Special Note Regarding Forward-Looking Information: Except for historical information contained herein, the matters set forth in this Form 10-Q are forward-looking statements. These statements are based on management’s current expectations and plans, which involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "delivering," "driving," "advancing," "expectation," "target," "uncertainty," "outlook," "assumes" and similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the filing date of this Quarterly Report and which involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Such risks and uncertainties include, among others, those discussed in "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Annual Report") and in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the filing date of this Quarterly Report. The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three and six months ended June 30, 2026 and 2025, including the notes to those statements, appearing elsewhere in this report. We also suggest that management's discussion and analysis appearing in this report be read in conjunction with the management's discussion and analysis and consolidated financial statements included in our 2025 Annual Report. Business Overview PROG Holdings, Inc. ("we," "our," "us," the "Company," or "PROG Holdings") is a financial technology holding company that provides transparent and competitive payment options to consumers. PROG Holdings has three reportable segments: (i) Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider; (ii) Purchasing Power, a voluntary employee benefit program provider, allowing employees to purchase brand-name products and services from Purchasing Power and then pay for those purchases through either automatic payroll deductions or allotments; and (iii) Four Technologies, Inc. ("Four"), which offers Buy Now, Pay Later ("BNPL") payment options to consumers through the Four platform. Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products, had been an operating segment prior to October 20, 2025. On that date, the Company sold substantially all of Vive's loan receivables portfolio and began the process of discontinuing its remaining operations. Vive is reported as discontinued operations in our condensed consolidated financial statements for all periods presented. All of Vive's revenues and expenses, other than allocated corporate overhead, are excluded from the results of continuing operations. Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and e-commerce website partners (collectively, "POS partners"), as well as through its direct-to-consumer app, PROG Marketplace. It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather, offers lease-purchase solutions to the customers of traditional and e-commerce retailers. Our Purchasing Power segment is a voluntary employee benefit program that allows employees of participating employer-clients to purchase brand-name products and services and pay for those purchases over time through payroll deductions or allotments. Products available through the platform include consumer electronics, home goods, furniture, appliances, and other merchandise, as well as certain services. Millions of employees nationwide have access to Purchasing Power's purchasing solutions. We acquired Purchasing Power on January 2, 2026, and its results are included in our condensed consolidated financial statements beginning on the acquisition date. Four allows shoppers to pay for merchandise through four interest-free installments. Four's proprietary platform capabilities and its base of customers and retailers expand and diversify PROG Holdings' ecosystem of financial technology offerings by introducing another payment solution to its customers. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty products, footwear, jewelry, and other consumer goods from retailers across the United States. The average ticket size of a Four transaction is significantly smaller than a transaction with Progressive Leasing or Purchasing Power. PROG Holdings also owns MoneyApp, a mobile application that offers customers short-term liquidity solutions through cash advances. MoneyApp is not a reportable segment in 2026 as its financial results are not expected to be significant to the Company's condensed consolidated financial results. MoneyApp's financial results are reported within "Other" for segment reporting purposes. 38 Acquisition of Purchasing Power On January 2, 2026, we completed the acquisition of Purchasing Power for $424.2 million in cash. In addition, Purchasing Power had $338.6 million of non-recourse funding debt that remained in place following the closing of the acquisition. The results of Purchasing Power are included in our condensed consolidated financial statements beginning on the acquisition date. Results for periods prior to the acquisition date are not included in this MD&A. See Note 2 of the condensed consolidated financial statements for additional information. Macroeconomic and Business Environment We believe the increased cost of living and recent rise in fuel costs has continued to have a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many products offered by our businesses, as well as in customer payment performance. The significant increase in inflation resulting from the war in Iran and related geopolitical disruption has further pressured our customers' budgets and unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of larger-ticket, durable consumer goods offered by many of our retail partners and by our Purchasing Power business. Progressive Leasing Progressive Leasing entered 2026 with a smaller lease portfolio, as measured by its gross leased asset balance, compared to 2025, which resulted in a decrease in lease revenues when compared to the three and six months ended June 30, 2025. Gross margin as a percentage of revenue increased from the prior-year periods, driven primarily by a lower rate of early purchase option activity. Macroeconomic conditions contributed to fewer customers exercising early purchase options and more customers making payments over the full lease term, which generally results in greater margin realization. The Company continues to operate in a challenging macroeconomic environment due to the factors described above. In addition, American Signature, Inc., one of Progressive Leasing's POS partners, filed for bankruptcy in November 2025, which will result in the permanent closure of many of its stores in 2026. Those closures have had and will continue to have an unfavorable impact on Progressive Leasing's GMV, revenue, and earnings from continuing operations before income tax in 2026. Customer payment delinquencies were elevated at the end of 2024 and during the first quarter of 2025, which prompted us to tighten our decisioning posture to maintain a healthy lease portfolio. While this action benefited our lease portfolio performance, it also negatively impacted Progressive Leasing's GMV during the periods subsequent to the change. In addition, elevated delinquencies in the second quarter of 2026 contributed to a provision for lease merchandise write-offs as a percentage of Progressive Leasing revenue of 8.4% compared to 7.5% in the prior year period. As a result, Progressive Leasing recently further tightened its decisioning posture, which is expected to continue to pressure GMV in future periods while supporting portfolio performance. Despite these trends, customer payment activity remained within expected ranges, and gross margin as a percentage of revenues increased during the three and six months ended June 30, 2026 when compared to the prior year. Purchasing Power We believe customer demand for the larger-ticket products and services sold by Purchasing Power also has been adversely impacted by the macroeconomic headwinds affecting Progressive Leasing's performance. However, we expect that Purchasing Power's recent focus on improving eligible employee-customer penetration, continuing to create new, attractive merchandising choices for its customers, and its addition of several new employer-clients, will help offset the impacts of such decreases in demand. While customer payment delinquencies and write-offs for Purchasing Power are generally lower than those of Progressive Leasing due to Purchasing Power's payroll deduction and allotment repayment model, delinquencies on non-federal employee receivables were elevated in the second quarter of 2026, which resulted in a higher than estimated provision for credit losses. Delinquencies for federal government employee receivables have improved compared to the elevated delinquencies experienced in 2025 resulting from various workforce disruptions, including DOGE workforce reductions and multiple government shutdowns. We continue to monitor these conditions, as well as increased turnover (both voluntary and involuntary) at Purchasing Power's clients, as prolonged uncertainty could pose additional risk to Purchasing Power's receivables performance. Four Due to the average ticket size of a BNPL transaction with Four being significantly lower than a transaction with Progressive Leasing and Purchasing Power, we believe demand for products purchased through the use of Four is not as impacted by the macroeconomic headwinds discussed above to the same degree as demand for larger-ticket products. 39 Highlights The following summarizes significant financial highlights from the three months ended June 30, 2026: •We reported consolidated revenues of $719.7 million, which was a 22.3% increase compared to the $588.5 million we reported for the second quarter of 2025. The increase in consolidated revenues was primarily due to the $130.4 million of revenues contributed by Purchasing Power, which we acquired on January 2, 2026. Additionally, revenues at Four increased by $19.0 million, compared to the prior year period, due to continued growth in its BNPL transactions. These increases were offset by a $19.8 million decrease in revenue at Progressive Leasing, which was driven primarily by a smaller gross leased asset balance throughout the second quarter of 2026 when compared to the same period in the prior year. •GMV from Four increased by $165.5 million, due to an increase in Four loan originations in the second quarter of 2026 compared to the second quarter of 2025, as a result of the continued growth in that business. GMV increased by $14.2 million for Progressive Leasing in the second quarter of 2026, compared to the same period in the prior year. The increase in GMV for Progressive Leasing was due primarily to $23.0 million in GMV growth from e-commerce channels. This increase was offset by a reduction in GMV due to the higher cost of living experienced by our customer base, including increased fuel prices, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. GMV relating to Purchasing Power was $158.8 million and no GMV was reported in the prior year period, as the acquisition was completed on January 2, 2026. •Earnings from continuing operations before income taxes decreased to $50.8 million compared to $51.2 million in the same period in 2025, primarily due to a $6.1 million decline in earnings at Progressive Leasing. The decrease at Progressive Leasing was driven by a $4.8 million charge related to the settlement of the litigation discussed in Note 8 to the accompanying condensed consolidated financial statements, higher personnel costs, higher net interest expense, and an increase in provision for lease merchandise write-offs. These impacts were partially offset by a $4.7 million gain on sale of lease receivables and higher earnings at Four and our Other operations. 40 Key Operating Metrics Gross Merchandise Volume. We believe GMV is a key performance indicator of our Progressive Leasing, Purchasing Power and Four segments, as it provides the total value of new leases, transaction orders, and loans written into our portfolio over a specified time period. GMV does not represent revenues earned by the Company, but rather is a leading indicator we use in forecasting revenues the Company may earn. Progressive Leasing's GMV is defined as the retail price of merchandise acquired by Progressive Leasing, which it then expects to lease to its customers. GMV for Purchasing Power is defined as the total value of merchandise and services purchased and delivered to customers through its platform. GMV for Four is defined as gross loan originations. The following table presents our GMV from continuing operations for the Company for the periods presented: Three months ended June 30, Change (unaudited and in thousands) 2026 2025 $ % Progressive Leasing $ 428,116 $ 413,872 $ 14,244 3.4 % Purchasing Power 158,794 — 158,794 nmf Four 315,107 149,632 165,475 110.6 Total $ 902,017 $ 563,504 $ 338,513 60.1 % nmf - calculation is not meaningful Progressive Leasing's GMV increased compared to the second quarter of 2025 due primarily to increases in GMV from e-commerce channels. E-commerce channels generated 25.6% of Progressive Leasing's GMV in the second quarter of 2026 compared to 20.9% in the second quarter of 2025. This increase was offset by a reduction in GMV driven by inflationary pressures, an elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering. The increase in Four's GMV is primarily attributable to the continued expansion of the Four BNPL platform, reflecting growth through higher transaction volumes and average order value from existing and new customers over the period. Active Customer Count. Our active customer count represents the total number of customers that have an active lease agreement with Progressive Leasing, an active receivable with Purchasing Power, or an active loan with Four. Active customer counts include customers that may have an active agreement with more than one segment. The following table presents our active customer count from continuing operations for each segment: As of June 30 (unaudited and in thousands) 2026 2025 Active customer count from continuing operations: Progressive Leasing 786 802 Purchasing Power 261 — Four 333 185 The number of active customers for Progressive Leasing decreased due to a decrease in consumer demand for many of the durable leasable goods offered by our retail partners, due to the continued elevated costs of living and inflationary pressures facing our customers. The increase in the number of customers for Four was the result of continued growth in BNPL transactions, which have a significantly smaller transaction size, as compared to our Progressive Leasing business. 41 Key Components of Earnings from Continuing Operations Before Income Tax Expense In this MD&A section, we discuss the key components of our condensed consolidated results. For the three and six months ended June 30, 2026 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows: Revenues. We separate our total revenues into three components: (i) lease revenues and fees, (ii) product and service revenues and (iii) other revenues. Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Product and service revenues represent Purchasing Power's sales of products and the revenue earned relating to arranging for services that customers purchase from Purchasing Power, net of estimated returns. Other revenues represents transaction income, subscription revenues, annual and other fees earned relating to loans in our Four segment and our other strategic businesses, as well as Progressive Leasing affiliate commissions and imputed interest income recognized on a portion of Purchasing Power's receivables portfolio. Depreciation of lease merchandise. Depreciation of lease merchandise reflects the expense associated with depreciating merchandise leased to customers by Progressive Leasing. Cost of product sales. Cost of product sales represents the cost of merchandise purchased by Purchasing Power from third‑party vendors for resale, along with associated fulfillment and distribution costs. Provision for lease merchandise write-offs. The provision for lease merchandise write-offs represents the estimated merchandise losses incurred and adjustments for changes in estimates for the allowance for lease merchandise write-offs. Operating expenses. Operating expenses include primarily personnel costs, stock-based compensation, occupancy costs, advertising, decisioning expense, professional services expense, sales acquisition costs, computer software expense, bank charges and processing fees, fixed asset depreciation expense, intangible amortization expense, legal settlement expense and restructuring expenses, among other expenses. Provision for credit losses. The provision for credit losses reflects the expected lifetime credit losses on Purchasing Power's, Four's and other strategic operations receivables, determined using the Current Expected Credit Losses ("CECL") framework and incorporating historical loss experience, current conditions, and reasonable and supportable forecasts. The provision for credit losses on Purchasing Power's receivables are net of estimated recoveries from its program of selling portfolios of charged-off receivables to third-parties. Gain on sale of lease receivables. Gain on sale of lease receivables reflects income recognized by Progressive Leasing from its program of selling portfolios of charged‑off lease receivables to third-parties. Gain on change in fair value of receivables. Receivables associated with the Purchasing Power acquired portfolio are measured at fair value on a recurring basis pursuant to the Company's election of the fair value option under ASC 825. Changes in fair value attributable to the passage of time, credit performance, discount rates, and other assumptions, are recognized as a gain or loss on changes in fair value of the receivables. Interest expense. Interest expense consists of interest incurred on the Company's debt. Interest income. Interest income consists of interest earned on the Company's deposits in cash and cash equivalents. 42 Results of Operations – Three months ended June 30, 2026 and 2025 Three months ended June 30, Change (in thousands) 2026 2025 $ % Revenues Lease revenues and fees $ 549,830 $ 569,674 $ (19,844) (3.5) % Product and service revenues 128,507 — 128,507 nmf Other revenues 41,378 18,829 22,549 119.8 719,715 588,503 131,212 22.3 Costs and expenses Depreciation of lease merchandise 364,311 385,107 (20,796) (5.4) Cost of product sales 75,702 — 75,702 nmf Provision for lease merchandise write-offs 46,499 42,633 3,866 9.1 Operating expenses 143,417 93,409 50,008 53.5 Provision for credit losses 30,667 8,043 22,624 nmf 660,596 529,192 131,404 24.8 Gain on sale of lease receivables 4,701 — 4,701 nmf Gain on change in fair value of receivables 1,810 — 1,810 nmf Operating profit 65,630 59,311 6,319 10.7 Interest expense (15,217) (9,794) (5,423) 55.4 Interest income 394 1,645 (1,251) 76.0 Earnings from continuing operations before income tax expense 50,807 51,162 (355) (0.7) Income tax expense 13,429 13,581 (152) (1.1) Net earnings from continuing operations 37,378 37,581 (203) (0.5) (Loss) earnings from discontinued operations, net of tax (349) 902 (1,251) nmf Net earnings $ 37,029 $ 38,483 $ (1,454) (3.8) % nmf - Calculation is not meaningful 43 Results of Operations – Six months ended June 30, 2026 and 2025 Six months ended June 30, Change (in thousands) 2026 2025 $ % Revenues Lease revenues and fees $ 1,146,694 $ 1,221,231 $ (74,537) (6.1) % Product and service revenues 234,913 — 234,913 nmf Other revenues 80,782 35,700 45,082 126.3 1,462,389 1,256,931 205,458 16.3 Costs and expenses Depreciation of lease merchandise 773,321 845,550 (72,229) (8.5) Cost of product sales 138,208 — 138,208 nmf Provision for lease merchandise write-offs 90,150 90,651 (501) (0.6) Operating expenses 293,617 191,533 102,084 53.3 Provision for credit losses 54,834 13,544 41,290 nmf 1,350,130 1,141,278 208,852 18.3 Gain on sale of lease receivables 11,158 — 11,158 nmf Gain on change in fair value of receivables 7,522 — 7,522 nmf Operating profit 130,939 115,653 15,286 13.2 Interest expense (33,606) (19,757) (13,849) 70.1 Interest income 1,037 2,518 (1,481) 58.8 Earnings from continuing operations before income tax expense 98,370 98,414 (44) — Income tax expense 24,774 26,243 (1,469) (5.6) Net earnings from continuing operations 73,596 72,171 1,425 2.0 (Loss) earnings from discontinued operations, net of tax (513) 1,030 (1,543) nmf Net earnings $ 73,083 $ 73,201 $ (118) (0.2) % nmf - Calculation is not meaningful Earnings (Loss) from Continuing Operations Before Income Tax Expense Information about our earnings (loss) from continuing operations before income tax expense by reportable segment is as follows: (in thousands) Three months ended June 30, Change 2026 2025 $ % Earnings (loss) from continuing operations before income tax expense Progressive Leasing $ 45,430 $ 51,546 $ (6,116) (11.9) % Purchasing Power (291) — (291) nmf Four 7,059 2,942 4,117 139.9 Other (1,391) (3,326) 1,935 58.2 Total earnings (loss) from continuing operations before income tax expense $ 50,807 $ 51,162 $ (355) (0.7) % nmf - Calculation is not meaningful 44 (in thousands) Six months ended June 30, Change 2026 2025 $ % Earnings (loss) from continuing operations before income tax expense Progressive Leasing $ 97,390 $ 100,171 $ (2,781) (2.8) % Purchasing Power (7,791) — (7,791) nmf Four 18,449 4,913 13,536 275.5 Other (9,678) (6,670) (3,008) (45.1) Total earnings (loss) from continuing operations before income tax expense $ 98,370 $ 98,414 $ (44) — % nmf - Calculation is not meaningful Progressive Leasing Progressive Leasing results of operations – Three months ended June 30, 2026 and 2025 Three months ended June 30, Change (in thousands) 2026 % of revenue 2025 % of revenue $ % Gross merchandise volume $ 428,116 $ 413,872 $ 14,244 3.4 % Total revenues $ 550,554 $ 569,674 $ (19,120) (3.4) % Depreciation of lease merchandise 364,311 385,107 (20,796) (5.4) Gross margin 186,243 33.8 % 184,567 32.4 % 1,676 0.9 Provision for lease merchandise write-offs 46,499 8.4 42,633 7.5 3,866 9.1 Selling, general and administrative 82,829 15.0 78,892 13.8 3,937 5.0 Other expenses 6,948 1.3 5,072 0.9 1,876 37.0 136,276 24.8 126,597 22.2 9,679 7.6 Gain on sale of lease receivables 4,701 0.9 — — 4,701 nmf Operating profit 54,668 9.9 57,970 10.2 (3,302) (5.7) Interest expense, net 9,238 1.7 6,424 1.1 2,814 43.8 Earnings from continuing operations before income tax expense $ 45,430 8.3% $ 51,546 9.0% $ (6,116) (11.9) % nmf - Calculation is not meaningful The decrease in revenues was primarily due to a lower gross leased asset balance as a result of the tightening of our decisioning posture during 2025, and a decrease in demand for the durable leasable products offered by many of our retail partners. We believe the inflationary and other macroeconomic factors had a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many products offered by our retail partners. Gross margin is a key performance measure for our Progressive Leasing segment, which generates lease revenue from transactions that include associated depreciation of the merchandise on lease, making gross margin a meaningful indicator of profit. The increase in Progressive Leasing's gross margin percentage reflects a decline in customers' electing early purchase options, as macroeconomic conditions contributed to customers choosing to make payments over the full contractual lease term rather than exercising early purchase options, which generally result in lower margin realization. 45 The provision for lease merchandise write-offs increased $3.9 million compared to the same period in 2025. The provision for lease merchandise write-offs as a percentage of revenues increased to 8.4% during the second quarter of 2026 from 7.5% in the same period in 2025, primarily reflecting higher period-end delinquency levels, as well as continued pressure on customer payment performance in a challenging macroeconomic environment. Given the significant uncertainty regarding the impacts of geopolitical disruptions, inflation, tariffs, increased fuel prices, elevated interest rates, and unemployment rates on our business, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of June 30, 2026. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs. Selling, general and administrative expense increased resulting from the following: –Personnel costs increased by $2.3 million due to an increase in incentive compensation expense when compared to 2025; and –Stock-based compensation increased $1.7 million, primarily due to (i) a higher aggregated fair value of restricted stock units granted during 2026 and (ii) higher expense recognized on performance stock units due to increased expected award achievement levels compared to the prior-year period. The increase in other expenses was attributable to Progressive Leasing incurring a one-time $4.8 million expense to settle a legal dispute during the three months ended June 30, 2026, with no comparable expense during the same period in the prior year. This increase was offset by lower intangible amortization expense resulting from a significant intangible asset becoming fully amortized in April 2026. In June 2026, Progressive Leasing sold a portfolio of charged-off lease receivables to a third-party for $4.7 million in cash and recognized a gain of $4.7 million as the carrying amount of the charged-off receivables had been reduced to zero. There were no similar sales during the three months ended June 30, 2025. Interest expense, net for the three months ended June 30, 2026 was higher than the same period in 2025 due to an increase in debt used for the acquisition of Purchasing Power on January 2, 2026. Progressive Leasing results of operations – Six months ended June 30, 2026 and 2025 Six months ended June 30, Change (in thousands) 2026 % of revenue 2025 % of revenue $ % Gross merchandise volume $ 821,086 $ 815,834 $ 5,252 0.6 % Total revenues $ 1,147,418 $ 1,221,231 $ (73,813) (6.0) % Depreciation of lease merchandise 773,321 845,550 (72,229) (8.5) Gross margin 374,097 32.6 % 375,681 30.8 % (1,584) (0.4) Provision for lease merchandise write-offs 90,150 7.9 90,651 7.4 (501) (0.6) Selling, general and administrative 164,089 14.3 161,072 13.2 3,017 1.9 Other expenses 12,785 1.1 10,200 0.8 2,585 25.3 267,024 23.3 261,923 21.4 5,101 1.9 Gain on sale of lease receivables 11,158 1.0 — — 11,158 nmf Operating profit 118,231 10.3 113,758 9.3 4,473 3.9 Interest expense, net 20,841 1.8 13,587 1.1 7,254 53.4 Earnings from continuing operations before income tax expense $ 97,390 8.5 % $ 100,171 8.2 % $ (2,781) (2.8) % nmf - Calculation is not meaningful The decrease in revenues was primarily due to a lower gross leased asset balance as a result of the tightening of our decisioning posture during 2025, and a decrease in demand for the durable leasable products offered by many of our retail partners. We believe the inflationary and other macroeconomic factors had a disproportionate negative effect on our customers' disposable income, negatively affecting demand for many products offered by our retail partners. 46 Gross margin is a key performance measure for our Progressive Leasing segment, which generates lease revenue from transactions that include associated depreciation of the merchandise on lease, making gross margin a meaningful indicator of profit. The increase in Progressive Leasing's gross margin percentage reflects a decline in customers' electing early purchase options, as macroeconomic conditions contributed to customers choosing to make payments over the full contractual lease term rather than exercising early purchase options, which generally result in lower margin realization. The provision for lease merchandise write-offs decreased $0.5 million compared to the same period in 2025. The provision for lease merchandise write-offs as a percentage of total revenues increased to 7.9% during the six months ended June 30, 2026 from 7.4% in the same period in 2025. The increase was due to a continued pressure on customer payment performance in a challenging macroeconomic environment. Given the significant uncertainty regarding the impacts of geopolitical disruptions, inflation, tariffs, higher fuel costs, elevated interest rates, and unemployment rates on our business, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of June 30, 2026. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs. Selling, general and administrative expense increased primarily due to a $2.7 million increase in stock compensation expense, which was primarily due to (i) a higher aggregated fair value associated with restricted stock units granted during 2026 and (ii) higher expense recognized on performance stock units due to increased expected award achievement levels compared to the prior-year period. The increase in other expenses was attributable to Progressive Leasing incurring a one-time $4.8 million expense to settle a legal dispute during the three months ended June 30, 2026, with no comparable expense during the same period in the prior year. This increase was offset by lower intangible amortization expense resulting from a significant intangible asset becoming fully amortized in April 2026. In February and June 2026, Progressive Leasing sold portfolios of charged-off lease receivables to third-parties for a total of $11.2 million in cash and recognized total gains of $11.2 million, as the carrying amount of the charged-off receivables had been reduced to zero. There were no similar sales during the prior year. Interest expense, net for the six months ended June 30, 2026 was higher than the same period in 2025 due to an increase in debt used for the acquisition of Purchasing Power on January 2, 2026. 47 Purchasing Power Purchasing Power results of operations – Three months ended June 30, 2026 and 2025 Three months ended June 30, Change (in thousands) 2026 % of revenue 2025 % of revenue $ % Gross merchandise volume $ 158,794 $ — $ 158,794 nmf Product and service revenues $ 128,507 $ — $ 128,507 nmf Other revenues 1,877 — 1,877 nmf Total revenues 130,384 — 130,384 nmf Cost of product sales 75,702 — 75,702 nmf Gross margin 54,682 41.9 % — 54,682 nmf Provision for credit losses 14,949 11.6 — 14,949 nmf Selling, general and administrative 29,381 22.9 — 29,381 nmf Other expenses 8,082 6.3 — 8,082 nmf 52,412 40.8 — 52,412 nmf Gain on change in fair value of receivables 1,810 1.4 — 1,810 nmf Operating profit 4,080 3.2 — 4,080 nmf Interest expense, net 4,371 3.4 — 4,371 nmf Loss from continuing operations before income tax expense $ (291) (0.2)% $ — $ (291) nmf nmf - Calculation is not meaningful Selling, general and administrative expenses include $1.9 million of transaction and transition costs incurred related to the acquisition of Purchasing Power. The gain on change in fair value of receivables of $1.8 million reflects changes in the estimated fair value of Purchasing Power's receivables under the fair value option, including the impact of the passage of time, changes in credit performance, discount rates and other valuation inputs. 48 Purchasing Power results of operations – Six months ended June 30, 2026 and 2025 Six months ended June 30, Change (in thousands) 2026 % of revenue 2025 % of revenue $ % Gross merchandise volume $ 291,472 $ — $ 291,472 nmf Product and service revenues $ 234,913 $ — $ 234,913 nmf Other revenues 2,606 — 2,606 nmf Total revenues 237,519 — 237,519 nmf Cost of product sales 138,208 — 138,208 nmf Gross margin 99,311 41.8 % — 99,311 nmf Provision for credit losses 27,910 11.9 — 27,910 nmf Selling, general and administrative 57,766 24.6 — 57,766 nmf Other expenses 19,510 8.3 — 19,510 nmf 105,186 44.8 — 105,186 nmf Gain on change in fair value of receivables 7,522 3.2 — 7,522 nmf Operating profit 1,647 0.7 — 1,647 nmf Interest expense, net 9,438 4.0 — 9,438 nmf Loss from continuing operations before income tax expense $ (7,791) (3.3)% $ — $ (7,791) nmf nmf - Calculation is not meaningful Selling, general and administrative expenses include $3.7 million of transaction and transition costs incurred related to the acquisition of Purchasing Power. Other expenses include restructuring expense related to employee severance of $3.4 million resulting from cost reduction initiatives that occurred shortly after the Company's acquisition of Purchasing Power. The gain on change in fair value of receivables of $7.5 million reflects changes in the estimated fair value of Purchasing Power's receivables under the fair value option, including the impact of the passage of time, changes in credit performance, discount rates and other valuation inputs. 49 Four Four results of operations – Three months ended June 30, 2026 and 2025 Three months ended June 30, Change (in thousands) 2026 % of revenue 2025 % of revenue $ % Gross merchandise volume $ 315,107 $ 149,632 $ 165,475 110.6 % Total revenue $ 35,085 $ 16,076 $ 19,009 118.2 % Provision for credit losses 13,688 39.0% 6,263 39.0% 7,425 118.6 Selling, general and administrative 12,942 36.9 5,678 35.3 7,264 127.9 Other expenses 256 0.7 248 1.5 8 3.2 26,886 76.6 12,189 75.8 14,697 120.6 Operating profit 8,199 23.4 3,887 24.2 4,312 110.9 Interest expense, net 1,140 3.2 945 5.9 195 20.6 Earnings from continuing operations before income tax expense $ 7,059 20.1% $ 2,942 18.3% $ 4,117 139.9 % Revenues at Four increased due to the continued significant growth in BNPL transactions, including growth in the number of Four+ subscription customers. Provision for credit losses increased due to the growth in new BNPL transactions. The increase in the provision for credit losses is consistent with the increase in GMV for the quarter ended June 30, 2026 when compared to the same period in the prior year. Selling, general and administrative costs increased due to the following: –Bank charges and processing fees increased $4.4 million related to higher customer payment transaction volumes; and –Advertising expense increased $1.6 million resulting from additional marketing efforts to drive continued growth of Four. Four results of operations – Six months ended June 30, 2026 and 2025 Six months ended June 30, Change (in thousands) 2026 % of revenue 2025 % of revenue $ % Gross merchandise volume $ 595,097 $ 269,495 $ 325,602 120.8 % Total revenue $ 70,052 $ 30,505 $ 39,547 129.6 % Provision for credit losses 23,285 33.2% 10,408 34.1% 12,877 123.7 Selling, general and administrative 25,596 36.5 12,366 40.5 13,230 107.0 Other expenses 509 0.7 640 2.1 (131) (20.5) 49,390 70.5 23,414 76.8 25,976 110.9 Operating profit 20,662 29.5 7,091 23.2 13,571 191.4 Interest expense, net 2,213 3.2 2,178 7.1 35 1.6 Earnings from continuing operations before income tax expense $ 18,449 26.3% $ 4,913 16.1% $ 13,536 275.5 % Revenues at Four increased due to the continued significant growth in the number of BNPL transactions, growth in the number of Four+ subscription customers and, to a lesser extent, an increase in the average order value for Four transactions. 50 Provision for credit losses increased due to the growth in new BNPL transactions. The increase in the provision for credit losses is consistent with the increase in GMV for the six months ended June 30, 2026 when compared to the same period in the prior year. Selling, general and administrative costs increased due to the following: –Bank charges and processing fees increased $9.3 million related to higher customer payment transaction volumes; and –Advertising expense increased $3.0 million resulting from additional marketing efforts to drive continued growth of Four. Other Operations Other operations incurred $1.4 million of losses before income tax expense for the three months ended June 30, 2026, which is primarily related to losses associated with our other strategic operations. Other operations incurred $9.7 million of losses before income tax expense for the six months ended June 30, 2026, which was primarily related to costs incurred in connection with the acquisition of Purchasing Power on January 2, 2026. Income Tax Expense Income tax expense decreased to $13.4 million for the three months ended June 30, 2026 from $13.6 million in the prior year comparable period. The effective income tax rate was 26.4% for the three months ended June 30, 2026 compared to 26.5% for the same period in 2025 and was generally consistent with the prior year period. Income tax expense decreased to $24.8 million for the six months ended June 30, 2026 compared to $26.2 million in the prior year comparable period. The effective income tax rate was 25.2% for the six months ended June 30, 2026 compared to 26.7% for the same period in 2025. The decrease in the effective tax rate was primarily due to the discrete tax benefit related to stock-based compensation vestings in March 2026. 51 Overview of Financial Position The significant changes in the condensed consolidated balance sheet from December 31, 2025 to June 30, 2026 were driven by the acquisition of Purchasing Power on January 2, 2026, as discussed below: •Cash and cash equivalents decreased $223.6 million from $308.8 million to $85.2 million during the six months ended June 30, 2026, due primarily to the cash consideration paid in connection with the acquisition of Purchasing Power. For additional information, refer to the "Liquidity and Capital Resources" section below. •Accounts receivable, net of allowances and unearned interest income, increased $300.3 million compared to December 31, 2025 primarily due to the addition of Purchasing Power's receivable portfolio acquired on January 2, 2026. •Lease merchandise, net of accumulated depreciation and allowances, decreased $77.9 million, reflecting the seasonal nature of the lease-to-own business. Lease merchandise balances typically peak during the fourth quarter due to higher holiday-season originations and subsequently decline in the first half of the year as leased merchandise depreciates and existing agreements mature. •Goodwill and other intangible assets, net increased $409.3 million, reflecting preliminary purchase accounting associated with the Purchasing Power acquisition, including the recognition of goodwill and identifiable intangible assets. •Accounts payable and accrued expenses increased $52.2 million, primarily due to the Purchasing Power acquisition. Purchasing Power had $60.0 million of accounts payable and accrued liabilities as of June 30, 2026. •Deferred income tax liabilities increased $36.0 million resulting primarily from the recognition of deferred income tax liabilities with the acquisition of Purchasing Power. •Income tax receivables decreased $22.7 million primarily due to federal tax refunds received during 2026, resulting from enactment of tax legislation permitting 100% federal bonus depreciation. •Debt, net increased $292.2 million primarily due to incremental borrowings incurred in connection with the acquisition of Purchasing Power and non-recourse funding debt of Purchasing Power following the acquisition, partially offset by debt repayments during the period. Overall, the changes in the Company's financial position during the period were primarily driven by the acquisition of Purchasing Power, which resulted in significant increases in assets, liabilities, and debt, partially offset by the use of cash to fund the transaction. 52 Liquidity and Capital Resources General We expect that our primary capital requirements will consist of: •Reinvesting in our business, including acquiring merchandise to lease to our Progressive Leasing customers, purchasing products and services for resale through installment sales agreements with our Purchasing Power customers, and originating new BNPL transactions with our Four customers. Because we believe these businesses will continue to grow over the long-term, we expect that the need for additional merchandise will remain a major capital requirement; •Making merger and acquisition investment(s) to further broaden our product offerings; and •Returning excess cash to shareholders through periodically repurchasing stock and/or paying dividends. Other capital requirements include (i) expenditures related to software development; (ii) expenditures related to our corporate operating activities; (iii) personnel expenditures; (iv) income tax payments; and (v) servicing our outstanding debt obligations. Our capital requirements historically have been financed through: •cash flows from operations; •private debt offerings; •bank debt; and •stock offerings. As of June 30, 2026, the Company had $85.2 million of cash, $350.0 million of availability under the Revolving Facility, and $893.7 million of gross indebtedness, which includes $293.7 million of funding debt associated with the Purchasing Power business which is non-recourse with respect to the Company and its assets. Cash Provided by Operating Activities Cash provided by operating activities decreased modestly to $277.9 million for the six months ended June 30, 2026, compared to $279.8 million in the prior year, a decline of approximately $1.8 million. Higher cash interest payments, increased net investments in lease merchandise, and lower earnings were largely offset by a favorable change in cash paid for income taxes of $60.7 million, reflecting income tax refunds received during the current period compared to net tax payments in the prior year period. Other changes in cash provided by operating activities are discussed above in our discussion of results for the six months ended June 30, 2026. Cash Used in Investing Activities Cash used in investing activities was $414.2 million and $34.8 million during the six months ended June 30, 2026 and 2025, respectively. The $379.3 million increase in investing cash outflows was primarily the result of the $391.8 million of cash paid for the acquisition of Purchasing Power, net of cash acquired. Cash Used in Financing Activities Cash used in financing activities was $80.1 million during the six months ended June 30, 2026 compared to $118.7 million during the same period in 2025. Cash used in financing activities during the six months ended June 30, 2026 was primarily $546.2 million of proceeds from borrowings, offset by $591.1 million of repayments on debt and $11.2 million paid for cash dividends. Cash used in financing activities during the prior year was primarily the repayment of $50.0 million that was drawn on our revolving credit facility during the fourth quarter of 2024, the Company's repurchase of $51.8 million of its common stock and $10.4 million paid for cash dividends. 53 Share Repurchases We purchase our stock in the market from time to time as authorized by our Board of Directors. Effective February 21, 2024, the Company's Board of Directors reauthorized the repurchase of Company common stock at an aggregate purchase price of up to $500 million under the Company's existing share repurchase program, with such reauthorized share repurchase program to be extended for a period of three years from February 21, 2024, or until the $500 million aggregate purchase price of Company common stock purchased pursuant to the reauthorized share repurchase program has been met, whichever occurs first. The Company repurchased 280,000 shares for $10.2 million during the six months ended June 30, 2026. That amount does not include any excise tax that may be assessed on those repurchases. As of June 30, 2026, we had the authority to purchase additional shares up to our remaining authorization limit of $299.4 million. Dividends On May 6, 2026, our Board of Directors declared a quarterly cash dividend in the amount of $0.14 per share of outstanding common stock, which was paid on June 2, 2026. Aggregate dividend payments during the six months ended June 30, 2026 were $11.2 million. While we expect to continue paying quarterly cash dividends in future periods, the future payment of dividends, if permitted, will be at the sole discretion of our Board of Directors and will depend on our capital allocation strategy at that time as well as other factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant. Debt Financing The Company's debt structure includes a combination of corporate-level borrowings and asset-backed financing arrangements of non-recourse funding debt. Our corporate-level borrowings increased to fund part of the purchase price we paid for the acquisition of Purchasing Power. Purchasing Power's asset-backed financing arrangements remained in place following our acquisition of Purchasing Power on January 2, 2026. Corporate Debt The Company maintains a $350.0 million senior revolving credit facility (the "Revolving Facility") that matures on November 15, 2029. Borrowings under the Revolving Facility bear interest, at the Company's election, at either a base rate or term SOFR plus an applicable margin based on the Company's leverage ratio, and the facility includes a commitment fee on unused capacity. As of June 30, 2026, there were no outstanding borrowings under the Revolving Facility and $350.0 million remained available for borrowing. During the six months ended June 30, 2026, borrowings under the Revolving Facility, which were repaid prior to June 30, 2026, were primarily utilized to support short-term liquidity needs in connection with the Purchasing Power acquisition and related transactions. In connection with the acquisition of Purchasing Power, the Company entered into a Fourth Amendment to its existing credit agreement, which among other changes provided for a new $125.0 million term loan ("Term Loan A") maturing November 15, 2029. Term Loan A bears interest at a variable rate based on SOFR plus an applicable margin determined by the Company's leverage ratio and amortizes through quarterly principal payments, with the remaining balance due at maturity. During the six months ended June 30, 2026, the Company voluntarily repaid the full $125.0 million of the term loan, resulting in no outstanding balance as of June 30, 2026. The Company also has $600.0 million aggregate principal amount of senior unsecured notes due November 2029, which bear interest at a fixed rate of 6.0%. The remaining principal amount of those notes remained unchanged during the period. Asset-Backed Financing The securitization and warehouse funding arrangements utilized by Purchasing Power remained in place following the Company's acquisition of Purchasing Power. Those arrangements are structured as non-recourse, asset-backed financings secured by underlying receivables and related cash flows. These arrangements are accounted for as secured borrowings, as the related receivables remain on the Company's balance sheet. Following its acquisition of Purchasing Power, the Company repaid and terminated certain of those securitization and warehouse facilities, while continuing to utilize asset-backed financing as a key funding source. On February 26, 2026, a wholly-owned securitization entity issued $220.0 million aggregate principal amount of asset-backed notes in a private placement transaction. These notes are secured by receivables held by the securitization entity, with collections applied through a customary priority of payments structure. As of June 30, 2026, total asset-backed debt was $291.6 million, net of unamortized debt issuance costs. These arrangements include various financial and performance covenants. If certain thresholds are not met, this may result in rapid amortization of 54 the outstanding debt, and if other covenants or requirements are breached, the lender may terminate the Company's ability to draw on the facilities, accelerate outstanding amounts, and exercise remedies against pledged collateral, including liquidation. As of June 30, 2026, no such events had occurred and we do not expect any such event to occur in future periods. Debt Activity and Liquidity Total debt, net increased to $887.1 million as of June 30, 2026 from $594.9 million as of December 31, 2025, primarily driven by (i) the asset-backed non-recourse funding debt that remained in place following the acquisition, and (ii) the issuance of new securitization debt, partially offset by repayments of asset-backed borrowings during the period. The Company's asset-backed financing arrangements are non-recourse to the general credit of the Company and are secured solely by the underlying receivables and related assets held within the securitization entities. Accordingly, these assets are restricted and not available to satisfy the claims of the Company's general creditors. Covenants The Company's debt agreements contain customary financial and operating covenants, including leverage and interest coverage requirements. As of June 30, 2026, the Company was in compliance with all such covenants and believes it will continue to be in compliance in the future. Commitments Income Taxes During the six months ended June 30, 2026, we received net income tax refunds of $15.6 million. Within the next nine months, we anticipate making estimated net tax payments of $3.7 million for United States federal income taxes and state income taxes. That expectation includes anticipated favorable impacts on the Company's cash taxes resulting from the One Big Beautiful Bill Act, which was signed into law on July 4, 2025. Deferred income tax liabilities as of June 30, 2026 were $157.2 million. Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. Leases We lease management and information technology space for corporate functions under operating leases expiring at various times through 2032. Our corporate and segment management office leases contain renewal options for additional periods ranging from two to 5.6 years. Contractual Obligations and Commitments Future interest payments on the Company's variable-rate debt are primarily based on the Secured Overnight Financing Rate ("SOFR") plus an applicable margin determined by the Company's leverage ratio. Following the Fourth Amendment to the Company's credit agreement, borrowings under the Revolving Facility and Term Loan A bear interest, at the Company's option, at either (i) SOFR plus a margin generally ranging from 1.5% to 2.8%, or (ii) a base rate plus a margin that is lower than the applicable SOFR-based margin. In addition, the Company is subject to commitment fees on unused revolving commitments, which range from 0.25% to 0.50% based on the Company's total net leverage ratio. The Revolving Facility and Term Loan A mature in November 2029. As of June 30, 2026, the Company had fully paid off the Term Loan A and had no outstanding borrowings under the Revolving Facility. Accordingly, future interest obligations under the Revolving Facility will depend on future borrowing activity and prevailing interest rates. The Company's $600.0 million aggregate principal amount of Senior Notes bear a fixed annual interest rate of 6.0%, payable semi-annually, and mature in November 2029. In addition, the Company has asset-backed financing arrangements associated with its securitization activities, which are secured by underlying receivables and related cash flows. These arrangements include contractual obligations for interest and principal payments based on the performance and collections of the underlying receivables originated by Purchasing Power and are generally non-recourse to the Company's other assets. The Company has no long-term contractual obligations to purchase merchandise or other commitments requiring minimum purchases beyond its normal course of business. 55 Critical Accounting Policies Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to those policies during the six months ended June 30, 2026, except as described below. In connection with our acquisition of Purchasing Power on January 2, 2026, we adopted new accounting policies related to Purchasing Power's operations, including revenue recognition, receivables, and debt-related policies. A detailed description of these policies is included in Note 1 in the accompanying condensed consolidated financial statements. Recent Accounting Pronouncements Refer to Note 1 to the condensed consolidated financial statements for a discussion of recently issued accounting pronouncements.