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Other Gains and Charges | 3 Months Ended
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Mar. 31, 2025
Unusual or Infrequent Items, or Both [Abstract] |
Other Gains and Charges | Other Gains and Charges Acima Holdings Acquisition. On February 17, 2021, we completed the acquisition of Acima Holdings, a leading provider of virtual lease-to-own solutions. Included in the aggregate consideration issued to the former owners of Acima Holdings were 8,096,595 common shares, valued at $414.1 million, subject to 36-month vesting conditions under restricted stock agreements, which were recognized over the vesting term as stock compensation expense, in accordance with ASC Topic 718, “Stock-based Compensation”. During the three months ended March 31, 2024, we recognized approximately $4.9 million in stock compensation expense, related to these restricted stock agreements. See Note 11 for additional information. These restricted stock agreements were fully vested during the three months ended March 31, 2024. The fair value of assets acquired as part of the transaction included $520 million in intangible assets and $170 million in developed technology. During the three months ended March 31, 2025 and 2024, we recognized approximately $10.9 million and $12.7 million in amortization expense, respectively, related to acquired intangible assets. We also recognized approximately $4.0 million and $3.9 million in incremental depreciation expense related to acquired technology assets during the three months ended March 31, 2025 and 2024, respectively. Brigit Acquisition. As described in Note 2, on January 31, 2025, we completed the acquisition of Brigit, a leading holistic financial health technology company. Included in the aggregate consideration issued to the former owners of Brigit were 1,313,331 common shares, valued at approximately $39 million, issued under restricted stock agreements and subject to vesting conditions, will be recognized as stock compensation expense over the vesting term, in accordance with ASC Topic 718, “Stock-based Compensation”. During the three months ended March 31, 2025, we recognized approximately $4.1 million in stock compensation expense related to these restricted stock agreements, in addition to $1.1 million related to Brigit's Replacement Awards and other agreement compensation. See Note 2 and Note 11 for additional information. The fair value of assets acquired as part of the transaction included $152.3 million in intangible assets and $65.1 million in developed technology. During the three months ended March 31, 2025, we recognized approximately $2.6 million in amortization expense related to acquired intangible assets. We also recognized approximately $1.6 million in incremental depreciation expense related to acquired technology assets during the three months ended March 31, 2025. For the three months ended March 31, 2025, we recognized approximately $6.2 million in transaction costs associated with the closing of the transaction. Legal Matters. As disclosed further in Note 12 in this Quarterly Report on Form 10-Q and as previously disclosed, we were party to the recently dismissed regulatory lawsuits with the Consumer Financial Protection Bureau and are currently party to a filed regulatory lawsuit with the New York Attorney General, as well as a multi-state regulatory investigation by attorneys’ general offices from forty states and the District of Columbia. These matters relate to lease-to-own transactions for our Acima subsidiary, which was acquired in 2021. We believe these regulatory lawsuits and the multi-state investigation are not representative of historical regulatory matters that arise in the ordinary course of our business. During the three months ended March 31, 2025, we recorded expenses of $10.0 million related to estimated legal accruals for certain of these regulatory matters based on the current status of the these matters. We will continue to evaluate and modify our estimated legal accruals as appropriate in future periods based on future developments. In addition, for these regulatory matters we incurred litigation and defense expenses of $0.6 million for the three months ended March 31, 2025. Stock Award Letter Agreement. On April 3, 2024, we entered into a letter agreement with the Company’s Chief Executive Officer as disclosed in our Current Report on Form 8-K dated as of April 5, 2024. The terms of the letter agreement included special provisions for his outstanding restricted stock awards vesting at various times through February 2027, which resulted in the acceleration of stock compensation expense for those awards in accordance with ASC Topic 718, “Stock-based Compensation”. Accelerated stock compensation expense recognized for the three months ended March 31, 2025 due to this letter agreement was approximately $1.6 million. Internally Developed Software Depreciation. During the third quarter of 2023, we completed initial development and began pilot testing a new internally developed point-of-sale system for our Rent-A-Center lease-to-own stores. Deployment of the new system across our lease-to-own store network began in the second quarter of 2024 and was completed in the third quarter of 2024, at which time our existing point-of-sale software was retired. Therefore, in the third quarter of 2023, we accelerated the remaining useful lives of our existing point-of-sale software assets to align with the deployment timeline of our new point-of-sale system, which resulted in the recognition of additional depreciation expense of $4.6 million for the three months ended March 31, 2024. Activity with respect to other gains and charges is summarized in the below table:
| Three Months Ended March 31, |  |  |  |
(in thousands) | 2025 |  | 2024 |  |  |  |  |  |  |  |  |  |
Acima acquired assets depreciation and amortization | $ | 14,900 |  |  | $ | 16,646 |  |  |  |  |  |  |  |  |  |  |
Legal matters | 10,645 |  |  | — |  |  |  |  |  |  |  |  |  |  |
Brigit transaction costs | 6,218 |  |  | — |  |  |  |  |  |  |  |  |  |  |
Brigit acquired assets depreciation and amortization | 4,144 |  |  | — |  |  |  |  |  |  |  |  |  |  |
Brigit equity consideration vesting | 4,059 |  |  | — |  |  |  |  |  |  |  |  |  |  |
Accelerated stock compensation | 1,599 |  |  | — |  |  |  |  |  |  |  |  |  |  |
Brigit replacement awards and other agreement compensation | 1,095 |  |  | — |  |  |  |  |  |  |  |  |  |  |
Acima equity consideration vesting | — |  |  | 4,893 |  |  |  |  |  |  |  |  |  |  |
Accelerated software depreciation | — |  |  | 4,611 |  |  |  |  |  |  |  |  |  |  |
Asset impairments | — |  |  | 646 |  |  |  |  |  |  |  |  |  |  |
Other(1) | 637 |  |  | — |  |  |  |  |  |  |  |  |  |  |
Total other gains and charges | $ | 43,297 |  |  | $ | 26,796 |  |  |  |  |  |  |  |  |  |  |
(1) Primarily represents shutdown and holding expenses related to store closures and severance for the three months ended March 31, 2025.

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