had another competitor in the space that was using Progressive Leasing, and we thought it was a conversion play because we would have customers that we believed left our store and purchased from them, and that turned out to be true. What we didn't realize before partnering was that it wasn't just a conversion play, because Progressive Leasing did drive conversion, but also average order value. Our average order value was about 40% higher with Progressive Leasing than it was with credit cards. That remains true today. It also drove traffic because once you put signs in the windows, the Progressive Leasing name, people knew what it was. The idea of lease-to-own, which I didn't know what was at the time, our customers certainly did.
Appreciate that. Lisa, how about on the Signet side?
Yeah. Somewhat similar to what Jody said. For us, we had an in-house credit solution. When we decided to get out of that business, we were looking for payment partners that could help us service the entire credit spectrum because we wanna make sure that we can close sales for customers regardless of their credit score. Progressive Leasing offered that to us. What I'll build on what Jody said, which is the signs in the window, et cetera, gave people confidence that they could come in and complete a purchase and not be embarrassed that they didn't have the funds to be able to purchase the item for their spouse, their partner, their mother, et cetera.
Appreciate that. You talked a little bit about how Progressive Leasing's fit into your businesses. I wanted to ask what drove the decision to partner with Progressive Leasing? Obviously, there was conversion, there were different things, but why Progressive Leasing and what drove that decision, and how does it align with your strategic priorities around customer access and growth?
Do you wanna go first?
Yeah, go ahead.
I think you touched on it, and Steve touched on it earlier. The innovation, the technology, the compliance, all of those things were very important to us as we got out of our own credit business. You know, this whole idea of being able to bring in customers across the credit spectrum. We stay with Progressive one because we have a long-term contract, but more importantly, it's about the innovation that Progressive is bringing to our business. I know for a lot of our customers, they've used a Progressive lease either with us or somewhere else, and they come back, and that drives loyalty for us.
Thank you. Jody, on the Mattress Firm side?
I think there's really two reasons. One, you know, any partner that you're gonna have, particularly in this space, you wanna make sure that they live up to the customer service expectations. We believe that Progressive would. That's turned out to be monumentally true. I think the best version of that was in 2020. It's not the most recent version, but the best version. In 2020, obviously, a lot of customers in this space, many of them lost their jobs or were furloughed or what have you. Progressive, for those of you who don't know, reached out to all the customers during that timeframe and extended terms as necessary to help them through it. That certainly drove loyalty to Progressive from that customer, but it also helped with the retailer partner.
The other is that, you know, our mission is to improve lives through sleep. Having Progressive on the floor, a lease-to-own option in general, democratizes that. You know, we often talk about health being a three-legged stool of sleep, diet, and exercise. It's in the U.S., we're the 34th most healthy country on earth, but we shouldn't be. We have unfettered access to food. We have we exercise more than most, but we also, we're not sleeping like a badge of honor, and so that is starting to change. What's happened is that many use financing as an option to help that because, fortunately for us, I guess, and fortunately, I don't know how you say it, but the better products cost more.
They do help you sleep better, but they cost more, and Progressive has helped democratize that. It's allowed more people to buy the product that will help them be healthier.
Love that. Okay, couple more questions here. What impact have you seen since working with Progressive, whether that's customer satisfaction, sales going up, the ability to serve a broader customer base? I think we've touched on a little bit, but any specifics that we haven't touched on that you'd wanna call out? Lisa, we can start with you.
I think Jody mentioned it. Our AOV with this customer cohort has increased by giving customers access to Progressive. One of the things that we did in partnership with Progressive this past year was we enabled something called split tender, which is a customer had $500 that they could use to buy an engagement ring. By enabling split tender, the customer was able to use their $500 and then also add a lease to that. That has really helped. Our customer satisfaction is high. I mentioned that earlier. People have come back, repeat. Strong NPS scores. Our customers are happy with the product once they've engaged in it. The other thing I would say is it gives confidence to our sales associates.
Our sales associates know when a customer comes in, if they don't have, you know, a open to buy on their traditional credit card, that they still can close a sale. That is huge. That's huge for us. You know, one of the things that Progressive has done is they have a strong field sales support system. You know, it creates a flywheel with our sales associates. They feel confident selling. They close more sales, and that creates that flywheel.
Great. Jody, on the Mattress Firm side?
Yeah. I mean, I mentioned earlier that it AOV conversion and traffic. It's also really good margin-wise because it's a less expensive financing option for us, and so that helps us. Lisa mentioned the rep force. That's been incredibly important. Heck, we built it together, right?
Right.
It was the, you know, I guess it was about 13 years ago, the idea of not just selling new clients, but teaching the existing teams how to use the product. Wildly important. We've asked other of our partners in this same space, not lease to own, but in the financing space, to do that as well, and they've all stepped up and begun to do it too because it's so important for what Lisa mentioned, that confidence on the sales floor.
Great. Okay. We've both been partners for a long time, over a decade, near a decade. What advice would you have for a retailer who doesn't have a lease-to-own provider today and is trying to make that decision, to do lease to own and who to do it with? Knowing that we've been partners for a long time and knowing that competitors in our space have talked to you multiple times, what advice do you have about lease to own and how to choose a partner? Lisa, you wanna go first?
Oh, you want me to go first? Yeah, again, I think, and I said this earlier, lease-to-own creates fills a gap in our payment solution suite because it attracts and converts customers that wouldn't otherwise be able to complete a purchase. I think lease-to-own is a really important piece of our payments ecosystem. I said it earlier, you know, the partnership that we have with Progressive is second to none, which is why Jody and I are both here today to support Prog at their Investor Day. Again, it's about innovation, quality, support. I think, you know, that's what Progressive brings to us.
Yeah. I think my first answer would be definitely get a lease-to-own partner. The second would be make sure you find one that you can trust. If you go back to how do you bring it to life, there's pretty significant systems integrations that at least in my experience have gotten better every year as we've worked together longer. The training that we do with associates stacks year after year. The longer they're here, the better they get because the more training they've had. Those are things that you know make the relationship sticky, and it's 'cause they're hard to unwind. You wanna make sure that you have a partner that you can trust because you're better off if you are in a long-term partnership.
Great. Okay. Last questions. Looking ahead, what do you value most about your relationship with Progressive Leasing, and how do you see it evolving and what gets you excited for the future? Jody, we can start with you, and then Lisa, we'll wrap it up.
I think the partnership in general. You know, every quarter we get together and we do a business review. That's important. We do that with most partners. I think from an evolving standpoint is continuing to lean in with marketing. Since Andy's joined your team, we've spent more time looking for ways to partner together to drive traffic to whether it's new traffic or repeat traffic. I would imagine that the evolution will come there and how do we get more feet in the door? How do we get more eyes on our website?
Awesome. Lisa?
I, you know, I mentioned it earlier. It's the partnership. It's the innovation. It's the willingness to try things and our ability to try those quickly based on technology. I would agree with what Jody said about the marketing. The Prog Marketplace we think is really exciting because it will bring new traffic and new eyeballs into our stores. People that didn't know that they could complete a purchase of that scale now is enabled by Prog through the marketing.
Great. Well, thank you both for being here. Thanks for joining us today. Thank you for the time. If you could help me one more time, round of applause for Jody and Lisa. Thank you. Appreciate it. Thanks, Lisa. With that, I'll turn it over to Lee Wright. Thank you.
Good morning, and thank you for joining us today. I'm Lee Wright, President of Purchasing Power. Before I begin my overview of the company, I wanted to walk you through, as the newest member of the PROG team, both my personal and professional background. On a personal standpoint, I grew up as an Army brat across the country, and I certainly know what it's like to live paycheck to paycheck. However, I can assure you my family was much more fortunate than others that I grew up with. Many of my best friends lived in trailer parks, and their trailers weren't double wides. I can tell you, I saw firsthand the financial stress that they went through every single day as a family. I'm proud to be part of PROG that focuses on this underserved consumer.
On a professional standpoint, I started my career in investment banking and quickly moved into private equity. I was there for almost two decades and focused on four core industry verticals, financial services with a focus on the subprime consumer, retail, industrial, and energy. After I left private equity, I went into operations and ran an energy company as CEO, and quickly then was recruited into Conn's HomePlus, a publicly traded consumer durable retail company with a focus on the subprime consumer. While there, I was both chief financial officer and then ultimately chief operating officer, where I had responsibility for both the in-store and online retail segment of the business, as well as the credit and collections segment of the business.
I left there in early 2021, did some consulting for both retail and financial services companies, and most recently was CEO of The Vitamin Shoppe before leaving in the middle of last year. As you can see, I have a long background in both retail and financial services. I ultimately or originally got to know Progressive while I was at Conn's HomePlus because while there I actually brought in Progressive Leasing as our virtual lease-to-own option for our customers who either didn't qualify for Conn's in-store financing or simply wanted the flexibility of a lease. It was there that I saw firsthand the way that Progressive Leasing treated their customers in a flexible, transparent way and where I saw the leadership team of Prog. When the opportunity came up to join Steve and the team at Prog and run Purchasing Power, I was incredibly excited.
With that, let's walk through Purchasing Power, which has a long track record, a powerful moat, and is a highly strategic acquisition for PROG's growth story. You see, Purchasing Power is not just a differentiated business, it's a platform for strong growth, which can scale across a massive under-penetrated employee market. There are three key messages I want to leave you with today. The acquisition of Purchasing Power represents an expansion into a very large employee market through a nationwide employer-based network, which provides millions of underserved customers access to needed products and services. Purchasing Power delivers a differentiated payment solution of payroll deduction and allotment, which provides better repayment outcomes and delivers a positive risk profile for the PROG portfolio.
You see, we're leveraging integrated data access and ecosystem relationships to generate organic growth while serving as a cross-pollination engine across PROG's B2B and B2C channels. Purchasing Power is not just a standalone asset, it truly is a strategic multiplier. At its core, Purchasing Power is an e-commerce retail purchasing platform built on a B2B2C platform. We provide employees with the ability to purchase brand name products and services and pay over time through payroll deduction. This is a triple win all the way around. It's a financial wellness benefit for employees, it's a no risk, no cost offering from employers, and it provides predictable repayment behavior for PROG. Now, Purchasing Power is primarily distributed through a national network of benefit brokers in addition to a small but mighty direct sales force.
We have over 360 established employer clients. We have 7 of the top 30 U.S. employers. We have 48 Fortune 500 companies as partners. That creates over 7 million eligible employees for us to target. We have approximately 98% client revenue retention, which shows the sticky relationships we have and repeat buyer behavior. With the revenue base, it truly serves as a revenue diversifier and a risk mitigator for PROG. Let's walk through how this works. Before I do, I wanna talk about Donza's quote because I love it. "I absolutely love Purchasing Power because I can shop from home. It's convenient, and they take payments directly from my paycheck, so I don't have to worry about making a payment. I've never had a problem with any purchases." You see, this is a set it and forget it option for a consumer.
They can make the purchase, and then it's just deducted from their paycheck. Purchasing Power's payment solution eliminates friction, reduces financial stress, and increases likelihood of repayment. Let's walk through exactly how this works. First, employees register, create the account online or in the app by selecting their employer and pay frequency. There's no credit check or approval process required. Employees do need to meet employer-specific eligibility requirements. From here, they receive a personalized spending limit based on salary, tenure, and other factors. They now have the opportunity to browse more than 100,000 brand name products. Upon checkout, they see the total cost, payment schedule, delivery estimate, and provide an estimated delivery date. Purchasing Power places the order with the vendor, and the vendor ships directly to the consumer. Payments are automatically deducted from paychecks in installments primarily over 12 months.
The employer value proposition, the employee value propositions is incredibly compelling and differentiated. We provide customers with immediate spending power with no credit checks, repayments and transparent fixed installments, and a broad selection of brand name products and services. Within the PROG ecosystem, Purchasing Power plays a critical role as it reaches a stable employed customer base with strong repayment behavior. Within the ecosystem, Purchasing Power creates cross-product opportunities and improves risk outcomes and ultimately deepens customer lifetime potential. I love the illustrative persona here because it shows the different ways that Purchasing Power as a platform is offered to various employees and members. However, I wanna walk you through a real-life example that I think is even more powerful. I was walking onto a United flight one night, and I had my branded quarter zip on that said Purchasing Power.
As I walked on the flight, the flight attendant, she was friendlier than normal. She said, "I love Purchasing Power." I said, "Well, that's fantastic. I'm glad you love us. I don't know why you love us because, I mean, I want United as a partner, but we don't have United as a partner yet. We've got your competitor down the street in Atlanta. That's our partner, but not United yet." I said, "So again, how do you know?" She said, "Well, my mother-in-law actually uses you, and she loves you guys. She walked me through how to shop, all that." I said, "It's fantastic." She said, "So I went on. I logged on." and she said, "Oh, I got denied." She said, "Ugh." I said, "Well," so we talked about the business, and it was a great conversation.
Anyways, well, I got busy on the plane, doing work, and as I get off, she stops me. She says, "Hey, just wanna hand you something." She hands me a card, got the wings on and everything, and I read it, and I said, "Wow." I said, "Thank you." I said, "Do you mind if I talk about this?" She said, "Absolutely. Please use it." She said, "Because I really want to be able to use this product. This is a great product. This platform, purchasing platform, that Purchasing Power has is amazing." Here's what she said. "Mr. Wright, it's a pleasure having you on the flight tonight. Purchasing Power is an amazing program for government employees. My mother-in-law, a New York City school teacher, shared the program with me. I signed up, but unfortunately I am unable to use it.
It would be really nice to extend the program to fellow flight attendants. Thank you for hearing me out, Houston-based Morgan. That's the kind of power and level of desire that people have to have this program because they know that it helps them. It's not the first person I've heard, but it's the first person to hand me a card like that, which I thought was fantastic. Let's talk about how Purchasing Power is distributed, because we do have a unique channel to access the market. We do partner with benefit brokers, which are typically a subset of the typical insurance brokerage firms. You'll think Aon, Willis, Mercer.
I mean, there are voluntary benefit insurance brokers that just do that solely, and we do have a direct, like I said, a small but mighty direct sales force, but this is a really unique channel for us because it provides us with significant distribution scale. It's a sales amplifier without the fixed cost. Benefit brokers are incentivized to sell this product as well. It's something that really solves a problem for the employers, and it's definitely something new. It's not your standard disability insurance, identity theft protection, pet insurance. It really does resonate with an underserved segment of the population. There's true alignment as well with our brokers that are distributing this product. You see, they don't get paid by just bringing a new client that we sign up. They don't get paid when a customer makes an order, a purchase with us.
They only get paid as payments are made and deducted from their paycheck. The alignment is there with us and the brokers, and the alignment is clearly there for the employers as well because, again, it creates real value for them. It's no risk, no cost. It provides a holistic solution to the stress that many of their employees are facing. It helps improve employee loyalty. We truly believe there's significant growth potential in the untapped employee benefits market. Now that you have a better understanding of the business and our go-to-market strategy, let's discuss the near-term industry drivers. There's growing demand for predictable, low-friction payment methods, especially as employees have continued to endure economic pressure. We're seeing an expansion of voluntary benefit marketplaces, making it easier for employers to adopt new programs. There's increasing interest from brokers.
You see, Purchasing Power sits at the intersection of payment solutions, financial wellness, and employer benefits, and we believe that convergence is accelerating. We have four key levers to advance PROG's growth strategy. The top two chevrons over here on the left are levers that Purchasing Power could have done on its own as a standalone entity. The bottom two chevrons, I'm gonna walk through, show you the power of being part of the PROG ecosystem. The first chevron, look, as I talked about, we have over 7 million eligibles today, but not all eligibles are our target demographic. If you go back to Steve's slide early, and he talked about 40% of the population being credit-constrained, underserved. Well, that's fine. Let's take 40% of 7 million. I'm at 2.8 million, what I would view as my eligible true target demographic customers.
I have less than 300,000 active users today. I'm at approximately 10% penetration of my target market. I have a massive opportunity through better marketing, making sure I've got the right retail catalog that meets the needs of these employees to grow my revenue without even trying to do the second lever, and that's adding new clients. Of course, I wanna add new clients. I mean, look, it's and we will continue to work on that. I mean, but 'cause if you think about it, I've got 7 of the top 30 U.S. employers. That means I don't have 23 of the top 30 U.S. employers. 48 of the Fortune 500. I've got 452 that is still available to me.
We truly believe that Purchasing Power is the only company of our scale and size that can handle these enterprise relationships. We think this is ours to win. The third chevron, by being part of the PROG ecosystem, we can leverage shared data to improve decisioning. We can also cross-promote to our existing retail partners. You heard from these wonderful firms of Signet, Mattress Firm. Look, obviously, we wanna make sure we introduce this as a voluntary benefit, and those discussions are underway. There's other amazing enterprise relationships that PROG already has. We wanna make sure that we're offering the voluntary benefit of Purchasing Power within their companies. We have other products, clearly, for MoneyApp. Well, employees of these companies that are already our partners, I guarantee they're already using these other products.
If they're gonna use them, why don't they use the PROG products, and how do we cross-promote those? Finally, we truly believe that we can use payroll allotments as a strategic direct-to-consumer lever, which is a whole another broader opportunity here. All of these initiatives compound over time, creating a durable multi-year growth engine for PROG. Let's walk through the key takeaways again. First, Purchasing Power gives PROG access to a large, attractive employee market.
Second, our payroll deduction and allotment payment solution provides PROG with the differentiated lower risk repayment model. Finally, Purchasing Power is truly a catalyst. It's enabling organic growth, fueling cross-pollination, and deepening our ecosystem advantage. This business is proven, it's defensible, and it's positioned for meaningful, sustainable growth. I hope you can tell how excited we are, and I am about the future of this business, and I look forward to discussing the opportunities ahead. Now I'd like to welcome John Baugh, Vice President of Investor Relations, back up to the stage to kick off the Q&A portion of the presentation. Thank you.
I'm gonna excuse me. Yep, Nate and Steve are gonna come up, and then if I could have the assistance.
Good job.
Let me walk you through the Q&A process very quickly. I've got two teammates who have microphones, and they'll be available, so when we're ready for questions, I'd ask you to raise your hand and state your name and your firm's name. If we can keep it to one question and a follow-up, we'll try to get more questions in that way. Before though we get started, you may have seen early this morning we issued a press release. It relates to Purchasing Power and revenue recognition. I'd like to give Steve the opportunity before we start the Q&A to address that press release. Steve?
Sure. Thanks, John. In my previous life, like I said, I was a CFO, and I had an active CPA license for about 20 years, and I've found when you start talking about technical accounting, you lose the room pretty quickly, unless it's a very special group. We did wanna talk about it kinda just to get it out of the way. This, I'll start with the end. There's really no change to the financial results of PROG Holdings or Purchasing Power for that matter. Happens from time to time when you buy a private company, you get in and you start kinda doing your work and checking your boxes, and our teams are the best there is.
They start papering the file and talking to our auditors, and we discovered on a small portion of the revenue base that when applying ASC 606, which is a revenue recognition policy, we have to basically recognize the revenue at net of certain direct costs as opposed to gross. What the press release did this morning, 'cause we knew we were gonna be up. This has really been fast moving over the last, you know, 4, 5, 6 days. We knew we were gonna be up here this morning in front of you. We wanted to get that information out publicly, so we could talk freely. As you saw from the release, there's absolutely no change to Purchasing Power's adjusted EBITDA or other earnings metrics.
There's no change to PROG Holdings earnings metrics or EPS metrics. The changes that we brought the revenue down by $70 million at the low end and the high end of the range for Purchasing Power and ultimately for PROG Holdings. As you can imagine, if you bring the revenue down and EBITDA does the same, it kind of increases the expected EBITDA margin of Purchasing Power. But it's really just a geography lesson on the P&L from taking some COGS and moving it up and netting it out against revenue. Importantly, we said back when we announced the acquisition on February eighteenth that we expected Purchasing Power to have a low double-digit growth rate from a revenue standpoint. When applying ASC 606 consistently across the periods, that still is true.
You know, I just wanted to hit on a few of those things that nothing has really changed here except for a little bit of revenue presentation, but the growth opportunities are. We're still as excited about them, and the earnings power is still the same, unchanged.
Thanks for that, Steve. Just to point out again, we've got two Q&A sessions, so in the first one here, if you can limit the questions to the three presentations we've had so far. We'll have plenty of time later to do the financials and address the entire team then. We're ready for questions. First question here from Bobby.
Thanks. Thanks, John. Good morning, everybody. It's Bobby Griffin from Raymond James. Nate, I guess I wanted to start with you on Progressive's side. You guys have some impressive retail partners, but, you know, it's been a while since we've seen a new partner of scale sign up. I'm curious now, as we've gone through the kind of COVID digestion and all this stuff, kind of what do you hear from partners when you're out pitching it, given the success that we've heard about today from two notable retailers? Kinda what do you think the outlook is and the hurdle to get some of these larger ones to the finish line?
Yeah. Thanks for the question, Bobby. You know, they're really long sales cycles. I think you heard from both Mattress Firm and Signet today that there's an investment that comes with doing lease-to-own, and those sales cycles can be a little bit long. You mentioned COVID. Coming out of COVID, everybody was trying to figure out how to keep the lights on and how to go to market in a new world. That maybe delayed some of those sales cycles even a little bit further. We continue to talk to everyone out there about Progressive Leasing and what leasing can do for their businesses. You haven't seen anybody really adopt it at the large scale.
You know, we haven't necessarily commented on those specific retailers in the past, and I don't think that's gonna change, but we continue to believe there's excitement and opportunity with larger national retailers for leasing.
Then I guess to follow up, say that from the large scale, the opportunity, say it's still a distance out for building. When you look at your small and medium business opportunity today, compare it to peers, you know, or I guess just kinda across the country, what's out there today? Like, how long do you think that runway of door growth is on a small and medium sized business perspective?
You know, a lot of the small mediums use lease-to-own today. I think there is definitely still growth there into the years to come. You know, we had a four-digit number of signups in the small, medium space last year. We expect to continue to accelerate that. Like I mentioned earlier, we're putting more firepower into that space. I think there's good growth opportunity there in your traditional, you know, furniture, mattress retailers, but also in expanding markets as well. I think there's good growth in that SMB space in future as well.
Yeah. I would just add on that, you know, the SMB we talk a lot about SMB, and it's really jockeying for position. It's fairly well mature across the small and medium-sized businesses, and there's multiple providers in there. We perform well there, but it's jockeying for position and trying to be first up and get the first app, and there's a lot of movement within that space. We're focused on it, and Nate's got a good team and a strategy this year certainly for growth. You know, where we think we are the clear leader and have the right to win is in the larger retailers.
That doesn't mean the A accounts that everybody talks about that are kinda individually needle moving, but there's dozens and dozens of really large ones that are not the size of, let's just say, Walmart. We believe we have a right to win there, and we're very referenceable, and we have great ambassadors and validators in our existing retail partners. Clearly, we want to have pipeline conversion as part of our growth strategy. We have given up on predicting the timing of that 'cause we will be always wrong. It's a big focus of ours.
Thank you.
Thank you. Question in the middle here from Kyle.
Great. Thanks. All right, good. Hey, Kyle Joseph with Stephens. Thanks for the presentations today. Good to see you again, Lee. I just wanna talk about kind of the evolution. You know, PROG has obviously evolved a lot in the last 5, 10 years. We understand what's going on in terms of furniture and mattress demand, but kind of moving over to the supply side, talk about the evolution of kind of the payment waterfall for consumers at retailers. You know, historically, it was primary, secondary, tertiary, but talk about how that's evolved in the last 10 years with other products and how PROG competes.
Yeah, I can start, and Nate sees it every day. Yeah, I mean, we have the traditional finance stack, as you referred to, is still the predominant way, especially at in-store, that people work through the system. Like, you know, at Best Buy, we've got the My Best Buy card, and then there's a flow to Progressive. We've done a lot better and our technology has helped, and we've really instituted waterfalls quite nicely and harmonized applications with the primary providers and to the extent a second look exists. With lease-to-own being tertiary, we've really improved there and helped funnel dynamics across the stack there.
There's certainly some other providers that are out there and have a brand name that drive traffic. Our retailers are very keen on making sure that doesn't divert apps from the traditional flow because they wanna make sure that, to the extent that there are apps coming in a different flow, that they still have an opportunity for the declines to be offered up a Progressive Leasing option. Those things are evolving, and in fact, our partners are probably our best ally in that to help make sure that we're getting as many at-bats as possible.
Great. Follow-up. Nate, you've obviously been there a long time, kind of thinking back to pre-COVID, when it was part of Aaron's, Progressive was one of the most kind of predictable companies I covered, you know, in terms of top-line growth and whatnot. Obviously, COVID really turned things upside down, not just for Progressive, for a lot of things. You know, kind of give us a sense for the outlook. You talked a bit about the pull forward of demand in terms of furniture and mattress specifically. You know, I'm a finance guy. I don't cover those companies. In your discussions with retail partners, the outlook for growth, particularly furniture and mattress.
Yeah. It's a tough industry when they've had the headwinds that they've had, right? I think they all certainly expect a tailwind from those replacement cycles to come around quickly. You've certainly seen some players, you know, really struggle through coming out of COVID in furniture and mattress specifically. The partners that we have, we're really confident in their ability to execute on those replacement cycles, and I think their confidence in us to help make sure that's a tailwind and a positive for them and us is pretty strong.
We look forward to that day, right?
Absolutely.
We've been fighting only headwinds for the last several years as it relates to demand in certain categories, and having it go to calm winds and then eventually a tailwind will be a welcome trend. Vincent, did you have-
Thanks, Kyle. Vincent, yeah, if you can wait for a mic.
Thank you. Vincent Caintic. There you go. All right. Vincent Caintic, BTIG. Thank you. I wanted to focus on Purchasing Power, so you gave a lot of great statistics for a new business to us. I appreciate that. I wanted to maybe paint a blue sky scenario on the business. You talked about you have 7 million employees right now that you can access. Of that, 2.8 million is kind of the addressable market. When you think about the total opportunity set, how big can that 2.8 million get to when you think about maybe the U.S. economy? What does it take to get to that scale? Like, how does the sales cycle look like? What does it take to eventually capture all of that? Thank you.
Yeah. No, thank you. Look, the overall opportunity is incredibly exciting, but I think let's just start with our first opportunity, which as I said, hey, we wanna make sure that we're doing a great job penetrating our 2.8 million addressable audience, and how do we make sure we do that? At the same time, clearly, we have a sales team that's through our broker network as well as our direct. It is a longer sales cycle. You do need to make sure that you go in, you're working with the chief people officer, CHRO, total rewards, and they're busy. They have a lot going on. As much as I believe and I can talk about how important this is for them, they're trying to do so many different things. Again, they absolutely understand the benefit, but they're trying to balance a lot.
The sales cycle itself does take a little bit of time, and we're consistently working on that. I mean, the opportunity is absolutely massive, we believe, for us to do this because it really is an innovative payment solution with our purchasing platform that we can apply. I mean, I don't wanna blow people's minds here, but it's, yeah, it's huge. If we execute well, and it goes back to what, Steve said earlier, you've gotta execute well. You've gotta make sure you're disciplined and, you know, continue to focus on that sales cycle and grow. It is a very, very large opportunity. And again, I know, you know, we're gonna walk through the financials later and the projections, but we're very bullish on the growth here for Purchasing Power.
One of the things that we observed about Purchasing Power was its similarities to the leasing business and how it's a B2B2C channel. We feel like we do a couple things really well here. We assess risk in this below-prime consumer very well, and we service this consumer very well. We also serve our partners very well as well. Nate and his team do a great job of on the B2B side. At leasing, technology plays a big role in it, and that's gonna be an unlock event, we think, in landing new pipeline opportunities and convincing additional retailers to adopt the product. Same thing is true on Purchasing Power.
We have we do have a broker network, but we also have a direct sales team, and we're out selling to the chief people officer or the total rewards leader. We need to work on making it easier to integrate with us because there is some payroll integration to get the census data and the payroll feeds. Those are some of the kind of expertise and the learnings that we can bring to the party in order to help the sales cycle. It is a longer sales cycle. I don't think it's actually longer than leasing, but it's longer than some of the other ones. I think we can have an influence on that.
The opportunity as far as this 100 million consumers, you know, they're working somewhere, and if we can partner with those employers, it'll be positive for us.
Okay, great. Thank you. A follow-up, actually focusing on the leasing side. So you spoke a little bit about the direct-to-consumer channel, and that's growing. When I look at the landscape, it does seem, and there's not many competitors directly on leasing, but when I look at buy now, pay later, including with Four, direct-to-consumer seems to be growing a lot, and I can look at other buy now, pay later. Maybe if you could talk about that growth opportunity, what's driving that, and is there perhaps more to go? I know you spoke some on the top merchants, but just going direct to the consumer, accessing that and driving some of that business. Thank you.
Yeah. Like Steve said multiple times, and I said as well, 100 million consumers. How do we help them understand what's available to them? Then I think you heard from our retail partners today as well, their excitement in our platform because it reaches more people. When you start thinking about our exclusive network of large national retailers as well as affiliates, you can go to any customer that's looking for something that's in a leasable range, price point, and bring them into that D2C platform and give them the opportunity to shop for what they need. Not just that I have an open to buy at a specific place, but I can use that leasing power everywhere.
That's really our goal is to try and bring people into that platform and help grow the accessibility of lease to own, whether we have a, you know, a direct relationship or not, and really build around that customer and what their need is and provide a solution to it. We think it just helps us reach customers faster, and we think it brings even more customers to our existing, you know, national partners that anchor us, but also gives the customer the ability to shop elsewhere if needed, but really builds that brand loyalty. Like I said, an extension of their wallet's really what we're going for.
We haven't talked about Four, MoneyApp yet, but those products, the velocity of the product is much more quick. We see them more frequently. They engage with our digital products more often, and it gives us more opportunities to be relevant to them when they do need that $1,500 or $1,200-$1,500 thing, and Marketplace is a great way to direct them in order to get those things that they need.
Thanks, Vincent. Yeah. Hoang?
Thank you. Hoang Nguyen from TD Cowen. Maybe a question for Nate and Steve. I want to dig a little bit deeper into your efforts to go after SMB in Progressive Leasing. I think historically you have been more focused on enterprise-level merchants and, you know, maybe your competitors were more focused on SMB. Can you talk a little bit about, I guess, the resources that you guys have been investing in going after SMB and, you know, does it involve more boots on the ground, and how should we measure your success in doing so, going forward?
Go ahead.
Go ahead.
Yeah, going forward, we've added some firepower into that space. We continue to see retailers of all sizes and especially in SMB looking to us for differentiation. I think our marketplace plays a part in that. Our technology that allows people to work with us faster and more efficiently plays a part into that. We've seen success where we've invested, and so we obviously wanna replicate that success. We have put more boots on the ground, and we've restructured some things to kind of break that business up a little bit differently than we have maybe in the last five years. It's a space where we've always played. I've been here for 19 years, you know, there were no national partners back then.
That SMB space is a space that I'm very familiar with, and our teams are very familiar with. We wouldn't be investing in it if we didn't think that there was an opportunity for success, meaningful success. Very confident in the team that we have and the group that we have focused on that segment of the business. It's an important one to us, and again, we wanna reach customers where they wanna shop, not any one specific place, but what do they need and where can we help them? We're excited about the future in that space.
Thank you. Maybe a follow-up for Lee. On the Purchasing Power side, I think you guys are one of the most dominant players in the employee benefit program space. Can you talk a little bit about your competitive advantage there? What makes you guys beat out your competitors? You know, can you talk about the stickiness of the relationship there with the employers as well? Thank you.
Yeah. Thank you. So first of all, as you said at the end, they are very sticky relationships. Once you are integrated with their payroll system, they understand that, look, anyone can move to someone else, but it's very difficult because they value the relationship. We do a great job. The employees certainly value what we provide to them, so it is sticky. With regards to the competitive landscape, as I mentioned in my presentation, we do think we have the right to win. We're the largest out there. We certainly have the trust of very large companies. If you think about, you know, Progressive Leasing with fantastic enterprise level clients, it's very similar at Purchasing Power.
We have the large enterprise companies out there, but we're not just satisfied with that because we think we have the right to win across the board because we think we've got the right scale, the right payment rails, the right expertise to ensure that we can dominate this space. Our plan is to continue to do so. There are smaller competitors, but they are, again, I would say much smaller. What we wanna make sure we do is keep the gas on, push really hard, don't get complacent. Again, we think we have a very large opportunity, as we discussed earlier, to continue to grow.
Great. Thank you. Question here.
Hi, David Dakis, Sterling Pine. I'm just trying to understand the commercial synergy side of the Purchasing Power acquisition. What's the cross-sell opportunity look like for Purchasing Power to win business from PROG's retail base? Is that a lever you're pulling on, and is there any color you can give on penetration there already?
Yeah. Again, as I discussed, certainly look, you heard from Matt from Signet and the relationship they have with Progressive Leasing being able to come in here. It's certainly an easy entry. We've already had those discussions. There are other, you know, great enterprise relationships, Best Buy, Lowe's, of course, we wanna make sure that we're making those introductions and working on that. We think it's a unique relationship that we can get that entry. To be honest with you, one of the hardest things to do is have someone that trusts you as a partner and make an introduction elsewhere in the organization. It's a very, from our standpoint of Purchasing Power, it's a very valued insight and handoff to be able to go in and talk to people where they already have a trusted partner.
We think that that's a really unique advantage we have on some of those enterprise retail partners already.
I'd just add that our ecosystem is exciting to our partners, and whether it's Purchasing Power or anything, where we've built trust and confidence, it's that innovation you heard us talk about earlier. When we have something new to add, I think our retailers are really good at listening and seeing how they can provide value to them. I think there's a lot of excitement about the ecosystem in general, and obviously Purchasing Power is a big part of that.
Got it. Thank you. Just a follow-up for Lee. You mentioned 7 of the 30 top employers in your book of business. What are some of the reasons that the other 23 aren't currently working with you guys?
Well, look, as I said, it's a huge opportunity and we've gotta make sure that we show them the value proposition as well as making sure that they take the time, because it does take a little bit of time as we've gotta bring them on. They've gotta integrate the payroll systems, et cetera. It's making sure that we truly show them the value proposition and win them over to say, "Hey, this is worth doing that." Again, we believe once we get in front of them that we can actually prove that it makes sense for them to bring this on as an employee benefit.
Got it. Thank you.
Thanks, David. Yeah, if you can hand the microphone to Hal.
Hey, thank you. Hal Goetsch from B. Riley. Wanted to ask about the pace and cadence of, in Purchasing Power when you bring on a new employer, like how do revenues ramp over time? Like, I mean, imagine if you're an employee, this is a novel way of buying things. You're, you've never used it, and then I imagined it builds over a period of years. Could you tell us how it goes, the pace and cadence of adoption? Thanks.
No, that's exactly right. As I talked about, one of the things that we view as our most important lever is, hey, we've only got 10% penetration, so how do we continue to build? It's really making sure that we get the awareness. Early, when we bring someone on, it's getting the awareness for the employees, to your point, to say, "Hey, this is a unique way they can purchase." Get that awareness in front of them and grow that base. I will tell you what we have traditionally seen from a ramp perspective is a little over three years. They sort of get to kind of a more of a steady state. It grows pretty quickly in the first three years and gets to a steady state.
Again, as I mentioned, I don't think that steady state is where we wanna be. We need to make sure we continue to get awareness and get that penetration even higher among our existing eligible base, because that really is. You know, if you think about the opportunity in front of us in the near term, it's that penetration rate, getting that up. Of course, I want new clients, but it takes time to ramp. It's like a layer cake. Yes, the first year is good, and then it grows quickly. But again, that's further out in 2026, 2027. How can I increase that penetration? It's a combination of the two, but it is roughly a 3+ year ramp.
I guess one follow-up on credit performance in the business. You know, what are the, like, the predominant personas of say delinquencies or defaults in that space, in that segment of credit?
No, it's a great question. We just did our ABS offering, as you're aware, so we got a lot of questions from the ABS investors of, you know, "Hey, what's the cause if you're getting payroll deduction? Well, why does anyone ever not pay?" The biggest thing that happens is through termination of the employee, whether it's voluntary or involuntary. If you have turnover of whatever sort. As I mentioned during the video presentation, we always ask for a backup payment method so that to the extent that we can't use the payroll deduction, that we can hit that to make sure we get it, you know, get paid.
To the extent that then they'll say they've canceled their account or done whatever, there's insufficient funds. Well, then we've got to go after them, then we're in the traditional collections method to do that. That is the leading reason for why we will have delinquency or defaults.
Thanks, Hal. We've got time for one more question, and I'm gonna sneak one in here from the webcast. It looks like it's directed to you, Lee. I took a quick look ahead. Not a financial question, but a Purchasing Power question. How much of your sort of three-year CAGR that you talked about in the deck is comprised of landing a new employer partner versus scaling with the existing?
Yeah. No, that's a good question. Look, the majority of our opportunity really is scaling with our existing eligible base and getting better penetration. Again, as I talked about, it's a layer cake. We will, and we do have some very exciting new clients in the pipeline we'll be excited to bring on, but again, it takes time to ramp. The majority is gonna be better penetration, but with really the cherry on top being these new clients.
Great. Thank you. Okay. At this point, we're gonna take a quick break, and then we'll reconvene in about 10 or 15 minutes. Thank you.
10 or 15? You need to tell-
Hello. Good. If we could start making our way back to the seats, please. We'll kick off the second half of the morning. Thank you so much. Really excited to kick off the start of the second half of the program with our fastest growing business, which is our BNPL business, Four Technologies, and we're gonna hear from the President of Four Technologies, John Trainor .
Thank you, John. Hello, everyone. I'm John Trainor, President of Four Technologies. I've been with Four for about 10 months now, and I bring a fresh set of eyes to this business. With that fresh perspective, I can't tell you how excited we are for what we're building. Before joining Four, I was Chief Technology Officer at Wahoo Fitness, a leading fitness technology brand. Before that, I was Chief Information Officer for 20 years at Aaron's, where I did things like help lead the Progressive Leasing acquisition and help build out the e-commerce business. Just like Steve, I too have been in the homes of our customers, whether it was delivering appliances in Detroit or working through payment flexibility in Farmington, New Mexico. I know these customers, and I know who we serve.
Over the next few minutes, I'm gonna show you why Four is the most exciting growth opportunity in all of PROG Holdings. We are a rapidly growing, highly profitable, lean organization with a high-caliber team, phenomenal technology, and a large market in front of us. There are gonna be three things that I'm gonna cover that I want you to leave with. If you remember only three things. We are scaling a proven growth engine. We scaled from our app launch in 2021 to over $736 million in GMV last year alone, and we are just getting started. Additionally, we are profitable and capital efficient, which should be near and dear to everyone's hearts right here. We are not chasing growth at any cost. We will not do that. We have built a business that balances growth with profit improvement.
We showed that last year when we went for our first year of positive adjusted EBITDA. Not only that, we went from a year before where we were losing to a 13.5% adjusted EBITDA margin. Third, Four is uniquely positioned in the buy now, pay later space. We have found the right customer, and very importantly, this is easy to miss, so pay close attention to it. We have a proven direct-to-consumer model. That is a key differentiator for our product. You couple that with the massive market runway that buy now, pay later has, and that is a phenomenal combo. Let me show you how all this works. What is Four? Four is a direct-to-consumer, buy now, pay later platform. We connect seamlessly with almost any retailer, so they're all wide open to us.
Customers split purchases into four equal payments over the course of six weeks, about two weeks apart. We are more though than just a payment method like some of our competitors. We are a consumer engagement platform. We use intelligent analytics, personalized marketing, and generative AI to drive engagement and retailer brand visibility. This past holiday season alone, we experienced 3 million monthly active users on an app that has 100,000 reviews and a very positive 4.8 rating. That engagement drove over $736 million in GMV, as I just told you. Here's a number that I'm incredibly excited about, and you should be as well. 80% of our GMV comes from our subscribers. These are customers who are paying for the Four Plus membership to gain access to premium retailers and premium support and other benefits.
These are not one-time shoppers. I wanna be very clear about that. They are engaged, repeat consumers who see enough value in our service to actively pay for it. That subscriber base is also, in part, what powers our economics. Our take rate is about 10% of GMV, and that is from a series of a diversified set of revenue items. We have our subscriber revenue, affiliate revenue, platform revenue, and interchange. That plus what we do with that take rate creates really strong and durable revenue. Let's talk about now how we make money and how we manage our risk. On a $1 of GMV, we immediately collect 25% of it at the time of the order. The remaining balance, as I mentioned before, is collected over three more payments spaced about two weeks apart. The full amount is collected within six weeks.
This means our capital turns over every six weeks. We recycle the same dollar 8-9 times in the course of a year. Here's what makes that powerful from a risk management perspective. I have visibility into our cohorts within 19 days. I have early indicators that allow me to manage my business as early as 19 days. We do not wait months to find out whether or not our underwriting and collections are performing. Instead, we measure that feedback loop in days, not months. Combine that with the diversified revenue model that I talked about in the last slide. This short collection cycle returns strong returns on capital without taking on long-duration credit risks. Let's talk about how people find Four. Most of our customers are finding us organically. They're searching in app stores on ways to manage their spending.
They're looking for alternatives to credit cards, especially our demographic, and Four shows up with those 100,000 reviews and that strong 4.8 rating. With targeted marketing activity, we have been as high as number four in Apple's App Store in the shopping category, right alongside retailers all of you know. We also go viral in social media. Last year alone on TikTok, when people were posting about how Four helps them, we had four videos that organically, I'm not even talking about what we boost, but organically each achieved more than 1 million views. That is customers telling people what they like about our product, and that is people reacting positively to it through views. We complement the organic strength, though, through retail partnerships and, most importantly, diversified paid marketing sources across social media.
All of this happens at a very disciplined and low cost per app install. I told you how customers find us. Now let me tell you why they choose us. It is simplicity. Customers love our product and the simplicity that we offer. No credit needed, a decision within seconds, and access to hundreds of retailers. It's simple, it's transparent, and it's in the customer's control. I suspect most of you here are not my target market. I don't know how many of you have Four loaded on your phone unless you're an employee of PROG Holdings that I made do it. I'm gonna explain to you how the app works because you may not fully understand how it works. I'm gonna walk through a video and show this to you interactively. First, you're gonna download the app from the App Store like I described.
You bring it down, and then you just simply connect your bank account. When you connect your bank account, we use decisioning, and within seconds, we know what your spending limit is. You go into the app knowing what your spending limit is, and you pick out a retailer. You go find one of your favorite retailers, and you shop for what you need right then. Once you've shopped, then you have the amount. The amount's very simple. You get that total. You split it into four payments, as I mentioned, and then you apply it back to the retailer. Very simple, very easy, and people understand it. Once you've done that, then you manage it within the app, so you stay engaged in the app. You can see all your previous, transactions with us.
When you are ready, you're able to become a Four plus subscriber. That unlocks premium merchants and order tracking eventually, and other items that are important. I've talked about that. Let me say a review of what the actual customer is saying about our product, because it's vital to know what the customer's saying. They say, "Really helps. When you're on a fixed income and you need extra cash, Four really helps. Better than using a credit card, spending thousands of dollars and paying $25 a month with no end in sight. With Four, you split it into four payments and you're done. A quick payoff when you need it most." This is a real review from back in December, and it captures what a lot of our customers are thinking.
I want to talk to you about not only how Four works for our customers, but how it helps PROG Holdings, because that's a key piece to what you're investing in. Four is a vital part of the PROG Holdings ecosystem and a great complement to what you've already heard about. For many customers, it's the easiest way into our ecosystem. First, we offer a very low-friction entry point, as you saw. We use non-FICO underwriting, and that's key to our customers. You simply connect your bank and get a decision within seconds. This lets us say yes to customers that a lot of traditional offerings may not approve. Second, we build a direct-to-consumer relationship. I mentioned that's a big differentiator. Customers start in our app, they build loyalty in our app, and they continue to grow with Four over time.
Other buy now, pay later competitors are moving in this direction. We are already there and have been there. As customer needs evolve, though, the PROG ecosystem is there to help them. Let me put a face to this. This is Nicole. Nicole is a real person, but this is not her real picture. She works at a restaurant near our office. I probably see her once every couple weeks, and I've talked to her about our product. She's 23. She works two jobs. She does not like credit cards like a lot of her peers. She just doesn't like them. She doesn't want high-interest credit cards and frankly doesn't want credit cards in general. But she can absolutely manage a flexible installment plan, and that's why she likes what Four offers. Before Four, Nicole maybe was never introduced to the PROG ecosystem.
Now she's in, and as her needs evolve, we are there to serve her across the entire ecosystem. Let's zoom out and talk about the market opportunity, which is what you probably care about if you're gonna invest in this business. The BNPL industry is still in early innings, very early innings, and there are a lot of tailwinds, as you can see if you look at the market. What I want you to understand, however, is not just that those tailwinds exist, but that we have the team to capture those tailwinds. First, consumer comfort with BNPL is increasing. More and more consumers prefer, just like Nicole, splitting payments rather than having credit cards. BNPL is being embedded in every transaction.
Once again, you're probably not my target consumer, but if you think of all of the transactions you've done online, in apps, et cetera, almost always now there is a buy now, pay later option. That is because it is now table stakes for retailers. Second, agentic AI commerce is emerging. It's maybe not fully there yet, but it is definitely emerging. That is the concept of AI assistants shopping on your behalf, finding deals, and actually completing purchases, and that's where buy now, pay later comes in. BNPL is a natural fit for that type of transaction, and Four is building the rails to make all of that work and be embedded directly in there. Third, we use AI to personalize that shopping experience. As I mentioned, that direct-to-consumer model is important. This is where our personalization shines.
We are developing the ability to properly curate that relationship with that customer and streamline how they discover retailers and purchase from us. This creates the ability for us to expand our monetization opportunities significantly. Here is why I'm confident that we can capture these opportunities. Four has a lean, exceptional team that is able to deliver. If you compare our revenue per employee, we outpace our competitors by multiples, and it's because we are an AI-driven, cloud-native business that is able to execute. We've been using AI to operationalize our business, and I don't just mean technology. I mean true operationalization of our entire business, and that gives us a strong competitive edge to be able to seize on these.
It is one of the most exciting things I've seen in the last 10 months, is how well this team performs and how well they use tools like AI to win. So how do we capture that opportunity? Let me walk you through four strategic priorities. The most obvious one probably to all of you, and similar to what Lee was talking about, we need to increase repeat usage to increase our lifetime value for our customers. We have this engagement, now let's get a higher lifetime value. Over 80% of our GMV comes from our subscribers. We're already demonstrating that we have repeat usage. Now it's time for us to do even more with that. Drive strong lifetime value. We know how it's created, we measure it, and we track it.
This goes down to not just making sure that we extract more, we actually decide on every single transaction that the customer does. Why do we do that? We want the customer set up for success with this buy now, pay later transaction every time they do business with us. Priority number two, innovate new product and product features around subscriptions and the rest of the product. We have a very loyal user base that is incredibly vocal about what they want. It's why we launched travel last year with partnerships with Travelocity, Expedia. We listen very closely to our customers and we bake that rapidly into our product. This year we'll launch tap to pay with within this year with the Four Card.
We're expecting to release Four+ features that include, as I mentioned earlier, order tracking, opt-in credit reporting, loyalty programs, et cetera. Each of these expands our market and deepens that engagement that we're already seeing. Priority number three, develop scalable marketing capabilities. When I arrived, we were really relying heavily on organic marketing. We have changed that radically. We are already acquiring customers efficiently at scale. As I mentioned, we have a low cost per app install. Now what we're doing is we're focusing on targeting those lowest cost, highest stability customers and using that to promote that lifetime value that I mentioned. We additionally have all of this rich data, and we've already been doing this, but drive more and more people into the PROG ecosystem. Priority four, enhance customer support and communications.
Customer support, great customer support is a true competitive advantage. We all know that based upon who we work with. We will lead the way in how we handle customer support. Already, I'm happy to say in the past year, we dropped resolution time by 78%, and we are currently doing 73% AI-driven touchless resolution of support. Our customers love how quickly problems are solved when they have them. They notice it, and it builds that loyalty over time. When I started, I told you there were three things that I wanted you to leave with. If you ignored everything else, just leave with these three things because they're vital to the value proposition of Four within PROG Holdings. Number one, we are a proven growth engine. This is not hypothetical. We launched the app in 2021. We've been growing steadily.
We will continue to grow. We went from app launch in 2021 to $736 million in GMV last year alone. Second, we are profitable and capital efficient. Our take rate is approximately 10%. Our capital turns over every six weeks, as I mentioned, and we scale without meaningfully scaling our costs, which is vital. We are not chasing growth at any cost. We have built a business that balances growth with meaningful profit improvement, and we just demonstrated that, and we plan to do that in the future. Third, Four is uniquely positioned. Even if the other two don't get you excited, know that we are uniquely positioned in the buy now, pay later space. We have found the right customer, we have a proven direct consumer model, and we have a massive market runway ahead of us.
Four is a growth engine for PROG Holdings and we are just getting started. With that, let me turn it back over to Lee Wright. Thank you.
Great to be back up in front of all of you again this morning. When I walked you through my professional background previously, what I didn't tell you is that I've actually been a very active investor as well as intimately involved with the short-term liquidity space. When Steve offered me the opportunity to lead Money App, I absolutely jumped at the opportunity. I was incredibly excited. I'm even more excited to share the progress that we're making with Money App, a dynamic growth engine within the PROG portfolio.
As a quick backdrop, Money App was started in 2022 as a new service that arose out of the efforts of PRG Ventures, an entity whose sole purpose is to develop new products and services focused on the core PROG customer to see if these new product and services could be built into long-term accretive and viable businesses. I'm pleased to show you today why we believe that Money App is the first successful company birthed by these efforts. Money App was built with a simple intention, provide hardworking budget-constrained consumers with a fast, transparent, responsible way to access short-term liquidity. Money App's becoming a powerful platform within PROG that advances our mission of providing inclusive financial solutions at scale.
Let's walk through what we've built, what we're learning, and how we're positioning the business for long-term profitable growth. The three key messages I want to leave you with today are, first, we're scaling a highly dynamic solution that addresses a real and persistent need for short-term liquidity. Second, we believe we've built one of the fastest, most frictionless user experiences available in the market today. Our onboarding, decisioning, and delivery processes are not just competitive, we believe that they are industry-leading. Third, our pricing model is simple, transparent, and economically competitive. No tips, no hidden fees, no complexity, just a clear consumer-aligned structure that builds long-term trust. These principles form the foundation of MoneyApp and position it as a differentiated, durable asset within the PROG portfolio. The short-term liquidity solution provides assistance to consumers who have steady incomes and bank accounts.
However, many of these consumers are underserved and/or overcharged by traditional financial institutions. Alternatives for short-term liquidity are often costly, inconvenient, or simply unavailable. Our goal is to deliver a simple, responsible experience that meets an essential need with speed and clarity. In just a short time, we've built a product with meaningful scale while still being early in its long-term potential, and you can see the traction. Even though we formed in 2022, we really didn't launch the platform till less than two years ago. In this short timeframe, we have over 2 million signups, over 280,000 transacting customers. We've delivered over 1.5 million cash advances. We have over 350,000 monthly active users. In 2025, we delivered almost $13 million in revenue.
Our value proposition is rooted in speed, simplicity, and responsible decisioning. All decisions are made and powered by AI cash flow underwriting models, not traditional credit scores. The flow is intuitive and easy. I'm gonna walk you through the video in a second, but I do wanna point out, if you look to the right of the screen, the customer, if they're ultimately approved, does have a choice in how they want to get their money delivered to them. If they need it quickly, and they can get it as little as eight seconds, they will pay an express fee. To the extent that they can wait for a standard delivery of 2-3 business days, it's free to that consumer. Let's walk through how this works. The consumer will download the app, and they'll enter in their personal information.
From there, they're gonna connect with their bank account, as well as providing a debit card. They will also then indicate what their date of their next direct deposit and the amount that they're gonna receive. We will verify their account and make a decision on whether they're approved or not for a cash advance. The consumer, if they're approved, ultimately chooses a cash advance amount. They may qualify for up to $250. They make the choice of whether they want express delivery, which has a fee, or standard, two to three business days for free. Once they make that choice, the money's delivered, and they've got the money in their account. The flow is simple, intuitive, and easy. The consumer need here is real and urgent.
Millions of Americans need flexible cash solutions for essential expenses. Rent, medical bills, car repairs, and other unplanned life events that simply happen to this consumer. Let's walk through Joan, an illustrative persona, but a very real person with very real things that happen in life for people. She's a 28-year-old personal assistant. She's done everything right. She's got a good job. She's got a budget that she sticks to. She's got insurance. What she didn't expect when she woke up that morning was a searing toothache. Well, she goes to the dentist and says, "Absolutely. Well, we also need $50 for your copay." Okay, well, that was not in her budget. She's got a decision to make. She could overdraw on her bank account for approximately $35, or she could do a cash advance with MoneyApp for much less than that.
The choice is pretty simple. If you think about it within the overall PROG ecosystem, we've got a single customer that's gonna have multiple financial needs that can be met with either Progressive Leasing, Four, Purchasing Power, and now MoneyApp. We're building a more complete, inclusive financial ecosystem that provides the customer with multiple solutions depending upon their needs and situation. We're operating in a large, highly fragmented market with significant white space, and there's a tremendous need for this product by a large number of consumers. Why is that? Well, again, let's look over here on the left. 67% of American consumers say they live paycheck to paycheck. 37% of Americans can't afford an unexpected expense over $400. There's over 100 million low-income and financially constrained Americans.
Modern cash advance products are rapidly displacing store-based liquidity providers due to better user experiences and lower costs, and are increasingly capturing additional volume from bank overdraft fees due to the lower cost, depending on the circumstance. All of this is possible due to the use of digital decisioning, rapid funding capabilities, and app-based engagement, which provides us multiple levers to capture market share. Our growth strategy is clear and actionable. We're clearly focused on expanding the total number of active users through paid marketing and ecosystem cross-promotion that we've talked about so much today. We also wanna increase responsible repeat usage to drive higher customer lifetime value. I'm pleased to talk about two new features we recently introduced. The first is an extension. Think about Joan. She took out the $50 cash advance, but her next paycheck is really already budgeted, fully budgeted.
She's got her rent's due, her car payment's due. That doesn't work in my budget. She can simply apply for an extension to repay that amount in her next pay cycle. We've also launched a feature called Top-Ups. So again, you think about Joan. Well, okay, great, she took the $50 out, she made her co-payment, but what she didn't realize was that she was gonna get prescribed antibiotics. Well, now she had another co-payment when she went to the pharmacy to buy that. Okay, well now we're gonna do that. Well, if she's pre-approved for a top-up, she can get more on that. So we're seeing that lifetime responsible usage happening here. What else do we have? We're offering graduation products on an affiliate basis. So again, you think about Joan. Hey, she went to college, but she's got multiple student loans.
She might wanna consolidate those. That's not what we do, but on an affiliate basis, we can make a referral and get revenue from that. Finally, we're exploring data monetization opportunities to scale here within the overall ecosystem. All of these strategic priorities reinforce our commitment to building a profitable, durable, multi-year growth engine for PROG. Let me close with three key takeaways. First, we're scaling a dynamic solution to provide short-term liquidity for budget-constrained consumers. Second, we're delivering one of the most fastest, most frictionless consumer experiences. Third, our transparent, no tipping, no surprise fee model is resonating with consumers and strengthening long-term trust. Let me close with this. MoneyApp is not just a product, it's a platform, one that's unlocking new growth for PROG, creating meaningful customer impact, and giving us a differentiated advantage in a multi-billion-dollar market.
With that, I'd like to welcome Sridhar Nallani, Chief Technology Officer of PROG, up to the stage. Thank you for your time.
Thank you, Lee. Hi, everybody. I'm Sridhar Nallani, the Chief Technology Officer here at PROG Holdings. Let's bring in some energy. Who doesn't love tech, right? A bit about myself. Before joining PROG, I led many large scale digital transformations as a CIO, CTO, head of technology, in retail and financial services. Some of the companies you might know, Macy's, Charlotte Russe, Gap and Old Navy, Backcountry. I was at Microsoft early on, got to see what scale truly is. Among all these companies, there's one pattern that stuck with me, which was a big deal. When you unify technology around the customer, everything accelerates. Speed, scale, stability, customer trust. You heard from Steve and all the business leaders today, we're applying the same principles here. Same thing.
We're building a unified digital and data ecosystem that powers every team, every product, every customer experience across Progressive Leasing, Four, MoneyApp, and now Purchasing Power. Our mission is simple, and these are five words I live by, still do, for the customer. Remove friction, deliver great experiences. You do this, everything else will work itself out. That's it. I'm gonna walk you through today how our technology and product roadmap is enabling all this growth. Before we dive in, I wanna frame up what today is about. Everything Steve and all the business leaders are trying to do for our customers, technology is the driver. I will say this, we're not a technology company, but we're driving everything that's happening at PROG. Four things which are of importance, the ecosystem that you heard about today.
First thing, we're building a platform that's stable, scalable, and built for the long term. We had to solve this before we get to speed to market and many other things. That's the most critical component. We're improving experiences for our customers and our retail partners by designing and building our products together and not in silos. We're learning from our portfolio. When one product gets smarter, we're opening it up to the ecosystem, so all the products benefit. It's the compounding effect, and we'll get into it in a little bit. Finally, we're truly now operating on a modern tech foundation, how some of the game-changing companies are driving modern commerce today. We're there. One team among all four build once, validate, and extend into the ecosystem.
Before we get into the strategy and some of the proof points, I want you to keep an eye on the pace of transformation that's going on in tech at PROG. I wanna take you back just a few years, where tech was what we were doing. When I arrived here at PROG in 2023, February of 2023, the landscape looked quite different. In fact, I would say dramatically different. 17 different tech stacks, multiple customer applications, long delivery times, lots of friction. But you'd see this in many high-growth companies in different phases of their journey. I've been there. I've seen this enough times. The key is this, though. What you do as a setup in those times is what sets you up for the growth ahead. We did exactly that here. We invested a ton.
We built a high-performing tech team, of whom I'm extremely proud of. I mean, everything you'll see today, it's because of them, and we got to work. What transformed? What changed? We're on one unified stack now on leasing, our biggest engine, our driver. One code base. We're operating as a true SaaS platform, and we're pulling in all the other pieces as appropriate. An improved customer experience that connects the dots for all the products, you know, we talk about. Enterprise platforms powering CX and the back end. Most of the critical apps are on cloud now, AWS, you know, eliminating the tech debt and enabling the growth. A global operating model which scales up with the business. Smarter buy versus build decisions. This is where you get to speed to market the fastest. There's many other things. Why is this important?
Because the heavy lifting is kinda done. Now we're set up for serious growth. Let's look at one key proof point. Stability. As I was saying, you gotta solve that so you can go fast without compromising things. As many of you know, holidays are when volumes go through the roof. It was the same case for us last year. Last Black Friday, we saw volumes spiked up 5x. We were able to scale our infra 5x, and we're ready for more. Zero issues that day and the rest of the holiday. See, this is what our customers feel, the smoother journeys, the reliability, and now we're investing a ton into AI and bringing in, you know, smarter and more intuitive kinda journeys. So how is this driving our strategy? Quickly gonna go over three pillars.
The first thing, we wanna extend our digital and data capabilities across the ecosystem. We can do that now because everything is set up on the same enterprise-grade building blocks, right? The platforms powering everything. Laser-focused on customer conversion. There's many things we do—we're doing that, we're doing here today, but two key areas of importance, universal decisioning, and we'll talk about it in a second, and a unified data layer. These are the two big ones. We can go with speed and flexibility with AI now because everything is API first. It's auto-scale. I'm throwing some tech terms at you, but tested on peak load that we just talked about. Let's get into it. Let's talk about our first pillar. This is an important one. Our strategy is this: connect all the products with the same foundations underneath.
Data, decisioning, personalization of scale that Steve talked about, delivery capabilities, AI workflows, all the same thing. This is not theoretical or some visionary thing. A lot of pieces are already in place. Take the customer data platform, CDP. It's already powering leasing and Four for those experiences. Capabilities in leasing we're extending now to the rest of the ecosystem, like decisioning, AI workflows. That is what we call the flywheel effect, right? Tested in, let's say, leasing or another product. I mean, Steve talked about the customer can come through any product now. One product gets smarter, as I've mentioned earlier. We're opening it up, and all of the portfolio gets lifted. That's a big deal. Now the customers are seeing all of this directly with the capabilities, both our retail partners as well, reaching them faster.
Let's look at what the customers are feeling and seeing in terms of these capabilities. The truth is this: the bar has raised, especially for younger shoppers. I'm sure there are many parents in the room. You know it. Gen Z is not going through a manual application anymore. I see some faces. Yeah. Sitting through a clunky workflow application, that's not happening. What's expected is something as straightforward as downloading an app, setting up a profile. That's what everybody's expecting, you know, in terms of experience. Simple and intuitive. Anything other than that is friction. When I spent decades in retail, this is how you look at it. Any block is friction. At PROG, our laser focus is to remove all of that. I've listed a few here. Personalization. Yeah, personalizing the cart eliminates the uncertainty. Universal decisioning.
We can now match the right product for what the customer is looking for in the fastest and the more accurate way. AI checkout assistant, it unblocks anybody on the path to purchase funnel before they get stuck. Raise your hand if any of you are looking forward to calling a support line. We're putting the power of a mature chatbot through our app on the phone for our customers to solve many things themselves. This is on the experience side. That's great, but we gotta convert our customers now, right? Let's get into our second pillar on how we're doing that. Decisioning. We're doing that today by increasing the access and reducing complexity. You heard from Nate a little while earlier, complexity kills conversion. It's simplicity. That's gotta be the driver.
We're doing that, and leasing decisioning is a very mature product, battle-tested across millions of applications already. Now we're extending that to Four, MoneyApp, and for the right use cases for Purchasing Power. It used to be multiple onboarding flows, possibly giving conflicting outcomes earlier. Now we assess once, and we're using that intelligence across the ecosystem. Again, when you remove these friction points, customers convert, and we're seeing that. Wanna get to another example, and this is a big one. Extending our D2C to PROG Marketplace. You heard from Lisa a little while earlier, our retailer partner from Signet, how this is making a difference. This, by far, is one of our biggest competitive advantages.
We started with leasing, and the complexity and scale of leasing gave us a lot of insights on where customers were dropping off and what our retail partners were looking for. Tons of effort went into this area last year especially. A lot of A/B testing, multivariate experience pivots when we didn't see something working out, but we got to see some good things. See the results. As of December 2025, +23% uplift in the funnel. Anybody in retail, you would know this is such a big deal, and we're just getting started there. This is the key. Leasing. Marketing on leasing was not our only strategy. This literally, the way we're looking at it, is gonna be the multi-product digital front door to all of our ecosystem, and we are scaling it up.
Let's look at one more example, how this is all coming together, the modernization, the experience, and then getting to conversion. Lease modernization. I mean, leasing is the heart of one of our core engines. Leasing is very complex, and for years, we pushed that complexity to all of our retailers, and this was the state where our retail partners had to figure out what products were leasable and which were non-leasable and manage all of this through exceptions over thousands of SKUs. We also pushed the same complexity to our customers, and they would see some non-leasables in their cart at the very end of checkout. This is friction, and we had to transform this, and we did. There's some more work left on the lease platform, but look at the results already. It's 1 million-plus lease eligibility evaluations per day on the platform already.
Item blocking accuracy went through the roof significantly. 90% reduction in non-leasables making it to signing now. You remove the friction, customers convert, and they're doing it now. It is precisely at this point of my presentation. It would look suspicious if I don't talk about AI. AI is not a headline at PROG. It's not experimental. I'm not gonna go through all of the numbers here, but look at the first column. Way faster decisions, more accurate. That +23% number, again, a big deal, and it's growing by the day. Higher returns in marketing, lower cost per acquisition lead. Operations, I wanna highlight something here. 75K+ transactional chats per month. This is the line you care about, the last one. Less than 9% making it to a live agent. That means our agent is now able to help a
Our customer who is truly in need of human help. AI is delivering today, not someday, for sure. Where are we taking all of this? From isolated projects, pilots and projects, we're moving to full-on AI workflow integration into all the products. We're empowering 600+ knowledge workers with secure AI tools, Copilot, ChatGPT, Claude, Figma connectors, many more. It's a full no-code automation drive going on in tech, and we're scaling up our AI Center of Excellence, which is what is driving all of this strategy under the Prog Market Labs. We truly wanna make each of our employees a super employee. That's the drive. We do talk about it, things this way. I know everything is going at light speed. You're all looking at every, you know, all sorts of streams, but we gotta keep up with this light-speed pace.
We do talk about things this way internally. It's not who can do this, but which agent should do this. I know it was a compressed thing in a brief time, but I'll say this, I've been through many transformations and some really impactful ones, but this one is special because of the purpose, the team, and as Steve mentioned, our ambition and intensity. It's coming together. We're set up for serious growth. When you step back, even for the brief time we talked about things here, the story is straightforward. What we built is a modern, unified platform. There's more work here, of course, but that which compounds every time we build. The platform, the data, the decisioning, personalization, AI workflows, all of these are not separate efforts at PROG.
They're one system working across the ecosystem, removing those friction points and delivering those great experiences. Behind the scenes, it is getting very powerful. For the customer, it's getting simpler. You see, that's the advantage of building an ecosystem, not a collection of products. It gives us speed, it gives us optionality, and it lets us grow with far less incremental cost. I'm gonna hand it over now to our CFO, Brian Garner. Thank you for your time.
Good morning, everyone. It's great to be with you. It's good to see so many familiar faces as you came on in. I appreciate the continued interest in the story. My name is Brian Garner. I'm the company's chief financial officer. I started my career in public accounting with Ernst & Young in the Bay Area and served technology clients primarily. Had the opportunity in 2012 to come back to my home state of Utah and join an organization in Progressive Leasing that was just getting started on tackling the growth opportunity in front of it. As we sit here today, just completing 2025, a $2.5 billion top line, served over 10 million customers, delivered consistent margins over the years, and effectively managed its balance sheet risk.
There's much that I'm proud of to be part of the team and the delivery that's occurred over the years. You've heard from others today and I share the view wholeheartedly that the company has significant growth opportunities in front of it. In fact, I would say it's never been greater as we sit here today, particularly with the acquisition of Four and Purchasing Power and the momentum that we're seeing there. What I'd like to do is just spend a few minutes and walk you through how we're digesting the financial drivers and how we're thinking about this opportunity and boil it down into our long-term outlook, which I trust no one has looked at in this room, all you numbers peoples.
I know this will be the first time you're seeing it, but I'm happy to walk through. Starting at the top, as you're rewinding the clock a few years on this business, we've really evolved from a single-threaded lease-to-own construct. Now with the acquisition of Purchasing Power and Four, we're much better positioned to serve our customer across a broad array of products, services, and ticket sizes. The second thing I'm gonna hit on today is we understand that managing our portfolio of risk in this industry is job number one, and I'm extremely proud of our track record in delivering consistent yields.
Next, Steve mentioned, and I'll highlight as well, we're just getting started on the ecosystem, the realization of the synergies that exist between the businesses. While we've had some early results that are encouraging, the best is yet to come. Fourth, we're well suited to drive margin expansion, and the most direct line of sight we have to driving margin expansion is through scale. You see that across our businesses, and hopefully you've had a chance to look at our 2026 guidance, and you'll see in the long-term outlook, we expect scale along the way.
In tandem with that, we understand the expectations around disciplined cost management along the way, and the consistent yields that we've had and the margins we've had on the Progressive Leasing side I think demonstrate our ability to control that and to focus on it. Finally, we have some very cash-generative products that have a very quick conversion cycle that gives us free cash flow and our ability to take that free cash flow and explore opportunities across our capital allocation priorities. It provides us optionality and flexibility as we move forward. As you think about the last few years, you know, it's tough without bringing up too many, you know, tough memories, you go back to the spin, and you think about the operating environment that we've been operating in, and admittedly, it's been challenging.
The early days of COVID, the demand destruction that occurred gave way to $6 trillion in stimulus. For our customer, what that meant was they got the $6 trillion, they got their stimulus checks, they went and acquired the furniture, mattress or TV, laptop that they needed. It created a multi-year pull-forward demand. Now as we're looking at the current economy and the K-shaped recovery that is playing out, our consumer continues to be pressured. Many are asking, we talked about earlier about the replacement cycle, when's that gonna come back around? When's that gonna turn into a tailwind? That's a very difficult shot to call.
I highlight those challenges not as a crutch or to focus on the negative, but I wanna contrast some of the very value-- the highly value-add actions this management team and this company has taken against that backdrop. Since our split, we've acquired over 40% of our shares outstanding at prices that we view as opportunistic and below our intrinsic value. We've acquired Four and Purchasing Power, adding fuel to the growth trajectory and diversifying our platform. We've managed our portfolio and our decisioning posture effectively and delivered consistent yields. We've restructured our costs, focusing more on high ROI initiatives and less on the routine, removing inefficiencies from the processes.
Finally, we freed up underperforming capital with the sale of our Vive segment and redeployed that capital into Purchasing Power, which has a much stronger growth trajectory and value add proposition. What we have now is a stronger foundation, a more diversified base, and the team and platform capable of delivering significant results. Just a quick snapshot of our 2025 results, $2.5 billion in GMV, just shy of that in revenue. Call it $270 million in adjusted EBITDA and over $200 million in free cash flow. Note that free cash flow number is after the capital that has been deployed to Four to grow that business.
You see the revenue headwinds, but along the way, we have driven margin expansion from the depths of the post-COVID recovery, and also increased adjusted EBITDA by approximately 50%. I wanna make sure that landed, and let me reemphasize this point. In one of the most challenging operating environments of the last 100 years, this company and this management team delivered a 160 basis point increase in EBITDA margins and over a 50% increase in adjusted EBITDA. The actions we took around share repurchases, cost management, and portfolio management helped turn the depths of the post-COVID recovery into something that we're proud of, although there's work to do on the top line, admittedly. Our long-term growth algorithm is fairly straightforward.
We're focused on growing the business on the top line while achieving margin expansion along the way, and that's what's incorporated in the long-term outlook. I mentioned the highly cash generative businesses. You know, we talk about Progressive Leasing as being a short cash conversion cycle as we've come up along the way, and a typical lease will stick around for six months. Now you've got, with MoneyApp and Four, you've got that in spades and much quicker conversion. Now the challenge then becomes as you manage the P&L and you manage margins, what do you do with that cash and where does it go? It gives us opportunity to delever the balance sheet from the most recent acquisition. It gives us the ability to invest in the business.
It gives us the ability in the pretty near term to reevaluate share repurchases, and we've got a dividend that we just increased. Our aim here is to compound value for shareholders over time consistently, efficiently, and profitably. Let's break the revenue opportunity down just a bit further, and some of this is just reemphasizing what you've heard already today. At Progressive Leasing, we're gonna look to achieve growth across all logos of all sizes, both within our current partnerships as well as the nurturing of our pipeline opportunities, and there's plenty of greenfield that remains. We expect the ecosystem to be fueled by synergies with our cross-sell opportunities and enhancements in our technological capabilities. At Four Purchasing Power and MoneyApp, we're just getting started on the growth opportunities that exist.
As you've heard from the other leaders today, we are in the early stages of development with high growth potential as we leverage core strengths. Expanding a bit on cross-sell opportunity, and this is a repeat of the slide that Steve showed, but I think it's important to the financial picture and how we're sizing up the optimal cross-sell motion. Progressive Leasing posted $45 million of GMV from a simplistic unidirectional cross-sell motion taking MoneyApp and Four customers and matching up against the leasing opportunity. As you look forward, that really represents the floor as the more omnidirectional strategy takes hold and there's data sharing and cross-functional selling across the platform. Even as we scale revenue and diversify the business, we remain grounded in the discipline around portfolio performance across every product.
As I mentioned, since 2012, the decision sciences team is what we call it internally. It's a group of folks, highly intelligent individuals that we have leaned on to help us develop an algorithm that gives insight into this customer, early indicators of stress, and also chart a path forward to, as we need to make adjustments with macro shifts, how do we keep the portfolio on the rails? What we have today, and I'm proud of what we have, is a best-in-class offering that has insights that nobody has, nobody else has. Our ability to take that and scale it across the rest of the ecosystem is very powerful.
Just to back up their performance, because I think it's worth noting, in 2016 we gave guardrails around our portfolio of 6%-8%. As we've talked to many of you and other investors on the road, the conversations around, "Okay, you're serving the subprime consumer. How do we get comfortable that this story isn't gonna end well for us and we're gonna end up holding a portfolio that's deteriorating?" In 2016 we gave those guardrails. Not a single time on a trailing twelve-month basis through all the ups and downs of COVID, through all the craziness that we've all lived through, not a single time have we been above that 8% mark. That hasn't happened with the hands off the wheel.
We've been actively managing, meeting often, leveraging those core strengths to make that happen. I just wanna iterate this point again. Through all the twists and turns of the last few years and continued pressure on subprime consumer, we have an unblemished record of delivering portfolio performance within our stated guardrails. Not a single miss. We have the best-in-class expertise and consumer insight to navigate choppy waters, and we're well-suited to leverage these capabilities to Purchasing Power and forward. Let's turn to cost and our view on cost is really two-pronged. And I think it's played out over the years. We understand the mandate of minimizing waste, being as efficient as possible. We often get asked the question, "Well, okay, that's great.
Get rid of cost and let's watch margins increase significantly. That very well if you wanted to run the business that way, you could drive even better margin expansion than what we're painting in the long-term outlook. We believe our best years are still in front of us, and we need to invest ahead of that growth. What you're observing within SG&A is a shift out of some of the more routine functions into technology, into sales, into marketing that we know we have high confidence is gonna drive ROI, positive ROI going forward. We have our hands firmly on the wheel. We understand the mandate and we'll align costs in the context of revenue trajectory. Taking a quick look at the balance sheet as we wrapped up the year.
$600 million in total debt, $308 million in cash. One note about the debt that I think is worth making, that was the result of a levered recap that we did in 2021 that was not incurred as a result of any internal cash needs. In fact, this business as constituted historically has generated more cash than it needed along the way, and so there was no need to lean on the leverage front. $658 million in total liquidity, and that liquidity position puts us in the driver's seat to capitalize on opportunities and to weather choppy waters. Cash generation's a staple of the business historically, and we expect to continue going forward, and we'll look to deploy that capital in a manner that maximizes shareholder value.
One key item that I would note as you look at historical leverage. Post-acquisition, which was on January second of this year of Purchasing Power, that leverage ratio bumped up to 2.5 times. You may have heard me say on the last earnings call that by the end of 2026 we will be under that two times target, the 1.5-2 times target. That gives you some insight into how we've made the largest acquisition in our history, and we're able to quickly delever with organic internal cash flows to bring our leverage target down within 1.5-2 times, which then gives us optionality across the capital allocation spectrum.
Speaking of which, just, historical versus the go-forward on capital allocation, we emphasize de-levering, in the immediate term, as we've mentioned. You see our historical focus on share repurchases, which after internal investments has really been where we've channeled the dollars. We've instituted a dividend a couple years back, and we increased that by a penny here this last quarter. That continues to be a lever that we use to return value to shareholders. I'm not gonna rehash much of what Steve has shared on outlook, but this remains unchanged with the exception of the accounting requirements around revenue recognition for Purchasing Power, which is really just a net presentation of their revenue on a small proportion of their revenue rather than the gross presentation that was in the original outlook.
No change to the prospect or the value proposition of this business in our view since the acquisition. Our guidance calls for revenue between $3 billion and $3.1 billion. Total adjusted EBITDA between $320 million and $350 million, and non-GAAP EPS between $4 and $4.45. It assumes margin expansion across every one of our products. Improvement in EPS is coming from organic growth as well as the addition of Purchasing Power, which we expect to be accretive here in 2026. We expect a challenging but stable macro environment, consistent decisioning posture, and continued execution against our strategic priorities. We are not baking in additional share repurchases in this view. We're excited to execute against this plan, and we have the right team to do it.
Stepping to the long-term targets, and this is the first time this business has put out long-term targets. This outlook, as you look at it on a consolidated basis, and I'll share the consolidated view here shortly, but it calls for a significant inflection in GMV growth, fueled by impressive momentum of Four, Purchasing Power and MoneyApp, while Progressive Leasing continues to expand its best-in-class offering within the lease-to-own space. Progressive Leasing is expected to grow mid-single digits percentage for GMV and adjusted EBITDA against an already large, approximately $2 billion installed base. We aim to accomplish this through increased penetration in our existing business, as well as the continued pursuit of pipeline opportunities. What I will say about this mid-single digit outlook for Progressive Leasing, this does not incorporate an enterprise win.
You know, this is middle of the fairway for us in terms of the opportunity that exists. As Nate said, these are long sales cycles on the enterprise side. They're difficult, and they're hard, that's a hard shot to call and get the timing right on it. We are excluding that from this guidance, and when that comes, we will keep you posted. Four, as you see there, 50%-60% growth in revenue, and that represents a deceleration from where they're at today. That's more of law of large numbers coming into play. The adjusted EBITDA margin expansion, I think is a huge opportunity for Four.
As you look at other pure-play Four providers that are public, and there's really only one, you can start to get an appreciation for what the margin profile can be. What we have done in this business from an economic standpoint, like John said, we have not grown at all costs at Four. What we've tried to take an approach of let's prove out the economic model, let's get the decisioning right, and then let's scale. As we scale, let's keep costs under control. The shift right now, as you look at the composition of the Four customer, it skews very heavily towards new customers that we haven't seen before. You look at more mature players, they skew very heavily towards existing. As that composition shifts from new to existing, your margins become much, much better along the way.
We think we're in the early innings of margin achievement, with roughly 13.5% there at Four. Then the purchasing power, low double digits on the revenue growth rate and significant, I think improvement from a synergy perspective. 25%-35% on the adjusted EBITDA CAGR for purchasing power. Just taking a look at the consolidated view and again, how it rolls up, and you'll hear us talk more about this consolidated GMV concept as we move forward. We have historically just talked about GMV really in the context of Progressive Leasing, but it makes more sense now with this ecosystem to talk about a consolidated GMV. 20%-25% on an already $2 billion base and growing, and growing revenue-adjusted EBITDA and adjusted EPS along the way.
The point that I would make and again, I'm trying to steer away from accounting lessons here, but I think in this instance it makes sense to point this out. Not all GMV converts to revenue at the same ratio. As John talked about, Four converts $1 GMV to roughly $0.10 of revenue. Adjusted EBITDA and EPS track more closely with consolidated revenue. They're starting consolidated GMV. That dynamic as Four is expanding, becoming a larger proportion of our business, you're gonna see more and more separation between the consolidated GMV number and the revenue picture. I hope this presentation was helpful. Just to kinda recap the things that are driving or the other areas that are driving the financial picture on a go-forward basis.
We're delivering a consistent, diversified revenue picture over the next three years. We've got more opportunity than ever before. As you size that opportunity, whether it's in Four, Progressive Leasing, MoneyApp or Purchasing Power, there's more greenfield than there's ever been. Second, we're gonna deploy the same mentality and the same discipline that we have had around credit all along the way. We are not gonna let our portfolios slip from the rails. Hopefully our track record in doing that from an investor perspective gives some credibility to our ability to manage it and keep it at acceptable yields. Third, we've got a direct line of sight to margin expansion, and it's strongest at Four, but we're gonna maintain discipline across the rest of the business.
I think with Purchasing Power we're able to lever some cost synergies that that we're looking to deploy. We're gonna generate free cash flow like we always have, and that's not gonna change, which gives us optionality against our capital allocation strategy, which focus on deleveraging in the near term and allocation to internal investment as well as driving capital to shareholders along the way. What we've got is a business model that's resilient, scalable, and designed to create long-term value. I appreciate your time, and I'm gonna hand the meeting back over to Steve to close out the day.
We're almost done, I promise. I'm gonna back up 'cause this slide's pretty impactful, right? We've never done three-year targets before. I just noticed something, so I wanna just perfect the record here. It's actually 26%-28% growth rates, not 25%-28%. It's a three-year CAGR. Importantly, this footnote at the bottom, these CAGRs include Purchasing Power in the base year. If we were to, like, just take credit for the inorganic growth of buying Purchasing Power, these CAGRs would be much higher. This includes Purchasing Power in the base year, and these are the CAGRs that we expect to be able to achieve.
We, you know, as Brian said, the consolidated GMV is a nice picture that translates into aggressive EBITDA growth and adjusted EPS growth. Yeah. Well, we've been through, you know, we've done a lot here today, so thanks for sticking with us. We talked about our evolution beyond a leasing-centric business, our growth across the ecosystem that we've observed and will achieve, and those three-year CAGRs that, you know, reflect our confidence in the strategy. At the foundation of it all is a business that is structurally stronger. Sridhar talked about our technology modernization. It's resulting in meaningful cost efficiencies. Our lease modernization and flexible lease engine are resulting in better customer experience and improved operational efficiencies.
We're seeing growth across the ecosystem itself with multiple products and multiple expanding relationships across the customer base. What once was primarily a leasing-driven business is now an omni-channel engagement across the platform. We've done all this with a, or we are in a position with a deeply embedded distribution channel that's moated, right? We've talked about our exclusive retail contracts. Both Lisa and Jody had to leave for the airport, but I think that tells you the depth of our relationships on the leasing side, that they would take time out of their busy schedules to travel to New York and get down here to the NYSE in order to help us tell our story.
We had a host of other retail partners that would've been willing to do it if they were unavailable. We have these contracts locked up into the 2030s. 70% of our GMV into the 2030s on the leasing side. I know there's some questions sometimes about the concentration risk, but those retailers that are in our top five that represent that GMV are public, and you guys can look at their public financials and see whether there's any financial strain out there. We obviously had a fairly high-profile bankruptcy last year, but the rest of the stable of partners looks very good. Lee talked about the large employer access, like, and 7 million eligibles, 48 of the Fortune 500, but there's a lot to go get, right?
We're excited about that. The direct-to-consumer channels, and we're kinda using that generally as a concept of both the Prog Marketplace and our Four Technologies business is really taking off. We're a multi-product business with improving economics, expanding reach, and a clear path to long-term value creation. We truly believe that PROG's best growth story lies in front of us. We thank you guys for your time today, and we are going to go into our final Q&A session.
Okay. While the presenting team assembles up front, we'll go through the same process as the first Q&A session, where you'll raise your hand and we'll get a microphone in front of you. I think I saw Bobby. Carrie?
Yeah. Just first, thanks for everybody for the time in putting this together. I guess, Steve, I want to actually circle back. I think it was early in your start of this day, you talked about, I think the data opportunity or data-sharing opportunity across products. I'm just curious kinda where that is today, what's embedded in that algo to make it successful, and then is that an opportunity on basically a GMV unlock, or is that an opportunity on better loss ratios, or both?
Yeah. That's, I mean, that's. Yes to both of those. It's really a big opportunity. Where we are, so we've got kind of a harmonized data lake with the data together, and we're able to make multi-decisions with an application. We're not actually, like, currently serving. Like, if somebody applies through one front door, we're not, like, serving an offer across all products to them currently, but certainly that's on the roadmap. The opportunity is absolutely both offense and defense. It's on the GMV front. It's on the ability to have visibility into what they're what they're consuming, that other products that we have. Like Lee brought up, we know that leasing customers are using BNPL, and we'd rather them use Four.
We know that BNPL customers are using Cash Advance, and we'd rather them use MoneyApp. We're looking to drive growth and originations with our shared data infrastructure. Clearly it's a loss mitigator as well because we can continue to build and enhance our proprietary dataset and kind of observations around payment behavior to make sure that we're making good decisions and, you know, hopefully say yes to people that might be more incrementally yes because we have better data.
Brian, just quick follow-up on the financial algo. I think you mentioned share repurchases. Share repurchases are not in 2026 guidance. Are they in the three-year algo for EPS guidance or not?
They are not in the three-year algo.
Okay.
We've never guided to share repurchases or made that commentary. I think how I would frame it up is it's been the primary way that we have been able to distribute capital to shareholders historically. The near-term focus is to de-lever under the two turns. I think the world opens up a little bit more in terms of working through your capital allocation stacks. In additional internal investment, M&A opportunities and share repurchases along the way, but it was absent from either guide.
In the three-year guide, one of the reasons that the non-GAAP EPS has a higher growth rate than the adjusted EBITDA is really because of that de-levering function. You know, we will generate cash. We're not baking share repurchases in, so we'll have a cash balance growing in this model, which then also kind of reduces your net interest expense.
Yep.
Another question here from Kyle.
Yeah. Thanks for all the information today. Very helpful. Since we have you guys all on stage, I think it might be helpful to just get a competitive update kind of across products. Obviously you guys have highlighted leasing's been tough sledding for the last five years, so interesting to see how the competitive environment has evolved. Since we have Nate and John, love to hear your takes. Sorry, one of you can cover leasing, and then John, your perspective on kind of the BNPL competitive environment. Lee, your two products as well.
Yeah. On the leasing side, you know, there's competition out there. Like Steve mentioned in the SMB space, there's a lot of jockeying for position. We're the only partner out there with any real national footprint and exclusive partnership, and we've talked about the length of those contracts. We're very excited about that. There's still a lot of greenfield to go get and, you know, we mentioned, I think in the remarks three notable wins at the end of last year. Those were competitive wins.
The competition's out there, but we still feel like we're the leader in the space and we're the best option not only for the customer but for the retailer as well to build a dependable business model around and, you know, that compliance, the algorithm from a decisioning standpoint that they can depend on. When you start doing different things, it can get tough to depend on your partner, and you heard from Lisa and Jody how important that is. We're still out there. Competition's out there, but we still feel like we're winning and we'll continue to win.
Yeah. With buy now, pay later, obviously it's a really large addressable space. As I mentioned in my talk, we're still in early innings. I think there's a lot of growth there. We have some really strong competitors in there, like really good, strong companies. And frankly, we look to a lot of them because they've run some really good plays. That being said, we plan on continuing to grow like we have been growing. As the law of large numbers kicks in, obviously that percentage maybe changes a little bit. But there is a lot for us to get after, and we are proving that we're doing that and we intend to continue to do that.
We do think that our strategic focus on that direct consumer engagement is the right one, and it has proven to be successful and we'll continue to do that because it is something we're good at and something that's demonstrated growth. Yeah.
Kyle, for my two businesses, we'll start with MoneyApp. Obviously we are a smaller player in what's a very large market, and there are multiple competitors in that space. We think our model, again, we're doing it organically, we think our, you know, no tipping, no hidden fees, et cetera, is slightly different. Within the ecosystem, we think we can grow that very nicely. The overall pie is growing as well. We're not just trying to take share from others because the pie is growing. We think we have an opportunity, but we're obviously, as we talked about, one of the smaller players in that market. Then to turn to Purchasing Power, look, we are the number one player, we believe, in the space by far.
Again, our view is we want to continue to dominate that space and not just focus on, hey, larger enterprises. We think across the spectrum we have the right to win and maintain that number one position.
Got it. Really helpful. Follow up, Brian, just, I haven't had, you know, a chance to run everything through the model, but appreciate the long-term outlook. Just looking for thinking about the cadence of revenue growth, obviously you guys gave a CAGR, but when you factor in kinda all the moving parts, right, in terms of Four obviously facing the law of large numbers, but growing very quickly, but also becoming a more meaningful part of the whole, how you're just thinking about the revenue, the cadence of revenue growth versus the CAGR.
Yeah. I think, well, when you take revenue growth overall, I think one of the key things you have to consider Progressive Leasing is. Obviously with the portfolio down a bit year-over-year, it'll take a little bit of recovery there. That'll be a little bit of a near-term revenue headwind. But I think the, you know, Four because the conversion rate is gonna be less about
You know, moving the revenue needle massively, and more about earnings and GMV. From a cadence perspective, we haven't given any specific guide on that, but I think it's safe to say we're coming out really strong with Four right now. Purchasing Power is just getting started. A little bit of an offset for Progressive Leasing, just kind of the near term. As we catch that stride and build that portfolio back up, that's gonna be adding to the picture as we go forward.
As you can think about in a three-year CAGR, having year one be a negative revenue number kinda has a sizable impact on that CAGR for the leasing business.
Yeah.
That mid-single digits is informed by kinda by year one, right?
Yeah. Really helpful. Thanks, guys.
Yep.
Huang.
Hoang Nguyen from TD Cowen. Maybe if you can give some updates maybe on the tax refund seasons. Obviously, we are probably three or four weeks in. I mean, anything that you are seeing that may be different from what you provided maybe during earnings call.
Yeah. I mean, I guess I would start with we're not really updating anything past 12/31 'cause you know we're in the middle of the quarter. I would say our observations are what you guys are kind of writing, right? The tax season is slightly above average. It's about 10-ish percentage, whereas there were reports of 30% or more as an expectation. I think that when you peel the layers back, that's less addressable for our customer because of some of the refunds being impacted by things that aren't necessarily available to our customer. It's slightly bigger than average. We were predicting slightly delayed, and that really hasn't come through.
Two weeks ago, the week that included February 24th was, like, the biggest ACH drop, and that was the same week as the previous year. We thought maybe that last week with the March 2nd date would've been the bigger one. It was big, but it wasn't as big as the February 24th one. About the same, slightly bigger.
Got it. Maybe a follow-up for John on the Four business. How do you think about maybe the impact of state regulations given you guys serve the more low-end consumers? Can you talk about I guess the mix of ancillary revenue at Four, you know, everything that's maybe outside of subscription revenue and, you know, how they may or may not be impacted by regulations, I guess namely the recent proposal from New York. Thank you.
Regulatory is obviously something we care a lot about. One thing that I love and part of the reason that I was excited to join PROG Holdings is, as mentioned earlier, PROG Holdings has always been the gold standard when it comes to regulatory and compliance. That is no different at Four. We will maintain that in all holdings companies, and I'm very proud of that. That being said, when New York or any other regulator comes out with a proposal, we wanna be involved in that conversation, obviously. We have a point of view. We also know that we come in from a position where we already have a very strong compliance function that comes from PROG Holdings. While we wanna be part of that conversation, nothing concerns us significantly.
Impact on revenue, obviously the proposals are out there. A lot of work that needs to be done still has to happen to know if there is anything. There's nothing immediately that scares us in that. We have a very healthy mix of diversified revenue, which is really valuable, and makes us a little bit stronger when it comes to anything that might affect us. I don't see any major problems. Once again, we wanna be part of that conversation as much as we can, and we're working to do that. Yeah.
Thanks, Hoang. Vincent.
Thank you. A lot of great information. First thing I just wanted to clarify in that slide 97, so a lot of useful information there. Just to clarify, since I think I might have gotten some of the numbers wrong, but, for the 2025, if you could maybe help us what the pro forma Purchasing Power was, or alternatively, with that 2026 - 2028, should we be taking the 2026 guidance and growing it based off of that CAGR or if you could provide any help on that, 'cause I know Purchasing Power is pro forma for that.
Yeah. Purchasing Power is included in 2025, and there hasn't been any disclosures on actual Purchasing Power 2025 results yet. The 8-K/A will be coming out, I think in the next 10 days or so. You can take the revenue guide that we provided for Purchasing Power and say that, you know, kinda we've said low double digits percentage, so that can kinda get you into what the revenue was for 2025 to build it into, and we've said, kind of, I think we've said in some form since December when we announced the transaction that they were kind of in the mid-single-digit% adjusted EBITDA margin. I think that can be helpful directionally.
It is important to have those CAGRs be off of that pro forma base, not the actual result, reported results.
Okay, great. Very helpful. Follow-up question actually maybe to all the businesses, if you can talk about the investments that you'd like to make going forward. I think the discussion about EBITDA margins expanding has been great, but I know there's a lot of growth to be had, it sounds like, with all these businesses, which is very great. If you could talk about that and maybe from the high level, how are you thinking between the GMV growth and the CAGR growth of 20%-25%, that's great acceleration, versus the EBITDA margins, which are also doing well. Like, you know, how do you toggle between the two? Thank you.
You wanna start, John?
Yeah. If you look at those strategic priorities that I laid out, the theme there is investing in areas where we can deepen the engagement that we already have. We're really happy with the engagement. We have great story to tell when it comes to our subscribers and the percentage of GMV. However, we think there are way more opportunities to continue to personalize, continue to make the retailers relevant, promote retailers that are really important to our consumer and make it a higher engagement app. So we'll definitely see investments there. We will see investments in features that our customers are demanding. We obviously are a little bit earlier than some of the bigger players in buy now, pay later space, so we have features within our product that we wanna continue to implement.
I'm able to do it really well because I have a lean, high caliber team, as I mentioned, that uses AI to build the technology and so we're already seeing some good results there. Some of the things that I laid out that are coming this year will be representative of things that our customers are demanding and asking for, and that's what we'll invest in.
On the leasing side, similar to John, customer's everything. How can we get in front of more customers? Whether that's investing in marketing or our retail relationships, but also once we get in front of that customer, the experience that they have. We want them to have a smooth, frictionless experience. Like I mentioned with our marketplace, we want people to find us, more people to find us, and find us quickly. We want them to be able to transact anywhere that they have a need. Continuing to invest in those areas I think is super important. And then just as well as in taking our marketplace to the next level.
We've got great adoption in our marketplace right now, on the Prog Marketplace, and just being able to continue to invest in that. Then I think the last one that I'll mention would be our technology to use Progressive. The long sales cycle of lease-to-own, you know, these point of sale systems that we integrate into with large retailers are old. Like, really old and really difficult to integrate into. Making that easier is definitely a priority for the future, and our teams have done an awesome job going down that path. Some of the recent wins that we have had have gone really smoothly compared to a historical integration cycle.
Yeah, for Purchasing Power, look, we're an e-commerce retail company. We wanna make sure that we have the best user experience possible on that. Obviously, we're the leader in the space. We wanna make sure that we do the right investments to have that user experience be best in class, so we'll continue to work on that. For MoneyApp, obviously, look, we wanna make sure we're continuing to be that app-based effort, and for that consumer experience, again, drive that value creation.
At the top level, I mean, as Brian says so frequently, we're very fortunate in that we're gonna generate cash, right? We don't have to have fist fights about this product's gonna get capital and this product's not, because there's a better, you know, a return on capital profile. We're fortunate in that regard to have that box of capital allocation checked, organic investment. Now, we do have to balance, you know, we have this thing called pesky profit, right? You know, we used to joke we were burdened by profit and so we still have to balance our margin expansion and deliver that.
We're doing a needle threading exercise on Four and looking for that efficient frontier of how fast can we grow it while still proving that we're on a path to that really healthy adjusted EBITDA margin that some of the peer BNPL peers have demonstrated. I think the team has done an awesome job of threading that needle. We're growing fast while still showing margin expansion. You guys have heard of LFG, right? It stands for, you know, let's effing go. Well, it actually stands for let Four grow. That's what we do. We have a neon sign in the office in Miami, in Aventura, that says LFG. We're trying to grow Four as fast as possible, but not at any cost.
We're not gonna try and get to 4 billion of GMV by taking EBITDA negative for three years. That's just not our philosophy. It's not our DNA. We're gonna grow quickly, and we're gonna show that we have that path to healthy EBITDA margins.
My team challenged me to weave in LFG in my talk.
I just did it.
I did not have on my bingo card that you would be the one to drop LFG. Thank you.
Yeah.
All right. I think we have time for one more question maybe from Hal.
Right behind you.
Thank you. On MoneyApp and Four, have you seen how many customers cross-shop both apps? I haven't checked, but
We have. Yes.
Yeah.
We've got, without you know, without talking too much about the secret sauce or the inner workings, we've got good visibility into customers and what they're consuming and what products they're using and how to attack them for Andy back there from a marketing standpoint. That's something, back to Bobby's question, that's why the data sharing is a GMV initiative, not just a loss mitigator.
Could you share any details on what that cross shop is?
It's pretty significant.
Okay.
Yeah.
Okay. One last question. What was the GMV kind of on the marketplace? I might have missed that in the presentation.
Yeah. We didn't say it today, so it's a good question. We did say it on the
Yeah
On the Earnings Call. I think it was around $85 million in 2025.
Okay.
Yep.
Any growth rate on that? Was it-
Yeah. Well, it grew, almost tripled in Q4, but it basically doubled for the year.
Okay. Sure. Thank you.
Yep.
Okay. Thank you all for hanging in there and being with us today. We really appreciate your attendance. Hope you share the excitement that we have about our growth prospects. We've outlined an ambitious program here, and we plan to execute on it. With that, we'll bring the formal program to a close. Thank you again.
Thank you all.