Good day, ladies and gentlemen, and thank you for standing by. Welcome to the PROG Holdings first quarter earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone keypad. At this time, I would like to turn the conference over to Mr. John Baugh, Vice President of Investor Relations. Mr. Baugh, you may begin. Thank you and good morning, everyone. Welcome to the PROG Holdings first quarter 2023 earnings call. Joining me this morning are Steve Michaels, PROG Holdings President and Chief Executive Officer, and Brian Garner, our Chief Financial Officer. Many of you have already seen a copy of our earnings release issued this morning, which is available on our investor relations website, investor.progholdings.com. During this call, certain statements we make will be forward-looking, including comments regarding our expectations related to the range of 2023 write-offs resulting from our lease decisioning posture, our GMV, gross leased asset balance, and levels of 90-day buyouts in future periods, the strength of our balance sheet and our capital allocation priorities, and our revised outlook for the 2023 full year, as well as our outlook for the second quarter of 2023. I want to call your attention to our safe harbor provision for forward-looking statements that can be found at the end of the earnings press release that we issued earlier this morning. That safe harbor provision identifies risks that may cause actual results to differ materially from the expectations discussed in our forward-looking statements. There are additional risks that can be found in our annual report on Form 10-K for the year ended December 31st, 2022, which we encourage you to read. Listeners are cautioned not to place undue emphasis on forward-looking statements we make today. We undertake no obligation to update any such statements. On today's call, we will be referring to certain non-GAAP financial measures, including adjusted EBITDA and non-GAAP EPS, which have been adjusted for certain items which may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included with our earnings release. The company believes that these non-GAAP financial measures provide meaningful insight into the company's operational performance and cash flows and provide these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding the company's ongoing operational performance. With that, I would like to turn the call over to Steve Michaels, PROG Holdings President and Chief Executive Officer. Steve. Thank you, John, good morning, everyone. I appreciate you joining us as we report our first quarter results, share our thoughts on a few important Q2 metrics, and provide an update on our 2023 full-year financial outlook. We had an excellent first quarter, meeting our expectations for GMV and net revenues. We also materially exceeded our earnings expectations due to lower 90-day buyouts, better-than-expected customer payment behavior, and continued portfolio management. The last 36 months have presented unprecedented challenges, but I am proud of our team's efforts in overcoming these obstacles to deliver such strong results. Our actions to improve portfolio performance and right-size costs in Q2 of last year continue to benefit us, as evidenced by our year-over-year gross margin expansion, improved write-offs of 6% and SG&A leverage. Despite consolidated revenues declining 8%, we still grew our adjusted EBITDA by $25 million or 39% through a 13.7% margin and our non-GAAP EPS by 94.7% as compared to the first quarter of 2022. This great start to the year has led us to significantly raise our full-year earnings outlook. While we were pleased with our strong first quarter results, there were factors contributing to our outperformance that may not carry forward, which Brian will discuss in more detail. Our first quarter demonstrates our ability to manage our business with healthy returns despite a persistent macroeconomic backdrop of inflationary pressures, economic instability, and strained customer liquidity. We remain cautiously optimistic about our portfolio health and gross margin, and while we are prepared to optimize our decisioning to shifts in the economic environment, we believe that our current decisioning positions us to deliver another year within our targeted annual 6%-8% write-off range, which is a key goalpost. Turning to our GMV, the double-digit declines over the past three quarters are largely a byproduct of tighter decisioning we implemented in Q2 of last year. We believe that those decisioning changes have accounted for approximately two-thirds of the pressure we have experienced in GMV over the past three quarters. In terms of GMV outlook, we expect our 2nd quarter GMV to decline at a similar rate to Q1 on a year-over-year basis due to our current decisioning posture, though we expect these difficult comparisons to ease in the back half of the year as we fully lap the introduction of last year's decisioning changes. Soft retail demand continues for big-ticket consumer durables in many of our leasable product categories. Data showing that this slowing demand is primarily due to our consumer base redirecting more of their income to essentials in response to liquidity pressures. We have seen no indicators leading us to assume that retail sales will materially rebound through the balance of 2023. We have very recently begun to see evidence that credit providers above us are starting to tighten their underwriting. The recent challenges in the banking sector that developed late in Q1 further speaks to the likelihood that credit providers will increasingly look to restrict the level of funding that fueled consumer borrowing for most of the past decade. Delinquencies that we track for prime lenders are moving higher, albeit in many cases still below pre-pandemic levels. While we believe the credit supply is becoming more restricted, there may be some delay as to when it will impact consumers. Because it is still too early to predict the timing of this potential tailwind for our business, we have not assumed any benefit to our GMV for the balance of 2023. We continue to closely track the overall quality of our applicant pools, and only very recently have we started to see improvements in the top quintile. Moving on to profitability, we expect to maintain our strong portfolio performance and our ability to deliver healthy margins in our core leasing business despite the outlook for our revenues to decline near term. The tighter decisioning posture we took in Q2 of last year helped the portfolio recover, with leases originated in the second half of the year performing on par with pre-pandemic levels. Because of our short duration portfolio, leases originated in the first half of 2022 now represent an immaterial portion of our remaining active leases. In February, we elaborated on our three key strategic pillars: grow, enhance, and expand. We believe our strong profitability and balance sheet will allow us to continue to make selective growth investments that position us to capitalize on market share gains in the near term while capturing more of our addressable market in the long term. For example, those investments will allow us to continue to build and enhance our technologies for an evolving consumer that we know better than anyone after more than 20 years as a LTO leader. Today, roughly two-thirds of our customers are Millennial or Gen Z, groups that have shown a more omnichannel approach, vacillating between online and in-store when researching and making key purchases. We also know these demographics interact with their personal finances differently than previous generations, adopting emerging products and technologies as part of their personal financial solutions. As a result, today's consumers have come to expect more flexibility and control over their payment options, especially for larger ticket items. We continue to address this demand by enhancing and developing products that offer a more frictionless, omnichannel customer journey while simultaneously providing consumers with the educational tools, price discovery, and disclosure transparency they need to help them make the best and most informed choices. We also continue to invest in further integration with existing retail partners while converting new Lease-to-Own pipeline opportunities, as we believe these actions will benefit all stakeholders long term, even with a challenging revenue backdrop in 2023. E-commerce integrations with new and existing partners remain a key focus, and the pace of our efforts in this area has accelerated as we continue to enhance and innovate technologies that offer retailers flexible, customizable, and secure ways to add LTO to their online checkouts. While e-commerce GMV in Q1 was down year-over-year, that decline was less than what we saw for comparable in-store results, and e-commerce as a percentage of total Progressive Leasing GMV continued to grow, coming in 100 basis points higher than the same period last year. Additional key technology initiatives that were completed within the quarter include enhancements to decrease the time it takes customers to complete an LTO transaction, optimizations to the customer and retailer experience, and updates to payment and lease systems. While Brian will provide more detail on the upward revision to our earnings outlook for the year, I'd like to summarize a few key themes. Our Q1 performance was stronger than we expected from a margin perspective, driven by materially low 90-day buyouts and better-than-expected customer payment behavior. Revenue in March from 90-day buyouts was at a historic low, which we believe was driven by the average tax refund decrease of approximately 10% year-over-year. While this was a tailwind for Q1 gross margin, it will be important to monitor whether the low buyout performance continues and how the portfolio performs with a lower percentage of customers executing buyout options. Should we see normal delinquency trends in the lease pools for the remainder of 2023, the lower 90-day buyouts we experience should be a positive impact to our financial results. However, should the decline in 90-day buyouts prove to be a leading indicator of stress on our customers and portfolio performance, we may experience higher delinquencies, which could prompt us to tighten our decision. Onto the topic of capital allocation. We purchased $36.5 million in shares during the first quarter, representing 3% of our outstanding stock. We also generated $157.4 million in cash flow from operations, further illustrating our ability to show financial strength in an unstable economic environment. Our capital allocation priorities remain unchanged, and we expect to continue to fund growth, look for strategic M&A opportunities, and return excess cash to shareholders, primarily through share repurchases. To close, I want to emphasize that our strong Q1 was a direct result of the hard work and strategic efforts that our teams have put in over the past several quarters. Our mission to create a better today and unlock the possibilities of tomorrow through financial empowerment remains at the core of how we operate, and we will continue to grow, enhance, and expand to help improve the lives of our customers. I'll now turn the call over to our CFO, Brian Garner, for more details on our first quarter results and 2023 financial outlook. Brian? Thank you, Steve. Good morning, everyone. I'd like to start by thanking our teams, retail partners, and customers for helping us deliver a strong quarter to start the year. Our first quarter results highlight the resilience of our business model and teams in overcoming the macroeconomic headwinds, including the inflationary pressures and the liquidity strains experienced by our consumer. Q1 2023 consolidated revenues declined 8% to $655 million. Consolidated adjusted EBITDA increased approximately 39% to $89.7 million in Q1 of 2023, from $64.6 million in Q1 of 2022, outperforming our expectations. Our better-than-expected consolidated results were primarily driven by margin improvement and lower write-offs at our Progressive Leasing segment. Non-GAAP diluted EPS for Q1 of 2023 increased to $1.11, growing 94.7% from $0.57 in Q1 of 2022. Liquidity pressure on our customer, partially driven by tax refund checks that were approximately 10% lower on average compared to last year, resulted in a record low 90-day buyout activity in Q1, which is a headwind to current period revenue, but a benefit to gross margins. Additionally, we experienced lower-than-expected charge-offs in the quarter due to our tightening efforts in Q2 of last year, which resulted in better payment performance, driving higher margins and increased profitability. For our Progressive Leasing segment, GMV decreased 17% to $418.7 million in Q1 of 2023 as compared to $504.5 million in Q1 of 2022. Largely driven by our current decisioning posture, continued weak retail traffic, and the double-digit percentage decline in tax refunds. Revenue in the period declined 8% year-over-year, driven by lower gross leased asset balance heading into Q1, softer GMV in the quarter, and a material decline in revenue from 90-day buyouts, partially offset by improved customer payment behavior. However, the segment's Q1 gross margins improved 340 basis points year-over-year to 31.7%, primarily due to the 90-day buyout activity in Q1 that reached record lows and last year's decision actions that improved portfolio yield. While a 90-day buyout results in significantly lower gross margin than an average lease, it remains more beneficial to gross margin than most charge-offs. We still expect 90-day buyout activity to be lower year-over-year for the remainder of 2023, although the variance is expected to narrow over the course of the year. Progressive Leasing's SG&A expense as a percentage of revenue declined to 11.9% in Q1 of 2023 from 12.4% in Q1 of 2022, while SG&A expense decreased $10 million year-over-year, primarily due to the cost actions in Q2 of last year. Progressive Leasing's write-offs were $38.4 million or 6% of revenues in Q1, down from 7.3% in the previous year's period. I continue to be encouraged by the trends we've seen thus far in 2023, we remain on track to end the year within our targeted annual write-off range. Looking at our balance sheet, we ended the quarter with $249.8 million in cash and gross debt of $600 million, resulting in a net leverage ratio of 1.24 x our trailing 12-month adjusted EBITDA. In the first quarter, we purchased 1.46 million shares of our common stock at a weighted average price of $25 and have $300.8 million remaining under our previously authorized $1 billion share repurchase program. I'd now like to touch on a few key aspects of our Q2 and revised full year 2023 outlook, which were provided in this morning's earnings release. Despite our strong first quarter results for adjusted EBITDA, we continue to experience headwinds on expected GMV due to economic and liquidity pressures felt by our consumers. As Steve mentioned, we expect the year-over-year percentage decline of our second quarter GMV to be roughly in line with our Q1 rate. This decline should lessen in the second half of 2023 as we compare against lower GMV year-over-year due to the tightening decisions we implemented last year. Our gross leased asset balance, which is a key driver of future period revenue, entered 2023 5.3% lower year-over-year and ended the first quarter 8.3% lower year-over-year. This gross leased asset balance will likely decline further through the second quarter of 2023 due to the GMV decline serving as a headwind to revenues in future periods. Our base case for the remainder of the year considers current consumer trends, but does not assume further economic downturn, a materially negative impact on the employment of our consumers, or a material benefit from tightening by providers above us in the credit stack. Despite revenue headwinds, we anticipate that our lease portfolio performance and low 90-day buyout rates will continue to drive Progressive Leasing's margin improvement year-over-year. We are raising our full-year earnings outlook and slightly decreasing our expected revenues. Our revised consolidated outlook for 2023 expects revenue in the range of $2.3 billion-$2.375 billion, adjusted EBITDA to be in the range of $235 million-$255 million, and non-GAAP EPS in the range of $2.50-$2.77. This outlook assumes a difficult operating environment with continued soft demand for leasable consumer durable goods, no material changes in the company's decisioning posture, an effective tax rate for non-GAAP EPS for approximately 28%, and no impact from additional share repurchases. I would like to address how we were thinking about the strength of the first quarter and our increased earnings outlook as they pertain to the remainder of the year. While we are encouraged by the strong financial results that we achieved in Q1, we are cautious about the continuing headwinds on GMV and expect margin pressures as we move throughout the year. The soft consumer demand trends we observed exiting Q1 and into April have caused us to adjust downward our expectations for GMV and revenue. Our revised outlook assumes adjusted EBITDA margins for the remainder of the year that are lower than Q1 due to the dissipation of some of the 90-day buyout dynamic that benefited margins in Q1, an increase in run rate for SG&A costs due to wage inflation and specific initiatives targeting key technology platforms, and full-year write-offs within our targeted annual 6%-8% range. In short, we are optimistic about the 2023 prospects following our strong start of the year and remain committed to the disciplined decisioning and other strategic efforts that have helped us achieve those results as we look to capitalize on the positive momentum gained from our Q1 performance. I will now turn the call back over to the operator for the Q&A portion of the call. Operator? Ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star one one again. Again, ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Kyle Joseph from Jefferies. Mr. Joseph, your line is open. Hey, good morning, guys. Thanks for taking my questions and good job navigating a difficult environment. Obviously on the credit side of things, a lot of moving parts. You guys have your underwriting changes implemented last year, you know, lower tax refunds this year, just trying to get a sense for the health of the underlying consumer. Obviously, they're employed, but facing elevated expenses. Have they kind of adapted to this inflationary environment as we've been in for going on a year now? Just kind of wanna get a sense for some of the dynamics that played out in the quarter given some of the moving parts. Yeah. Thanks, Kyle. Good morning. This is Steve. There's certainly a lot there. We did, as you mentioned, make our decisioning changes throughout Q2 of last year, and the portfolio has, you know, responded nicely and as expected to those changes. Underlying that is the consumers and the customers that we were approving and having, you know, funded GMV were performing per our expectations, which, as you know, we track kind of against the pre-pandemic pool performance, because we have history that those pools delivered our portfolio performance within our targeted ranges. Throughout the back half of 2022, we saw that performance and as the portfolio turned over due to our short-duration leases, it was reflected in the metrics that we provide externally. Q1 was an interesting story, right? We saw from a portfolio performance standpoint, similar trends as expected, although slightly better than expected from a customer payment behavior standpoint. The wildcard was the tax refund. What we believe was driven by the tax refund season. We expected it to be lower, and as many of y'all report very fairly frequently, it did come in lower. We built that into our original outlook as it related to some pressure on GMV, just kind of on the origination side. What we saw, it's not a perfect read-through, but it's our, you know, just our experience and our history dictates this or leads us to believe that this is the driver, is that those lower refunds were the primary driver of a materially lower 90-day buyout activity by our consumer. As Brian and I both said in our prepared remarks, that resulted in higher gross margin than we were anticipating and that we have seen in previous tax refund seasons. The question that, you know, remains to play out is why did the 90-day buyouts, you know, react so materially lower? Was it due to some new set of stress on the consumer that caused them to not have the liquidity to do the 90-day buyout? While we're in this kind of interesting situation right now where we had lower 90-day buyouts, which was a tailwind to margin, yet our delinquency picture is still in good shape, will that persist? We need a few more cycles of data to come through to convince us that that will persist. We believe it's naive to think that someone who did a 90-day or would have done a 90-day and wasn't able to, is just gonna magically march on to be a full term, full margin lease. There's gonna be some other stress and dispositions throughout that customer's life cycle that didn't do the 90-day. That remains to play out. It's still a little bit of a mixed bag. We had strong performance in Q1. If that persists, we're gonna have some tailwinds to margin throughout the balance of the year. We're anticipating that customer payment performance outperformance to dissipate. That's really helpful clarification. Just one follow-up from me. I know you guys talk to a lot, a lot of retail partners and just wanna get the sense for, I guess first, kind of their take in terms of the potential for demand to recover. You know, do we have any precedents? Do we have to go back and look at the 70s and see how long it took for kind of consumer durables to recover? You know, in this more challenging environment, have you seen a greater desire to add the products from new retailers? Yeah. I've been in the business a long time, but not since the seventies. Yeah, we definitely talk to our retailers very frequently, as you can imagine, and it's one of the benefits of us having the large enterprise retail partners. They have sophisticated shops. Obviously, we're not gonna out them on what they, what they say and what they tell us. It's a, it's a challenging environment out there. As Brian said in his prepared remarks, we saw some weakness really exiting March and into April. I would not make a direct correlation between, you know, SVB and the banking crisis to our consumer because I'm not sure they're impacted by that. Something from a animal spirit slash consumer confidence happened, and we saw some weakness coming out of Q1 and into the first few weeks of April. As we alluded to, we've got the lapping of our decisioning changes here towards the end of Q2, so that'll be a removal of a headwind. It continues to be a challenged demand environment for our retailers and then ultimately for us. Got it. Thanks very much for answering my questions. Thank you. Our next question or comment comes from the line of Brad Thomas from KeyBanc. Mr. Thomas, your line is open. Thanks. Good morning, a nice execution here. Let me add my comments in that regard as well. Wanted to ask first about the gross margin outlook. Even though there were lower rates going on tax base on year-over-year, and year-over-year that produced early buyouts, I know that one Q is usually the big quarter for that. You know, as I look out at the, you know, balance of the year, it does look like there's a pretty good outlook here for gross margin. Maybe you could just talk a little bit more about how you're thinking about that. Thanks. Brad, I can take that. Yeah, I think that's driven by, primarily by our assumptions around how these customers behave. Those that did not take the 90-day here in Q1, and ultimately the dispositions that they work towards, we expect to be a more favorable mix. Based upon what we're seeing thus far and where our delinquency profile is sitting, we're more optimistic around those customers who elected not to do a 90-day to go into an outcome that is favorable to gross margins. We've incorporated that into our guide, and that's what you're seeing in terms of the trends that are reflected and the favorable gross margin trends going forward. We'll see what happens. Obviously, this is... The model is very sensitive to consumer behavior and what they elect to do. Based on everything we're seeing right now, delinquencies are holding, I would say, within our comfortable balance. That's really helpful, Brian. Steve, I'd just be curious a little more color. As you're talking to your, you know, retail company customers, who many of which are dealing with, you know, declines in sales right now coming off of tough pandemic comparisons. I guess, what do they need most from Progressive here right now? How do you think about maybe the opportunity to get more share of wallet with them? Thanks, Brad. I mean, it continued, you know, it existed in 2022 and continues into this year, our partnering well with the retailers that are currently in our preferred partner network, and them reaching, as we've discussed before, for more tools in the tool belt. What they need from us, obviously, is for us to, you know, drive more traffic to them and also save more sales and convert more traffic and, you know, ultimately increase their sales and return on ad spend. The way we can do that is by making these payment types in Progressive more visible within their environment, whether it's on the site or in the store, easier for the consumer to do business with Progressive. Also increased training efforts for the retail sales associates in the retailers' in-store environment. So all the, you know, whether it be point-of-purchase material for awareness, whether it be direct co-branded marketing with Progressive and the retailer, whether it be a Partner Week or a Perk Week, as we call it, where we have daily deals sponsored by various partners. Those things are things that we can do that may not take a lot of tech lift. Then on the other end of the spectrum, you know, or a sliding scale, I should say, are other things like waterfalls and transactional e-com carts and better placement on product display pages online. Those things, we're also seeing a lot of appetite from our retailers to partner with us and pull those levers to help save, you know, help save more sales for them. We're encouraged by the partnership that we've had, and we believe that this set of this environment will allow us to come out of this environment with much deeper integrations with our existing partners and kind of be a springboard for growth when that underlying demand returns. That's great. Thanks so much. Thank you. Our next question or comment comes from the line of Anthony Chukumba from Loop Capital. Mr. Chukumba, your line is open. Great job on the pronunciation of my last name. I guess my first question, you talked about the fact that you started tightening in the back half of last year. Given the, you know, the short duration of your leases, you know, most of those, you know, sort of pre-tightening leases are pretty much gone by this point. Would that imply then that your, you know, lease merchandise write-off rate for the remainder of this year, I know you're saying it's gonna be in that 6%-8% range, but that would imply to me that it should be, you know, everything else being equal, toward the low end of that range, right? I mean, wouldn't I guess, am I thinking about that the right way? I mean, I guess, what I'd point you towards, thanks, Brian, is, you know, what we've been targeting towards in our decisioning efforts is really trying to get back to pre-pandemic level of performance in terms of our last point of normal. As you saw during those periods, we were kind of in the midpoint of that 6%-8% range. Really that's our target. I don't wanna overpromise on the low end. Here we saw a base 6% here in Q1, which is great. Seasonally, what you would expect is a sequential step up in Q2 and Q3, just as you get further away from tax season and you experience perhaps just more strain on the consumer, the further away you get from tax season. Q4 tends to be the lowest write-off rate seasonally. I would just caution you about taking Q1 and stating that as a run rate and making sure we incorporate the seasonality there. We're really trying to get back to within the range of reasonableness that we saw pre-pandemic. Got it. Fair enough. Then just a quick follow-up. You know, obviously, you increased your earnings guidance and, you know, GMV will remain pressured for the reason that you mentioned. That would imply that, and I know you didn't give free cash flow guidance, but that would imply that you'll have incredibly strong free cash flow this year, and your leverage is at 1.2x. I guess, how should we think about capital allocation for the remainder of this year? I mean, is it a reasonable assumption that you'll, you know, I know you're not building to your guidance, but is it a reasonable assumption that you could at least potentially step up your share repurchases given those free cash flow dynamics? Yeah, Anthony, I mean, you nailed kinda the variables. We talk about our capital allocation. We're able to fund growth with internally generated cash. Our history has shown that we favor repurchases of our stock as the way to return capital to shareholders. We will have good free cash flow generation this year. A reminder, there's a little bit of seasonality on that as well, where we will likely generate more than 100% of our annual free cash flow in the first six months of the year just because of the seasonality of GMV. Even in a declining GMV environment, the dollars of GMV will be higher in Q4. We also look at that through the lens of our net leverage ratio, and, you know, we're in a comfortable spot at 1.24x as of 3/31. We look at that over the course of a 12-month period, and it's probably gonna tick up a little bit just because of the use of cash in the back half for GMV funding as well as some seasonality on the EBITDA. Having said all that, you know, we, you know, should the equity remain in these price ranges that we deem attractive, that has been our preferred vehicle, and I would expect it to continue to be. Got it. Thank you. Good luck with the rest of the year. Thank you, Anthony. Thank you. Our next question or comment comes from the line of Bobby Griffin from Raymond James. Mr. Griffin, your line is open. Good morning, everybody. Thanks for taking my questions. I guess, Steve, I want to first circle back on GMV. I think in your prepared remarks, you mentioned that two-thirds of the decline was driven by your internal leasing decisions. I want to maybe see if you could unpack that a little. Does that mean you're seeing app flow and kinda quote, unquote demand to use the product stronger than what the GMV trends that we're seeing on a reported basis are? How exactly are you kinda getting at that figure? Yeah, I mean, we analyze all of our, all of our channel metrics, top funnel, mid funnel, bottom funnel, source, whether it be online, in store. We even try and parse out whether it's from someone's phone while they're in the store. We analyze all those app flows. We can look at our apps by channel and then kind of just follow it down the funnel and say, "Okay, well, your approval rate is X, whereas same period last year it was Y." Conversion has done, you know, this or that, average ticket has changed this or that. Well, that's how we get to kind of the rough 2/3 analysis of the GMV pressure was from effectively, you know, in simplistic terms, just lower approval rates. There's a lot of moving parts as was implied in your question, but that is the driving factor. As we turn the page into the back half of this year, we will be on a neutral footing, all things being equal, as it relates to decisioning. Then it'll be more of a, you know, an app and underlying retail demand story. But as I, as I've talked about before, we stand ready to potentially loosen approval rates if the data warrant or if we see additional stress in the data. We also have a series of adjustments at the ready if we had to tighten additionally. All other things being equal, that headwind will go away in the back half. Okay. Yeah, I guess that was gonna be my second part of the question. I guess with that would imply that there is a greater demand, and I guess we can approve that during the current economic environment for the product. I guess what would you wanna see economically to maybe start to loosen a tiny bit to go after that delta, that gap between your app flow and what the GMV's performance at? Is it loss ratios continue to hang out here at the bottom of the range at 6%, or is it some type of payment trends or some type of category performance? I guess, like, what would you like to see where we can kinda maybe get a view of when there could be maybe a chance to potentially loosen and change the GMV? I mean, you know, ultimately the loss rates are, you know, over time are a good indicator. In, in the, in the shorter term, there's components to that. There's reserve build-up or reserve release versus underlying lease performance. Obviously the reserves are built based on our expectations of how the leases are gonna perform. We're tracking delinquencies against pre-pandemic buckets, or I should say lease pools. We're tracking, you know, all the indicators that you, that you would think we're tracking, you know, ACH bounces and the first payment defaults and all kinds of things. If all, you know, if you were just looking in isolation on March 15th at our lease pools, you would say, "Okay, it's time to loosen." There's, you know, there's more nuance to it than that because as I talked about in Kyle's question, we don't want to naively create another pig going through the python if there's liquidity stress out there in for the consumer because of, you know, something happened why they weren't executing those 90-day buyouts, and Goldilocks situations don't last forever. We're defensively postured. We think that's appropriate. We've as I've said and, you know, as it sounds like you want, you want us to be doing, we're looking for opportunities to loosen. If the data, warrant that and prove to us that that's the appropriate decision, then I stand ready to do it. We're just gonna have to get a few more cycles of data in the door before the team feels comfortable doing that. Okay. Yeah, that's yeah, just the answer I was just looking for. Yeah, it makes perfect sense. I guess lastly, just Brian, on cash OpEx, was the comments meant to imply the cash OpEx is probably gonna step up sequentially from the 1Q levels despite kinda, I guess, the revenue coming down a little bit, and that's some of the margin pressure, sequentially? You're speaking from a cash flow from operations, perspective? Yeah. You know, I look at cash OpEx. I just look at OpEx, ex write-offs, you know. Got it. Got it. Got it. Yeah. Yeah. Sorry, I gotcha. I think there's gonna be a step up in SG&A as a% of revenue as we move throughout the year. There're a couple reasons for that. There's wage inflation that obviously we're dealing with, there's also an element, you know, as you feel those top line pressures, there's a deleveraging aspect that happens with respect to that ratio. While we are highly variable in our cost structure, we do have some fixed costs, that will start to reflect in that metric. Yeah, to answer your question, I think there's gonna be a, I would say a moderate increase in from Q1 run rate levels. Okay. I appreciate all the details. congrats on the upside this quarter and best of luck to you going forward. Thanks, Bobby. Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. Our next question or comment comes from the line of Jason Haas from Bank of America. Mr. Haas, your line is open. Hey, great. Good morning, and thanks for taking my questions. I'm curious to know, to what extent do you think the current results are benefiting from any sort of credit tightening or trade down? Are you not really seeing a benefit yet, and that's potentially to come, even though I know it's not included in the guidance? Yeah. Jason, certainly I don't believe that the Q1 results were benefited by credit tightening. In the prepared remarks we said. This is really kind of, you know, really recently developing news, but we have started to see the beginnings of what we think is tightening above us in the stack. We look at it very, you know, very precisely, whether it be by vertical or by region or by retailer or by actual primary lender. As you know, the secondary lenders, near-prime lenders have been tightening for some time now. We had not seen it happening in the prime lenders. Only in the very last couple weeks have we seen evidence that it might be happening. There's certainly a delay in what that means for GMV trends or even app trends for us. It's encouraging because as I've admitted on previous calls, I was expecting it to happen quarters ago, and we saw no evidence of it. The fact that we're starting to see some evidence is kind of a stay tuned comment. As, as you said and we said in our prepared remarks, we have not built anything into the back half or really the full year GMV expectations from a tailwind from that. To the extent it continues to play out that way, it could be a tailwind for us. Got it. Over the next, few months here, we should start to lap some of the highest, gas prices from last year. I was curious, is that a factor that impacts payment rates? I don't know if it's something you're able to see a correlation there, in your data. Maybe that could potentially be a benefit, but I'm just not sure how impactful something like that is for your business. Well, I mean, I would definitely say it's not a negative. It would be a benefit. It's been difficult to parse out, with all the moving parts that have happened during the pandemic, like what is the driver of this or that. Certainly, we know that our customer was more impacted by the inflationary pressures across food, energy, and shelter than the prime customer. To the extent there's an easing there, that's a good thing for us, especially since employment is still strong and there has been some wage gains. That could be, you know, that will be a good thing for us. It's difficult to tell how much is driven by gas versus prices of eggs or something like that. We'll take it, and, hopefully it continues to show in the portfolio performance and strong gross margin. Got it. Thank you. Thank you. Our next question or comment comes from the line of Vincent Caintic from Stephens. Mr. Caintic, your line is open. Hey, thanks for taking my question. Most of my questions have been asked. One question on just trying to dissect, parse out consumer demand. You know, understanding the GMV guidance maybe is, you know, kind of weaker to the year, but I'm trying to separate out, you know, how much of that comes from your tight underwriting posture versus consumer demand maybe picking up. Maybe there's, you know, more need for the product. I don't know if there's a metric like application volume or something like that, so we can kind of see, you know, how much demand might be moving over time. Thank you. Vincent, I would just, I guess, point you back to our comments about the kind of mid-teens decline in GMV that we've seen over the last 3-ish quarters. We believe is about two-thirds of that is driven by our own decisioning, necessary decisioning adjustments. That would lead you to believe that there's, you know, another third of that, you know, kind of mid-single digits driven by lower demand for the product. That could be offset by, you know, moving further away from the large purchases and the demand pull forward during the pandemic. It could be offset by break fix cycles as things need to be replaced or laptops become obsolete. We would look forward to those trends. We do see some continued soft consumer demand outside of our decisioning adjustments. Okay. Perfect. That's helpful. That's all I had. Thank you. Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks. Thank you. I'd like to thank you again for joining us this morning and for your interest in PROG Holdings. Our team did a great job getting us off to a strong start for the year. We feel good about the positioning of our portfolio, and we're making the right investments in people and technology to further our three-pillar strategy of grow, enhance, and expand. We look forward to updating you on our progress next quarter, and we hope you have a great day. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.