The Upbound pivot: An exclusive conversation with CEO Fahmi Karam

Upbound Group Inc. (NASDAQ: UPBD) is currently mid-flight in one of the most ambitious corporate transformations in the consumer finance sector. Once known primarily as the parent company of Rent-A-Center, the Plano-based firm has spent the last year aggressively repositioning itself as a "digital-first" ecosystem for the credit-constrained consumer.

The strategy appears to be paying off. With a record-breaking $4.7 billion in 2025 revenue and a recent stock surge, Upbound is proving that there is massive scale in serving the 3.5 million "underserved" customers often ignored by traditional banks. However, the path forward is a tightrope walk. CEO Fahmi Karam, who transitioned from CFO to the top seat last June, must now balance the high-velocity growth of his new fintech acquisition, Brigit, against a backdrop of persistent inflation.

In an exclusive sit-down with Investing.com, Karam details how he is managing this "light-touch" integration and why he believes the company’s new data-driven underwriting is the key to surviving—and thriving—in a high-interest-rate world.

"Growth that degrades portfolio health is not growth we pursue," Karam says, a clear signal that discipline remains the priority. "That balance—discipline first, growth second—is what allows us to guide confidently."

THE FULL CONVERSATION

The following is the complete interview with Upbound Group CEO Fahmi Karam.

Reporter: You’ve described Brigit as the cornerstone of your digital transformation. How does a traditional "rent-to-own" company like Rent-A-Center successfully absorb a high-growth fintech culture without stifling the very innovation you bought them for?

Fahmi Karam: Our acquisition of Brigit, a leading subscription-based financial health technology company, in January 2025 was a natural next step in our evolution toward becoming a more comprehensive digital marketplace serving underserved consumers. We acquired Brigit because its digital-first culture, product velocity and customer engagement model are exactly what we want to preserve and scale. It strengthens our ability to serve our core customer: underserved consumers with imperfect credit, limited access to financing and constrained discretionary spending.

We’re taking an intentional, light-touch integration approach. Brigit doesn’t need to conform to our existing businesses; it complements them. We’re integrating only where it enhances scale, preserving Brigit’s culture, technical expertise and ability to innovate quickly. With Upbound’s scale, we’re expanding cross-selling opportunities through targeted digital outreach and physical touchpoints, while extending Brigit’s financial health tools to the millions of consumers that we already serve. The goal isn’t to force convergence, but to connect relevance across financial moments responsibly over time.

We’re pleased with Brigit’s integration into Upbound Group so far. Brigit finished 2025 with approximately 1.6 million paid subscribers, a nearly 30% increase year-over-year, and delivered $64.6 million in Q4 revenue. That’s up 41.5% from the prior year. That performance validates the thesis that digital health tools resonate deeply with our target market.

Reporter: You spent years as the CFO looking at the spreadsheets; now you’re the CEO. What is the one thing about this company that looked different from the CEO’s chair than it did from the CFO’s office?

Fahmi Karam: What struck me most in transitioning to CEO was the importance of balancing multiple stakeholder perspectives simultaneously. As CFO, I focused intensely on financial discipline and portfolio health. From the CEO seat, you see more clearly how strategy, sequencing, culture and customer outcomes all intersect.

As CEO, I’ve gained deeper appreciation for how our three segments (Rent-A-Center, Acima and now Brigit) must work together as an integrated platform serving the same core consumer. That integrated view reinforces that our digital transformation isn’t just about technology; it’s about reimagining how we support customers across their entire financial journey. We acknowledge how important the relationships are for our coworkers in the field with both the consumers we serve and retailers we partner with.

My tenure as CFO reinforced to me how critical it is for consumers to have flexible tools available to them to shop for what they need when they need it. This capability is especially important during periods of heightened inflation and constrained spending. Stepping into the CEO role sharpened my conviction that we have both the responsibility and the opportunity to deliver more innovative, inclusive and technology-driven solutions and reach more underserved consumers while maintaining the financial discipline that makes our progress sustainable.

Reporter: You served 3.5 million customers last year. What are your U.S. (and international) customers telling you through their data? You mentioned macroeconomic pressures during the call.

Fahmi Karam: The data from those 3.5 million customers – across our Acima, Brigit and Rent‑A‑Center lines of business – tells us that our core consumers are struggling with affordability and keeping up with the rising costs of everyday life. The data also tells us that they are resilient and can find ways to make ends meet, especially using our products, whether it’s lease-to-own for durable goods or short-term liquidity at Brigit. Our products are increasingly relevant today.

Consumers need flexibility to navigate today’s inflationary environment and the elevated costs of essential goods. Our core consumer continues to face cumulative effects of inflation, with higher prices for essentials like groceries, rent and utilities weighing on purchasing power, as well as wages that haven’t kept pace with cost of living. As a result, our offerings have become increasingly relevant for consumers seeking flexible, tailored financial solutions that help them avoid additional credit debt, break free from debt cycles and still enable access to the items they need.

We expect our continued investment in advanced analytics and AI capabilities to keep enhancing how we serve both customers and retail partners. These capabilities allow us to improve underwriting accuracy while responsibly using proprietary data to personalize experiences, increase satisfaction and retention, and drive repeat engagement.

Reporter: You discussed ’credit tightening’. How do you balance the pressure from shareholders to keep this 10% revenue growth alive while your underwriting team is telling you to be more cautious because of inflation?

Fahmi Karam: Growth that degrades portfolio health is not growth we pursue and ultimately is not sustainable. We are aligned with our shareholders as we pursue responsible and sustainable growth. As I mentioned during our latest earnings call, we feel confident about the health of our portfolio entering 2026. Delinquencies at both Rent‑A‑Center and Acima remain in line with historical levels (under 3.5% at Rent-A-Center and solidly improving at Acima). Our margins are durable, and our recent underwriting adjustments at Acima are performing in line with expectations.

While we’ll see some initial temporary pressure in the first half as we lap the tightening actions from 2025, we expect the back half of the year to return to more normalized growth. That balance – discipline first, growth second – is what allows us to guide confidently while protecting long-term value.

Reporter: How do you respond to critics who view the lease-to-own model as predatory during times of high inflation, and how is the Brigit acquisition intended to change that perception?

Fahmi Karam: When families need a refrigerator, a laptop for school or access to wages they’ve already earned, waiting isn’t always an option. Upbound Group exists to expand access and elevate financial opportunity for consumers who are often left with few fair choices. Our portfolio is designed to give consumers greater shopping power through flexible, transparent solutions tailored to their pay cycles and financial realities. Across our platform, we’ve helped millions reduce financial stress, avoid unfair fees and prevent further damage to their credit.

Brigit supports overall financial well‑being with budgeting tools, financial insights and early access to wages consumers have already earned. Importantly, cash advances are responsibly determined based on real banking activity – income patterns, account balances and spending habits – so consumers are never advanced more than they can reasonably repay. There are no late fees or penalties, and repayment schedules can flex when circumstances change. Acima and Rent-A-Center offer lease agreements that allow customers to complete their agreements early or return products at any time without penalty or further financial commitment. The common thread across all our brands is transparency, flexibility and respect for the customer.

Reporter: Upbound stock is up over 20% this year, but over the last 12 months the stock is down. What should investors in Upbound be most excited about?

Fahmi Karam: This is a year of investment, and we’re still in the early stages of initiatives that we believe will drive sustained, long‑term growth and create meaningful value for both consumers and shareholders. What’s different now is our focus on building capability to serve the same consumer across multiple financial moments – not just a singular transaction.

We’ve strengthened our executive leadership team with the additions of Hal Khouri as our chief financial officer and Rebecca Wooters as our chief growth officer. Both bring deep expertise across retail, digital transformation, product innovation, technology and customer engagement that will be instrumental in fueling our next phase of growth.

Our 2025 results demonstrate this momentum. We delivered record revenue of approximately $4.7 billion – up 8.7% year-over-year and our highest ever. Adjusted EBITDA reached nearly $510 million (up 7.5%), and non-GAAP diluted EPS grew to $4.13 (a 7.8% improvement). Perhaps most importantly, free cash flow surged to $180 million (up over $130 million year-over-year), demonstrating the cash-generative power of our business model.

What should excite investors most is the combination of scale, data and engagement across our three brands. We interact with millions of consumers each year and we understand our customers’ behaviors (and demands). We are investing heavily around how best to use that data to create innovative financial solutions that meet their needs. The synergy across Rent-A-Center, Acima and Brigit positions us to better serve underserved communities more holistically in today’s credit‑constrained environment. There is meaningful runway ahead for us.

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